Will Manufacturer's Bite on Applied DNA's New Tag?
Applied DNA Sciences, Inc. [[APDN.OB]] announced the launch of its new SigNature DNA security garment label on Monday. The revolutionary woven label gives brand owners a proactive way to deter counterfeiters, while the technology could put a dent in the $600 billion a year counterfeiting market. The big question or investors is whether or not companies will adopt the new technology.
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Counterfeiting represents a real problem for both manufacturers and consumers around the world. Manufacturers lose substantial revenues each year from counterfeit products, while many consumers unknowingly purchase low-quality counterfeit products. They can even be dangerous for consumers, with some dyes posing substantial health risks due to lead or other contaminants.
Currently, many manufacturers rely on governments to enforce their intellectual property rights. There have been a substantial number of high-profile crackdowns, ranging from New York City to rural China. However, with 7 percent of the world’s trade being counterfeit, the problem may be too big for governments to handle. As a result, some may be ready to use technology to stem the tide.
There are many different types of anti-counterfeiting technologies on the market, including DNA technologies, nanotechnologies, holograms, chemically-altered fibers, electromagnetic, and countless other applications. So far, many anti-counterfeiting technologies have remained on the sidelines as companies have continued to rely on police and governments to shut down operations.
One key advantage that Applied DNA Sciences has over these competing products is industry partnerships. In its press release, the company counted Nilorn UK as one of its partners, who brands and design labels for the fashion industry. This could give the company a window through which it can disseminate its products to manufacturers.
In the end, industry adoption of anti-counterfeiting is dependent on several factors. The two primary factors are cost and availability, which Applied DNA Sciences claims to have under control. However, the technology remains unproven and prudent investors may want to wait on the sidelines until sales and net income figures support the story down the road.
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