YPB Group looks to commercialise ‘holy grail’ of anti-counterfeit technology

Anti-counterfeit company YPB Group (ASX: YPB) has achieved what it says is “the most significant technical advance in its history”, after successfully testing smartphone readability of a highly secure anti-counterfeit mark.

The news could potentially mean that YPB will go on to develop a distinct product that reduces counterfeiting and become a highly desirable security consideration for various industrial suppliers.

According to YPB, smartphone readability is the “holy grail” of the anti-counterfeit industry and was a key reason for YPB’s acquisition of Motif Micro, a deal the company finally completed in January this year.

Motif Micro develops secure, smartphone-readable micro barcode technology which YPB identified as an entity worth absorbing into its own operations back in 2015.

YPB first announced its acquisition plans three years ago when it bought Motif Micro for $7 million as a means of advancing its own capabilities in developing smartphone-readable solutions.

Motif Micro’s platform uses non-replicable identifier technology and uniquely encodes products “at the item level” while maintaining ultralow cost, high physical security, visual appeal and reliable readouts.

Acquiring its way to anti-counterfeit supremacy

As a company, Motif Micro is a low cost, high security company that specialises in “invisible-to-the-human-eye technology” first developed in Cambridge Massachusetts by YPB’s CTO, Dr Paul Bisso. Intellectual property underpinning the technology is protected by three distinct patents with YPB owning the exclusive global rights to all three.

It is expected that the technology will form the basis for YPB to commence production of microparticle barcodes from proprietary polymer nanocomposites, in order to authenticate various manufactured goods.

The company says its latest innovation is on course to do just that.

YPB’s beta ProtectCode smartphone authentication app can reliably scan for, and confirm, the presence of “covert tracer” and is then able to confirm the digital identity as part of a highly secure two-factor authentication process.

https://www.youtube.com/watch?v=0UHLsRzvg6I

YPB has confirmed that it plans to carry out further development work of the code-reading smartphone app to allow a commercial release later this year and will primarily involve software development to capture a broad range of smartphone brands and models.

The commercial release of the first generation of ProtectCode is due for release in the second half of this year and will feature “tracer-infused QR codes” as standard. The second-generation version is due to be completed sometime next year with YPB confirming that its 2.0 version will be built on the Motif Micro platform, resulting in a “secure, covert serialisation solution independent of QR codes” – a feature that is particularly attractive to premium brands.

Authenticating medical cannabis

One industry that’s been identified as having a key need for item-level authentication is medical cannabis.

In June this year, YPB signed a three-year master supply agreement with Namaste Technologies, an emergent cannabis producer in Canada, which will see the two companies working together to leverage Namaste’s suppliers across the global cannabis industry and particularly those accessing Namaste’s large and growing e-commerce customer base.

YPB says the project is likely to be a “major revenue contributor” to its balance sheet in excess of A$1 million per year, with Namaste agreeing to make an investment in YPB as part of the deal.

If YPB can develop a secure and reliable method for smartphones to help solve the existing issues facing manufacturers and brands, the solution “is so highly prized due to the almost unlimited opportunity for universal, mass market application,” according to YPB.

“I cannot overemphasise the significance of a highly secure smartphone driven anti-counterfeit solution to YPB. We have rapidly combined expertise in material science, software engineering and the security industry to develop an IP-protected, world-beating secure serialisation solution that can be read with just an unmodified smartphone,” said John Houston, executive chairman of YTB Group.

“The commercial prospects of this breakthrough are enormous, and we are intent on converting potential to tangible shareholder value as quickly as possible,” said Mr Houston.

News of YPB potentially unearthing the “holy grail” of the anti-counterfeit industry sent its shares 84% higher by the start of afternoon trade and helped the stock to reach its highest level since March, at $0.035 per share.