Brand Protection Game: The Results

We had a great response to last week’s brand protection game! Our goal for this was to simply see how companies are currently handling the issue of counterfeiting.

Without further ado, the results:

1.) Has your company seen a rise in counterfeit products or websites? 

  • 100% of respondents said yes

2.) Does your company have a dedicated brand protection department?

  • 50% of respondents said yes
  • 50% of respondents said no

3.) Currently, how much of your company’s budget is allocated towards brand protection?

  • 50% of respondents said 0%
  • 20% of respondents said 25%
  • 17% of respondents said 50%
  • 0 respondents said 75% or more
  • In addition to this several respondents said “5%” or “unknown”

4.) Does your company engage in searching or tracking the web for counterfeit websites?

  • 33% of respondents said yes
  • 66% of respondents said no

5.) Has your company done anything to engage it’s consumers in the fight against counterfeit products and websites?

  • 33% of respondents said yes
  • 66% of respondents said no

The main takeaway we found from this game was that despite the fact every participant has seen a rise in counterfeit products and websites, companies are still dragging their feet when it comes to protecting their consumers. 

What do you think companies could do to help curb this growing problem? Tell us in the comments!

For more information on how AuthentiGuard can help brand owners and consumers alike, please visit www.AuthentiGuard.com 

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The Brand Protection Game!

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Every major brand puts in some effort to fight counterfeit products and websites. Take our quick survey to see where you and your company rate.

Click here to take our survey!

The results will be posted here, the DSS blog, next week!

Disclaimer: all information will remain anonymous. This survey is strictly for fun and to see where you and your company stock up against the rest of the brand protection community.

For more information on how AuthentiGuard can help brand owners and consumers alike, please visit www.AuthentiGuard.com 

DSS Earnings Call Scheduled for Thursday, November 15th at 4:30pm EST

November 13, Rochester, NY — Document Security Systems, Inc. (NYSE MKT: DSS) which announced its  preliminary third quarter earnings on October 22, 2012, will have an earnings conference call to discuss the results with investors at 4:30 pm EST on November 15, 2012. The earnings call was originally scheduled for November 13. As highlighted in the press release on October 22, 2012, and detailed in the Form 10-Q filed today with the SEC, DSS had strong third quarter results, including a 15 percent increase in revenues and a 20 percent increase in gross profits. Moreover, core operating profit, as measured by adjusted EBITDA, less merger costs, was at a near break-even level, a significant financial milestone for the company.

During the call, DSS will also provide an update on its pending merger with Lexington Technology Group, Inc. (“Lexington”), announced on October 2, 2012.

CONFERENCE CALL

DSS Management will host a teleconference and webcast on November 15, at 4:30 p.m. ET to discuss the results with the investment community:

Time: 4:30 p.m. ET
Date: Thursday, November 15, 2012
Investor Dial In (Toll Free):  877-407-9205
Investor Dial In (International):  201-689-8054

Live Webcast URL: http://www.investorcalendar.com/IC/CEPage.asp?ID=170041

A replay of the teleconference will be available until November 29, 2012, which can be accessed by dialing (877)660-6853 within the United States or (201)612-7415 if calling internationally. Please enter account #286 and conference ID #402581 to access the replay.

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ABOUT DOCUMENT SECURITY SYSTEMS:

Document Security Systems, Inc. (NYSE MKT: DSS) is a leader in anti-counterfeit, authentication, and mass-serialization technologies, providing security solutions to corporations, governments, and financial institutions. DSS security programs are designed to protect against product diversion, counterfeit, theft, and other costly and damaging occurrences. From risk analysis and vulnerability assessment, to systems integration and monitoring, DSS offers the advanced tools and knowledge base needed to protect the world’s most valuable and at-risk brands. More information can be found at their website, www.dsssecure.com

Follow Document Security Systems, Inc. on LinkedInFacebookTwitter and WordPress

ABOUT LEXINGTON TECHNOLOGY GROUP:

Lexington Technology Group invests both expertise and capital in the development and monetization of pioneering technologies. Lexington’s goal is to catalyze technology development within its investments and to reward those who take on the risks of innovation. The enterprise invests in companies that have developed important innovations but have not been fairly rewarded by the marketplace, where shareholder value depends on the company’s ability to successfully monetize patented technologies. Its efforts contribute to an intellectual property market in which inventors are better able to profit from their inventions. More information is available at www.lex-tg.com.

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Important Additional Information Will Be Filed with the SEC

This press release does not constitute an offer to sell or the solicitation of an offer to buy any securities of DSS, or Lexington Technology Group or the solicitation of any vote or approval. In connection with the proposed transaction, DSS will file with the SEC a Registration Statement on Form S-4 containing a proxy statement/prospectus. The proxy statement/prospectus will contain important information about DSS, Merger Sub, Lexington Technology Group, the transaction and related matters. DSS will mail or otherwise deliver the proxy statement/prospectus to its stockholders and the stockholders of Lexington Technology Group when it becomes available. Investors and security holders of DSS and Lexington Technology Group are urged to read carefully the proxy statement/prospectus relating to the Merger (including any amendments or supplements thereto) in its entirety when it is available, because it will contain important information about the proposed transaction.

Investors and security holders of DSS will be able to obtain free copies of the proxy statement/prospectus for the proposed Merger (when it is available) and other documents filed with the SEC by DSS through the website maintained by the SEC at http://www.sec.gov. In addition, investors and security holders of DSS and Lexington Technology Group will be able to obtain free copies of the proxy statement/prospectus for the proposed Merger (when it is available) by contacting Document Security Systems, Inc, Attn.: Philip Jones, Chief Financial Officer, at First Federal Plaza, 28 East Main Street, Suite 1525, Rochester, New York 14614, or by e-mail at ir@dsssecure.com. Investors and security holders of Lexington Technology Group will also be able to obtain free copies of the proxy statement/prospectus for the Merger (when it is available) by contacting Lexington Technology Group Technology Group, Inc., Attn.: Jennifer Buckley, 375 Park Avenue 26th Floor, New York, NY 10152, or by e-mail at jen@lex-tg.com.

DSS and Lexington Technology Group, and their respective directors and certain of their executive officers, may be deemed to be participants in the solicitation of proxies in respect of the transactions contemplated by the agreement between DSS, Merger Sub and Lexington Technology Group. Information regarding DSS’s directors and executive officers is contained in DSS’s Definitive Proxy Statement on Schedule 14A prepared in connection with its 2012 Annual Meeting of Stockholders, which was filed with the SEC on April 18, 2012. Information regarding Lexington Technology Group’s directors and officers and a more complete description of the interests of DSS’s directors and officers in the proposed transaction will be available in the proxy statement/prospectus that will be filed by DSS with the SEC in connection with the proposed transaction.

Cautionary Note Regarding Forward-Looking Statements

Statements in this press release regarding the proposed transaction between DSS and Lexington Technology Group; the expected timetable for completing the transaction; the potential value created by the proposed Merger for DSS’s and Lexington Technology Group’s stockholders; the potential of the combined companies’ technology platform; our respective or combined ability to raise capital to fund our combined operations and business plan; the continued listing of DSS’s or the combined company’s securities on the NYSE MKT; market acceptance of DSS products and services; our collective ability to maintain or protect our intellectual property rights through litigation or otherwise; Lexington Technology Group’s limited operating history, competition from other industry competitors with greater market presence and financial resources than those of DSS’s; our ability to license and monetize the patents owned by Lexington Technology Group; potential new legislation or regulation related to enforcing patents; the complexity and costly nature of acquiring patent or other intellectual property assets; the combined company’s management and board of directors; and any other statements about DSS’ or Lexington Technology Group’s management teams’ future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Any statements that are not statements of historical fact (including statements containing the words “believes,” “plans,” “could,” “anticipates,” “expects,” “estimates,” “plans,” “should,” “target,” “will,” “would” and similar expressions) should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including: the risk that DSS and Lexington Technology Group may not be able to complete the proposed transaction; the inability to realize the potential value created by the proposed Merger for DSS’s and Lexington Technology Group’s stockholders; our respective or combined inability to raise capital to fund our combined operations and business plan; DSS’s or the combined company’s inability to maintain the listing of our securities on the NYSE MKT; the potential lack of market acceptance of DSS’s products and services; our collective inability to protect our intellectual property rights through litigation or otherwise; competition from other industry competitors with greater market presence and financial resources than those of DSS’s; our inability to license and monetize the patents owned by Lexington Technology Group; and other risks and uncertainties more fully described in DSS’s Annual Report on Form 10-K for the year ended December 31, 2011 and its Quarterly Reports on Form 10-Q for the quarters ended March 31, 2012, June 30, 2012, and September 30, 2012 each as filed with the SEC, as well as the other filings that DSS makes with the SEC. Investors and stockholders are also urged to read the risk factors set forth in the proxy statement/prospectus carefully when they are available.

 

In addition, the statements in this press release reflect our expectations and beliefs as of the date of this release. We anticipate that subsequent events and developments will cause our expectations and beliefs to change. However, while we may elect to update these forward-looking statements publicly at some point in the future, we specifically disclaim any obligation to do so, whether as a result of new information, future events or otherwise. These forward-looking statements should not be relied upon as representing our views as of any date after the date of this release.

 ______________________

Investor Relations for Document Security Systems:
CenturyIR.com 212-776-1030

For further information on Lexington Technology Group please contact:

Jamie Diaferia
Infinite PR
212-687-0935
jdiaferia@infinitepr.com

ipCapital Group, Inc. Assesses Document Security Systems, Inc. Technology and IP Licensing Market Potential at $245 Million

ROCHESTER, N.Y., May 15, 2012 — Document Security Systems, Inc. (NYSE Amex: DSS; “DSS”), a leading developer and integrator of cloud computing data security, Radio Frequency Identification (“RFID”) systems and security printing technologies which prevent counterfeiting, product diversion and brand fraud, reported today that ipCapital Group, Inc. (“ipCG”) has completed a high-level assessment of DSS’ technology and intellectual property (“IP”) portfolio and has valued the licensing market potential at approximately $245 million.

ipCG, which is located in Williston, Vermont, is an intellectual property consulting firm that has been serving clients ranging  from early development stage to Fortune 500 status since 1998.  ipCG consultants use their strong foundations in business and IP strategy to develop models that address and estimate potential business, technology, and IP opportunities.

Chairman of the board, Robert Fagenson commented, “In response to continued requests from shareholders and the investment community, we asked John Cronin and his ipCapital Group, as part of their consulting agreement with DSS, to produce an early stage evaluation that we could share with the public of certain technologies of ours, as they apply to commercial uses that could become revenue drivers for DSS in the future.  Our investor base clearly has a continuing interest to see how the intellectual property of DSS can be utilized and monetized in commerce and industry and that was one of the principle reasons we engaged ipCapital and invited John to join the DSS Board earlier this year.”

ipCG’s high-level value assessment of DSS’ technology and IP licensing opportunity considers applications in the following key markets: security printing, cloud storage, cloud security services, and email security.  The $245 million value estimate represents the present value of potential future licensing revenue across these key markets over the next ten years, assuming a conservative market penetration forecast, industry average royalty rates applied to top-line market revenue, and availability of financial investment required to drive DSS’ continued technology and IP development and licensing efforts.

ipCG noted that its value assessment of DSS’ licensing opportunity considers only one of the several potential value drivers for technology and IP described below, the sum of which would be included in a full analysis of DSS’ potential technology and IP value:

  1. 1. Support competitive advantage: A strong IP position surrounding a differentiated technology solution in the market can support first-mover advantage, higher margins, and market share.  ipCG’s current assessment does not include an analysis of how DSS’ IP could support competitive advantage for its products in a well-capitalized operation.
  2. 2. Define market boundaries: A strong IP position can allow a company to effectively assert its property rights against other market players.  ipCG’s current assessment does not include any analysis of the pending coupons.com litigation or any infringement, misappropriation, damages, or any other legal analysis.
  3. 3. Generate licensing revenue: A strong IP position that includes patents, pending patent applications, trade secrets, and technology know-how can support licensing transactions that drive technology adoption.  The going-forward technology and IP licensing opportunity for DSS is the focus of ipCG’s current assessment.
  4. 4. Gain transactional leverage: A strong IP position can allow a company to negotiate favorable business terms and ownership in partnership relationships including joint ventures, reseller relationships, spin-outs, etc.  ipCG’s current assessment does not include any such business opportunities for DSS.
  5. 5. Support brand: A strong IP position that includes trademarks and patent-protected technology and products can support a positive brand perception in the market that helps drive sales.  ipCG’s current assessment does not include this component of potential value for DSS.
  6. 6. Shareholder value: A well-capitalized company that has the opportunity to leverage its technology and IP strategically in the market using one or more of the value drivers described above ultimately creates strong shareholder value.  ipCG’s current assessment focuses on how DSS can support shareholder value through licensing.

John Cronin, a member of the DSS board of directors and Managing Director and Chairman of ipCG, commented: “DSS’s core security printing technologies combined with continued technology and IP development that transcends into the digital world is expanding the market opportunity for DSS.  ipCG’s recent assessment helps size the potential opportunity DSS is targeting through licensing relationships with key industry players that will drive technology commercialization and adoption of solutions to very important problems.”

CEO Patrick White stated, “It’s important to note that the ipCapital Group’s assessment is an indication of just one value driver [see 3 above] of DSS intellectual property, and supports our belief in the potential of our technologies to bolster long-term shareholder value.  As we have indicated, DSS has embarked on an aggressive IP development program in 2012, and has recently identified approximately130 concepts and ideas involving new and offshoot technologies, many of which may ultimately result in new patent applications.  IP development will continue to be a significant focus of DSS moving forward as we strive to position DSS at the forefront of security printing while also moving our technologies to cloud computing data security applications.”

ipCG’s Managing Director, Chairman, and part owner, John Cronin, was appointed as a member of the Board of Directors of DSS in February, 2012.

About DSS (Document Security Systems, Inc.):

DSS provides counterfeit prevention, RFID tracking and comprehensive brand and digital information protection solutions to corporations, governments, and financial institutions around the world.  DSS develops and manufactures secure printed products such as labels, packaging, ID Cards, RFID Cards and tags and documents using their AuthentiGuard line of patented optical deterrent and authentication technologies.  The company also provides cloud computing security services, provides disaster recovery backup, writes custom software solutions, and integrates track and trace technologies.

DSS is comprised of four operating units:

DSS Plastics Group – Custom RFID and Plastic ID Card Solutions (Brisbane, CA) PH: 1-415-585-9600

DSS Packaging Group – Commercial and Secure Packaging Manufacturing (Victor, NY) PH:  585-924-8760

DSS Printing Group – Commercial and Security Printing Manufacturing (Rochester, NY) PH: 585-341-3100

DSS Digital Group – Cloud Computing Services and Secure Digital/Internet Documents (Rochester, NY) PH: 585-746-6958

For more information on DSS and its subsidiaries, please visit DSSsecure.com.

About ipCapital Group

ipCG is an  IP strategy consulting practice helping clients develop, manage and use their IP effectively to support strategic business objectives. ipCG offers a range of services and proprietary methodologies to help companies throughout the full lifecycle of IP, from creation and strategic management to value extraction. Since 1998, ipCG has worked with numerous Fortune 500, mid-size, and early-stage companies in a wide variety of industries.

ipCG has been serving clients that range from early stage to Fortune 500 since 1998. Its interdisciplinary team trained in business, law, marketing, and product development provides a systematic and comprehensive view of the full lifecycle of IP, from creation to value extraction. ipCG maximizes business results for clients that seek to develop and execute IP strategies, strengthen and monetize IP portfolios, and establish and implement Intellectual Asset Management (IAM) practices. For more information, visit www.ipcg.com.

The high-level assessment performed by ipCG is not a legal or financial valuation of DSS. The intention of the assessment was to support DSS’ decision-making relative to various business strategies. The conclusions, estimates, and observations contained in this press release are solely statements of opinion and not statements of fact or recommendations to purchase, hold or sell any securities or make any investment decision. ipCG and its affiliates do not guarantee the accuracy, adequacy or completeness of any information herein and shall not be responsible for any errors or omissions.  Actual results will differ due to factors such as shifts in market demand, DSS’s success in completing technology and IP licensing transactions, technological shifts, changes in the IP environment, DSS’s ability to continue IP development, and other variables.

Investor Relations:
Nicole Acton
585-325-3610
Email: ir@documentsecurity.com

Document Security Systems to Expand IP Portfolio in Cloud Computing, Mobile Applications, and Database Management

ROCHESTER, N.Y., February 27, 2012 — Document Security Systems, Inc. (NYSE Amex: DSS; “DSS”), a leading developer and integrator of cloud computing data security and security printing technologies which prevent counterfeiting and brand fraud, announced today that it has entered into a new agreement with ipCapital Group, Inc. (ipCG), a leading intellectual property (IP) strategy firm, to drive a strategic expansion of its IP portfolio.

Previously ipCG worked on an analysis of DSS’s unique intellectual property landscape. This intelligence has defined new areas for expansion of their IP portfolio.  Under this new agreement, ipCG will now provide ongoing IP management support and facilitate a series of invention sessions throughout 2012 using its proprietary tools and techniques for invention and IP strengthening.

John Cronin, a recently elected member of the DSS board of directors and Managing Director and Chairman of ipCapital Group, commented, “Upon analysis of the unique DSS patent landscape, we see significant market opportunity to expand DSS’s IP portfolio. DSS’s unique combination of security printing technologies that transcend into the digital world through cloud computing, mobile applications, and database management creates considerably large solution building opportunities across all areas of commerce and industry.  Increasing global awareness of data security breaches as well as fraud reconfirms our belief that we can capitalize and expand the exceptional value from DSS’s game changing patents.”

Patrick White, CEO of DSS commented, “We are looking forward to working with ipCapital Group to continue developing and expanding our patent portfolio into strategic growth areas such as data security, cloud computing and digital delivery systems.  With the expert guidance of ipCapital Group, we can focus the expansion directly into these specific market areas and more efficiently capitalize on our patents’ value.”

About DSS (Document Security Systems, Inc.):

DSS provides counterfeit prevention and comprehensive brand and digital information protection solutions to corporations, governments, and financial institutions around the world. DSS develops and manufactures products and services containing patented and patent pending optical deterrent technologies that help prevent counterfeiting and brand fraud from the use of the most advanced scanners and copiers in the market. DSS’s customized solutions are designed to protect against product diversion, counterfeit, and other costly and damaging events. In addition, The Company owns numerous patented and patent-pending technologies and products.

For more information on DSS and its subsidiaries, please visit DSSsecure.com.

Follow Document Security Systems, Inc. on LinkedIn, Facebook, Twitter and WordPress.

About ipCapital Group:

ipCapital Group has been serving clients that range from early stage to Fortune 500 since 1998. Its interdisciplinary team trained in business, law, marketing, and product development provides a systematic and comprehensive view of the full lifecycle of IP, from inception through shareholder value creation. ipCapital Group maximizes business results for clients that seek to develop and execute IP strategies, strengthen and monetize IP portfolios, and establish and implement Intellectual Asset Management (IAM) practices. ipCapital Group has worked with a variety of public companies including VirnetX.  For more information, visit www.ipcg.com.

For more information:

Investor Relations:
Nicole Acton
585-325-3610
Email: ir@documentsecurity.com

Counterfeit Vodka on the Rise – Are you safe?

We’ve all done it – too broke to go out to the bars all night, too bored not to. The only feasible solution is to go to the liquor store and find a bottle of the cheapest vodka on the market and a house party.

Sounds fun, right? Wrong.

An article from the Press Association told a gruesome story of a girl, Lauren Platts, who suffered severe side effects from purchasing cheap vodka. The article stated that the employee of the store she bought it from joked, “It will blind you.” Little did she know, he wasn’t joking.

After consuming about a third of the vodka mixed with lemonade, Platts now two months later, is still having trouble with her eyesight. She states “I’ve been sent home from work because of the vision problems. It’s really scary. I think I might have it for good, but I’m just grateful to be alive.” This problem is not only affecting her ability to work, but affecting her ability to perform routine daily tasks, tasks as simple as crossing the street.

The problem lies with the fact that Platts didn’t just buy cheap vodka, but counterfeit vodka. Bootleggers are using industrial alcohol, compared to traditional agricultural alcohol, mixing it with bleach and a cocktail of other chemicals, and selling it for those desirable low prices.

The end result is a product that is more similar to cleaning fluids and paint stripper than vodka. Counterfeit alcohol has the potential to leave you ill for weeks or in Platt’s case, debilitated.

As news of this growing problem surfaces, counterfeiters are finding an easy way around their falling sales – raise the price. If consumers spend more money on their alcohol, they immediately assume they are buying a product of higher quality. But, all this is really doing, is creating a seemingly endless cycle.

DSS patented Phantom technology would create an easy way for consumers to validate their alcohol purchase. By incorporating this authentication technology into the label, all a consumer would have to do is tilt the bottle, reveal the hidden image, and go home with a clear conscience. Best part of this? Bootleggers won’t be able to easily copy the technology.

For more information on how DSS can help, please visit www.DSSsecure.com

Packaging Fraud Case Study- Refilled Apple iPad and Wine bottles

Earlier today we wrote about the clay iPads that popped up in Canada. As more information has emerged about this situation we have decided to take a closer look into the problem.

A recent article states that someone bought real iPad2’s with cash, removed the iPad from its packaging and in return, replaced it with a perfectly weighted slab of modeling clay. The counterfeiters then resealed the original packaging and returned it to the store. The crime was done so professionally that Apple employees could not tell the difference in packaging or weight and resold the clay to unwitting customers.

Refilling genuine packaging with a fraudulent product is not a new practice. This is something that has been around for years and is evident even more in the wine and beverage industries. For example, in China, there has been a huge problem with people refilling high-end wine bottles with cheap inexpensive wine, tarnishing the validity of the popular wine industry and brand owners. To the average consumer, the packaging looks legitimate therefore, the wine must be as well. However, to those educated in wine, the difference is overwhelming. The problem has grown so quickly that the organizers of wine tastings are taking to smashing the used bottles with a hammer to curb the activity. But unfortunately, the black market prevails as people are offering significant money for empty bottles from anyone who is offering.

DSS sees a clear solution to this problem. Apple needs to include a tangible seal with authentication features and copy deterrence technologies onto their packaging. This frangible seal is a form of adhesive label that is extremely delicate once applied, and when removed it comes apart in layers and pieces. The copy deterrent AuthentiGuard Pantograph 4000 would prevent a counterfeiter from being able to scan the graphics onto a desktop to create or duplicate the seal. Additionally, adding an authentication technology such as AuthentiGuard Phantom or AuthentiGuard Prism would give retailers a quick and simple way of verifying if a seal on a product is genuine. Both of these technologies cannot be duplicated on a copier or scanner and are not easily mimicked.

These simple solutions would greatly help to prevent the emergence of fraudulent product into the supply chain, reducing financial loss to retailers and brand owners as well as reducing liability to brand value should dangerous fake products enter the market. When combined with covert security features on the original label or packaging itself, DSS would create a strong and more secure solution that would benefit everyone but the counterfeiter.

For more information regaurding our technologies, please visit our website; www.DSSsecure.com

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