The following interview originally appeared in the October 2010 issue of Authentication News:

Tal Gilat, Inksure’s New CEO - In August, Authentication News ran a company profile on Inksure, the US-Israeli company that is making inroads in to the security printing and product protection market with its machine-readable spectral fingerprint taggants. In early 2010, the company appointed a new President and CEO, Tal Gilat. As he has now settled in Authentication News® interviewed him to learn what he brings to the company and where he sees its future.

Authentication News: Tal, what is your background? When did you join Inksure and what is your background?

Tal Gilat: I was born and educated to degree level in Israel. I worked in business development at Intel Corporation, before pursuing my MBA at Columbia Business School in New York. In 1999, I co-founded and headed a web security firm called Kavado, which raised over $18m in funding from 3i and Bank of America. We became a global leader in web application security, ranking number one globally in web application firewall sales and number two in web security scanners sales, and in 2004 sold to Protegrity Corp, following which I joined M-Systems (NASDAQ:FLSH). I headed the Enterprise business which grew from limited sales to capturing over 50% of the global enterprise drivesmarket.

The company was then bought by SanDisk (NASDQ:SNDK) and I headed SanDisk Enterprise Business in North America. After a few years at SanDisk, I looked for a new challenge. I was drawn to InkSure because it is a high-end R&D company with world-leading technology and numerous global successes. In turn, InkSure was looking for a leader with international technology-sector experience to bring the company to the next level. So in March of this year I joined Inksure as President and CEO.

AN: So what was your first priority on joining the company?

TG: To thoroughly understand the Authentication market! I spent a lot of time with our customers and with their customers - that is, end users. I attended relevant conferences and met with potential customers and distribution partners. The first conference that I attended was the Tax Stamp Forum event held earlier this year in London. It was an excellent venue to meet and share insights with the market’s movers and shakers. Now I have a clear understanding of what Inksure can offer and where we should be positioning ourselves.

AN: I’d like to come back to that… but staying with the corporate side: the company is headquartered in NY - where is the plant?

TG: We’re headquartered in New York City as we’re a public company trading in the US. But our plant, our research & development center, is in Israel. We have a highly experienced R&D team comprised of PhD scientists, software and electro-optical engineers who have been developing brand protection and authentication solutions for over a decade. This global presence enables us to effectively serve North American as well as European & Asian customers.

AN: So how do you see the strengths in your product?

TG: We provide forensic-level machine readable taggants that can be incorporated in inks and holograms. We also provide the readers, both handheld and automatic in-line production readers, giving our customers several options to suit their specific needs. Our technology depends on spectral analysis of the taggant, and we have numerous taggant materials so we can provide unique codes to specific customers. In addition, we perform in-house calibration of every reader to establish a very high level of security which provides instant authentication of the presence of the correct taggant. (Ed: See the August 2010 issue - Vol 16 No 8).

By now, our reader capabilities have been perfected to deliver zero false positive and false negative rates. Although the technology is highly secure and reliable, the cost per protected item is low and the integration process is very easy. We integrate seamlessly in the current processes of the incumbent manufacturers of inks or holograms per a specific project. One critical factor is that it is extremely difficult to reverse engineer the taggant and matched reader as evidenced by our success cases over the past 11 years.

AN: So having spent time with customers and end users, what do you now see as Inksure’s target markets?

TG: The Authentication market is becoming more and more aware that overt features are subject to interpretation by the inspector and are relatively easy to fake in a way that passes the inspector level of verification. There is a clear need to complement overt features with a forensic level in-field authentication of covert features. This is our added value in the authentication market. Our target markets are bank notes, tax stamps, high security documents, pharmaceuticals, consumer goods etc. Our taggants are now implemented on tens of billions of items and security documents annually. In most cases our clients are the solution providers, the integrators, because they’re the ones that add our taggant - whether in ink or on the hologram - onto the customer’s authentication solutions which combines overt and covert features.

A recent success for us has been our work with the Ukrainian company EDAPS for the latest version of the Ukrainian tax stamp. The Ukrainian government has reported that in the first year of this new tax stamp, which has our taggant in the hologram, tax revenues have gone up over $200m, and they no longer see high-end tax stamps counterfeits. There is no more visual guesswork, identification of the stamps is computerized and is by far more accurate than before.

AN: So let’s return to market positioning; where do you see Inksure in the supply chain?
TG:  We offer our technology both to integrators and end users by providing unique high-end covert features as well as turnkey brand protection solution. My top priority is to develop a strategy that will effectively work with both channel and end-users globally and then make sure we deliver on it. Our focus is the integrators which add our covert feature to their existing overt/cover solution.  We have identified four key integrator profiles:  security integrators, security printers, hologram manufacturers and security label converters.

AN: So what does the future hold for Inksure?

TG: We see the need to couple covert security with track & trace capabilities. We’re now developing a reader that will provide our forensic level authentication via taggant-based invisible barcodes. This combination allows us to analyse with one click whether the item is counterfeited, diverted, manufactured by a third shift operation or even an expired product that should not be in circulation. We expect to release the product early next year.

AN: End-users now recognise that an unavoidable cost in using a covert authentication element is the cost of readers and training to use them – how do you manage this?

TG: We have several kinds of readers ranging from pocket size to more robust supervisor-level readers. The benefit of InkSure's line of readers is that they can be used with almost any of the InkSure product lines. This empowers the customers to choose the reader that best suits their needs and gives them the best ROI.

We can also install readers on production lines, high speed document counting or sorting machines. One use of the automatic readers is to check that properly – for quality control or tax mark monitoring; another use is to verify the authenticity of the item such as a banknote or check.

For field inspection we have a pocket-sized reader, which gives a simple yes/no response, and for a more detailed analysis, a handheld reader with an LCD screen which provides detailed information on the taggant. These can also be integrated in to barcode readers and the like. So I’m confident that going forward we have the right products available and the right products in development to deliver a workable and affordable system for covert authentication to customers.

Our involvement in the Ukrainian tax stamp project shows how well we can integrate and enhance other security features. I’m very positive about our future!