Micro-Optics Partnership Drives New Security Threads for Banknotes

Earlier this year, Oberthur Fiduciaire announced the acquisition of a 65.5% stake in Rolling Optics. The Swedish-based company uses micro-lens patterns to create 3D effects in film, and its technology already underpins some of the existing micro-optics security features on the market (see CN February 2023).

Oberthur Fiduciaire, meanwhile, has launched a slew of new security features in recent years, following its acquisition of the IP of Arjowiggins, and will shortly be launching a new product – Anima™ – that is the result of its partnership with Rolling Optics.

Currency News™ spoke to Thomas Savare, CEO of Oberthur Fiduciaire (OF), and then to Axel Lundvall, Rolling Optics’ founder, Vice President and Director Hi-Security, about what the acquisition means for both companies, and how it will help in OF’s long-term ambitions in the currency market.

Q: You now have a majority stake in Rolling Optics (RO). What was the logic/intention behind this acquisition?

TS: RO has developed extensive know how and IP portfolio around micro-lens technology. The primary intent is to complement our range of offerings in the premium thread and foil segment to the banknote market. Beside our Pulsar™ and Relief™ features, their technology will allow us to offer to our customers the widest range of threads and foils.

Q: What are the results of the investment?

TS: OF and RO have been actively cooperating, since May, to develop a new high security thread based on RO’s technology, for which we use the internal code name Anima™ for the time being. It is a premium thread offering spectacular movement. It is available in most colours, in widths between 3mm and 6mm and could include stunning animation effects.

Q: How does this new feature fit into your portfolio?

TS: It completes our premium thread offering. Relief offers unique 3D effects combined with colour shifting liquid crystals. Pulsar, based on micro-optic technology, offers optically variable images. Anima will occupy the moving/changing images segment.

Q: How does it differ from other comparable technologies from competitors?

TS: It differs in many ways. One difference is the ability to push the customisation to a great level by designing specific threads with customised design elements combined with a wide range of optical effects and a broad choice of colour hues. One other difference is the ability of generating animation effects.

Q: You acquired IP in security features from Arjowiggins/VHP, who used to work in partnership with Hueck Folien. Did your relationship with HF continue after that acquisition?

TS: Yes, both Arjowiggins’ IP portfolio and the Research Centre near Lyon were part of that acquisition. Since then we have kept the initial team and expanded the R&D Team. Hueck Folien was a partner for Oberthur Fiduciaire even before the acquisition of VHP. We do keep a strong relationship.

Q: How important do you see having ownership of your own features and development pipeline to the success of OF?

TS: As of today, the value chain of our industry has shifted. The shift globally has been to the security features, and especially to high security threads. It is essential for our future to be actively present in this segment with innovative products.

We must also develop, own and offer the latest available technologies to our customers, in order to be ahead of the counterfeiters and the competition.

Q: You are making your mark with threads. But what about surface applied optically variable features. Do you have ambitions in that direction?

TS: Surface applied optically variable features are certainly very attractive visually. They are however expensive to produce and transfer, thus limiting the opportunities to select them.

But we will certainly be active in this segment and are already developing surface applied solutions. We are particularly focusing on the development of cost effective production processes, in order to offer price-attractive surface applied propositions to our customers.

While doing so, our primary focus is on high security thread, which remains the leading segment, a proven feature with many opportunities for development and innovation still.

Q: What is your policy for licencing your features to other papermakers/printers?

TS: Our policy is very clear and straightforward: our products are available to the market. We have developed a licensing model which can be applied to papermakers and printers. We are not locking our clients in. If they wish to use one of our products, it is available through us or other licensed / qualified suppliers.

Q: There is an argument that the focus on visible security in banknotes is misplaced, and Level 2 and 3 features are more important. Can you comment?

TS: We develop mainly Level 1 features. These are indispensable to secure the banknote, to create trust with the general public, the end user. The end user has to make a very quick decision whether the banknote is genuine or not. Meantime Level 2 and 3 features are solely dedicated to those equipped with tools or sophisticated machines.

Q: In a similar vein, some argue that the issue for cash isn’t security, but accessibility and efficiency. What can OF, as a printer and substrate/feature supplier, do to take forward those requirements?

TS: As a global supplier for paper, high security threads and banknotes, we deliver high quality products to meet the security expectations of our clients in the most efficient way. Access to cash is done mainly via ATMs. We also develop security systems within Oberthur Cash Protection to deter attacks and offer higher availability on these machines.

In addition, we offer a solution for extending effectively the lifetime of banknotes by varnishing them with our Ultra+ varnish and by using our Bioguard solution. Both solutions contribute to a longer lifetime and thus a clean note policy. In addition, Bioguard prevents the banknote from fungal, viral or bacterial damage.

Q: There is much talk about ‘phygital’, combining digital functionality with physical documents. Do you see this as potentially advantageous for banknotes?

TS: This has been around for more than 20 years. Technologies to incorporate digital components on banknotes are available. The real challenge is to find a real use case for a feature that inevitably would increase cost many folds.

Q: OF has expanded considerably in recent years and is now one of the leading integrated banknote suppliers. So what and where next for the company?

TS: Our strategy is clearly centred around bringing innovation to the global banknote market. The investment in Rolling Optics is very much part of that. In a market that is still in large overcapacity, differentiation through innovation will be ever more important.

Our R&D efforts target not only thread and security features, but also paper and banknote durability, sanitary protection of the general public and cash-handling staff, and overall environmental impact of banknote production and disposal.

Q: And now turning to Axel Lundvall, what does the acquisition mean for RO? And how will you fit into OF?

AL: To have OF as a majority owner means primarily that we will be able to set out for a more long term strategy in our business.

Our competences and manufacturing capabilities within the micro-optics technology matches very well with what OF can convert and catalyse to bring high end micro-optical security components to the currency market, notwithstanding privileged interactions with central banks, through OF’s ongoing access to its wide base of long-term banknote customers.

Q: How have you overcome the IP of similar micro-optics technologies on the market?

AL: Rolling Optics has been developing its own micro-optical technology since 2002 and has around 50 granted patents protecting its own technology. When launching a product we always make sure we have freedom to operate by conducting an extensive and tailored freedom-to-operate analysis.

Q: You offer features for brand protection as well as currency. How do you differentiate the two?

AL: The technical field of micro-optics is very broad; optical effects and artwork could be perceived very differently.

When distinguishing between products we have to take primarily two things into account; 1) the visual perception should not be similar, and 2) the technology must be differentiated so that reverse engineering and harvesting is avoided.

To do this, we have clearly defined and technologically separated products as well as design rules and rigorous control mechanisms to make sure that nothing slips though the net. Our partners within the currency business have full insight into this process and provide all their expertise to guarantee that their clients´ interests within currency are protected.