HOLOGRAM FIRM GIVES FORGERS BAD IMAGE.

Byline: Bert Caldwell The Spokesman-Review

Counterfeiting is good business for New Light Industries Ltd.

Not that the West Plains company runs off its own $20 bills.

Instead, holograms produced with its technology protect everything from credit cards to driver's licenses.

Owner Steve McGrew has worked with the shiny, three-dimensional images since the 1970s, when he was a graduate student at the University of Washington. Turns out holograms provide some solutions to problems he was trying to solve in wave and particle theory.

More practically, he said, state-of-the-art holograms imprinted on identification, licenses and other documents help discourage forgers.

But staying ahead of the imitators is not easy. Anyone can buy a hologram, or the equipment to make one, so experts like McGrew are constantly fine-tuning a process that already produces an image with 50,000 lines to the inch.

By comparison, a typical newspaper photograph has about 100 lines to the inch.

New Light Industries makes equipment that produces holograms. Besides refining the technology, McGrew said he also is trying to make holograms affordable for small customers who want a relatively small number of copies on, for example, a letterhead.

The search goes on.

In a laboratory behind the company offices, a bench holds a partially assembled piece of equipment called a defractive image setter.

When completed, a series of lenses and gratings will expose photosensitive plates with laser light copying images stored in computers.

Each plate is treated chemically, then coated with nickel, which picks up the image. The paper-thin metal ``shim'' is peeled off and wrapped around a cylinder.

Holograms are produced by pressing heated, thin plastic against the cylinder, which transfers the image to the plastic. The heat and pressure can destroy the shim in less than an hour.

But New Light has developed a new method, called ultraviolet embossing, that uses plastic coated with liquid resin.

The light hardens the resin as it coats the nickel cylinder, simultaneously bonding the resin and plastic.

Combined with another innovation, an in-line metalizer, McGrew said the result is a virtual replica of the original.

And the shims last far longer.

McGrew said New Light sells its equipment worldwide. China, where he has done business for 12 years, is a major market, as is India and the United States.

``It kind of depends on the counterfeiters,'' McGrew said. ``They can help us quite a lot.''

The most sophisticated machine, the image setter, will sell for $125,000.

At a peak output of 50 machines per year - a level he predicts is still more than a year away - McGrew figures New Light Industries will probably hire about 14 employees to join the six on the payroll now.

Local subcontractors who make some components may also add positions, he said, and the company is also tapping talent on area campuses.

``There's a lot of resources here,'' said McGrew, 51, who grew up in Pullman and Cheney before graduating from Eastern Washington University and moving on to UW.

From Seattle, McGrew went to Amsterdam, where a group of friends were trying to start a company based on hologram technology. McGrew was the chief engineer.

Although the company failed, he received his first patent, for a holographic stereogram, which produces a three-dimensional image by superimposing several images of the same subject taken from slightly different angles.

Other patents followed, as did stints with other companies that eventually went under.

In 1981, McGrew founded Light Impressions. At its peak, the company had 20 employees and did about $5 million a year from its Santa Cruz, Calif., offices.

An offshoot, Light Impressions International, continues to sell holograms and holographic equipment from London. McGrew is the majority owner and sits on the board of directors.

The domestic operation foundered when a potentially lucrative contract with the Upper Deck Co. collapsed.

McGrew is suing the maker of baseball cards for patent infringement.

But it was the 1989 earthquake, not business difficulties, that ended McGrew's California stay. The epicenter was only a few miles away, and the rumbler split his home in two.

``As soon as I was able to build a house, I moved here,'' he said.

While New Light Industries prepares its new equipment for market, the company has been able to draw on government grants, as well as revenues from the sale of a genetic algorithm, a mathematical formula capable of solving problems of phenomenal complexity.

Exxon has bought a copy, as have stock analysts in Singapore. McGrew said almost one-half the buyers are using the algorithm, written in-house, to predict the stock market.

McGrew said he also has tinkered with virtual-reality eyeglasses - ``My vision for that is a wearable computer'' - but doubts he will have time to develop that idea.

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PHOTO Steve McGrew's company, New Light Industries, creates holograms for licenses and credit cards.

Associated Press