On April 22, federal authorities searched a trash receptacle from Dutschke's Tupelo home and found, among other items, different types of yellow paper, address labels and a dust mask.

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An additional feature of the software is My Art for customizing photos through various templates including collages, greeting cards, calendars, stickers, disc labels and paper crafts.

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It is supplying customers with change-of-address labels to attach to their paper bills, so that in future they will be sent to PayMyBills, which will put them online using a high-speed scanner.

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Then there are the quality-control issues: On one occasion "a Spanish producer printed our labels on old, horrible carbon paper, " recalls Hughes.

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Such smart paper could be used for banknotes, legal documents, tickets and smart labels, the team said.

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