You will need to peel the label off the battery (exposing the metal casing) to use it with the Box. The coil in the Box needs to make electrical contact with the battery. Removing the battery label makes this possible. The battery will not work in the Box otherwise.
Please be careful if you use a sharp tool to cut the label (do not dent or cut through the metallic battery casing). Most battery labels simply peel off cleanly, but some manufacturers use a glue underneath the label. You can clean this off using a product such as Goo Gone; WD-40 also works, just spray on and rub the softened glue off with a paper towel, exposing the metal battery casing. A pencil eraser may be used to remove any remaining residue.
Incidentally, the paper ring on the positive end of the battery does not much matter. Magic-Flight leaves them on only for cosmetic reasons and removes them if they ever come loose or get in the way.
Also, it is very important to NOT let the batteries get too hot. It is okay for them to get warm (when charging or in use), but hot is not good—it shortens the life of the battery. ("Hot" is when you would not want to hold the battery in your hand—hotter than hot coffee). Magic-Flight strongly recommends that Launch Box users get into the habit of pulling the battery back after each draw. This keeps the battery cooler and prevents accidental loss of the load and the charge.
It is essential that you make sure that the tips of your peeled batteries do not come into contact with any metallic items—this can result in accidentally making a connection between the positive nipple and the negative casing. If such contact occurs, a charged battery will quickly overheat. Once you have peeled a battery, you must be careful to store and handle it properly. The rubber caps shipped with the Box can be used to prevent this problem. Storing batteries side by side in a case is fine. All charged batteries must be either in their case or have an endcap on the nipple end to protect them from overheating (ie, at all times when not in use in the Box).