Are your products being pirated?

Increased outsourcing also makes it difficult to pursue infringers. "[Entrepreneurs] have become much more active players in the global market, but without offices [overseas], they don't have people who can protect their rights everywhere," says Hirschmann.

With more than 60 percent of all fakes originating in China, according to the Bureau of Customs and Border Protection, and the rest in countries as varied as India, Italy and Russia, domestic entrepreneurs often stumble into international disputes they have little hope of winning.

But there is some recourse: Dozens of anti-counterfeiting vendors have mushroomed over the past five years to help entrepreneurs protect their brands. Capolino, for example, turned to Boston-based GenuOne two years ago, when he realized a sole employee checking eBay could no longer keep track of all the fake online auctions. A 7-year-old technology startup, GenuOne scours the internet for unauthorized retailers or obviously fake merchandise. Entrepreneurs once showed little interest in his product, says GenuOne CEO Jeffrey Unger, but now account for about 25 percent of revenue.

GenuOne also makes software applications for supply-chain tracking and security marking technologies added to goods so their authenticity can be checked later. Other companies such as DuPont and 3M make holograms or color-changing labels that can be added to packaging to help customers identify the real thing.

Entrepreneurs are also turning to lawyers and private detectives to help track down counterfeiting rings. A few years ago, undercover investigators at PICA Corp. helped a leading maker of auto scratch remover trace the source of knockoffs that ended up in mainstream stores. For less than $100 an hour, PICA's agents comb store shelves, interview salespeople and gather evidence to help clients build solid lawsuits against counterfeiters.

Finding anti-counterfeiting vendors these days isn't too difficult since it's a nascent market with few competitors. You can get recommendations from security consultants such as Reconnaissance International, the U.S. Chamber of Commerce or your lawyer. Whether finding the right vendor will help you beat the problem is another question.

Capolino's outlook, for example, remains bleak. Although GenuOne helped Mitchell & Ness recapture about $20,000 in monthly sales, Capolino says counterfeiters pop up as quickly as he can shut them down. "The counterfeiters are so many, and it's such a diverse and worldwide market, that I have no prayer of being successful," he says. "But I have to keep going after the bad guys; otherwise, they could just take over my business."

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