The modern-day counterfeiting problem began in the years after World War II in the developing countries. Many developing countries had no local industry and turned to commercial counterfeiting to jump-start their industrial development. Other developing countries were formerly colonies; after they gained independence, their local industries turned to commercial counterfeiting.
"The Japanese were the masters of counterfeiting," says Paul Carratu, managing director of Carratu International, a private investigation firm based in London. Founded in 1963, Carratu International is one of the oldest firms engaged in investigating product counterfeiting. According to Carratu, in the years right after the war, the Japanese named different sections of their country after famous brands that were counterfeited. Hence, there was whiskey produced in Scotland and steel produced in Solingen.
Initially, the industrialized countries ignored the problem. Because the counterfeits were often of poor quality and were produced and distributed only to the local market, the counterfeiting posed little economic threat. Also, in the years right after the war, there was little that could be done legally. Most developing countries had few intellectual property laws.
The situation changed dramatically by the late 1960s. Advances in technology and the globalization of the economy made trademark counterfeiting a serious economic threat to any industry that had a portfolio of intangible assets. In the United States, one industry that was particularly hard hit by the counterfeiting losses was the garment industry.
Trademark counterfeiting erupted in the garment industry with the