At the Andreas Luka boutique in Prague 1, surrounded by discount no-name jeans and sweaters, Louis Vuitton and Gucci bags sit in the display window. Otherwise a shabby looking store in a dark passage in downtown Prague, the bags give the boutique a hint of luxury.

They're fake.

"It's a copy," Andreas Luka's shop assistant says while holding a red handbag that boasts the famous Louis Vuitton logo and has a small brand identification card on the inside. "It differs in some details, but we never see the original, so I don't know what the differences are. I am only a shop assistant."

The bag carries a 4,449 Kč ($187) price tag, making it around three times the price of any other item at the store but nowhere near as expensive as the real thing, which goes for 25,400 Kč at the new Louis Vuitton store on Prague's most exclusive boulevard, Pařížská.

Counterfeit goods such as Louis Vuitton bags or fake Rolex watches are on the rise worldwide. Globally, the counterfeit luxury goods market is a multibillion-dollar business.

During the past few years, the Czech Republic has seen a steady increase in copy luxury goods, and, with Czechs becoming more brand-conscious, fakes are in greater demand than ever before.

Indeed, in the first month of 2006 alone the General Directorate of Customs seized 11,000 pieces of fake Louis Vuitton accessories, compared with 21,400 pieces in all of 2005. Approximately 80 percent of the counterfeit goods come from China.

"This trend will grow, there is no doubt," says Petr Holý, an attorney at Rott, Růžička & Guttmann, which focuses on patent and trademark law. "Before, brands were not in such demand. The stronger brand awareness [gets], the more attempts there will be to counterfeit the brands."

Famous fakers

World-famous brands have taken notice of Czechs' appetite for products associated with luxury. Earlier this month, Louis Vuitton expanded its operation here by moving to a new, larger location on Pařížská.

"Czech customers are more and more interested in the products themselves and not, as they were before, their price," Philippe Schaus, president of Louis Vuitton Europe, recently told Czech daily Hospodářské noviny. Louis Vuitton's Czech corporate office declined comment for this story.

The considerable gap between the cost of original goods and Czechs' buying power, however, has created a huge market here for knockoffs, even among the social elite.

Both former first lady Dagmar Havlová and the wife of former Prime Minister Stanislav Gross, Šárka Grossová, have been spotted toting fake Louis Vuitton handbags. Havlová apologized and stopped carrying the purse, but Grossová said she didn't care about being caught wearing the fake accessory.

In another style faux pas, Andrea Verešová, a Czech model of Slovak origin and former girlfriend of international hockey star Jaromír Jágr, showed up to a Louis Vuitton fashion show with a fake Louis Vuitton handbag on her arm. She was asked to leave.

Fighting the problem

Czech authorities, including the customs office and the Czech Retail Inspection (ČOI), have the right to seize and destroy counterfeit goods, in line with European Union intellectual property rights.

Customs authorities, however, can only check cargo that enters the country from outside the European Union. Within EU borders, goods can move unchecked. Once fake goods enter the Czech market they are subject to random inspections by the ČOI, an office designed to protect customers' rights.

The shop assistant at Andreas Luka did not specify where their bags came from. Two days later, when The Prague Post returned to the boutique, the bags were gone. The same shop assistant said the store does not have them anymore and will not sell them in the future. She added that the owner of the boutique would not comment for this story.

During its inspections, the ČOI routinely finds fake Rolex watches and Gucci bags, and last year seized and destroyed half a billion crowns in counterfeit goods.

In order to have their products protected, companies such as Gucci, Louis Vuitton and Rolex are required to make an official request to authorities such as the ČOI and the customs office. Richard Holenda, head of the intellectual property department at the General Directorate of Customs, says every major luxury brand has filed a request with his office.

Holenda says the stream of counterfeited goods coming into the Czech Republic started about seven years ago. Every year, his office has more and more work, primarily because purchasing power here, while low when compared to Western Europe and the United States, is significantly higher than in the rest of Central and Eastern Europe.