In the harshly lit backroom of a storefront in New York City’s Chinatown, there hangs what appears to be millions of dollar’s worth of merchandise. Hundreds of bags bearing the Louis Vuitton logo are crammed onto metal hooks. The purses look nothing like the shoddy knockoffs sold for $10 on street corners. Only a close look inspection reveals that the zippers are just a bit too shiny and the leather is too rough. These fakes aren’t just sold to tourists; undercover bag dealers from around the country order them in bulk from makeshift catalogs.

Thanks in part to this backroom business, New York city was home to an estimated $23 billion counterfeit-goods market in 2003, costing the city more than $1 billion in taxes and vexing luxury-goods companies. The police have been jailing and fining vendors for decades, but the problem seems to be getting worse-the value of U.S. Customs seizures of counterfeits leaped 48% last year. Which is why knockoff favorite Louis Vuitton has stepped up its fight against the Faux. Last year it spent more than ever-15 million euros-to battle counterfeiting, conducting 6,000 raids and 8,200 legal actions worldwide. But instead of just going after counterfeit sellers-who, like cockroaches, tend to spring up elsewhere-LVMH has developed a novel legal strategy: It’s going after landlords.