A couple of years ago, Mark Schurman, director of corporate communications at Herman Miller, got an irate phone call from an architect who had purchased an Eames lounge chair that had fallen apart. The Michigan-based manufacturer has produced the Eames' designs since they were first created in the 1940s and remains the licensed manufacturer for the classic furniture. "Before he was even finished, I asked him to turn the chair over and look at the label," says Schurman. "When he did, there was this long pause." It was a case of another dissatis-fied noncustomer. The architect had unwittingly bought a knockoff chair by a different company, hardly an isolated incident. Herman Miller estimates that knockoffs potentially cost the company millions of dollars a year.

It's a long-standing problem for leading furniture manufacturers. The legal protection offered by copyright laws is weak; many classic designs have fallen into the public domain, making ownership rights murky. In 1998, Herman Miller took a bold step by suing Palazetti--the New York company that had been importing a version of the Eames chair since 1995--for both trademark and trade-dress infringement. Herman Miller was asking the courts to rule on whether the Eames name was a trademark and, more ambitiously, whether the specific shape of its lounge chair merited trade-dress protection. In two classic, earlier cases, the courts had granted such protection to McDonald's golden arches and to Coke's distinctive bottle.

Last year the court ruled that the name "Eames" is a registered trademark and can only be used on products made by Herman Miller, the firm that pays royalties to the Eames office. But the court surprised many observers by refusing to even hear evidence on the more important issue of trade dress. (Herman Miller has appealed that aspect of the court's decision; a ruling is expected later this year.) So for the time being, Palazetti can continue to sell the knockoffs, but it cannot use the Eames name on them. If customers ask for an Eames chair, salespeople are required to say that they sell an "Eames-style chair."

Even if Herman Miller prevails on appeal and wins trade-dress protection, enforcement of the law will always be difficult, if not impossible. Recently I went into the Palazetti store in Manhattan and asked if they carried the Eames lounge chair. Without hesitation, the clerk said yes. Later when I told Sergio Palazetti about the incident he said, "Even the judge agrees that I cannot control what my salesmen say when I'm not in the store." On a visit to another store, Nuovo in Soho, the clerk was more forthcoming. "We have something like the Eames chair, but we can't call it that," she said, then pointed out the ways in which it was superior to Herman Miller's.

Given the obstacles that Herman Miller faces in policing the marketplace, not to mention the high cost of litigation, it's easy to see why other manufacturers have adopted different policies regarding knockoffs. Knoll is the licensed manufacturer for such classic Modernists as Marcel Breuer and Mies van der Rohe. On every Mies piece it sells, Knoll pays a royalty to the Museum of Modern Art, which inherited the designs. But instead of suing everyone who puts out a Cesca or Barcelona chair--an impossible task given the number of iterations generated by these two objects--the attitude at Knoll is similar to that taken by the British royal family: The firm does not even comment on pretenders to the throne.

"It comes down to: Do you want to own a Timex, or do you want to own a Piaget?" says Al Pfeiffer, curator of the Knoll Museum, part of the company's factory complex in Pennsylvania. But Pfieffer's haughty insouciance masks the effort the company puts into maintaining that public image. Knoll spends a great deal of time and money on brand-building exercises like exhibitions and conferences. The public museum Pfieffer curates is another example.

Somewhere between litigation and indifference lies a third option, adopted by Cassina. The Italian company is the licensed manufacturer of furniture by Le Corbusier, Gerrit Rietveld, Charles Rennie Mackintoch, and Frank Lloyd Wright. Cassina's former U.S. distributor, Atelier International, once looked into suing Palazetti but abandoned the idea after reviewing U.S. laws. (The laws in Europe protecting licensed designs tend to be much stricter. In France, for example, Le Cor-busier's furniture is given nearly the same degree of legal protection as Picasso's art.) Here in the U.S., Cassina fights knockoffs with information. Unlike Knoll, the company not only comments on its many imitators but also distributes "knockoff brochures" to salespeople that highlight the differences between its products and the leading copycats. "When we have a client who wonders why they should pay more for our pieces, we take them to a Palazetti installation and show them how their pieces age," says Nancy Reedy, Cassina USA's director of marketing services. "Then we show them our installation. That usually sells them."

Dan Fogelson, vice president of marketing at ICF Group, also educates his sales force on the finer points of the Josef Hoffman and Alvar Aalto work that his New York firm imports to the U.S. But he serves as a watchdog, too. Last fall, the e-commerce site Design Within Reach (DWR) showed licensed Alvar Aalto products from Finland on the same page as a knockoff that Modernica makes in China; there was no effort to distinguish between the two. Fogel-son called Rob Forbes, the president of DWR, and convinced him to separate the Aalto pieces in future catalogs.

For years the insular nature of the market actually served to protect knockoffs. Until recently, good design was only sold to the trade through big-city showrooms at prices that left the middle class shopping at Ethan Allen. In other words, very few people came into contact with either knockoffs or their originators. When Palazetti opened its New York store in 1981, the principal retail outlet for design was the store at the Museum of Modern Art, which sold a handful of pieces at high prices. By the mid-1990s, manufacturers like Cassina and Knoll began to open their showroom doors to the public. Suddenly firms like Palazetti found themselves in direct competition with the licensed firms. Today they continue to offer knockoffs at lower prices, but the rise of e-commerce is narrowing the gap. The real Eames lounge chair and ottoman are now selling over the Internet, directly from Herman Miller, for just eight percent more than Palazetti's knockoff.

One would expect the Internet, and the broadened market it has created, to introduce a flood of new pirated designs, but this has yet to happen. Full Upright Position (FUP), one of the first e-commerce sites for designer furniture, adopted a policy of selling only licensed products when it went online in 1998. Deborah Starr, CEO of FUP, says the main reason she refuses to sell knockoffs is that the licensed manufacturers tend to be stable outfits that guarantee their products. "Our business is for people who want the authentic piece," she says. "We adhere to a certain level of quality. With knockoffs, the quality varies from month to month." Starr advises people who cannot afford the originals to save their money until they can. "This furniture will last forever," she says. "It's a good investment."

Starr's attitude is good news for licensed manufacturers like Herman Miller, but it doesn't begin to fully address the problem. Schurman concedes that the high cost of litigation simply adds to the losses incurred by knockoffs, but says, "What's even more damaging to us, and more difficult to calculate in dollars and cents, is the loss of goodwill that comes from shoddy reproductions." The company has begun to attack the problem with a new strategy: severing ties with retailers who sell knockoffs.

All of which is bad news for Sergio Palazetti, who has spent thousands of dollars fighting the Miller lawsuit. At the same time, his own products are under increasing competitive pressure from licensed manufacturers as well as a number of low-end firms. (Yes, there are even knockoffs of knockoffs.) Palazetti, a former sculptor, is unrepentant. "Herman Miller's Eames chairs are knockoffs, too," he insists. "Anything not made under the supervision of the designer is a knockoff. My chairs are as faithful as theirs." This may be true in a technical sense, but it conveniently ignores the whole point of the original lawsuit, which was about legal license, not authenticity. Still, even some industry people plagued by knockoffs consider Palazetti an early pioneer who helped to popularize design in the United States. "The irony," says Cassina's Reedy, "is that he laid the groundwork for what we do today."

Jeffrey Hogrefe is the author of O'Keefe: The Life of an American Legend.