Seizures of counterfeit clothing imports in the US is up 67%. This article here talks about how clothing companies that import these 'knock-off's' have found a way around being caught. They will import them as unbranded apparel, then sew the brands on the clothes here in the states.
This is an example of a few economic principles, but the one I want to focus on is government's role in the free economy. Normally, I like to let the market run on its own without government involvement, but in this case, the free market would behave self-interestedly enough that it would be unfair and government involvement is needed.
Left alone, counterfeits of well branded products would produce and sell as many of a popular product as possible. This would inundate the market and drive the price of the true product down. The true producers would be unmotivated to produce since there is no profit in the business, and society would be at a loss because it is not enhanced by the products and innovations that would have come.
Government is needed to protect property rights, including intellectual property rights like patents and trademarks. This protection gives businesses a safe environment to peddle their wares and make a profit. Now the exclusivity of their product raises the price, but the availability of substitutes helps keep the price at a competitive level.