On his last business trip to China, a senior director for a California-based life sciences company purchased 30 counterfeit watches for himself, friends, and family. It was no anomaly—with each Asia visit, he adds to his collection of fakes, which now includes several "Tag Heuers," an "Omega Seamaster," and an assortment of "Rolexes."

"I am addicted," admits the 42-year-old, who requested anonymity given his predilection for contraband timepieces. "We have a gag competition to see who can get the best fakes for the least amount of money."

Premium Swiss watch manufacturers are not amused. The Swiss Customs Service estimates that 30 million to 40 million counterfeit watches enter the global market each year, costing the Swiss watch industry more than $600 million. These numbers have been questioned, since the sale of a copy doesn't necessarily supplant the sale of an authentic timepiece. Nevertheless, watch counterfeiting is regarded as a scourge, and fought with legislation (a new Swiss law requires border authorities to destroy any counterfeit watch they discover), lawsuits, and design components.

"Until two years ago, it was easy to spot a fake," says Christian Selmoni, product director at Vacheron Constantin, which has been making watches in Geneva since 1755. "Something would not be right—whether it was the lugs, the size, or the function." But in 2006, Selmoni received from customs photos of two chronographs; even he could not tell the watches were copies until he was able to open them up to inspect the movements.

Today, the watchmaker launches a state-of-the-art weapon in the battle against counterfeiters: the Quai de l'Ile (kay-de-leel). Developed with Roger Pfund, designer of the Swiss passport and bank notes for Switzerland and other countries, the timepiece is, Vacheron Constantin claims, practically fakeproof.

To stay ahead of counterfeiters, watchmakers are always devising new authenticity markers for their products. Since 2002, Rolex has laser-etched its watch crystals with a tiny crown logo at 6 o'clock, and each case back bears a holographic sticker. Cartier prints its dials with a "secret signature"—the brand printed in tiny type on one of the Roman numerals. "When you look at it with the naked eye, you see a straight line, but under a loupe you can read it," explains Aaron Rich, head of the watches department at Sotheby's New York. "When it comes to printing—whether on the dial or the date wheel—it's just a matter of how much time, effort, and money the counterfeiter is willing to invest to make it look legitimate."

Vacheron had conceived its new collection to freshen its staid image. But after Selmoni visited Pfund's workshop, where he spotted a reproduction of a Romanian bank note printed on glass, he thought of how security printing techniques could be applied in the watch realm.
 
Last spring in Geneva, Vacheron unveiled two self-winding wristwatches, one with a date function and another more complicated variation that displays day, date, and power reserve, which indicates how much energy is stored. These new movements exemplify the traditional art of mechanical watchmaking.