    Intellectual Property: Strategy for Targeting Organized Piracy
    (STOP) Requires Changes for Long-Term Success (08-NOV-06,
    GAO-07-74).

    U.S. government efforts to protect and enforce intellectual
    property (IP) rights are crucial to preventing billions of
    dollars in losses and mitigating health and safety risks from
    trade in counterfeit and pirated goods. These efforts are
    coordinated through the National Intellectual Property Law
    Enforcement Coordination Council (NIPLECC), created by Congress
    in 1999, and the Strategy for Targeting Organized Piracy (STOP),
    initiated by the Bush administration in 2004. This report
    describes the evolution of NIPLECC and STOP, assesses the extent
    to which STOP addresses the desirable characteristics of an
    effective national strategy, and evaluates the challenges to
    implementing a strategy for protecting and enforcing IP rights.
    GAO examined relevant documents, interviewed agency and industry
    officials, and assessed STOP using criteria previously developed
    by GAO.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-07-74
        ACCNO:   A63124
      TITLE:     Intellectual Property: Strategy for Targeting Organized
    Piracy (STOP) Requires Changes for Long-Term Success
         DATE:   11/08/2006
      SUBJECT:   Accountability
    	     Intellectual property
    	     Interagency relations
    	     International trade regulation
    	     Law enforcement
    	     National policies
    	     Performance measures
    	     Program evaluation
    	     Program management
    	     Risk management
    	     Strategic planning
    	     Trade policies
    	     Policies and procedures
    	     Program implementation
    	     Strategy Targeting Organized Piracy

    ******************************************************************
    ** This file contains an ASCII representation of the text of a  **
    ** GAO Product.                                                 **
    **                                                              **
    ** No attempt has been made to display graphic images, although **
    ** figure captions are reproduced.  Tables are included, but    **
    ** may not resemble those in the printed version.               **
    **                                                              **
    ** Please see the PDF (Portable Document Format) file, when     **
    ** available, for a complete electronic file of the printed     **
    ** document's contents.                                         **
    **                                                              **
    ******************************************************************
    GAO-07-74

         * [1]Results in Brief
         * [2]Background
         * [3]Lines between NIPLECC and STOP Have Blurred into Overlapping

              * [4]NIPLECC and STOP Originated under Different Authorities but
              * [5]Congress Enhanced NIPLECC While STOP Continues to Play the P
              * [6]NIPLECC Adopts STOP As Its Strategy

         * [7]STOP Is a Good Initial Effort but Does Not Yet Fully Address

              * [8]Effective National Strategic Planning Has Six Desirable Char
              * [9]STOP Is Missing Several Elements Important to Planning and A
              * [10]Some Agency Planning Documents Contain Characteristics Missi
              * [11]STOP Does Not Fully Integrate Agencies' Planning Documents

         * [12]Current Structures Create Challenges to an Effective Integra

              * [13]IP Coordinator Praised, but NIPLECC Retains an Image of Weak
              * [14]Energized STOP Has Features That May Limit Its Long-term Eff
              * [15]NIPLECC's Unclear Commitment Impairs Accountability

         * [16]Conclusions
         * [17]Recommendations for Executive Action
         * [18]Agency Comments and Our Evaluation

              * [19]Six Desirable Characteristics Were Developed from Numerous a
              * [20]STOP Partially Addresses Five Characteristics and Does Not A

                   * [21]STOP Discusses Purpose and Scope but Lacks Detailed
                     Discussi
                   * [22]STOP Identifies the Problem but Lacks Detailed
                     Discussion of
                   * [23]STOP Addresses Goals and Activities but Lacks Important
                     Elem
                   * [24]STOP Does Not Address Elements Relevant to Resources,
                     Invest
                   * [25]STOP Partially Addresses Organizational Roles and
                     Coordinati
                   * [26]STOP Partially Addresses Integration with Member
                     Agencies bu

         * [27]GAO Contact
         * [28]Staff Acknowledgments
         * [29]GAO's Mission
         * [30]Obtaining Copies of GAO Reports and Testimony

              * [31]Order by Mail or Phone

         * [32]To Report Fraud, Waste, and Abuse in Federal Programs
         * [33]Congressional Relations
         * [34]Public Affairs

    Report to the Chairman, Committee on Government Reform, House of
    Representatives

    United States Government Accountability Office

    GAO

    November 2006

    INTELLECTUAL PROPERTY

    Strategy for Targeting Organized Piracy (STOP) Requires Changes for
    Long-term Success

    GAO-07-74

    Contents

    Letter 1

    Results in Brief 3
    Background 6
    Lines between NIPLECC and STOP Have Blurred into Overlapping Structures 8
    STOP Is a Good Initial Effort but Does Not Yet Fully Address the Desirable
    Characteristics of an Effective National Strategy 15
    Current Structures Create Challenges to an Effective Integrated Strategy
    21
    Conclusions 24
    Recommendations for Executive Action 24
    Agency Comments and Our Evaluation 25
    Appendix I Scope and Methodology 27
    Appendix II GAO's Analysis of STOP as an Effective National Strategy 29
    Appendix III Bush Administration: Strategy for Targeting Organized Piracy
    Accomplishments and Initiatives 39
    Appendix IV Comments from the Department of Commerce 50
    Appendix V GAO Contact and Staff Acknowledgments 51

    Tables

    Table 1: Comparison of Features of NIPLECC and STOP 11
    Table 2: Summary of Desirable Characteristics for an Effective National
    Strategy 30

    Figures

    Figure 1: Primary U.S. Government Agencies and Entities Supporting U.S.
    Intellectual Property Rights 8
    Figure 2: Key Events Relevant to NIPLECC and STOP 13
    Figure 3: Extent to Which STOP Addresses GAO's Desirable Characteristics
    of an Effective National Strategy 17

    Abbreviations

    APEC Asia Pacific Economic Cooperation
    CACP Coalition against Counterfeiting and Piracy
    CBP Customs and Border Protection
    CAFTA-DR Central America-Dominican Republic Free Trade Agreement
    CHIP Computer Hacking and Intellectual Property
    CRM Case Referral Mechanism
    DOJ Department of Justice
    DHS Department of Homeland Security
    EU European Union
    FDA Food and Drug Administration
    FBI Federal Bureau of Investigation
    GPRA Government Performance Results Act
    ICE Immigration and Customs Enforcement
    IP intellectual property
    IPR intellectual property rights
    NIPLECC National Intellectual Property Law Enforcement Coordination
    Council
    MOFCOM China's Ministry of Commerce
    OECD Organization for Economic Cooperation and Development
    SPP Security and Prosperity Partnership
    STOP Strategy for Targeting Organized Piracy
    USPTO U.S. Patent and Trademark Office
    USTR U.S. Trade Representative
    WTO World Trade Organization

    This is a work of the U.S. government and is not subject to copyright
    protection in the United States. It may be reproduced and distributed in
    its entirety without further permission from GAO. However, because this
    work may contain copyrighted images or other material, permission from the
    copyright holder may be necessary if you wish to reproduce this material
    separately.

    United States Government Accountability Office

    Washington, DC 20548

    November 8, 2006

    The Honorable Tom Davis Chairman Committee on Government Reform House of
    Representatives

    Dear Mr. Chairman:

    U.S. government efforts to protect and enforce intellectual property (IP)
    rights overseas are crucial to preventing billions of dollars in losses to
    U.S. industry and IP rights owners and addressing health and safety risks
    resulting from the trade in counterfeit and pirated goods. IP protection
    and enforcement cut across a wide range of U.S. agencies and functions, as
    well as those of foreign governments, making coordination among all
    parties essential.

    The U.S. government has developed a complex structure to achieve
    coordination of IP enforcement efforts. In 1999, Congress created the
    interagency National Intellectual Property Law Enforcement Coordination
    Council (NIPLECC) as a mechanism to coordinate U.S. efforts to protect and
    enforce IP rights in the United States and overseas.^1 In October 2004,
    the President announced the Strategy for Targeting Organized Piracy (STOP)
    to "smash the criminal networks that traffic in fakes, stop trade in
    pirated and counterfeit goods at America's borders, block bogus goods
    around the world, and help small businesses secure and enforce their
    rights in overseas markets." STOP also calls for collaboration among U.S.
    agencies. Then, in the Consolidated Appropriations Act of 2005, Congress
    created the position of Coordinator for International Intellectual
    Property Enforcement to head NIPLECC.^2 In addition, the act mandated,
    among other things, that NIPLECC promulgate a strategy for protecting
    American intellectual property abroad and oversee its implementation.
    Recently, NIPLECC adopted STOP as that strategy.

    ^1NIPLECC was established under Section 653 of the Treasury and General
    Government Appropriations Act, 2000 (Pub. L. No.106-58), 15 U.S.C. 1128.

    ^2The Consolidated Appropriations Act, 2005 (Pub. L. No. 108-447),
    Division B, Title II.

    In response to your request to understand more fully U.S. government
    efforts to develop a comprehensive and integrated strategy with a
    long-term perspective to combat IP counterfeiting and piracy, this report
    (1) describes the evolution of the relationship between NIPLECC and STOP,
    (2) assesses the extent to which STOP addresses the desirable
    characteristics of an effective national strategy, and (3) evaluates the
    challenges to ensuring the implementation of a long-term integrated
    strategy for protecting and enforcing IP rights.

    To meet these objectives, we examined NIPLECC and STOP official documents
    and reviewed the legislative history of NIPLECC. To determine the extent
    to which STOP serves as a national strategy for combating trade in
    counterfeit and pirated goods, we assessed STOP using the six desirable
    characteristics of an effective national strategy developed in previous
    GAO work.^3 GAO has used this methodology to assess and report on the
    administration's strategies relating to combating terrorism, restructuring
    DOD's global force posture, and rebuilding Iraq.^4 National strategies
    with these desirable characteristics offer policymakers and implementing
    agencies a management tool that can help ensure accountability and more
    effective results.^5 We also obtained and analyzed documents required
    under the Government Performance Results Act (GPRA) of 1993, as well as
    IP-related planning documents from the government agencies involved with
    STOP. We assessed the extent to which these agency documents support STOP
    goals and add information that may support elements necessary for an
    effective national strategy. In addition, we interviewed agency officials
    involved in NIPLECC and STOP, including the Coordinator for International
    Intellectual Property Enforcement. We also interviewed members of the
    private sector, which we selected judgmentally to ensure that we obtained
    the views of major cross-industry associations, as well as individual
    associations and companies representing key industries that are heavily
    affected by IP violations such as the manufacturing, entertainment, and
    pharmaceutical industries. In all we spoke to 20 representatives from 16
    private sector groups. We conducted our work from January 2006 through
    October 2006 in accordance with generally accepted government auditing
    standards. See appendix I for a more detailed description of our scope and
    methodology. See appendix II for a detailed discussion of GAO's analysis
    of STOP using the six desirable characteristics of an effective national
    strategy. See appendix III for the STOP strategy.

    ^3GAO, Combating Terrorism: Evaluation of Selected Characteristics in
    National Strategies Related to Terrorism, [35]GAO-04-408T (Washington
    D.C.: Feb. 3, 2004).

    ^4GAO, Defense Management: Comprehensive Strategy and Annual Reporting Are
    Needed to Measure Progress and Costs of DOD's Global Posture
    Restructuring, [36]GAO-06-852 , (Washington D.C.: Sept. 13, 2006); and
    Rebuilding Iraq: More Comprehensive National Strategy Needed to Help
    Achieve U.S. Goals, [37]GAO-06-788 (Washington D.C.: June 28, 2006).

    ^5The six characteristics are (1) a clear purpose, scope, and methodology;
    (2) a discussion of the problems, risks, and threats the strategy intends
    to address; (3) the desired goals and objectives, activities, and
    performance measures; (4) a description of the resources needed to
    implement the strategy; (5) a clear delineation of the organizational
    roles and responsibilities, including oversight as well as mechanisms for
    coordination; and (6) a description of how the strategy relates to
    subordinate levels of government and their plans to implement the
    strategy. These six characteristics can be subdivided into 29 separate
    elements for more detailed assessment.

    Results in Brief

    NIPLECC and STOP originated under different authorities, but the lines
    between them have become increasingly blurred, creating overlapping
    structures to protect and enforce IP rights. NIPLECC is a coordinating
    council created by Congress in 1999, while STOP is a strategy initiated by
    the White House in 2004 under the auspices of the National Security
    Council, with a strong coordination component; both involve nearly the
    same agencies.^6 However, unlike NIPLECC, which has struggled to define
    its purpose, STOP generated active coordination and has sponsored IP
    protection related activities from the outset. Although Congress augmented
    NIPLECC's capabilities and clarified its purpose through passage of the
    Consolidated Appropriations Act of 2005,^7 STOP remains more prominent.
    NIPLECC's Coordinator for International Intellectual Property Enforcement
    (also known as the IP Coordinator), a position created by the 2005 act and
    filled by presidential appointment in July 2005 to head NIPLECC, has
    regularly been participating in STOP activities and acted as a STOP
    spokesperson to Congress and private industry. In addition, NIPLECC cites
    STOP activities as among its accomplishments in its September 2006 report
    to Congress and the President.^8 Significantly, the NIPLECC principals
    recently identified STOP as their strategy for protecting American IP
    overseas, as one of the requirements under the Consolidated Appropriations
    Act. (See app. III for the complete STOP strategy.)

    ^6NIPLECC legislation includes Departments of Commerce (U.S. Patent and
    Trademark Office and International Trade Administration), Homeland
    Security (originally Legacy Customs), Justice (Criminal Division), State
    (Bureau of Economic and Business Affairs), and the Office of the United
    States Trade Representative. STOP includes the same agencies with the
    addition of the Federal Drug Administration.

    ^7In December 2004, Congress augmented NIPLECC's capabilities in the
    Consolidated Appropriations Act of 2005, which created the Coordinator for
    International Intellectual Property Enforcement position and provided $2
    million for NIPLECC's expenses through fiscal year 2006.

    STOP is a good first step toward a comprehensive, integrated national
    strategy to protect and enforce U.S. intellectual property, and it has
    energized agency efforts. However, we found that STOP's full potential as
    a strategy is limited because it does not fully address the six desirable
    characteristics of an effective national strategy. We believe these
    characteristics would improve the likelihood of STOP's long-term
    effectivenss and ensure accountability.^9 STOP does not fully address key
    characteristics related to planning and accountability, missing key
    elements such as a discussion of performance measures, resources, risk
    management, and designation of oversight responsibility. While STOP
    generally addresses goals and subordinate objectives and activities, it
    only partially addresses performance measures; for example, it reports the
    number of calls to the U.S. Patent and Trademark Office (USPTO) hotline,
    but it does not provide data on baselines or targets to assess how well
    the activities are being implemented. The strategy does not address
    resources, investments, and risk management; for instance, it lacks a
    discussion of current or future costs, the types or sources of investments
    needed to target organized piracy, and processes to effectively balance
    the threats from counterfeit products with the resources available. In
    addition, STOP also partially addresses organizational roles and
    responsibilities by citing many examples of agency roles with respect to
    their STOP activities; however, it does not discuss a framework for
    accountability among the STOP agencies, such as designating responsibility
    for oversight. While some of these elements are addressed in individual
    agency documents, the need to consult multiple agency documents
    underscores the strategy's lack of integration and limits its usefulness
    as a management tool for effective oversight and accountability.

    ^8Report to the President and Congress on Coordination of Intellectual
    Property Enforcement and Protection, September, 2006. The National
    Intellectual Property Law Enforcement Coordination Council.

    ^9While national strategies are not required by executive or legislative
    mandate to address a single, consistent set of characteristics, GAO has
    identified six desirable characteristics of an effective national
    strategy.

    Several challenges to the implementation of an effective long-term
    strategy result from the current structures. First, despite NIPLECC's key
    role of providing permanence, it continues to have leadership problems.
    NIPLECC retains an image of inactivity among the private sector despite
    its enhanced mandate and, in July 2006, Senate appropriators expressed
    concern about the lack of information provided by NIPLECC on its progress.
    Second, while agency and private sector officials praise STOP for
    energizing U.S. IP protection efforts, STOP lacks permanence. The
    authority and influence STOP enjoys as a presidential initiative could
    disappear after the current administration. Third, NIPLECC's commitment to
    implementing STOP as a successful strategy remains unclear, creating a
    challenge for accountability. NIPLECC' September 2006 report describes
    numerous STOP activities but does not articulate how NIPLECC plans to
    carry out its oversight responsibility mandated by Congress. Agency
    officials we interviewed generally considered STOP to be the U.S.
    government's IP strategy. However, NIPLECC officials have sent mixed
    signals about the extent to which they believe STOP is meant to provide
    performance measures and information on resource levels. For instance, one
    NIPLECC representative said that STOP should include metrics to measure
    progress that should be reported on by the IP Coordinator. Yet, another
    NIPLECC representative told us that STOP was a fact sheet rather than a
    strategy. While the IP Coordinator stated in congressional testimony that
    STOP is NIPLECC's strategy, he also told us that STOP was never meant to
    be an institutional method for reporting priorities and metrics to the
    President or Congress. Furthermore, the STOP strategy neither makes
    reference to NIPLECC's oversight role, nor does STOP articulate a
    framework for oversight and accountability among the STOP agencies
    carrying out the strategy.

    To improve STOP's effectiveness as a planning tool and its usefulness to
    Congress:

    We recommend that the IP Coordinator, in consultation with the National
    Security Council and the six STOP agencies, including the Departments of
    Commerce, Homeland Security, Justice, and State; and the Office of the
    U.S. Trade Representative; and the Food and Drug Administration, take
    steps to ensure that STOP fully addresses the six characteristics of a
    national strategy.

    To clarify NIPLECC's oversight role with regard to STOP:

    We recommend that the IP Coordinator, in consultation with the National
    Security Council and the six STOP agencies, including the Departments of
    Commerce, Homeland Security, Justice, and State; and the Office of the
    U.S. Trade Representative; and the Food and Drug Administration, clarify
    in the STOP strategy how NIPLECC will carry out its oversight and
    accountability responsibilities in implementing STOP as its strategy.

    We provided USTR, the Departments of Commerce, Justice, Homeland Security,
    and State; and USPTO, Food and Drug Administration, and the IP Coordinator
    with a draft of this report for their review and comment. The IP
    Coordinator, through the Department of Commerce in consultation with the
    USPTO and the International Trade Administration, provided technical
    comments. The Department of Homeland Security, the Food and Drug
    Administration, and the Office of the U.S. Trade Representative also chose
    to provide technical comments. We modified the report where appropriate.
    The Departments of Justice and State did not provide any comments. We also
    received written comments from the U.S. Coordinator for International
    Property Enforcement (IP Coordinator), which are reprinted in appendix IV.
    The IP Coordinator reiterated our message that STOP was a good first step
    toward a comprehensive, integrated strategy to protect and enforce U.S.
    intellectual property rights and that it had energized U.S. efforts. He
    concurred with our recommendations, stating that his office would review
    them, and planned to identify opportunities for improvement based on those
    recommendations, where appropriate.

    Background

    Intellectual property is an important component of the U.S. economy, and
    the United States is an acknowledged global leader in its creation.
    However, the legal protection of intellectual property varies greatly
    around the world, and several countries are havens for the production of
    counterfeit and pirated goods. Technology has facilitated the manufacture
    and distribution of counterfeit and pirated products, resulting in a
    global illicit market that competes with genuine products that complicates
    detection and actions against violations. High profits and low risk have
    drawn in organized criminal networks, and the public is often not aware of
    the issues and consequences surrounding IP theft. The Department of State
    has cited estimates that counterfeit goods represent about 7 percent of
    annual global trade, but we note that it is difficult to reliably measure
    what is fundamentally a criminal activity.^10 Industry groups suggest,
    however, that counterfeiting and piracy are on the rise and that a broader
    range of products, from auto parts to razor blades, and from vital
    medicines to infant formula, are subject to counterfeit production.
    Counterfeit products raise serious public health and safety concerns, and
    the annual losses that companies face from IP violations are substantial.

    ^10The Organization for Economic Co-operation and Development (OECD) is
    conducting a study on IP, examining the extent to which counterfeit goods
    are entering global trade and associated data reliability issues.

    Eight federal agencies, as well as entities within those agencies
    including the Federal Bureau of Investigation (FBI) and USPTO, undertake
    the primary U.S. government activities in support of IP rights. These
    eight agencies are: Departments of Commerce, State, Justice, and Homeland
    Security; the U.S. Trade Representative (USTR); the Copyright Office; the
    U.S. Agency for International Development; and the U.S. International
    Trade Commission. These agencies undertake a wide range of activities that
    fall under three categories: policy initiatives, training and technical
    assistance, and law enforcement. U.S. international trade policy
    initiatives to increase IP protection and enforcement are primarily led by
    USTR, in coordination with the Departments of State, Commerce, USPTO, and
    the Copyright Office, among other agencies. The policy initiatives are
    wide ranging and include reviewing IP protection abroad and negotiating
    agreements that address intellectual property. Key activities to develop
    and promote enhanced IP protection through training or technical
    assistance are undertaken by the Departments of Commerce, Homeland
    Security, Justice, and State; the FBI; USPTO; and the Copyright Office.

    A smaller number of agencies and their entities are involved in
    investigating IP violations and enforcing U.S. IP laws. Working in an
    environment where counterterrorism is the central priority, the Department
    of Justice, including the FBI, and the Department of Homeland Security
    take actions that include engaging in multicountry investigations
    involving intellectual property violations and seizing goods that violate
    IP rights at U.S. ports of entry. The Food and Drug Administration (FDA)
    also investigates intellectual property violations for FDA-regulated
    products as part of its mission to assure consumer safety. Finally, the
    U.S. International Trade Commission has an adjudicative role in
    enforcement activities involving patents and trademarks. These agencies,
    and their entities, may be affiliated with NIPLECC, STOP, or both as
    indicated by figure 1.

    Figure 1: Primary U.S. Government Agencies and Entities Supporting U.S.
    Intellectual Property Rights

    Note: NIPLECC is required to consult with the Register of Copyrights on
    copyright law enforcement matters. Immigration and Customs Enforcement,
    while not an original member, was reported as a member of NIPLECC in the
    council's fifth annual report issued in September 2006.

    Lines between NIPLECC and STOP Have Blurred into Overlapping Structures

    NIPLECC and STOP originated separately under different authorities, but
    the lines between them have become increasingly blurred. They share
    similar goals, including coordination of IP protection and enforcement,
    and involve nearly the same agencies. Five of the six STOP agencies house
    NIPLECC principals. NIPLECC is a coordinating council created by Congress,
    while STOP is a strategy initiated by the White House with a strong
    coordination component. NIPLECC has struggled to define its purpose, while
    STOP has generated active coordination and sponsored IP protection related
    activities from the outset. Although Congress passed legislation to
    enhance NIPLECC's mandate, STOP remains more prominent and is
    characterized by a high level of activity and visibility. The IP
    Coordinator, who heads NIPLECC, regularly participates directly in
    STOP-sponsored activities and represents STOP before Congress and private
    industry. Finally, significantly, NIPLECC adopted STOP as its strategy for
    protecting IP overseas in February 2006.

    NIPLECC and STOP Originated under Different Authorities but with Similar Goals

    NIPLECC and STOP were created under different authorities, NIPLECC as a
    congressional mandate and STOP as a presidential initiative. In 1999,
    Congress created NIPLECC to coordinate domestic and international
    intellectual property law enforcement among U.S. federal and foreign
    entities. The council's membership is designated by statute and includes
    (1) Assistant Secretary of Commerce and Commissioner of Patents and
    Trademarks (USPTO); (2) Assistant Attorney General, Criminal Division
    (Justice); (3) Under Secretary of State for Economic and Agricultural
    Affairs (State); (4) Ambassador, Deputy United States Trade Representative
    (USTR); (5) Commissioner of Customs (Legacy Customs);^11 and (6) Under
    Secretary of Commerce for International Trade (Commerce). NIPLECC is also
    required to consult with the Register of Copyrights on copyright law
    enforcement matters. In addition, officials from the USPTO and the
    Department of Justice are the co-chairs of NIPLECC. Congress required
    NIPLECC to report its coordination efforts annually to the President and
    to the Committees on Appropriations and the Judiciary of the Senate and
    the House of Representatives. NIPLECC's authorizing legislation included
    no specific dollar amount for funding or staff.

    Although created to coordinate U.S. IP law enforcement efforts, NIPLECC
    has had difficulties. In our September 2004 report, we stated that NIPLECC
    had struggled to define its purpose. Our 2004 report noted that NIPLECC
    had little discernible impact and had not undertaken any independent
    activities, according to interviews with both industry officials and
    officials from its member agencies, and as evidenced by NIPLECC's own
    annual reports. From 1999 through the end of 2004, NIPLECC produced three
    annual reports that did little more than provide a compilation of
    individual agency activities. Indeed, we reported that officials from more
    than half of the member agencies offered criticisms of NIPLECC, remarking
    that it was unfocused, ineffective, and "unwieldy." In official comments
    to the council's 2003 annual report, major IP industry associations
    expressed a sense that NIPLECC is not undertaking any independent
    activities or having any impact. However, some officials interviewed did
    cite positive contributions supporting IP efforts, including an IP
    training database Web site. Finally, we noted in our 2004 report that if
    Congress wished to maintain NIPLECC and take action to increase its
    effectiveness, it should consider reviewing the council's authority,
    operating structure, membership, and mission.^12

    11NIPLECC's authorizing legislation designates the Commissioner of Customs
    as a council member. This individual remained a NIPLECC member after the
    formation of the Department of Homeland Security in 2003, but under the
    new title of Department of Homeland Security's Commissioner of Customs and
    Border Protection. NIPLECC's fifth annual report, issued in September
    2006, added a second representative from the Department of Homeland
    Security, the Assistant Secretary for Immigration and Customs Enforcement,
    which includes investigative functions that had been conducted under the
    former Legacy Customs.

    In October 2004, the President launched STOP, a separate initiative led by
    the White House under the auspices of the National Security Council, to
    target cross-border trade in tangible goods and strengthen U.S. government
    and industry IP enforcement actions. While STOP made no mention of
    NIPLECC's role, STOP members are the same agencies that house NIPLECC
    members, except that STOP includes the FDA. According to a high-level
    official who participated in the formation of STOP, the initiative was
    intended to protect American innovation, competitiveness, and economic
    growth. It stemmed from the recognition that U.S. companies needed
    protection from increasingly complex and sophisticated criminal
    counterfeiting and piracy. As part of STOP, agencies began holding
    meetings, both at working levels and higher, to coordinate agency efforts
    to tackle the problem.

    Congress Enhanced NIPLECC While STOP Continues to Play the Prominent Role in
    Coordination

    Congress addressed NIPLECC's lack of activity and unclear mission in the
    2005 Consolidated Appropriations Act in December 2004. The act called for
    NIPLECC to (1) establish policies, objectives, and priorities concerning
    international IP protection and enforcement; (2) promulgate a strategy for
    protecting American IP overseas; and (3) coordinate and oversee
    implementation of the policies, objectives, and priorities and overall
    strategy for protecting American IP overseas by agencies with IP
    responsibilities. The act appropriated $2 million for NIPLECC's expenses
    through the end of the fiscal year 2006. It also created the position of
    the Coordinator for International Intellectual Property Enforcement, also
    known as the "IP Coordinator," to head NIPLECC. The IP Coordinator is
    appointed by the President and may not serve in any other position in the
    federal government. The co-chairs for NIPLECC are required to report to
    the IP Coordinator. In July 2005, the Secretary of Commerce announced the
    presidential appointment of the IP Coordinator. Table 1 compares NIPLECC
    and STOP.

    ^12See GAO, Intellectual Property: U.S. Efforts Have Contributed to
    Strengthened Laws Overseas, but Challenges Remain,  [38]GAO-04-912
    (Washington D.C.: Sept. 8, 2004).

    Table 1: Comparison of Features of NIPLECC and STOP

    Features        NIPLECC                           STOP
    Origin          Congressional mandate             White House initiative
    Leadership         o Coordinator for                 o National Security
                          International Intellectual        Council
                          Property Enforcement (IP
                          Coordinator)
                          o Co-Chairs from USPTO and
                          Justice report to Coordinator
    Membership      By agency and position:           By agency:

                          1. Department of Justice:         1. Department of
                          Assistant Attorney General,       Justice
                          Criminal Division                 2. Department of
                          2. Department of Commerce:        Commerce
                          Under Secretary for IP and        3. Department of
                          Director of USPTO; and the        Homeland Security
                          Under Secretary for               4. Department of
                          International Trade               State
                          3. Department of Homeland         5. Office of the U.S.
                          Security: Commissioner of U.S.    Trade Representative
                          Customs and Border Protection;    6. Food and Drug
                          and the Assistant Secretary       Administration
                          for Immigration and Customs
                          Enforcement
                          4. Department of State: Under
                          Secretary for Economic,
                          Business, and Agricultural
                          Affairs
                          5. Office of the U.S. Trade
                          Representative: Deputy U.S.
                          Trade Representative
    Dedicated       $2 million (for fiscal years 2005 None
    funding         and 2006)
    Dedicated staff Seven (IP Coordinator, four staff None
                       members, and two detailees)
    Meetings        Quarterly                         Approximately monthly
                                                         (scheduled on an ad hoc
                                                         basis)

    Source: GAO.

    Note: NIPLECC is required to consult with the Register of Copyrights.

    Since obtaining enhanced capabilities under the 2005 Consolidated
    Appropriations Act, NIPLECC has made some progress, through NIPLECC's
    administrative staff, including the IP Coordinator, an assistant, a policy
    analyst, part-time legislative and press assistants, and detailees from
    USPTO and CBP. Examples of the office's activities include working with
    the Commercial Law Development Program^13 to train foreign governments on
    IP enforcement, co-hosting an IP regulation training and industry
    partnership conference in Chicago, working with the Department of State on
    an IP-related Web site for information sharing among U.S. agencies,
    working with USPTO to implement a workshop on border enforcement of IP
    rights in India, working with the Department of Justice to identify IP
    regulation enforcement needs in India, and producing four country fact
    sheets highlighting the status of IP protection. In addition, the IP
    Coordinator has facilitated two NIPLECC meetings, established the practice
    of holding NIPLECC meetings quarterly, and NIPLECC has issued two annual
    reports since the 2005 act. The 2004 annual report was made available in
    June 2005 and is similar to earlier reports in that it is a compilation of
    individual agency activities. However, the 2005 annual report, which was
    released in September 2006, represents a departure in substance and style.
    For example, it provides a broad overview of the problem of IP violations
    and how the U.S. government is supporting U.S. business to address it, as
    well as a description of the activities of the IP Coordinator's office.
    Another new aspect of the report is that it provides examples of U.S.
    government actions to improve IP protection in China. (See fig. 2 for a
    time line of key NIPLECC and STOP events.)

    ^13The Commercial Law Development Program, a program of the U.S.
    Department of Commerce Office of the General Counsel, is uniquely tasked
    with providing technical assistance in the commercial law arena to the
    governments and private sectors of transitional countries in support of
    their economic development goals.

    Figure 2: Key Events Relevant to NIPLECC and STOP

    Note: STOP participants meet on an ad hoc basis approximately once or
    twice a month. According to NIPLECC annual reports, NIPLECC principals met
    four times in 2000, once in 2001, twice in 2002, and once in 2003. No
    NIPLECC principals meetings were reported to have been held in 2004 or
    2005. NIPLECC principals held two meetings in 2006 with the IP
    Coordinator, and hereafter plan to meet on a quarterly basis.

    Unlike NIPLECC, STOP from its beginning has been characterized by a high
    level of active coordination and visibility. Agency officials with whom we
    spoke said that STOP meetings occurred once or sometimes twice a month,
    and were driven by particular issues or events, and also involved status
    checks on ongoing efforts and discussing and prioritizing new ones. For
    example, agency officials met to ensure that IP was given attention at the
    European Union summits and to share talking points for international
    trips. In addition, USPTO established a hotline to give businesses a point
    of contact for information on IP rights enforcement and report problems in
    other countries. The hotline is fielded by attorneys with regional
    expertise. Commerce developed a Web site to provide information and
    guidance to right holders on how to register and protect their IP assets
    in markets around the world. STOP also launched multiagency delegations to
    engage foreign officials and the private sector on IP protection and
    enforcement. Officials from STOP agencies traveled to Asia during April
    2005 and 2 months later to countries in the European Union. STOP agencies
    also work with the Coalition Against Counterfeiting and Piracy (CACP), an
    association jointly led by the U.S. Chamber of Commerce and National
    Association of Manufacturers, which U.S. private sector officials we
    interviewed have stated is their primary mechanism of interfacing with
    agency officials representing STOP. STOP officials work with CACP on their
    "No Trade in Fakes" program to develop voluntary guidelines companies can
    use to their supply and distribution chains are free of counterfeits.

    NIPLECC Adopts STOP As Its Strategy

    The lines between NIPLECC and STOP have become increasingly blurred. The
    IP Coordinator, who heads NIPLECC, regularly participates directly in STOP
    activities. For example, the IP Coordinator has effectively functioned as
    a STOP spokesperson overseas, to Congress, and to U.S. private industry.
    Significantly, NIPLECC has adopted STOP as the strategy it is required to
    promulgate under the 2005 Consolidated Appropriations Act. The IP
    Coordinator told us that STOP was not meant to cover all aspects of IP but
    represented a good start toward an effective strategy. He believed that it
    made sense to use STOP as NIPLECC's strategy rather than starting anew.
    The STOP strategy was updated since it was announced in October 2004 and
    is encompassed in the June 2006 document, Bush Administration: Strategy
    for Targeting Organized Piracy, Accomplishments and Initiative. The
    document consists of five general goals and discusses activities
    associated with each goal. The goals are (1) empowering American
    innovators to better protect their rights at home and abroad, (2)
    increasing efforts to seize counterfeit goods at our borders, (3) pursuing
    criminal enterprises involved in piracy and counterfeiting, (4) working
    closely and creatively with U.S. industry, and (5) aggressively engaging
    our trading partners to join our efforts. (See app. III to view this
    latest document representing the STOP strategy, which we evaluate in the
    next section.)

    STOP Is a Good Initial Effort but Does Not Yet Fully Address the Desirable
    Characteristics of an Effective National Strategy

    STOP represents progress toward developing a comprehensive integrated
    national strategy for IP protection and enforcement and has experienced
    some success. However, we found that STOP does not fully address the six
    desirable characteristics of an effective national strategy that we
    believe would improve the likelihood of its long-term effectiveness and
    ensure accountability. Our analysis showed that STOP does not fully
    address key characteristics related to planning and accountability,
    missing elements such as a discussion of performance measures, resources,
    risk management, and designation of oversight responsibility. While we
    found that some strategy documents belonging to individual STOP agencies
    supplemented some of the characteristics not fully addressed in STOP, the
    need to consult multiple agency documents limits the usefulness of STOP as
    an integrated strategy to guide policy and decision makers in allocating
    resources and balancing priorities with other important objectives.

    Effective National Strategic Planning Has Six Desirable Characteristics

    While national strategies are not required by executive or legislative
    mandate to address a single, consistent set of characteristics, GAO has
    identified six desirable characteristics of an effective national
    strategy. It is important that a national strategy contain these
    characteristics, and their underlying elements, because they enable
    implementers of the strategy to effectively shape policies, programs,
    priorities, resource allocations, and standards so that federal
    departments and other stakeholders can achieve the desired results.
    National strategies provide policymakers and implementing agencies with a
    planning tool that can help ensure accountability and effectiveness. A
    summary of the six characteristics is presented below, and appendix II
    provides a more detailed discussion of GAO's criteria.

               o Purpose, Scope, and Methodology-addresses why the strategy was
               produced, the scope of its coverage, and the process by which it
               was developed.
               o Problems, Risks, and Threats-discusses or defines problems the
               strategy intends to address, their causes, and the operating
               environment, and also provides a risk assessment, including an
               analysis of the threats and reliability of available data.
               o Goals, Objectives, Activities, and Outcome-Related Performance
               Measures-addresses what the strategy strives to achieve and the
               steps needed to reach the goals, as well as priorities,
               milestones, and performance measures to monitor and evaluate
               results.
               o Future Costs and Resources Needed-addresses what the strategy
               will cost, the sources and types of resources and investments
               needed, and a risk management framework to guide where those
               resources and investments should be targeted.
               o U.S. Government Roles, Responsibilities, and Coordination
               Mechanisms-clarifies implementing organizations' relationships in
               terms of leading, supporting, and partnering, and designates
               responsibility for the overall framework for accountability and
               oversight.
               o Strategy's Integration among and with Other Entities-addresses
               both how the strategies' goals and objectives relate to those of
               government agencies and how the agencies plan to implement the
               strategy.

               We believe a national strategy should ideally contain all of these
               characteristics and present them in this order because they flow
               logically from conception to implementation. Specifically, the
               strategy's purpose leads to the definition of the problems and
               risks it intends to address, which in turn leads to specific
               actions for tackling those problems and risks, allocating and
               managing the appropriate resources, identifying different
               organizations' roles and responsibilities, and finally to
               integrating action among all relevant parties and implementing the
               strategy.

               We recognize that strategies themselves are not end points, but
               rather dynamic, working documents. As with any strategic planning
               effort, implementation is the key. The ultimate measure of these
               strategies' value will be the extent to which they are useful
               guidance for policy and decision makers in allocating resources
               and balancing priorities with other important objectives. It will
               be important over time to obtain and incorporate feedback from the
               "user" community as to how the strategies can better provide
               guidance and how Congress and the administration can identify and
               remedy impediments to implementation, such as legal,
               international, jurisdictional, or resource constraints.

    			  STOP Is Missing Several Elements Important to Planning and
    			  Accountability

               Figure 3 shows that STOP partially addresses five of the six
               characteristics and their key elements, and does not address any
               of the elements within one characteristic. Our analysis noted that
               STOP does not address any elements related to resources,
               investment, and risk management and only partially addresses a
               number of elements within the other five characteristics that are
               important for planning and accountability, including performance
               measures and designation of oversight responsibility. A full
               discussion of each characteristic and our analysis can be found in
               appendix II.

    STOP Is Missing Several Elements Important to Planning and Accountability

    Figure 3: Extent to Which STOP Addresses GAO's Desirable Characteristics
    of an Effective National Strategy

    STOP partially addresses the third characteristic, which is important for
    planning and accountability. Although STOP identifies five main goals, it
    does not always provide subordinate objectives and is missing key elements
    related to performance measures such as priorities, milestones, and a
    process for monitoring and reporting on progress. For example, under its
    goal of pursuing criminal enterprises, STOP clearly lists subordinate
    objectives of increasing criminal prosecutions, improving international
    enforcement, and strengthening laws. But, subordinate objectives under its
    goal of working closely and creatively with U.S. industry can only be
    inferred. Also, STOP mentions implementing a new risk model to target
    high-risk cargo but does not specify time frames for its completion.
    Although STOP cites output-related performance measures^14--such as the
    USPTO STOP hotline receiving over 950 calls during fiscal year 2005 and a
    45 percent increase in the number of copyright and trademark cases filed
    from fiscal year 2004 to fiscal year 2005--these figures are presented
    without any baselines or targets to facilitate the assessment of how well
    the program is being carried out. In addition, STOP cites outcome-related
    performance measures for a few activities.^15 For example, STOP goal of
    pursuing criminal enterprises includes shutting down sophisticated
    international peer-to-peer networks used by over 133,000 members. Without
    effective performance measures, STOP's goals, objectives, and activities
    cannot be effectively measured, and policymakers cannot effectively
    monitor STOP's progress.

    STOP does not address any of the elements within the fourth characteristic
    related to resources, investments, and risk management. As a result,
    decision makers are limited in their ability to determine necessary
    resources, manage them, and shift them with changing conditions. STOP
    neither identifies current or future costs of implementing the strategy,
    such as those related to investigating and prosecuting IP-related crime or
    conducting IP training and technical assistance, nor does it identify the
    sources or types of resources required. While the strategy states that
    "American businesses lose $200 to $250 billion a year to pirated and
    counterfeit goods," it does not provide a detailed discussion of the
    economic threat to U.S. business, discuss other risks such as the
    potential threats to consumer health and safety from counterfeited
    products, or discuss how resources will be allocated given these risks.

    ^14An "output measure" records the actual level of activity or whether the
    effort was realized and can assess how well a program is being carried
    out.

    ^15An "outcome measure" assesses the actual results, effects, or impact of
    an activity compared with its intended purpose.

    STOP also partially addresses elements within the fifth characteristic of
    organizational roles, responsibilities, and coordination. STOP identifies
    lead, support, and partner roles for specific activities. For example, it
    identifies the White House as leading STOP and indicates partnering roles
    among agencies, such as the Department of Homeland Security's Immigration
    and Customs Enforcement (ICE) and the Department of Justice's FBI joint
    role of running the National Intellectual Property Rights (IPR) Center.
    However, STOP does not discuss a process or a framework for oversight and
    accountability among the agencies carrying out the strategy. Although STOP
    discusses specific instances of coordination among member agencies, it
    lacks a clear and detailed discussion of how overall coordination occurs.
    For instance, there is no mention of STOP meetings, their frequency,
    objectives, or agendas.

    Some Agency Planning Documents Contain Characteristics Missing in STOP

    We found that some STOP agency planning documents provided additional
    detail on missing elements important to planning and accountability. For
    example, the October 2004, Report of the Department of Justice's Task
    Force on Intellectual Property, and,  June 2006, Progress Report of the
    Department of Justice's Task Force on Intellectual Property clearly sets
    forth the Department of Justice's strategies, objectives, activities and
    associated milestones and performance measures for improving the
    department's overall intellectual property enforcement. The June 2006
    progress report details how the Department of Justice implemented the 31
    recommendations made by the Task Force in 2004 and, where appropriate, how
    it exceeded those milestones and objectives in a number of important
    areas. For instance, the 2004 report recommended increasing the number of
    Computer Hacking and Intellectual Property (CHIP) units by 5; the progress
    report indicated that, by June 2006, an additional 12 units were added,
    increasing the total number of CHIP units nationally to 25.

    CBP articulates its strategies, objectives, activities, and associated
    milestones and performance measures related to STOP in its 2006 Priority
    Trade Issue: IPR Trade Strategy.^16 For example, the first objective
    within CBP's strategy identifies the IPR risk model as a STOP deliverable
    and provides targets, measures, and milestones to track performance.
    Associated targets included a 15 percent increase in efficiency, using
    cargo selectivity criteria to develop a baseline, indicating a milestone
    of completing a pilot test by March 2005 with implementation pending.
    Another example of an agency document that addresses other characteristics
    not addressed in STOP is USPTO's annual Performance and Accountability
    Report for 2005, which discusses the resources available for USPTO's
    IP-related operations during that fiscal year, including the costs
    associated with patent and trademark related programs.

    ^16IPR Goal: Improve the effectiveness of IPR enforcement by actively
    supporting the administration's STOP initiative and by ensuring a single
    uniform approach and focusing on known or alleged violators with high
    aggregate values or whose infringing products threaten health, safety, and
    economic security or have possible ties to terrorist activity.

    STOP Does Not Fully Integrate Agencies' Planning Documents

    We found that STOP partially addresses the sixth desirable characteristic
    regarding integration, which involves the extent to which the STOP
    strategy consistently articulates how it relates as a national strategy to
    STOP agencies' own strategies, goals, and objectives. This characteristic
    also encompasses how STOP demonstrates the extent to which the agencies'
    strategies have shared goals and objectives. While STOP refers to agency
    strategies for some STOP agencies, it does not do so for others. For
    example, STOP cites the Department of Justice's October 2004 Report of the
    Department of Justice's Task Force on Intellectual Property and links one
    of its STOP objectives, increasing criminal prosecutions, to the task
    force. However, STOP does not clearly link its objectives with those cited
    in other agencies' planning documents relevant to IP enforcement, such as
    CBP's most recent Priority Trade Issue: IPR Trade Strategy.^17 In
    addition, STOP does not consistently show the linkages among the agencies'
    goals and objectives supporting STOP. For example, under its objective of
    pursuing criminal enterprises, STOP does not discuss how the objectives of
    the Department of Justice's task force might be linked to the goals and
    objectives found in an ICE strategy. It is important that STOP not only
    reflects individual agencies' priorities and objectives but also
    integrates them in a comprehensive manner, enhancing collaboration among
    the agencies and providing a more complete picture to policy makers with
    oversight responsibilities. The absence of clear linkages underscores the
    strategy's lack of integration and limits the usefulness of STOP as a
    management tool for effective oversight and accountability...

    ^17CBP's most recent Priority Trade Issue: IPR Trade Strategy was issued
    on May 16, 2006. The prior IPR Trade Strategy was issued on May 20, 2005.

    Current Structures Create Challenges to an Effective Integrated Strategy

    Several challenges to implementation of an effective long-term integrated
    strategy result from the current structures. First, NIPLECC continues to
    have leadership problems despite enhancements made by Congress. Second, in
    contrast, STOP has a positive image compared with NIPLECC but lacks
    permanence. STOP's authority and influence, which results from its status
    as a presidential initiative, could disappear after the current
    administration. Third, NIPLECC's commitment to implementing STOP as a
    successful strategy remains unclear, creating a challenge for
    accountability.

    IP Coordinator Praised, but NIPLECC Retains an Image of Weak Leadership

    Since Congress enhanced its powers, NIPLECC has been given a key
    leadership role in overseeing the development of policies, objectives, and
    priorities for IP protection and enforcement and in implementing an
    overall strategy. Yet, NIPLECC retains an image of inactivity within some
    of the private sector. For example, almost half of the 16 private sector
    groups with whom we spoke expressed the opinion that NIPLECC was inactive
    or a nonplayer. In addition, representatives from 10 of these groups were
    unclear about NIPPLEC's role, and many said that they were unclear about
    the difference between NIPLECC and STOP. Finally, in July 2006, Senate
    appropriators expressed concern about the lack of information provided by
    NIPLECC on its progress.

    On the other hand, both agency officials and private sector
    representatives with whom we spoke consistently praised the IP
    Coordinator, who heads NIPLECC, saying that he was effectively addressing
    their concerns by making speeches, communicating with their members, and
    heading U.S. delegations overseas, although they most often associated his
    activities with STOP. In fact, most of the activities of the IP
    Coordinator's office cited in NIPLECC's latest annual report are part of
    STOP. While the IP Coordinator has noted in congressional testimony that
    NIPLECC has made some valuable contributions, such as updating a database
    for IP training overseas and contributing legislative suggestions to
    improve domestic IP laws, he acknowledged that there is unmet potential
    for NIPLECC.

    Energized STOP Has Features That May Limit Its Long-term Effectiveness

    Agency officials and members of the private sector attribute STOP's
    effectiveness to its status as a White House initiative and its resulting
    authority and influence. However, there is uncertainty whether this
    authority and influence will continue beyond the current administration
    because priorities may shift after the next presidential election. In
    addition, STOP has weaknesses as a national strategy, including its
    failure to fully address key characteristics related to planning and
    accountability such as performance measures, resources and investments,
    risk management, and designation of oversight responsibility. Uncertainty
    as to whether STOP will have the same White House support in a new
    administration and its current shortcomings as a strategy may impact
    NIPLECC's ability to successfully implement and monitor it.

    However, despite STOP's lack of permanence, it is viewed as energizing
    U.S. IP protection and enforcement efforts and is generally praised by
    agency officials and industry representatives. The IP Coordinator stated
    in congressional testimony that STOP has built an expansive interagency
    process that provides the foundation for U.S. government efforts to fight
    global piracy. Several agency officials participating in STOP cited its
    advantages. They said that STOP gave them the opportunity to share ideas
    and support common goals. Many agency officials with whom we spoke said
    that STOP had brought increased attention to IP issues within their
    agencies and the private sector, as well as abroad, and attributed that to
    the fact that STOP came out of the White House, thereby lending it more
    authority and influence. One agency official pointed out that IP was now
    on the President's agenda at major summits such as the G8 and the recent
    European Union summits.^18 Another agency official praised STOP for giving
    constituent agencies the flexibility to add to and enhance existing IP
    enforcement and protection efforts.

    Private sector representatives with whom we spoke generally had positive
    views on STOP, although some thought that STOP was a compilation of new
    and ongoing U.S. agency activities that would have occurred anyway. One
    industry representative noted that STOP is a coordinated outreach to
    foreign governments that provided a collaborative alternative to the
    Special 301 process,^19 whose punitive aspects countries sometimes
    resented. Another indicated that his association now coordinates training
    with CBP that is specific to his industry as a result of contacts made
    through STOP. In addition, most private sector representatives with whom
    we spoke agreed that STOP was an effective communication mechanism between
    business and U.S. agencies on IP issues, particularly through CACP, a
    cross-industry group created by a joint initiative between the Chamber of
    Commerce and the National Association of Manufacturers. Private sector
    officials have stated that CACP meetings are their primary mechanism of
    interfacing with agency officials representing STOP. There were some
    industry representatives, though, who questioned whether STOP had added
    value beyond highlighting U.S. IP enforcement activities. Some
    representatives considered STOP to be mainly a compilation of ongoing U.S.
    IP activities that pre-existed STOP. For example, Operation Fast Link^20
    and a case involving counterfeit Viagra tablets manufactured in China,
    both listed as STOP accomplishments, began before STOP was created.

    ^18The G8 is an annual summit that involves nine countries, including
    Canada, France, Germany, Italy, Japan, the United Kingdom, Russia, and the
    United States. The European Commission President is also a G8 member.

    ^19The "Special 301" provisions of the Trade Act of 1974, as amended,
    require USTR to identify foreign countries that deny adequate and
    effective protection of intellectual property rights or fair and equitable
    market access for U.S. persons that rely on intellectual property
    protection.

    NIPLECC's Unclear Commitment Impairs Accountability

    Ambiguities surrounding NIPLECC's implementation of STOP as a successful
    strategy create challenges for accountability. How NIPLECC will provide
    accountability through STOP, in practice, remains unclear. For instance,
    although NIPLECC's most recent annual report describes many STOP
    activities and the IP Coordinator's direct involvement in them, it does
    not explain how the NIPLECC principals and the IP Coordinator plan to
    carry out their oversight responsibilities mandated by Congress to help
    ensure a successful implementation of the strategy. In addition, the STOP
    strategy document has not been revised to mention NIPLECC's oversight role
    or articulate a framework for oversight and accountability among the STOP
    agencies carrying out the strategy.

    Furthermore, while agency officials we interviewed generally considered
    STOP to be the U.S. government's IP strategy, NIPLECC officials have sent
    mixed signals about the extent to which they believe STOP is meant to
    provide accountability in terms of performance measures and resource
    levels. One official representing NIPLECC said that the STOP strategy
    should have goals and objectives, including metrics to measure progress
    about which the IP Coordinator should report. However, a NIPLECC
    representative from another agency told us that this document was a fact
    sheet rather than a strategy and that it should not be assessed as a
    national strategy but as an account of administration efforts. Similarly,
    a NIPLECC representative from a third agency was skeptical whether STOP
    should be assessed as NIPLECC's strategy. Finally, the IP Coordinator
    stated in congressional testimony that STOP is NIPLECC's strategy but also
    told us that STOP was never meant to be an institutional method for
    reporting priorities and metrics to the President or Congress, or to
    manage resources. Yet, as mentioned earlier, these are key characteristics
    of any strategy.

    ^20Under the Department of Justice's Operation Fast Link, on April 2004,
    law enforcement authorities executed over 120 total searches during the
    previous 24 hours in 27 states and in 10 foreign countries. Four separate
    undercover investigations were simultaneously conducted, striking all
    facets of the illegal software, game, movie, and music trade online.

    Conclusions

    Combating IP counterfeiting and piracy requires the involvement of many
    U.S. agencies. The STOP strategy has brought attention and energy to IP
    efforts within the U.S. government. Agency participants and industry
    observers have generally supported the new effort. At the same time, the
    challenges of IP piracy are enormous and will require the sustained and
    coordinated efforts of U.S. agencies, their foreign counterparts, and
    industry representatives to be successful. The current structure presents
    several challenges. STOP is an important first step in the development and
    implementation of an integrated strategy, but it is not well suited to
    address the problem over the long term. As a presidential initiative, STOP
    lacks permanence beyond the current administration. This poses challenges
    to its long-term effectiveness because STOP depends upon White House
    support. In addition, STOP does not fully address the six desirable
    characteristics of an effective national strategy that we believe would
    improve the likelihood of its long-term effectiveness and ensure
    accountability. This limits its usefulness as a tool to prioritize, guide,
    implement, and monitor the combined efforts of multiple agencies to
    protect and enforce IP rights. While NIPLECC offers STOP some permanence
    and congressional oversight, it is unclear how NIPLECC will carry out its
    responsibilities in practice, which, along with its legacy of inactivity,
    raises questions about the prospects for improving STOP and sustaining its
    positive momentum. NIPLECC's persistent difficulties create doubts about
    its ability to carry out its mandate - that of bringing together multiple
    agencies to successfully implement an integrated strategy for IP
    protection and enforcement that represents the coordinated efforts of all
    relevant parties.

    Recommendations for Executive Action

    To improve STOP's effectiveness as a planning tool and its usefulness to
    Congress:

    We recommend that the IP Coordinator, in consultation with the National
    Security Council and the six STOP agencies, including the Departments of
    Commerce, Homeland Security, Justice, and State; and the Office of the
    U.S. Trade Representative; and the Food and Drug Administration, take
    steps to ensure that STOP fully addresses the six desirable
    characteristics of a national strategy.

    To clarify NIPLECC's oversight role with regard to STOP:

    We recommend that the IP Coordinator, in consultation with National
    Security Council and the six STOP agencies, including the Departments of
    Commerce, Homeland Security, Justice, and State; and the Office of the
    U.S. Trade Representative; and the Food and Drug Administration, clarify
    in the STOP strategy how NIPLECC will carry out its oversight and
    accountability responsibilities in implementing STOP as its strategy.

    Agency Comments and Our Evaluation

    We provided USTR; the Departments of Commerce, Justice, Homeland Security,
    and State; USPTO; Food and Drug Administration; and the IP Coordinator
    with a draft of this report for their review and comment. The IP
    Coordinator, through the Department of Commerce in consultation with USPTO
    and the International Trade Administration, provided technical comments.
    The Department of Homeland Security, the Food and Drug Administration, and
    the Office of the U.S. Trade Representative also chose to provide
    technical comments. We modified the report where appropriate. The
    Departments of Justice and State did not provide any comments.

    We also received written comments from the U.S. Coordinator for
    International Property Enforcement (IP Coordinator), which are reprinted
    in appendix IV. The IP Coordinator reiterated our message that STOP was a
    good first step toward a comprehensive, integrated strategy to protect and
    enforce U.S. intellectual property rights and that it had energized U.S.
    efforts. He concurred with our recommendations, stating that his office
    would review them, and planned to identify opportunities for improvement
    based on those recommendations, where appropriate.

    As agreed with your office, unless you publicly announce the contents of
    this report earlier, we plan no further distribution until 30 days from
    the report date. At that time, we will send copies of this report to
    appropriate congressional committees; the U.S. Trade Representative; the
    Secretaries of the Departments of Commerce, Justice, Homeland Security,
    and State; the Director of the United States Patent and Trademark Office;
    and the Director of the U.S. Food and Drug Administration. We also will
    make copies available to others upon request. In addition, the report will
    be available at no charge on the GAO Web site at [39]http://www.gao.gov .

    If you or your staff have any questions concerning this report, please
    contact me at (202) 512-4128 or at [40]yagerl@gao.gov . Contact points for
    our Office of Congressional Relations and Public Affairs may be found on
    the last page of this report. GAO staff who made major contributions to
    this report are listed in appendix V.

    Sincerely yours,

    Loren Yager
    Director, International Affairs and Trade

    Appendix I: Scope and Methodology

    As part of GAO's review of U.S government efforts to develop a
    comprehensive and integrated strategy with a long-term perspective to
    combat intellectual property counterfeiting and piracy, we reviewed
    documents related to the National Intellectual Property Law Enforcement
    Council (NIPLECC) and the Strategy for Targeting Organized Piracy (STOP).
    Specifically, we reviewed legislation authorizing NIPLECC and augmenting
    its capabilities and mandate, as well as its legislative history. We also
    examined official STOP documents including the strategy document, Web site
    contents, IP fact sheets, NIPLECC meeting minutes, and NIPLECC's annual
    reports.

    To determine the extent to which STOP serves as a national strategy for
    combating trade in counterfeit and pirated goods, we assessed STOP using
    the six desirable characteristics of an effective national strategy
    developed in previous GAO work.^1 The six characteristics are (1) the
    purpose, scope, and methodology; (2) the problem definition and assessment
    of risks the strategy intends to address; (3) the goals, subordinate
    objectives, activities, and performance measures; (4) resources,
    investments and risk management; (5) organizational roles,
    responsibilities and coordination, including oversight; and (6) the
    strategy's integration into the goals, objectives and activities of its
    implementing agencies. (See app. II for a full description of the six
    characteristics). First, we developed a checklist using the six desirable
    characteristics of an effective national strategy and verified the
    relevance of the checklist to the STOP strategy. Specifically, three
    analysts from the audit team independently reviewed the April 2006 Bush
    Administration: Strategy for Targeting Organized Piracy, Accomplishments
    and Initiatives document by applying the checklist to the strategy, then
    met to discuss the relevance of the checklist to the information contained
    in the document. The analysts concluded that the checklist was relevant
    and appropriate for assessing STOP as a strategy. Second, six
    analysts--three from the audit team and three with experience using the
    methodology for prior GAO work--independently assessed STOP using the
    checklist. The six analysts then divided into two panels, each with a mix
    of audit team and nonaudit team members and an adjudicator. Each panel
    discussed their observations and reached consensus on a consolidated
    assessment. Finally, the two panels met to reconcile any differences in
    their consolidated assessments using adjudicators as facilitators if
    needed. On the basis of these evaluations, we developed a consolidated
    summary of the extent that STOP addressed the six characteristics and 29
    elements of an effective national strategy. We repeated this process when
    the June 2006 Bush Administration: Strategy for Targeting Organized
    Piracy, Accomplishments and Initiatives document became available. These
    results are presented in figure 3 of this report.

    ^1 [41]GAO-04-408T .

    We gave each of the 29 elements under the six characteristics an
    individual rating of either: "fully addresses," "partially addresses," or
    "does not address." According to our methodology, a strategy "fully
    addresses" an element of a characteristic when it explicitly cites all
    parts of the element, and the strategy has sufficient specificity and
    detail. Within our designation of "partially addresses," one or more of
    the element's individual parts should be addressed. A strategy "does not
    address" an element of a characteristic when it does not explicitly cite
    or discuss any parts of the element of that characteristic, or any
    implicit references to the elements are either too vague or general to be
    useful. We conducted our review of STOP as a national strategy from April
    to October of 2006.

    We also obtained and analyzed documents required under the Government
    Performance Results Act (GPRA) of 1993, and IP-related planning documents,
    from the government agencies involved with STOP. The GPRA documents we
    reviewed included the "Performance Annual Report," the "Annual Performance
    Plan," and the "Strategic Plan." We assessed the extent to which these
    agency documents support STOP goals and add information that may support
    characteristics and elements necessary for an effective national strategy.

    In addition, we interviewed agency officials involved in NIPLECC and STOP,
    including the Coordinator for International Intellectual Property
    Enforcement. We also interviewed representatives from the private sector.
    We used U.S. Customs and Border Protection data on commodities seized for
    IP violations to select the private sector groups judgmentally to ensure
    that we obtained the views of major cross-industry associations, as well
    as individual associations and companies representing key industries that
    are heavily affected by IP violations such as the manufacturing,
    entertainment, and pharmaceutical industries. In all we spoke to 20
    representatives from 16 private sector groups. Interviewees included the 6
    cross-industry associations addressing IP violations, 7 industry level
    associations, and representatives from three companies. We also reviewed
    their testimonies before Congress when available. We conducted our audit
    work from February to October of 2006 in accordance with generally
    accepted government auditing standards.

    Appendix II: GAO's Analysis of STOP as an Effective National Strategy

    In prior work, GAO identified six desirable characteristics of an
    effective national strategy that would enable its implementers to
    effectively shape policies, programs, priorities, resource allocations,
    and standards and that would enable federal departments and other
    stakeholders to achieve the identified results. GAO further determined
    that national strategies with the six characteristics can provide
    policymakers and implementing agencies with a planning tool that can help
    ensure accountability and more effective results. GAO has applied this set
    of characteristics in our assessment of strategies for combating
    terrorism, defense management costs, and the National Strategy for Victory
    in Iraq.

    National strategies are not required by executive or legislative mandate
    to address a single, consistent set of characteristics, and they contain
    varying degrees of detail based on their different scopes. Furthermore, we
    found there was no commonly accepted set of characteristics used for an
    effective national strategy. Nonetheless, after consulting numerous
    sources, GAO identified a set of desirable characteristics that we believe
    would provide additional guidance to responsible parties for developing
    and implementing the strategies--and to enhance their usefulness as
    guidance for resource and policy decision makers and to better ensure
    accountability.

    Six Desirable Characteristics Were Developed from Numerous and Diverse Sources

    To develop these six desirable characteristics of an effective national
    strategy, GAO reviewed several sources of information. First, GAO gathered
    statutory requirements pertaining to national strategies, as well as
    legislative and executive branch guidance. GAO also consulted the
    Government Performance and Results Act of 1993, general literature on
    strategic planning and performance, and guidance from the Office of
    Management and Budget on the President's Management Agenda. In addition,
    among other things, GAO studied past reports and testimonies for findings
    and recommendations pertaining to the desirable elements of a national
    strategy, as well as recommendations by national commissions and research
    organizations that have commented on national strategies. Furthermore, we
    consulted widely within GAO to obtain updated information on strategic
    planning, integration across and between the government and its partners,
    implementation, and other related subjects.

    GAO developed these six desirable characteristics, identified in table 2,
    based on their underlying support in legislative or executive guidance and
    the frequency with which they were cited in other sources. We believe a
    national strategy should ideally contain all of these characteristics.
    Although the authors of national strategies might organize these
    characteristics in a variety of ways and/or use different terms, we
    present them in this order because they flow logically from conception to
    implementation. Specifically, the strategy's purpose leads to the
    definition of the problems and risks it intends to address, which in turn
    leads to specific actions for tackling those problems and risks,
    allocating and managing the appropriate resources, identifying different
    organizations' roles and responsibilities, and finally to integrating
    action among all relevant parties and implementing the strategy.

    Table 2: Summary of Desirable Characteristics for an Effective National
    Strategy

    Desirable
    characteristic          Description           Examples of elements
    Purpose, scope, and     Addresses why the        o Principles guiding
    methodology             strategy was             development.
                               produced, the scope      o Impetus: e.g.,
                               of its coverage, and     legislation.
                               the process by which     o Definition of key terms
                               it was developed.        and mission areas.
                                                        o Process and methodology
                                                        to produce strategy (via
                                                        interagency task force,
                                                        private input, etc.).
    Detailed discussion of  Addresses the            o Discussion and
    problems, risks, and    particular national      definition of problems,
    threats                 problems and threats     causes, and operating
                               at which the strategy    environment.
                               is directed.             o Risk assessment,
                                                        including analysis of
                                                        threat and
                                                        vulnerabilities.
                                                        o Quality of data:
                                                        constraints,
                                                        deficiencies, unknowns.
    Desired goals,          Addresses what the       o Overall results
    objectives, activities, strategy is trying to    desired.
    and output-related and  achieve, steps to        o Hierarchy of goals and
    outcome-related         achieve those            subordinate objectives.
    performance measures    results, as well as      o Priorities, milestones,
                               the priorities,          and performance measures
                               milestones, and          to gauge results.
                               performance measures     o Specific performance or
                               to gauge results.        activity measures.
                                                        o Limitations on progress
                                                        indicators.
    Description of future   Addresses what the       o Resources and
    costs and resources     strategy will cost,      investments associated
    needed                  the sources and types    with strategy.
                               of resources and         o Types of resources
                               investments needed,      required.
                               and where resources      o Sources of resources.
                               and investments          o Economic principles,
                               should be targeted by    e.g., balancing benefits
                               balancing risk           and costs.
                               reductions and costs.    o Resource allocation
                                                        mechanisms.
                                                        o Mandates/incentives to
                                                        spur action.
                                                        o Importance of fiscal
                                                        discipline.
                                                        o Linkage to other
                                                        resource documents.
                                                        o Risk management
                                                        principles.
    Delineation of U.S.     Addresses who will be    o Lead, support, and
    government roles and    implementing the         partner roles and
    responsibilities and    strategy, what their     responsibilities.
    coordination mechanism  roles will be            o Accountability and
                               compared to others,      oversight framework.
                               and mechanisms for       o Potential changes to
                               them to coordinate       structure.
                               their efforts.           o Specific coordination
                                                        processes.
                                                        o Conflict resolution
                                                        mechanism.
    Description of          Addresses how a          o Integration with other
    strategy's integration  national strategy        national strategies
    with implementing       relates to the           (horizontal).
    agencies                strategies' goals,       o Integration with
                               objectives, and          relevant documents from
                               activities of            other implementing
                               implementing             organizations (vertical).
                               agencies.                o Implementation
                                                        guidance.
                                                        o Details on subordinate
                                                        strategies and plans for
                                                        implementation (e.g.,
                                                        human capital, enterprise
                                                        architecture).

    Source: GAO.

    We recognize that strategies themselves are not end points, but rather,
    are starting points. In our view, the strengths of some strategies are
    useful in suggesting ways to enhance the value of other strategies, fill
    in gaps, speed implementation, guide resource allocations, and provide
    oversight opportunities. As with any strategic planning effort,
    implementation is the key. The ultimate measure of these strategies' value
    will be the extent they are useful as guidance for policy and decision
    makers in allocating resources and balancing stated priorities with other
    important objectives. It will be important over time to obtain and
    incorporate feedback from the "user" community as to how the strategies
    can better provide guidance and how Congress and the administration can
    identify and remedy impediments to implementation, such as legal,
    international, jurisdictional, or resource constraints.

    STOP Partially Addresses Five Characteristics and Does Not Address One

    Our analysis showed that the strategy partially addresses five of the six
    desirable characteristics of an effective national strategy and fails to
    address one characteristic. As indicated in figure 3, shown earlier, the
    Strategy for Targeting Organized Piracy (STOP) is missing key elements
    within each characteristic related to planning and accountability such as
    performance measures, resources and investments, and designation of
    oversight responsibility. The following section discusses the STOP
    strategy as it relates to each of the desirable characteristics of an
    effective national strategy.

      STOP Discusses Purpose and Scope but Lacks Detailed Discussion of Methodology

    This characteristic addresses why the strategy was produced, the scope of
    its coverage, and the process by which it was developed. For example, a
    strategy should discuss the specific impetus that led to its being written
    (or updated), such as statutory requirements, executive mandates, or other
    events. Furthermore, a strategy would enhance clarity by including
    definitions of key, relevant terms. In addition to describing what it is
    meant to do and the major functions, mission areas, or activities it
    covers, a national strategy would ideally address its methodology. For
    example, a strategy should discuss the principles or theories that guided
    its development, the organizations or offices that drafted the document,
    or working groups that were consulted in its development. A complete
    description of purpose, scope, and methodology make the document more
    useful to organizations responsible for implementing the strategies, as
    well as to oversight organizations such as Congress.

    STOP clearly identifies the purpose of the strategy as protecting and
    enforcing IP through targeting organized piracy, which encourages American
    innovation and keeps American businesses competitive throughout the world.
    However, STOP does not provide a complete discussion of the purpose
    because it does not clearly discuss the specific impetus that led to the
    creation of this particular strategy at the time it was written. Such an
    impetus might include a discussion of increasing demand by the victims of
    IP violations, relevant legislation or executive mandates, or key events
    related to piracy that may have functioned as a catalyst in developing the
    strategy. STOP fully addresses the element regarding the scope of the
    strategy. The five general goals serve to clearly identify the major
    functions and mission areas the strategy covers and provides supporting
    activities for each goal. STOP, however, does not include a discussion of
    its methodology such as the process that produced the strategy, what
    organizations or offices were involved in drafting the document or whether
    it was the result of a working group.

      STOP Identifies the Problem but Lacks Detailed Discussion of Risk Assessment

    This characteristic addresses the particular national problems and threats
    at which the strategy is directed. Specifically, this means a detailed
    discussion or definition of the problems the strategy intends to address,
    their causes, and operating environment. In addition, this characteristic
    entails a risk assessment, including an analysis of the threats to and
    vulnerabilities involved with the problem and implementing the strategy.
    Specific information concerning a risk assessment helps responsible
    parties better implement the strategy by ensuring that priorities are
    clear and focused on the greatest needs. A discussion of the quality of
    data available regarding this characteristic, such as known constraints or
    deficiencies, would also be useful.

    Global piracy and counterfeiting are identified as the problem in the
    strategy addresses. While these terms are not defined in detail, the
    strategy contains additional information on the types of piracy and
    counterfeiting that affect U.S. businesses such as references to software
    piracy, counterfeit labels, and counterfeit Viagra.

    STOP only partially addresses the causes of the problem and the operating
    environment. The strategy implies, but does not clearly discuss, some
    causes of global piracy and counterfeiting when describing its activities.
    For instance, STOP discusses efforts to assist companies with supply chain
    management and U.S. government case referral mechanisms to address
    instances where foreign governments fail to provide adequate IP protection
    to U.S. businesses. In addition, STOP refers to, but does not clearly
    discuss, a variety of operating environments relevant to counterfeiting,
    such as references to IP violations on the internet and seizures of
    counterfeit products at the U.S. border, as well as in warehouses in
    China.

    Further, STOP does not provide a detailed risk assessment of the threats
    involved in counterfeiting and piracy. While the strategy states that
    "American businesses lose $200 to $250 billion a year to pirated and
    counterfeit goods," it neither provides a detailed discussion of the
    economic threat to U.S. business nor does it discuss other risks such as
    the potential threats to consumer safety from counterfeited products. STOP
    also states that profits related to piracy are "one way for criminal
    networks to support their heinous activities" but does not discuss the
    issue any further. In addition, STOP does not include any discussion
    regarding the quality of data it cites in the strategy or on
    counterfeiting and piracy in general.

      STOP Addresses Goals and Activities but Lacks Important Elements for Measuring
      Performance

    This characteristic addresses what the national strategy strives to
    achieve and the steps needed to garner those results, as well as the
    priorities, milestones, and performance measures to gauge results. At the
    highest level, this could be a description of the overall results desired,
    followed by a logical hierarchy of major goals, subordinate objectives,
    and specific activities to achieve results. In addition, it would be
    helpful if the strategy discussed the importance of implementing parties'
    efforts to establish priorities, milestones, and performance measures,
    which help ensure accountability. Ideally, a national strategy would set
    clear desired results and priorities, specific milestones, and
    outcome-related performance measures while giving implementing parties
    flexibility to pursue and achieve those results within a reasonable time
    frame. If significant limitations on performance measures exist, other
    parts of the strategy should address plans to obtain better data or
    measurements, such as national standards or indicators of preparedness.
    Identifying goals, objectives, and performance measures aids implementing
    parties in achieving results and enables more effective oversight and
    accountability. Identifying priorities and milestones would provide
    decision makers with information to better assess progress and manage time
    and resources. In addition, identifying and measuring outcome-related
    performance, rather than output measures alone, would allow for more
    accurate measurement of program results and assessment of program
    effectiveness.^1 STOP fully addresses goals and activities in its strategy
    document, while partially addressing subordinate objectives and
    performance measures.

    STOP clearly identifies its goals and further identifies overall results
    desired with references to a level playing field for American businesses
    throughout the world. STOP goals are to

               o empower American innovators to better protect their rights at
               home and abroad,
               o increase efforts to seize counterfeit goods at our borders,
               o pursue criminal enterprises involved in piracy and
               counterfeiting,
               o work closely and creatively with U.S. industry, and
               o aggressively engage our trading partners to join U.S. efforts.

    STOP also presents numerous activities clearly associated with each goal.
    In general, STOP only partially addresses subordinate objectives because
    they are clearly stated under some goals, but implied or otherwise,
    unclear in other goals. Under the third goal for example, to pursue
    criminal enterprises involved in piracy and counterfeiting, STOP clearly
    identifies increasing criminal prosecutions, improving international
    enforcement and strengthening laws as the subordinate objectives. In
    contrast, the subordinate objectives are not clearly identified under the
    fourth goal-- to work closely and creatively with U.S. industry-- although
    they can be inferred based on the activities, such as helping businesses
    to ensure their supply and distribution chains are free of counterfeiters
    and correcting faulty business practices.

    STOP is missing a number of elements within this characteristic that are
    important for effective monitoring and oversight, including a clear
    discussion of priorities, milestones, and processes for monitoring and
    reporting on progress. For example, STOP mentions implementing a new risk
    model to target high-risk cargo but does not specify time frames for its
    completion.

    ^1An "output measure" records the actual level of activity or whether the
    effort was realized and can assess how well a program is being carried
    out. An "outcome measure" assesses the actual results, effects, or impact
    of an activity compared with its intended purpose.

    STOP only partially addresses output-related and outcome-related
    performance measures, lacking information relevant to assessing how well
    programs are implemented and their impacts as compared with the intended
    purpose. For example, STOP cites output-related performance measures such
    as the number of calls received on the U.S. Patent and Trade Mark Office
    (USPTO) STOP hotline, the number of small businesses that attended four
    intellectual property Road Show events in 2005, the number of prosecutors
    in the Computer Hacking and Intellectual Property (CHIP) units within the
    Department of Justice and the percentage increase in copyright and
    trademark cases filed. However, these figures are presented without any
    baselines or targets needed to assess progress. In addition, STOP cites
    outcome-related performance measures for a few activities, such as
    shutting down a sophisticated international peer-to-peer network used by
    over 133,000 members. It should be noted that performance measures should
    be carefully chosen to be meaningful for each goal, acknowledging
    limitations, and avoiding perverse incentives where possible.

    STOP provides no discussion of any processes for monitoring and reporting
    on progress or the limitations of its output-related and outcome-related
    performance measures. Without effective performance measures in place,
    STOP's goals, objectives and activities cannot be effectively measured. In
    the absence of these elements policymakers cannot effectively monitor
    STOP's progress toward its stated goals.

      STOP Does Not Address Elements Relevant to Resources, Investments, or Risk
      Management

    This characteristic addresses the costs and resources involved in
    implementing the strategy and how the strategy balances those costs with
    the benefits and risks. This characteristic discusses the current and
    future costs of the strategy, the sources of resources and investments
    associated with the strategy (e.g., federal agencies, private sector), and
    the types of investment needed (e.g., human capital, information
    technology, research and development, budgetary). Ideally, a strategy
    would also identify where those resources and investments should be
    targeted and appropriate mechanisms to allocate resources. A national
    strategy should also address the difficult, but critical, issues about who
    pays and how such efforts will be funded and sustained in the future.

    A national strategy should also discuss linkages to other resource
    documents, such as federal agency budgets or human capital, information
    technology, research and development, and acquisition strategies. Finally,
    a national strategy should also discuss in greater detail how risk
    management will aid implementing parties in prioritizing and allocating
    resources, including how this approach will create society-wide benefits
    and balance these with the cost to society. Guidance on costs and
    resources needed using a risk management approach helps implementing
    parties allocate resources according to priorities; track costs and
    performance; and shift resources, as appropriate. Such guidance also would
    assist Congress and the administration in developing a more effective
    strategy to achieve the stated goals.

    STOP does not address elements related to resources and investments or
    risk management. STOP does not identify current or future costs of
    implementing the strategy. Costs related to implementing STOP would
    include, among other things, costs related to investigating and
    prosecuting of IP related crime, conducting IP training and technical
    assistance, and developing new risk assessment technologies. STOP also
    does not identify the sources, or types, of resources required by the
    strategy. While the strategy document lists numerous activities, some
    involving multiple agencies, it neither indicates which agencies have
    employed what types of resources to carry out the activity, nor does it
    identify the level and type of resources needed in order to effectively
    implement the activity. Furthermore, with no established priorities or
    discussion of risk management, the strategy does not address how to
    allocate resources in order to best manage the threats of counterfeit
    products with the resources available to target organized piracy. As a
    result, the resources necessary to implement STOP cannot be reliably
    determined and policymakers are limited in their ability to manage
    resources and shift them as appropriate with changing conditions.

      STOP Partially Addresses Organizational Roles and Coordination but Lacks
      Framework for Oversight

    This characteristic addresses which organizations will implement the
    strategy, their roles and responsibilities, and mechanisms for
    coordinating their efforts. This characteristic entails identifying the
    specific federal departments, agencies, or offices involved, as well as
    the roles and responsibilities of private and international sectors, if
    appropriate. A strategy would ideally clarify implementing organizations'
    relationships in terms of leading, supporting, and partnering. In
    addition, a strategy should describe the organizations that will provide
    the overall framework for accountability and oversight, such as the
    National Security Council, Office of Management and Budget, Congress, or
    other organizations. Furthermore, a strategy should also identify specific
    processes for coordination and collaboration between sectors and
    organizations--and address how any conflicts would be resolved. Addressing
    this characteristic fosters coordination and enhances both implementation
    and accountability.

    STOP provides some information on organizational roles and
    responsibilities, such as identifying lead, support, and partner roles for
    specific activities. For example, it identifies the White House as leading
    STOP and indicates partnering roles among agencies, such as between the
    Department of Homeland Security's Immigration and Customs Enforcement
    (ICE) and the Department of Justice's Federal Bureau of Investigation
    (FBI), which jointly run the National Intellectual Property (IPR) Center.
    However, STOP neither discusses the need, nor designates any agency with
    responsibility for providing framework for oversight and accountability
    within the strategy.

    STOP also partially addresses mechanisms for coordination. For example,
    the strategy discusses some coordination among member agencies in its
    description of STOP activities but lacks a clear and detailed discussion
    of how overall coordination occurs among agencies. For instance, there is
    no mention of STOP meetings, their frequency, objectives, or agendas. In
    addition, there is no discussion of how agencies coordinate on IP issues
    that may involve law enforcement sensitive material among agencies and
    other entities with which they collaborate. Furthermore, STOP does not
    address how conflicts among member agencies should be resolved.

      STOP Partially Addresses Integration with Member Agencies but Lacks Linkage to
      Individual Agency Goals and Objectives

    This characteristic addresses both how a national strategy relates to
    other strategies' goals, objectives, and activities (horizontal
    integration)--and to subordinate levels of government and other
    organizations and their plans to implement the strategy (vertical
    integration). For example, the strategy could indicate how it relates to
    implementing agencies' shared goals, subordinate objectives, and
    activities. Similarly, related strategies should highlight their common or
    shared goals, subordinate objectives, and activities. In addition, the
    strategy could address its relationship with relevant documents from
    implementing organizations, such as the strategic plans, annual
    performance plans, or annual performance reports required of federal
    agencies by the Government Performance and Results Act. A strategy should
    also discuss, as appropriate, various strategies and plans produced by the
    state, local, private, or international sectors. A strategy also should
    provide guidance such as the development of national standards to link
    together more effectively the roles, responsibilities, and capabilities of
    the implementing parties. A clear relationship between the strategy and
    other critical implementing documents helps agencies and other entities
    understand their roles and responsibilities, foster effective
    implementation, and promote accountability.

    STOP partially addresses this characteristic. STOP associates its goals
    with specific member agencies. For example, pursuing criminal enterprises
    is associated with the Department of Justice, and increasing efforts to
    stop counterfeits goods at the border is associated with the U.S. Customs
    and Border Protection. However, STOP does not consistently articulate how
    it relates to agencies' strategies, goals, and objectives. While STOP is
    missing many elements related to the desirable characteristics, we found
    that agency planning documents contained some of the missing information.
    For example, we identified federal agency planning documents that provide
    additional detail on missing elements important to planning and
    accountability that STOP did not adequately address. However, the need to
    consult multiple agency documents underscores the strategy's lack of
    integration and limits the value of STOP as a management tool for
    effective oversight and accountability. Clearly linking STOP to the
    agencies' own strategies is important to ensure that the strategy not only
    reflects individual agencies' priorities and objectives but also
    integrates them in a comprehensive manner, enhancing collaboration among
    the agencies and providing a more complete picture to policymakers with
    oversight responsibilities.

    Appendix III: Bush Administration: Strategy for Targeting Organized Piracy
    Accomplishments and Initiatives

    Appendix IV: Comments from the Department of Commerce

    Appendix V: GAO Contact and Staff Acknowledgments

    GAO Contact

    Loren Yager, (202) 512-4128, or yagerl@gao.gov

    Staff Acknowledgments

    In addition to the individual named above, Christine Broderick, Assistant
    Director; Nina Pfeiffer; Jasminee Persaud; and Wendy Ho made significant
    contributions to this report. Martin De Alteriis, Kelly Baumgartner, Karen
    Deans, Etana Finkler, Ernie Jackson, Patrick Hickey, and Terry Richardson
    also provided assistance.

    (320400)

    GAO's Mission

    The Government Accountability Office, the audit, evaluation and
    investigative arm of Congress, exists to support Congress in meeting its
    constitutional responsibilities and to help improve the performance and
    accountability of the federal government for the American people. GAO
    examines the use of public funds; evaluates federal programs and policies;
    and provides analyses, recommendations, and other assistance to help
    Congress make informed oversight, policy, and funding decisions. GAO's
    commitment to good government is reflected in its core values of
    accountability, integrity, and reliability.

    Obtaining Copies of GAO Reports and Testimony

    The fastest and easiest way to obtain copies of GAO documents at no cost
    is through GAO's Web site ( www.gao.gov ). Each weekday, GAO posts
    newly released reports, testimony, and correspondence on its Web site. To
    have GAO e-mail you a list of newly posted products every afternoon, go to
    www.gao.gov and select "Subscribe to Updates."

    Order by Mail or Phone

    The first copy of each printed report is free. Additional copies are $2
    each. A check or money order should be made out to the Superintendent of
    Documents. GAO also accepts VISA and Mastercard. Orders for 100 or more
    copies mailed to a single address are discounted 25 percent. Orders should
    be sent to:

    U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
    D.C. 20548

    To order by Phone: Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
    512-6061

    To Report Fraud, Waste, and Abuse in Federal Programs

    Contact:

    Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail:
    fraudnet@gao.gov Automated answering system: (800) 424-5454 or (202)
    512-7470

    Congressional Relations

    Gloria Jarmon, Managing Director, JarmonG@gao.gov (202) 512-4400 U.S.
    Government Accountability Office, 441 G Street NW, Room 7125 Washington,
    D.C. 20548

    Public Affairs

    Paul Anderson, Managing Director, AndersonP1@gao.gov (202) 512-4800
    U.S. Government Accountability Office, 441 G Street NW, Room 7149
    Washington, D.C. 20548

    www.gao.gov/cgi-bin/getrpt?GAO-07-74 .

    To view the full product, including the scope
    and methodology, click on the link above.

    For more information, contact Loren Yager at (202) 512-4128 or
    yagerl@gao.gov.

    Highlights of [49]GAO-07-74 , a report to the Chairman, Committee on
    Government Reform, House of Representatives

    November 2006

    INTELLECTUAL PROPERTY

    Strategy for Targeting Organized Piracy (STOP) Requires Changes for
    Long-term Success

    U.S. government efforts to protect and enforce intellectual property (IP)
    rights are crucial to preventing billions of dollars in losses and
    mitigating health and safety risks from trade in counterfeit and pirated
    goods. These efforts are coordinated through the National Intellectual
    Property Law Enforcement Coordination Council (NIPLECC), created by
    Congress in 1999, and the Strategy for Targeting Organized Piracy (STOP),
    initiated by the Bush administration in 2004. This report describes the
    evolution of NIPLECC and STOP, assesses the extent to which STOP addresses
    the desirable characteristics of an effective national strategy, and
    evaluates the challenges to implementing a strategy for protecting and
    enforcing IP rights. GAO examined relevant documents, interviewed agency
    and industry officials, and assessed STOP using criteria previously
    developed by GAO.

    [50]What GAO Recommends

    To improve strategic planning for IP protection, GAO recommends that the
    IP Coordinator, in consultation with the National Security Council and the
    STOP agencies (1) take steps to ensure that STOP fully addresses the six
    characteristics of a national strategy and (2) clarify how NIPLECC will
    carry out its oversight and accountability responsibilities in
    implementing STOP as its strategy. The IP Coordinator concurred with both
    recommendations.

    Although NIPLECC and STOP originated under different authorities, the
    lines between them have become increasingly blurred. NIPLECC is a
    coordinating council, while STOP is a strategy involving coordination led
    by the National Security Council. While NIPLECC has struggled to define
    its purpose, STOP generated coordination and attention to IP protection
    from the outset. Congress gave NIPLECC an oversight role, funding, and an
    IP Coordinator as its head in 2005, but STOP remains prominent. Their
    functions, however, increasingly overlap. The IP Coordinator regularly
    conducts STOP activities and speaks for STOP before Congress and private
    industry. Most significantly, NIPLECC recently adopted STOP as its
    strategy.

    STOP is a good first step toward a comprehensive integrated national
    strategy to protect and enforce IP rights and has energized protection
    efforts. GAO found, however, that STOP's potential is limited because it
    does not fully address the characteristics of an effective national
    strategy, which GAO believes helps increase the likelihood of
    accountability, as well as effectiveness. STOP does not fully address
    characteristics related to planning and accountability. For example, its
    performance measures lack baselines and targets. STOP lacks a discussion
    of costs, the types and sources of investments needed, and processes to
    address risk management. Finally, STOP lacks a full discussion oversight
    responsibility.

    The current structures present several challenges to implementing a
    long-term strategy. First, NIPLECC retains an image of inactivity, and
    many private sector groups GAO interviewed were unclear about its role.
    STOP, despite its energy and prominence, lacks permanence beyond the
    current administration. Second, NIPLECC's commitment to implementing an
    effective strategy is unclear. For instance, NIPLECC's recent annual
    report does not explain how it plans to provide oversight. NIPLECC
    officials have sent mixed signals about STOP's role, with one saying STOP
    should include metrics to measure progress, and another calling STOP an
    account of administration efforts, not a strategy.

    Extent STOP Addresses GAO's Desirable Characteristics of an Effective
    National Strategy

    References

    Visible links
      35. http://www.gao.gov/cgi-bin/getrpt?GAO-04-408T
      36. http://www.gao.gov/cgi-bin/getrpt?GAO-06-852
      37. http://www.gao.gov/cgi-bin/getrpt?GAO-06-788
      38. http://www.gao.gov/cgi-bin/getrpt?GAO-04-912
      39. http://www.gao.gov/
      41. http://www.gao.gov/cgi-bin/getrpt?GAO-04-408T
      49. http://www.gao.gov/cgi-bin/getrpt?GAO-07-74
    *** End of document. ***