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
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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
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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][email protected] . 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 [email protected]
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)
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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
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