    Intellectual Property: Federal Enforcement Has Generally
    Increased, but Assessing Performance Could Strengthen Law
    Enforcement Efforts (11-MAR-08, GAO-08-157).

    Federal law enforcement actions against criminals who manufacture
    and distribute counterfeit and pirated goods are important to
    enforcing intellectual property (IP) rights and protecting
    Americans from unsafe or substandard products. GAO was asked to:
    (1) examine key federal agencies' roles, priorities, and
    resources devoted to IP-related enforcement; (2) evaluate
    agencies' IP-related enforcement statistics and achievements; and
    (3) examine the status of the National Intellectual Property
    Rights Coordination Center. GAO reviewed relevant documents,
    interviewed officials in five key agencies, and analyzed agency
    IP enforcement data from fiscal years 2001 through 2006.
    -------------------------Indexing Terms-------------------------
    REPORTNUM:   GAO-08-157
        ACCNO:   A81281
      TITLE:     Intellectual Property: Federal Enforcement Has Generally
    Increased, but Assessing Performance Could Strengthen Law
    Enforcement Efforts
         DATE:   03/11/2008
      SUBJECT:   Agency missions
    	     Allocation (Government accounting)
    	     Consumer protection
    	     Crime prevention
    	     Crimes
    	     Criminal investigation
    	     Data collection
    	     Intellectual property
    	     Interagency relations
    	     Investigations by federal agencies
    	     Law enforcement
    	     Law enforcement agencies
    	     Performance measures
    	     Product evaluation
    	     Program evaluation
    	     Program management
    	     Public health
    	     Regulatory agencies
    	     Risk assessment
    	     Risk management
    	     Safety standards
    	     Search and seizure
    	     Statistical data
    	     Assessments
    	     Policies and procedures

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    GAO-08-157

         * [1]

              * [2]Results in Brief
              * [3]Background
              * [4]Multiple Agencies Carry Out IP Enforcement, but Their IP Pri

                   * [5]Key Agencies Carry Out Three Primary IP-Related
                     Enforcement
                   * [6]Responsible Agencies Have Broad Missions, and IP
                     Enforcement
                   * [7]Determining the Total Resources Allocated to IP-Related
                     Enfo
                   * [8]Agency Enforcement Roles and Actions Are Often
                     Interdependen

              * [9]IP Enforcement Generally Increased, but Agencies Have Not Ta

                   * [10]IP Enforcement Statistics Show an Increase in Activity

                        * [11]CBP Seizure Activity Has Grown, but Penalty
                          Collections Rema
                        * [12]CBP's Enforcement of Exclusion Orders Has Been
                          Limited
                        * [13]The Number of Investigative Agency IP Cases Have
                          Fluctuated,
                        * [14]DOJ's IP Enforcement Has Generally Increased

                   * [15]Agencies Have Not Taken Steps to Assess IP Law
                     Enforcement E

              * [16]The National Intellectual Property Rights Coordination Cente

                   * [17]Created to Improve and Coordinate IP Enforcement, the
                     Center
                   * [18]Despite Congressional Expectations, the Center's
                     Staffing Le
                   * [19]ICE Views Center's Relocation as an Opportunity to
                     Revisit C

              * [20]Conclusions
              * [21]Recommendations for Executive Action
              * [22]Agency Comments and Our Evaluation

         * [23]Appendix I: Scope and Methodology
         * [24]Appendix II: Federal Protection and Enforcement of IP Rights
         * [25]Appendix III: Private Sector Views on Federal IP Enforcement

              * [26]Various Companies Are Impacted by Counterfeiting and Piracy

                   * [27]Industry Concerned over Lack of Resources to Carry Out
                     IP En

                        * [28]Industry Cites Lack of Information Sharing and
                          Unclear Agenc
                        * [29]Industry Has Cited Some IP Enforcement Improvements
                          Followin
                        * [30]Increased Training and Consumer Awareness Cited as
                          Areas for

         * [31]Appendix IV: Comments from the Department of Homeland Securi

              * [32]GAO Comments

         * [33]Appendix V: Comments from the Department of Justice

              * [34]GAO Comments

         * [35]Appendix VI: Comments from the Department of Health and Huma

              * [36]GAO Comments

         * [37]Appendix VII: GAO Contact and Staff Acknowledgments

              * [38]GAO Contact
              * [39]Staff Acknowledgments

                   * [40]Order by Mail or Phone

    Report to the Ranking Member, Subcommittee on Oversight of Government
    Management, the Federal Workforce, and the District of Columbia, Committee
    on Homeland Security and Government Affairs, U.S. Senate

    United States Government Accountability Office

    GAO

    March 2008

    INTELLECTUAL PROPERTY

    Federal Enforcement Has Generally Increased, but Assessing Performance
    Could Strengthen Law Enforcement Efforts

    GAO-08-157

    Contents

    Letter 1

    Results in Brief 3
    Background 7
    Multiple Agencies Carry Out IP Enforcement, but Their IP Priorities Vary,
    and Few Resources Are Dedicated Exclusively to IP Enforcement 9
    IP Enforcement Generally Increased, but Agencies Have Not Taken Key Steps
    to Assess Enforcement Efforts 21
    The National Intellectual Property Rights Coordination Center Has Not
    Achieved Its Mission, and Staff Levels Have Decreased 36
    Conclusions 42
    Recommendations for Executive Action 43
    Agency Comments and Our Evaluation 44
    Appendix I Scope and Methodology 48
    Appendix II Federal Protection and Enforcement of IP Rights under U.S. Law
    52
    Appendix III Private Sector Views on Federal IP Enforcement Efforts 56
    Appendix IV Comments from the Department of Homeland Security 63
    Appendix V Comments from the Department of Justice 69
    Appendix VI Comments from the Department of Health and Human Services 80
    Appendix VII GAO Contact and Staff Acknowledgments 83

    Tables

    Table 1: Dollar Value of IP Penalty Amounts Assessed and Collected by CBP,
    Fiscal Years 2001- 2006 23
    Table 2: DOJ's IP Crime Sentencing Outcomes, Fiscal Years 2001 - 2006 31
    Table 3: Summary of Federal Protection and Enforcement of IP Rights under
    U.S. Law 53
    Table 4: Summary of Industry Representatives' Views on the Impact of
    Counterfeiting and Piracy, by Sector 57
    Table 5: Summary of Industry Representatives' Views on Federal Resources
    Dedicated to IP Enforcement, by Sector 58
    Table 6: Summary of Industry Representatives' Views on Coordination with
    Federal IP Enforcement Agencies, by Sector 59
    Table 7: Summary of Industry Representatives' Views on Effectiveness of
    Training on IP Enforcement Activity, by Sector 60
    Table 8: Summary of Industry Representatives' Views on Areas for Improved
    IP Enforcement, by Sector 61

    Figures

    Figure 1: Federal IP Enforcement Functions, the Key Agencies That Execute
    Them, and the Agencies' Structures 10
    Figure 2: Estimated Number of Investigative Resources Spent on IP-Related
    Investigations by ICE, FBI, and FDA, Fiscal Years 2001-2006 19
    Figure 3: Trends in the Number of IP Seizure Actions and Estimated
    Domestic Values of Seizures by CBP, Fiscal Years 2001-2006 22
    Figure 4: Number of CBP Exclusion Order Exams Performed and IP
    Discrepancies Found, Fiscal Years 2002-2006 25
    Figure 5: Number of Criminal Cases Opened by ICE, FBI, and FDA Related to
    IP Investigations, Fiscal Years 2001-2006 28
    Figure 6: Number of Arrests, Indictments, and Convictions by FBI, ICE, and
    FDA, Fiscal Years 2001-2006 29
    Figure 7: Number of IP-Related Cases Filed by DOJ, Fiscal Years 2001-2006
    30

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

    Abbreviations

    C3: Cyber Crimes Center:
    CBP: Customs and Border Protection:
    CCIPS: Computer Crime and Intellectual Property Section:
    CHIP: Computer Hacking and Intellectual Property:
    DHS: Department of Homeland Security:
    DOJ: Department of Justice:
    FBI: Federal Bureau of Investigation:
    FDA: Food and Drug Administration:
    FTE: full-time-equivalent:
    HHS: Health and Human Services:
    ICE: Immigration and Customs Enforcement:
    IMAGEICE: Mutual Agreement between Government and Employers:
    IP: Intellectual Property:
    NIPLECC: National Intellectual Property Law Enforcement Coordinating
    Council:
    STOP: Strategy Targeting Organized Piracy:

    United States Government Accountability Office
    Washington, DC 20548

    March 11, 2008

    The Honorable George V. Voinovich:
    Ranking Member:
    Subcommittee on Oversight of Government Management, the Federal
    Workforce, and the District of Columbia:
    Committee on Homeland Security and Governmental Affairs:
    United States Senate:

    Dear Senator Voinovich:

    Intellectual property (IP) is an important component of the U.S. economy,
    and the United States is an acknowledged global leader in its creation.
    The United States grants IP rights through the issue of patents,
    trademarks, and copyrights, and regards many types of unauthorized IP
    use--called infringement--as a crime. Examples of IP infringement range
    from the creation or sale of counterfeit or pirated music and movies to
    the manufacturing and sale of counterfeit auto parts and pharmaceuticals;
    the poor quality of some of these goods can be dangerous for consumers.
    Governments and private companies have cited a recent expansion in IP
    crimes, noting that criminal networks have increasingly moved into this
    domain due to high profit potential, ease of market entry, and relatively
    low risks.1

    Federal law enforcement actions against those who manufacture and
    distribute IP-infringing goods are an important component of U.S. efforts
    to protect IP creators and owners and American consumers. Federal actions
    range from seizing IP-infringing goods to prosecuting alleged criminals.
    Key federal law enforcement agencies that play an active role in enforcing
    IP rights are the Department of Homeland Security's (DHS) Customs and
    Border Protection (CBP) and Immigration and Customs Enforcement (ICE), and
    the Department of Justice's (DOJ) Criminal Division, U.S. Attorney's
    Offices, and the Federal Bureau of Investigation (FBI).2 The Department of
    Health and Human Services' (HHS) Food and Drug Administration (FDA) also
    plays a role.3 Several interagency mechanisms exist to coordinate federal
    IP enforcement efforts, including the National Intellectual Property Law
    Enforcement Coordination Council (NIPLECC) and the National Intellectual
    Property Rights Coordination Center.4

    1The Economic Impact of Counterfeiting and Piracy, Organization for
    Economic Cooperation and Development (Paris, 2007).

    We reported to you in April 2007 on challenges that CBP faces in carrying
    out its IP enforcement role to seize IP-infringing goods at U.S. ports of
    entry and identified certain steps that it could take to improve its
    efforts.5 You subsequently asked us to broaden this work and examine
    efforts undertaken by CBP and other key federal agencies to carry out law
    enforcement actions against those who commit violations of U.S. IP laws.
    Specifically, this report: (1) examines federal agencies' roles,
    priorities, and resources devoted to IP-related enforcement; (2) evaluates
    agencies' IP-related enforcement statistics and achievements; and (3)
    examines the status of the National Intellectual Property Rights
    Coordination Center.

    Based on our prior work and background research, we determined that CBP,
    ICE, FBI, and DOJ are the four key law enforcement agencies that play an
    active role in IP enforcement, and that FDA also plays an important role.
    To examine the key federal agencies' roles and priorities for IP-related
    enforcement, we met with agency officials in their headquarters and in
    seven field locations6 and reviewed strategic plans and other agency
    documents. To examine agencies' resources for IP-related enforcement, we
    obtained information on staff resources, where available. To evaluate
    IP-related enforcement trends and achievements, we reviewed agency
    statistics for fiscal years 2001 through 2006, including IP-related
    seizures, investigations, and prosecutions. We also reviewed agencies'
    internal strategic planning documents to determine their priorities,
    goals, and objectives for IP enforcement and compared them to the types of
    data agencies collected. To examine the status of the National
    Intellectual Property Rights Coordination Center, we met with ICE, FBI,
    DOJ, and FDA officials to discuss its evolution, role, and staffing
    levels; reviewed agency documents that articulated the center's purpose;
    and analyzed congressional appropriators' conference reports that directed
    agencies to staff and fund the center. Some of the information we reviewed
    was considered sensitive for law enforcement purposes, and our report only
    discusses publicly available information. We obtained private sector views
    on federal IP enforcement efforts through interviews with representatives
    from 22 companies and eight industry associations across eight sectors,
    such as the entertainment, pharmaceutical, and manufacturing industries.
    We conducted this performance audit from December 2006 through March 2008
    in accordance with generally accepted government auditing standards. Those
    standards require that we plan and perform the audit to obtain sufficient,
    appropriate evidence to provide a reasonable basis for our findings and
    conclusions based on our audit objectives. We believe that the evidence
    obtained provides a reasonable basis for our findings and conclusions
    based on our audit objectives. See appendix I for a more detailed
    description of our scope and methodology.

    2We recognize that DOJ's Criminal Division and the U.S. Attorney's Offices
    are not agencies, but these offices work in parallel with the other
    agencies we reviewed. Thus, DOJ and its entities are discussed in this
    report as one of the key federal IP enforcement "agencies" for ease of
    reference. Other federal agencies also play a role in protecting and
    enforcing IP rights, but we focus in this report on the key federal law
    enforcement agencies.

    3FDA's primary mission is to ensure public health and safety. It has both
    regulatory and law enforcement authorities and responsibilities. FDA's
    Office of Criminal Investigations pursues counterfeit product
    investigations in furtherance of the agency's public health mission. Since
    these counterfeit product cases have an impact on the protection of IP
    rights, we chose to include FDA in this report.

    4We have previously reported on NIPLECC. See GAO, Intellectual Property:
    Strategy for Targeting Organized Piracy (STOP) Requires Changes for
    Long-Term Success, [41]GAO-07-74 (Washington, D.C.: Nov. 8, 2006).

    5GAO, Intellectual Property: Better Data Analysis and Integration Could
    Help U.S. Customs and Border Protection Improve Border Enforcement
    Efforts, [42]GAO-07-735 (Washington, D.C.: Apr. 26, 2007).

    Results in Brief

    For the five key federal agencies that play a role in enforcing IP laws,
    such enforcement is not a top priority, and determining the resources they
    have devoted to this function is challenging. IP law enforcement actions
    consist of three primary functions--seizing goods, investigating crimes,
    and prosecuting alleged criminals. CBP is responsible for seizing
    IP-infringing goods at the U.S. border, a function that also includes
    assessing penalties and excluding--or denying entry to--certain types of
    IP-infringing goods. ICE and FBI share responsibility for investigating
    those suspected of IP crimes, and FDA investigates counterfeit versions of
    the products it regulates. DOJ is responsible for prosecuting those
    accused of committing IP crimes. IP enforcement activities are generally a
    small part of these agencies' much broader missions, and, according to
    agency officials and documents, IP enforcement is not the top priority for
    these agencies. However, within their IP enforcement activities, these
    agencies have given enforcement priority to IP crimes that pose risks to
    public health and safety, such as counterfeit pharmaceuticals, batteries,
    and car parts. Determining the federal resources allocated to IP
    enforcement is challenging because few agency staff are dedicated
    exclusively to IP enforcement, and only investigative agencies tracked the
    time spent by non-dedicated staff on IP criminal investigations. The
    information we obtained shows declining staff resources in some agencies
    and increases or little change in others. Because agencies' IP enforcement
    roles are interdependent, the emphasis one agency places on IP enforcement
    can affect the actions of others. For example, officials from several
    investigative agencies' field offices said their decisions to open IP
    investigations were influenced in part by the willingness of the local
    U.S. Attorney's Office to prosecute certain types of IP enforcement cases.

    6The field locations we selected were based on the locations we examined
    in our April 2007 report on CBP ( [43]GAO-07-735 ). For that report, we
    selected a mix of ports with high and medium import levels, measured by
    value. For this report, we conducted work at ICE, FBI, and DOJ field
    offices co-located near these ports to get a sense of the local federal
    enforcement environment. We did not disclose port identities in our 2007
    report for law enforcement reasons; we maintain that confidentiality in
    this report for the same reasons.

    Federal IP enforcement activity generally increased from fiscal year 2001
    through 2006, but agencies have not taken key steps to assess their IP
    enforcement achievements. Our review of agencies' enforcement statistics
    over the 6-year period found that IP enforcement activities generally
    increased, with fluctuations in activity across fiscal years and type of
    enforcement action. Specifically, the number of CBP's seizures have
    steadily increased, but the domestic value of goods seized varied by
    fiscal year. However, we found that CBP collected less than 1 percent of
    penalties assessed during 2001 through 2006. We also found a lack of data
    on CBP's exclusion of imports subject to "exclusion orders" and certain
    procedural issues, such as delays in creating enforcement guidance and
    minimal electronic targeting in certain cases.7 The number of IP-related
    criminal investigations that ICE, FBI, and FDA opened each year fluctuated
    during 2001 through 2006, but the number of arrests, indictments, and
    convictions stemming from these investigations generally increased during
    that time period. The number of IP prosecutions by DOJ for fiscal years
    2001 through 2005 hovered around 150 cases before increasing to about 200
    cases in fiscal year 2006. Although agencies' enforcement activities show
    general increases, agencies have not taken key steps to evaluate their own
    enforcement trends in ways that would better inform management decisions
    and resource allocation. For example, agencies have generally not
    conducted systematic analyses of IP-related enforcement activities, such
    as by field offices or type of violation pursued. Our analysis of agency
    data shows that a small number of CBP and DOJ field offices are
    responsible for the majority of these agencies' total IP enforcement
    activity. Further, all the agencies have given priority within their IP
    enforcement efforts to IP crimes that affect public health and safety, but
    most have not clearly identified which IP enforcement actions relate to
    public health and safety or lack data to track their achievements in this
    area. Finally, agencies have generally not established performance
    measures or targets to aid them in assessing their IP enforcement
    achievements and reporting their progress to Congress and interagency
    coordinating bodies.

    7CBP is required to exclude goods that are subject to an "exclusion order"
    issued by the United States International Trade Commission (ITC). The
    Commission investigates allegations of unfair import practices and issues
    exclusion orders in cases where it has found unfair import practices.
    These cases typically involve allegations of patent or trademark
    infringement.

    The executive branch created the National Intellectual Property Rights
    Coordination Center to improve and coordinate federal IP enforcement
    efforts, but the center has not achieved its mission, and staff levels
    have declined. The center, which began operations in 2000, was set up to
    be a hub for the collection, analysis, and dissemination to investigative
    agencies of IP-related complaints from the private sector. However, it got
    off to a slow start, compounded by the events of September 11, 2001, and
    the envisioned flow of private sector complaint information never
    materialized. In addition, participating agencies--FBI, legacy Customs,8
    and ICE--did not reach a common understanding about the center's purpose
    and agencies' roles. Over time its mission shifted and the center began
    focusing instead on educating the private sector about federal IP
    enforcement agencies' efforts. Congressional appropriators expressed
    support for the center's creation and mission in various conference
    reports, which, over time, directed participating agencies to allocate
    certain appropriated funds to staff and operate the center. However, ICE
    staff at the center have declined from the levels originally established
    by the executive branch, and the FBI and CBP no longer participate in the
    center. The center is scheduled to move to a new location in early 2008,
    and ICE officials said they met with the other IP enforcement agencies to
    invite them to establish or increase their presence there. However,
    according to some officials from the invited agencies, their future
    involvement depends in part on clarifying, and perhaps adjusting, the
    center's purpose and activities.

    8The term "legacy Customs" refers to the U.S. Customs Service, which was
    responsible for collecting revenue in the form of customs duties, taxes,
    and fees. The center was originally established to be a coordination body
    between FBI and Customs. Upon the creation of DHS, Customs' role was
    shifted to ICE and CBP.

    To improve agencies' assessment of their IP enforcement efforts, we make
    several recommendations to the Attorney General and the Secretaries of
    Homeland Security and Health and Human Services, including directing their
    agencies to collect additional data on, and systematically analyze, their
    enforcement activity and establish related performance measures and
    targets. To better inform CBP and affected rights holders on the
    enforcement of exclusion orders, we recommend that the Secretary of
    Homeland Security direct the CBP Commissioner develop a strategy for
    addressing identified procedural weaknesses, including collecting
    additional data to better track its enforcement efforts in this area. To
    clarify the roles and responsibilities of the National Intellectual
    Property Rights Coordination Center, we recommend that, in consultation
    with NIPLECC, the Attorney General and the Secretary of Homeland Security
    reassess the center's mission and agencies' roles in the center.

    We provided a draft of this report to DHS, DOJ, and HHS for comment. DHS,
    CBP, and ICE concurred with our recommendations. DOJ did not comment on
    our recommendations. HHS said it disagreed with the recommendation that
    FDA establish performance measures and targets for IP enforcement. Given
    FDA's public health and safety mission, we reconsidered the
    appropriateness of recommending that it establish law enforcement-related
    performance measures and no longer make this recommendation to FDA.
    However, because of the importance of understanding and addressing trends
    in IP violations that affect public health and safety, we added FDA to the
    recommendation that agencies systematically analyze their IP enforcement
    activity. In addition, CBP, DOJ, and FDA had certain concerns about
    portions of our report, which we address at the end of this letter and in
    appendixes IV, V, and VI. The agencies all made technical comments, which
    we incorporated as appropriate.

    Background

    Intellectual property has become a critical component of our country's
    economy, accounting for an average of 18 percent of the U.S. gross
    domestic product from 1998 through 2003.9 Industries that rely on IP
    protection--including the aerospace, automotive, computer, pharmaceutical,
    semiconductor, motion picture, and recording industries--are estimated to
    have accounted for 26 percent of the annual real gross domestic product
    growth rate during this period and about 40 percent of U.S. exports of
    goods and services in 2003 through 2004. Further, they are among the
    highest-paying employers in the country, representing an estimated 18
    million workers or 13 percent of the labor force.

    The economic value of IP-protected goods makes them attractive targets for
    criminal networks. Criminal activities have negative effects for U.S.
    innovation and investment, the value and reputation of individual
    companies, and consumers who are put at risk by substandard or dangerous
    products. Such activity is inherently difficult to measure, but the
    Organization for Economic Cooperation and Development recently estimated
    that international trade in counterfeit and pirated products in 2005 could
    have been up to $200 billion.10

    According to industry groups, a broad range of IP-protected products are
    subject to being counterfeited or pirated, from luxury goods and brand
    name apparel to computer software and digital media to food and medicine.
    Evidence of counterfeiting in industries whose products have a public
    health or safety component, such as auto and airline parts; electrical,
    health, and beauty products; batteries; pharmaceuticals; and infant
    formula, presents a significant concern. The World Health Organization
    estimates that as much as 10 percent of medicines sold worldwide are
    believed to be counterfeit, including essential medicines such as
    vaccines, antimalarials, and human immunodeficiency virus therapies.

    The federal government plays a key role in granting protection for and
    enforcing IP rights. It grants protection by approving patents or
    registering copyrights and trademarks.11 It enforces IP rights by taking
    actions against those accused of theft or misuse. Enforcement actions
    include both civil and criminal penalties. U.S. laws criminalize certain
    types of IP violations, primarily copyright and trademark violations, and
    authorize incarceration or fines. These laws are directed primarily toward
    those who knowingly produce and distribute IP-infringing goods, rather
    than those who consume such goods. Although U.S. laws do not treat patent
    violations as a crime, the federal government does take actions to protect
    patents and authorizes civil enforcement actions against infringers. See
    appendix II for a detailed list of the U.S. laws that grant IP protection
    and the criminal and civil penalties that federal law enforcement agencies
    are authorized to impose.

    9Stephen E. Siwek, Economists Incorporated, Engines of Growth: Economic
    Contributions of the U.S. Intellectual Property Industries (2005).

    10The Economic Impact of Counterfeiting and Piracy, Organization for
    Economic Cooperation and Development (Paris, 2007).

    Protection is also provided by the U.S. International Trade Commission,
    which investigates allegations of unfair import practices that commonly
    involve claims of patent or trademark infringement.12 For example, in
    January 2007, the commission issued an "exclusion order" to cease
    importation of certain types of laminated floor panels that it found
    infringed on three U.S. patents.13 Exclusion orders direct CBP to stop
    certain goods from entering the United States while the order is in
    effect.14 The commission is also authorized to take other actions, such as
    issuing "cease and desist" orders to those engaging in unfair import
    practices or assessing civil penalties.

    11These IP rights grant registrants limited exclusive ownership over
    whatever economic rewards the market may provide for their creations and
    products. A copyright provides protection for literary and artistic works
    such as books, musical compositions, computer software, and movies. A
    copyright is a property right in an original work of authorship that
    arises automatically upon creation of such a work and belongs, in the
    first instance, to the author. A patent protects an invention by giving
    the inventor the right to exclude others from making, using, or selling a
    new, useful, nonobvious invention during a specific term. Trademarks are
    words, phrases, logos, or other graphic symbols used by manufacturers or
    merchants to identify their goods and distinguish them from others. Other
    types of intellectual property include trade secrets, industrial designs,
    and geographic indications. Geographic indications are names used to
    identify products with quality, reputation, or other characteristics
    attributable to the origin of the product.

    12Such authority is granted under Section 337 of the Tariff Act of 1930,
    19 U.S.C 1337.

    13U.S. International Trade Commission Investigation Number 337-TA-445,
    January 5, 2007.

    14Exclusion orders involving patents are generally in effect until the
    patent expires. Exclusion orders involving trademarks are in effect as
    long as the trademark is valid and is recognized by the granting agency as
    being in force.

    Congress has supported several interagency mechanisms to coordinate
    federal IP law enforcement efforts. In 1999, Congress created the
    interagency NIPLECC as a mechanism to coordinate U.S. law enforcement
    efforts to protect and enforce IP rights in the United States and
    abroad.15 Officials from seven federal entities are members of NIPLECC.16
    A presidential initiative, called the Strategy Targeting Organized Piracy
    (STOP), is the council's strategy, and it articulates five broad goals.17
    From 2001, Congress supported the creation of the National Intellectual
    Property Rights Coordination Center, another interagency mechanism that
    aims to improve federal IP enforcement and coordinate investigative
    efforts between ICE and FBI (discussed in detail later in this report).

    Multiple Agencies Carry Out IP Enforcement, but Their IP Priorities Vary, and
    Few Resources Are Dedicated Exclusively to IP Enforcement

    For the five key federal agencies with IP enforcement roles, such
    enforcement is not a top priority for most of them, and determining their
    resource allocations to IP enforcement is challenging. These agencies' IP
    enforcement functions include: (1) seizing IP infringing goods; (2)
    conducting investigations; and (3) prosecuting alleged violations. The
    overall aim of U.S. government efforts is to stop trade in counterfeit and
    pirated goods, and the three functions each present some degree of
    deterrent. The key law enforcement agencies--CBP, ICE, FBI, and DOJ--have
    broad missions with many competing responsibilities, and their IP
    enforcement role is not generally their highest priority, while FDA's
    primary mission is to protect public health. We were not able to identify
    the total resources allocated to IP enforcement across the agencies
    because few staff are dedicated solely to IP enforcement, and only certain
    agencies track the time spent on IP criminal investigations by
    non-dedicated staff who carry out this function. The information we were
    able to compile shows declines in IP enforcement resources in several
    agencies, and fluctuating or growing resource allocations to IP
    enforcement in others. Because federal IP enforcement roles are
    interdependent--seizures may launch or contribute to investigations, and
    investigations may lead to prosecutions--the emphasis placed on
    enforcement of IP at one agency or field office can impact the IP
    enforcement efforts of others.

    15In September 1999, Congress authorized NIPLECC (Public Law 106-58). In
    December 2004, Congress passed legislation to enhance NIPLECC's mandate
    (Public Law 108-447). See [44]GAO-07-74 .

    16The council's membership includes officials from: CBP, ICE, DOJ, the
    Department of Commerce, the U.S. Patent and Trademark Office, the
    Department of State, and the Office of the U.S. Trade Representative.
    NIPLECC is required to consult with the Register of Copyrights. DOJ and
    the U.S. Patent and Trademark Office are co-chairs. The Coordinator for
    International IP Enforcement (IP Coordinator), a presidential appointee,
    heads NIPLECC and resides in the Department of Commerce. See [45]GAO-07-74
    .

    17STOP's five goals are to: (1) empower American innovators to better
    protect their rights at home and abroad, (2) increase efforts to seize
    counterfeit goods at our borders, (3) pursue criminal enterprises involved
    in piracy and counterfeiting, (4) work closely and creatively with U.S.
    industry, and (5) aggressively engage our trading partners to join our
    efforts.

    Key Agencies Carry Out Three Primary IP-Related Enforcement Functions

    Key federal agencies carry out three IP enforcement functions.18 Seizing
    IP infringing goods is primarily performed by CBP.19 IP-related
    investigations are performed by agencies located in three different
    departments. Prosecuting IP crimes is carried out by two different
    entities within DOJ. Figure 1 identifies the IP enforcement functions and
    the structure, including the departments and agencies, in which they are
    performed.

    Figure 1: Federal IP Enforcement Functions, the Key Agencies That Execute
    Them, and the Agencies' Structures

    aThe Department of Justice is not an agency, but given that its Criminal
    Division and U.S. Attorney's Offices work in parallel with the other
    agencies we reviewed, DOJ and its entities are described as one of the key
    federal IP enforcement "agencies" for ease of reference.

    18State and local government officials also carry out enforcement of IP
    laws, and private sector companies and industry associations whose
    products are counterfeited and pirated often carry out their own
    enforcement efforts.

    19We have previously reported on CBP's efforts to enforce IP rights at the
    border, including its efforts to target and seize counterfeit goods and
    assess penalties. See [46]GAO-07-735 .

    Responsible Agencies Have Broad Missions, and IP Enforcement Is Not a Top
    Priority at Most

    The four key federal law enforcement agencies and FDA have broad missions
    and many responsibilities, and IP enforcement is not a top priority at
    most agencies. CBP and ICE address IP enforcement as part of their legacy
    efforts to combat commercial fraud, but their top mission is securing the
    homeland. DOJ identifies IP enforcement as one of its top priorities, but
    FBI does not. FDA's role is driven by its public health and safety
    mission, not IP enforcement per se. Regardless of the priority ranking
    agencies assign to IP enforcement, within their IP enforcement efforts,
    they have all given priority to IP-related crimes that pose risks to
    public health and safety. Staff in agency headquarters play a role in
    setting IP enforcement policies and, at some agencies, carry out certain
    IP enforcement actions, but most enforcement activity takes place at the
    field office level. Each field office faces a unique set of challenges in
    its local environment, balancing IP enforcement efforts with other agency
    priorities.

    Several companies and associations we interviewed remarked that the
    federal IP enforcement structure is not clear. For example, one
    association remarked that agency responsibilities are unclear and may
    overlap, while another said that there is no formal process for referring
    cases for federal action. This structure was seen as especially
    challenging for small companies who need federal assistance but lack the
    resources or expertise to navigate the federal system. Additional
    information on private sector views about federal IP enforcement is
    contained in appendix III.

    Information is presented below on each agency's IP enforcement function,
    the priority assigned to IP enforcement, and the structure within which
    such enforcement is carried out.

               CBP - Seizures, Penalties and ExclusionsIP

               o Function: CBP is the primary federal agency authorized to seize
               goods, including IP-infringing goods, upon their arrival in the
               United States. CBP is also responsible for preventing the entry of
               goods into the United States that are subject to exclusion orders
               and assesses penalties against IP infringers when warranted.

               o Priorities: CBP's primary mission is to protect the homeland.
               CBP is also responsible for carrying out its legacy Customs
               functions, including trade enforcement. CBP has identified six
               Priority Trade Issues, one of which is IP enforcement.20 Within
               its IP enforcement efforts, CBP gives priority to large value
               seizures and violations that affect public health and safety or
               economic security or that have ties to terrorist activity.

               o Structure: CBP's Office of International Trade develops IP
               enforcement policies and plans, develops national instructions for
               targeting shipments suspected of carrying IP-infringing goods,
               writes guidance for assessing penalties and enforcing exclusion
               orders, and maintains data on IP-related seizures. The Office of
               Field Operations oversees implementation of these policies and
               procedures at 325 U.S. ports of entry.21 While much of CBP's IP
               enforcement activity is carried out by the ports, headquarters
               staff play an integral role in supporting those efforts, including
               providing policy and guidance on enforcement priorities and
               developing systems and technologies to enhance enforcement.

    			  ICE Criminal Investigations

               o Function: ICE conducts investigations of IP-related criminal
               activity, including infringement of trademark and copyright law.

               o Priorities: ICE's primary mission is to protect the homeland. It
               is also responsible for combating commercial fraud, which includes
               IP enforcement. ICE's interim agency-wide strategic plan and its
               plan for commercial fraud are law enforcement sensitive and not
               available to the public. However, according to ICE officials, the
               top priorities within commercial fraud enforcement are public
               health and safety violations and IP infringement.

               o Structure: Within ICE's Office of Investigations, the Critical
               Infrastructure and Fraud Division develops the agency's IP
               policies and oversees its IP enforcement efforts.22 The division's
               IP responsibilities are handled by the Branch for Commercial Fraud
               and Intellectual Property Rights, which also houses the National
               Intellectual Property Rights Coordination Center. Although the
               center is officially an interagency coordination body, it plays a
               lead role in developing and carrying out ICE's IP enforcement
               policies. In addition, ICE has a Cyber Crimes Center that focuses
               on Internet-based crimes, including IP piracy, and provides
               referrals and investigative assistance to ICE's field offices.23
               IP investigations are carried out by agents located in about 100
               U.S. cities, organized under ICE's 26 field offices.

    20As of fiscal year 2006, CBP's Priority Trade Issues included
    agriculture, antidumping and countervailing duties, IP rights, penalties,
    revenue, and textiles and wearing apparel.

    21We reported in April 2007 that a lack of integration between these two
    offices impedes CBP's ability to improve its IP enforcement efforts. See
    [47]GAO-07-735 .

               FBI Criminal Investigations

               o Function: FBI conducts investigations of IP-related criminal
               activity, including infringement of trademark and copyright law,
               as well as theft of trade secrets.

               o Priorities: The FBI's principal mission is to investigate
               criminal activity and defend the security of the United States. It
               has identified 10 priority enforcement areas, including cyber
               crime.24 IP enforcement is included in the cyber crime area, but
               it is ranked 5th out of FBI's 6 cyber crime priorities.25 Within
               its IP enforcement efforts, FBI's priorities are, in order, trade
               secret theft, copyright infringement, trademark infringement, and
               signal theft, and one of FBI's IP enforcement goals is for its
               field offices to initiate IP investigations that affect public
               health and safety.

    22The division also investigates immigration violations, customs fraud,
    and cases involving worksite enforcement and human smuggling.

    23The Cyber Crimes Center is often referred to by the acronym "C3."

    24As of 2006, FBI had 10 priority enforcement areas. The first 8 in order
    of importance are to: (1) protect the U.S. from terrorist attack; (2)
    protect the U.S. against foreign intelligence operations and espionage;
    (3) protect the U.S. against cyber-based attacks and high-technology
    crimes; (4) combat public corruption at all levels; (5) protect civil
    rights; (6) combat transnational and national criminal organizations and
    enterprises; (7) combat major white collar crime; and (8) combat
    significant violent crime. In addition, FBI aims to (9) support federal,
    state, local, and international partners; and (10) upgrade technology to
    successfully perform FBI's mission.

               o Structure: FBI's Cyber Division oversees the agency's IP
               enforcement efforts even though not all of its IP investigations
               are cyber-related.26 A single unit within the Cyber Division,
               called the Cyber Crime Fraud Unit, has operational and management
               oversight for all of FBI's cyber crime activities. IP-related
               investigations are primarily carried out in FBI's 56 field
               offices.

               FDA Criminal Investigations

               o Function: FDA investigates illegal activity pertaining to food,
               drugs, medical devices, and other products because of the impact
               on public health.27

               o Priorities: FDA's primary mission is to protect public health by
               assuring the safety, efficacy, and security of human and
               veterinary drugs, the food supply, medical devices, and other
               products. IP enforcement is not part of FDA's mission or its
               enforcement priorities; however, FDA carries out IP-related
               enforcement actions in fulfilling its mission to protect public
               health and safety, such as investigating criminals that traffic in
               counterfeit pharmaceuticals.

    25Cyber Division's six priorities are, in order of importance: (1)
    computer intrusions involving counterterrorism, (2) computer intrusions
    involving counterintelligence, (3) other computer intrusions, (4) innocent
    images (child pornography), (5) IP enforcement, and (6) Internet fraud. In
    April 2006, the Cyber Division lowered the priority of IP enforcement to
    5th rank and elevated the priority of child pornography to 4th rank.
    Despite this decrease in stated priority, Cyber Division officials said
    that IP investigations remain a major focus of their program, particularly
    investigations targeting health and safety issues.

    26This division also conducts investigations of computer intrusions and
    child pornography.

    27The Federal Food, Drug and Cosmetic Act (21 U.S.C. 301 et seq.) provides
    legal authority for FDA to conduct counterfeit product investigations and
    enforcement actions. In addition, FDA brings charges under the statute
    that prohibits trafficking in counterfeit goods (18 U.S.C. 2320).

               o Structure: FDA's Office of Regulatory Affairs, in collaboration
               with other agency components, carries out the agency's enforcement
               activities. This office houses, among other entities, FDA's Office
               of Criminal Investigations and the Division of Import Operations.
               The Office of Criminal Investigations, with six field offices and
               presence in 25 U.S. cities, has the primary responsibility for all
               criminal investigations conducted by the FDA. The Division of
               Import Operations provides guidance on the agency's import policy
               to FDA field staff, including at numerous ports around the
               country. FDA field staff that discover suspected counterfeit
               imports of products that are regulated by FDA would refer these to
               the Office of Criminal Investigations for further action. In
               addition, Office of Regulatory Affairs laboratories play a role by
               analyzing samples of suspected counterfeit products.

    			  DOJ - Prosecutions

    			  o Function: DOJ prosecutes IP cases referred from ICE, FBI, and
               FDA, as well as from private sector representatives and other
               sources.

               o Priorities: According to DOJ officials and documents, IP
               enforcement is one of the department's highest priorities. In
               March 2004, the Attorney General announced the creation of a DOJ
               Task Force on Intellectual Property, with a mission of identifying
               ways to strengthen the department's IP enforcement efforts. The
               Task Force produced 31 recommendations for improving IP
               enforcement and provided a progress report on those
               recommendations in its 2006 report. The Task Force made numerous
               short- and long-term recommendations, including increasing the
               number of DOJ prosecutors and FBI agents that focus on computer
               crime and IP cases and prosecuting IP cases involving a threat to
               public health and safety.28 In addition, DOJ developed an internal
               IP enforcement strategy for 2007 with six strategic objectives
               designed to help it meets its larger goal of reducing IP theft.
               DOJ shared this document with us, but its contents are for
               official government use only.

    28See DOJ 2006 Task Force report,
    [48]http://www.usdoj.gov/criminal/cybercrime/ip.html . The Task Force
    continues to monitor DOJ's implementation of these recommendations.

               o Structure: DOJ's IP enforcement is carried out primarily by the
               94 U.S. Attorney's Offices located throughout the country as well
               as its Criminal Division's Computer Crime and Intellectual
               Property Section (CCIPS). Under DOJ's Computer Hacking and
               Intellectual Property (CHIP) program, each U.S. Attorney's Office
               has one CHIP coordinator who is trained in prosecuting IP
               enforcement cases.29 In addition, 25 U.S Attorney's Offices have
               CHIP units, usually comprised of 2 or more attorneys (a few units
               have as many as 8 attorneys), who focus solely on prosecuting
               computer hacking or IP crimes. IP crimes prosecuted by the U.S.
               Attorney's Office are not limited to CHIP units, but may be
               prosecuted as part of a larger case, such as one involving
               organized crime. CCIPS, located in DOJ headquarters, is
               responsible for supporting IP prosecutions by U.S. Attorney's
               Offices, as well as prosecuting their own cases. CCIPS is also
               responsible for developing DOJ's overall IP enforcement strategy
               and coordinating among U.S. and foreign law enforcement officials
               on domestic and international cases of IP theft.

    			  Determining the Total Resources Allocated to IP-Related Enforcement
    			  Is Challenging

               Determining the total resources that agencies have allocated to IP
               enforcement is challenging because agencies have few staff
               exclusively dedicated to IP enforcement, and only the agencies
               that conduct criminal investigations estimated time spent on this
               activity. Most agencies have some headquarters staff exclusively
               dedicated to IP enforcement. However, staff in the field, where
               most IP enforcement activity occurs, are generally not dedicated
               exclusively to IP enforcement. The information we were able to
               compile shows declines in IP enforcement resources in some
               agencies and fluctuating or growing resource allocations to IP
               enforcement in others. Agencies' ability to allocate staff to IP
               enforcement is affected by not only the priority they assign to
               this function but also their overall resource situation. Some
               agencies have faced resource challenges in recent years.

               Private sector representatives we interviewed across various
               sectors expressed concern about the federal government's ability
               to carry out IP enforcement due, in part, to a lack of resources.
               While several companies said that federal IP enforcement efforts
               have increased, 14, or nearly half, of the representatives we
               contacted said there is a shortage of resources to carry out IP
               enforcement. Appendix III provides further detail on private
               sector views.

    29Under the CHIP program, prosecutors are assigned four areas of
    responsibility: prosecuting computer crime and IP offenses; serving as a
    technical advisor for other prosecutors and law enforcement agents;
    assisting other CHIP coordinators in multi-district investigations; and
    providing training and community outreach regarding computer-related
    issues.

               Information on each agency's resources for IP-related enforcement
               are detailed below.

    			  CBP - Seizures, Penalties, and ExclusionsIP

               Various types of CBP staff play a role in IP enforcement. The only
               staff that are dedicated exclusively to IP enforcement are
               international trade specialists, attorneys, and paralegals
               assigned to the Office of International Trade, and their numbers
               have fluctuated over time. International Trade Specialists are
               responsible for performing nationwide targeting for all CBP ports
               of incoming shipments suspected of carrying IP-infringing goods
               and for analyzing IP seizure data. The number of international
               trade specialists remained relatively flat from fiscal year 2003
               through 2006, at about 11, before increasing to 17 in 2007.
               However, the number of these specialists that were performing
               targeting in 2003 through 2006 actually declined.30 Attorneys are
               responsible for advising ports on how to carry out CBP's IP
               enforcement authorities and have sole responsibility for
               developing exclusion order enforcement guidance, a highly complex
               and labor intensive task. The number of attorneys devoted to IP
               enforcement declined from 11 in 2003 to 9 in 2006 and remains at
               that level. Other CBP staff perform IP enforcement activities, but
               are not exclusively dedicated to it; CBP does not track the amount
               of time these staff spend on IP enforcement. 31 In addition,
               within the Office of International Trade, CBP auditors perform
               targeted audits on selected companies to assess their internal
               controls for preventing the importation of IP-infringing goods.
               CBP does track hours spent on IP audits. As of December 2007, CBP
               reported that slight over 14 "man years" have been charged to IP
               audits since fiscal year 2005, when such audits were initiated.

    30During 2003 through 2005, all 11 International Trade Specialists were
    assigned to headquarters but worked out of CBP's Strategic Trade Center in
    Los Angeles and a satellite office in San Francisco. In 2006, the number
    of staff performing targeting in the field was reduced to 8. Three
    positions were shifted to headquarters, and the staff in these positions
    were not performing targeting. As of July 2007, CBP increased the number
    of specialists in the field to 12 and the number in headquarters to 5. The
    increase in the field enabled CBP to reduce the number of industries for
    which each specialist is responsible.

    31CBP officers are responsible for examining shipments with suspected
    counterfeit goods, but one of their primary focus is screening cargo for
    weapons of mass destruction. Import specialists are responsible for
    applying duties to imports and develop expertise in certain goods,
    including a determination of whether imports are counterfeit. Fines,
    Penalties, and Forfeiture officers are responsible for assessing penalties
    against importers that violate U.S. trade laws, as well as those that
    traffic in counterfeit goods.

               CBP staff that carry out the agency's IP enforcement activities
               operate in an environment that is plagued by staffing challenges,
               including staffing shortages, difficulty hiring and retaining
               staff, and fatigue among its workforce. For example, in November
               2007, we reported that CBP estimates it may need several thousand
               more CBP officers to operate its ports of entry.32 In April 2007,
               we also reported that staff resources at CBP for customs revenue
               functions have declined since the formation of DHS.33

    			  ICE, FBI, and FDA - Criminal Investigations

               Among the agencies that conduct criminal investigations, only ICE
               has staff dedicated exclusively to IP enforcement. These include
               ICE staff assigned to the National Intellectual Property Rights
               Coordination Center and a commercial fraud team in one of its
               field offices that focuses solely on IP enforcement. As discussed
               later in this report, the number of ICE staff assigned to the
               center declined from 15 in 2004 to 8 in 2007. Neither FBI nor FDA
               have any staff dedicated exclusively to IP enforcement. A senior
               FBI Cyber Division official said the size of FBI's IP enforcement
               effort is small relative to other FBI efforts and has limited
               resources.

               However, ICE, FBI, and FDA all track the amount of time that their
               investigators spend on IP-related investigations (see fig. 2). By
               converting ICE and FDA investigative hours to full-time-equivalent
               (FTE) positions,34 and using a similar measure (average on board)
               for FBI, we determined that ICE spent an average of 154 FTEs on IP
               enforcement during 2001 through 2006, while FBI averaged 53 agents
               on board for IP enforcement, and FDA spent an average of 16 FTEs.
               ICE investigative resources spent on IP enforcement increased from
               2001 to 2003 before falling off, while the estimated number of
               investigator FTEs spent on IP cases at FBI and FDA experienced
               little change over the 6-year period.

    32GAO, Border Security: Despite Progress, Weaknesses in Traveler
    Inspections Exist at Our Nation's Ports of Entry, [49]GAO-08-219
    (Washington, D.C.: Nov. 5, 2007).

    33GAO, Customs Revenue: Customs and Border Protection Needs to Improve
    Workforce Planning and Accountability, [50]GAO-07-529 (Washington, D.C.:
    Apr. 12, 2007).

    34ICE and FDA use different calculations to compute their FTE equivalents.
    We used the formulas provided by the agencies.

               Figure 2: Estimated Number of Investigative Resources Spent on
               IP-Related Investigations by ICE, FBI, and FDA, Fiscal Years
               2001-2006

               Note: ICE and FDA capture the number of investigative case hours
               worked and provided formulas for converting to FTEs. FBI captures
               the average agents on board that worked IP investigations, which
               we report in this figure as FTEs. FDA did not begin to collect
               data on the number of investigative case hours until fiscal year
               2003.

    			  DOJ - Prosecutions

               DOJ dedicates staff to IP enforcement in headquarters and within
               its U.S. Attorney's Offices. The number of staff dedicated to IP
               enforcement has grown in recent years. For example, DOJ's CHIP
               units, first created in February 2000, grew from 13 units as of
               2002 to 25 units as of 2007. Most of the CHIP units have
               approximately two or more attorneys who focus on prosecuting IP
               and high-technology crimes, with as many as eight in at least one
               of the units. As the number of units has grown, so has the number
               of attorneys assigned to working IP cases. As of July 2007, DOJ
               had 101 Assistant U.S. Attorneys assigned to CHIP units. Another
               122 Assistant U.S. Attorneys have been specially trained to
               prosecute computer crime and IP offenses, with at least one such
               CHIP prosecutor located in every U.S. Attorney's Office. DOJ began
               tracking the time attorneys spend on IP enforcement in May 2006,
               but we did not collect this data.35 In addition, according to DOJ,
               it had 14 attorneys working on IP enforcement in its CCIPS.
               Despite having these dedicated and trained staff, however,
               officials from the U.S. Attorney's Offices we visited noted that,
               over the past few years, their offices have experienced high
               turnover and have been generally understaffed, with vacant
               positions left unfilled.

    			  Agency Enforcement Roles and Actions Are Often Interdependent

               Given the interdependent nature of federal IP enforcement and the
               central role played by the field offices, the emphasis placed on
               IP enforcement at one location can affect the IP enforcement
               efforts of others. For example, investigative agency officials at
               some locations we visited said that their decisions about
               beginning or continuing an IP-related investigation were
               influenced by the willingness of the local U.S. Attorney's Office
               to prosecute the case. Some field office officials we interviewed
               stated that local U.S. Attorney's Offices set minimum value
               thresholds for taking IP cases, in part because the U.S.
               Attorney's Offices also have limited resources. However, officials
               at the U.S. Attorney's Offices we visited said that they did not
               have specific thresholds for IP prosecutions, particularly when it
               comes to public health and safety, and that they evaluate cases on
               their individual merits. Similarly, the degree to which an ICE
               field office can accept and work on IP enforcement referrals from
               CBP may depend on the field office's other priorities, such as
               money laundering or smuggling enforcement. Officials at most of
               the agencies noted other factors that influence their IP-related
               enforcement decisions, including the number or value of items
               seized, the health or safety impacts of the crime, and the
               organizational structure of the entities involved.

    			  35DOJ's relatively recent data collection effort did not allow us
    			  to track attorney time spent on IP enforcement over time, as we have
    			  done for other agencies.

    			  IP Enforcement Generally Increased, but Agencies Have Not Taken Key
    			  Steps to Assess Enforcement Efforts

               Federal IP enforcement activity generally increased from fiscal
               year 2001 through 2006; however, most agencies have not taken key
               steps to assess their achievements. Specifically, most agencies
               have not: (1) conducted systematic analyses of their IP
               enforcement data to inform management and resource allocation
               decisions, (2) clearly identified which of their efforts relate to
               a key IP enforcement area--IP crimes that affect public health and
               safety--nor collected data to track these efforts, and (3)
               established performance measures or targets to assess their
               achievements and report to Congress and others.

    			  IP Enforcement Statistics Show an Increase in Activity

               Our review of agency statistics for fiscal years 2001 through 2006
               indicated that IP enforcement actions generally increased over the
               period, with some fluctuations in activity. The number of CBP
               seizure actions and the value of such seizures has increased
               significantly. Investigative agencies' enforcement
               outcomes--arrests, indictments, and convictions--also increased
               during the time period. The number of DOJ prosecutions hovered
               around 150 cases per year during fiscal years 2001 to 2005 before
               increasing to about 200 cases in fiscal year 2006, with the number
               of defendants charged with IP crimes fluctuating.

    			    CBP Seizure Activity Has Grown, but Penalty Collections Remain Low

               CBP's primary IP enforcement efforts involve seizing IP-infringing
               goods that individuals attempt to import through U.S. ports of
               entry. In April 2007, we reported that the total number of CBP's
               seizure actions has grown since fiscal year 2001, nearly doubling
               from fiscal years 2005 to 2006; however, most of these actions
               involved numerous small-value seizures made from air-based modes
               of transport while significantly fewer seizure actions have been
               made from sea- or land-based modes of transport.36 We reported in
               2007 that CBP officials said they believed the trend reflects
               growing Internet sales and the ability of manufactures to directly
               ship their merchandise to consumers through mail and express
               consignment. At that time, some CBP officials stated that this
               trend may reflect a shift in smuggling techniques toward the use
               of multiple small packages rather than large shipments in cargo
               containers, possibly to reduce the chance of detection. See figure
               3 for trends in the number of CBP seizure actions and estimated
               domestic values.37

    36 [51]GAO-07-735 .

    Figure 3: Trends in the Number of IP Seizure Actions and Estimated
    Domestic Values of Seizures by CBP, Fiscal Years 2001-2006

    After CBP seizes the counterfeit goods, it may also assess penalties that
    result in monetary fines imposed against the violator. CBP officials
    reported that processing penalty cases is resource-intensive, but noted
    that few penalties are collected and such enforcement has little deterrent
    effect. We found that less than 1 percent of the penalty amounts assessed
    for IP violations in each fiscal year were collected. See table 1 for
    IP-related penalties assessed and collected in each fiscal year from 2001
    through 2006. Various factors contribute to CBP's limited collection rates
    on IP penalties, including petitions for mitigation or dismissal by the
    violator, dismissal due to criminal prosecutions, and the nature of
    counterfeit importation.38

    37Domestic value is calculated as the landed cost plus profit (the cost of
    the merchandise when last purchased, plus all duties, fees, broker's
    charges, profit, unlading charges, and U.S. freight charges to bring the
    good to the importer's premises), a value generally lower than the price
    at which the goods might sell to the final consumer.

    Table 1: Dollar Value of IP Penalty Amounts Assessed and Collected by CBP,
    Fiscal Years 2001- 2006

    Total penalty amount assessed:
    2001: $52.0;
    2002: $65.0;
    2003: $45.0;
    2004: $442.9;
    2005: $423.9;
    2006: $136.6.

    Total penalty amount collected:
    2001: $0.5;
    2002: $0.3;
    2003: $0.4;
    2004: $0.5;
    2005: $0.4;
    2006: $0.6.

    Percent collected:
    2001: 0.90;
    2002: 0.48;
    2003: 0.91;
    2004: 0.11;
    2005: 0.10;
    2006: 0.45.

    Source: GAO analysis of CBP data.

    Note: Penalty data are based on penalties assessed under 19 U.S.C.
    1526(f). All data presented are based on statistics available as of
    January 2007. Penalty amounts assessed in one fiscal year may not be
    collected until the following fiscal year, therefore, there is not a
    direct relationship between amounts assessed and collected in a given
    fiscal year. CBP officials said that the amount collected may change on
    different dates that data are run for open penalty cases that are still
    being processed; however, officials noted that future adjustments are
    unlikely to significantly change the disparity between penalty amounts
    assessed and collected. CBP officials said that they use the same type of
    collection calculation to report penalty statistics to Congress.

      CBP's Enforcement of Exclusion Orders Has Been Limited

    CBP does not maintain statistics on all of its exclusion order activities,
    but available information indicates that its exclusion activities have
    declined, in part due to procedural weaknesses.39 While the U.S.
    International Trade Commission issues relatively few exclusion orders each
    year, these orders can affect large volumes of trade, according to CBP
    officials. As of July 2007, 66 exclusion orders were in effect, according
    to CBP. CBP takes two basic steps to enforce these orders: (1) CBP posts
    written guidance, called Trade Alerts, to its intranet to inform ports
    about new orders,40 and (2) it creates electronic targeting instructions
    that alert ports about incoming shipments that need to be examined for
    potential infringing goods related to the order. When its exams identify
    goods that should be excluded, CBP does not allow the goods to enter the
    country and issues a notice of exclusion to the importer. According to CBP
    officials, CBP does not maintain data on the number of exclusion notices,
    either in total or by order, nor does it alert the rights holder of the
    exclusion. However, CBP does maintain data on the total number of
    exclusion order exams it conducts and the number of times these exams
    reveal any IP discrepancies.41 As shown in figure 4, the number of
    exclusion order exams have declined since fiscal year 2002, and a very
    small number of discrepancies have been found.42 CBP explained that the
    decrease in exams from fiscal years 2002 to 2004 was due to the
    termination of targeting for one exclusion order that had been generating
    most of the exams.43

    38CBP officials said that many violators petition to have a penalty
    mitigated or dismissed, and these actions often reduce the amount of the
    penalty that CBP collects. They said that the statutory fines are large,
    and when a collection action goes to court, DOJ attorneys who prosecute
    the government's case are reluctant to pursue the case because they view
    the penalty amounts as excessive. One agency official explained that some
    penalties are dismissed as a result of the case going to criminal
    prosecution, in which the U.S. Attorney negotiates to have a penalty
    dropped in exchange for information or other evidence that will support
    the criminal case. Also, the deceptive nature of counterfeit importation
    makes it difficult for CBP to track violators and enforce penalties.

    39CBP is required to exclude from entry to the United States goods that
    are subject to exclusion orders issued by the U.S. International Trade
    Commission. Such orders are issued when the commission has found unfair
    import practices, typically involving patent or trademark infringement.

    40Trade Alerts are developed by attorneys in CBP's Office of International
    Trade, based on U.S. International Trade Commission documents related to
    the exclusion order, and explain how to identify the goods that are to be
    excluded.

    41According to CBP, most of the IP discrepancies it found in the course of
    conducting exclusion order exams were not violations of the order, but
    were other types of IP discrepancies, such as trademark violations, that
    it found during the exam.

    42CBP was unable to provide similar data for 2001.

    43CBP officials said that, in terminating its targeting, CBP reviewed
    current use of the patented technology--a process for creating acid-wash
    jeans--covered by the order as well as the results of its exams, which CBP
    officials said uncovered no violations of the order.

    Figure 4: Number of CBP Exclusion Order Exams Performed and IP
    Discrepancies Found, Fiscal Years 2002-2006

    Note: According to CBP, most of the IP discrepancies it found in the
    course of conducting exclusion order exams were not violations of the
    order, but were other types of IP discrepancies, such as trademark
    violations, that it found during the exam.

    CBP's limited and declining enforcement of exclusion orders has been of
    concern to certain private sector representatives, notably the companies
    that have sought such orders or the attorneys that represent them.
    Representatives said companies spend millions of dollars in legal fees to
    win a U.S. International Trade Commission ruling for their products, but
    that the effectiveness of the ruling is weakened by poor enforcement at
    CBP. Private sector representatives also stated that CBP's enforcement of
    the orders is not transparent because CBP does not notify companies of any
    exclusions that have occurred, impeding their ability to follow through on
    the matter. This differs from CBP's practices when it detains or seizes
    IP-infringing goods: CBP notifies both the importer and IP rights owner of
    such detentions or seizures.44 CBP officials said the agency does not have
    a regulation to permit the notification of exclusions to affected rights
    owners, and they did not know whether CBP had legal authority under the
    relevant statute to make such notifications.

    44Under 19 U.S.C. 1499 and Customs regulation 19 C.F.R. 12.39, CBP
    notifies importers and other interested parties when it detains goods for
    examination. In cases involving IP infringement, CBP notifies the affected
    rights holder of the detention. In addition, CBP also notifies the rights
    holder when it seizes IP-infringing goods that bear counterfeit trademarks
    (under 19 C.F.R. 133.21(c)) or goods seized as piratical (under 19 C.F.R.
    133.42(d)).

    We found several procedural weaknesses in CBP's exclusion order
    enforcement, including a lack of intranet Trade Alerts for about half of
    the orders currently in force, delays in posting Trade Alerts to its
    intranet, minimal use of electronic targeting, and no procedures for
    updating Trade Alerts when the status of exclusion orders changes or
    expires. The effect of these weaknesses has been to limit or delay the
    degree to which exclusion orders are enforced; details are provided below.

               o CBP does not have Trade Alerts on its intranet for all orders
               currently in effect and lacks information to develop Trade Alerts
               for some orders. Of the 66 orders in effect as of July 2007, CBP
               had posted Trade Alerts to its internal website for 24 of them and
               was developing such guidance for 5 others. CBP said it had paper
               records for 15 older orders that it had not yet converted to Trade
               Alerts due to limited resources, but lacked records for enforcing
               most of these remaining orders.45

               o Although CBP officials said the agency is required to enforce
               the orders from the date they are issued, we found that CBP's
               enforcement may be considerably delayed. According to CBP
               officials, this is because CBP must review and interpret large
               amounts of complex information generated by the administrative
               process, but only two attorneys at CBP are presently qualified to
               carry out this review.46 We determined that it took CBP more than
               60 days to post Trade Alerts for 14 of 18 orders for which it
               could provide such data.47 According to CBP officials, work to
               establish the intranet platform for IP issues began in 2003, but
               CBP did not have the capability to actually begin posting Trade
               Alerts to its Web site until April of 2004. Prior to that date,
               text-only Alerts were published to an internal electronic bulletin
               board that housed them for 90-day renewable periods.

               o CBP develops targeting instructions for most, but not all, of
               the exclusion orders it receives. Of 10 randomly selected orders
               for which CBP had posted Trade Alerts as of July 2007, we found
               that it had developed targeting instructions for only 4.48 Also,
               although CBP officials said that the agency is to enforce
               exclusion orders until they expire, we found that its actual
               targeting instructions for an order may expire far sooner. CBP
               officials said that targeting instructions that have not generated
               any exams or found any IP violations after 90 days are removed
               from CBP's targeting system. CBP provided data on the number of
               exclusion orders for which it had targeting instructions in place
               in each of fiscal years 2003 through 2006. The number of orders
               with targeting instructions dropped from 25 in fiscal year 2003 to
               10 in fiscal year 2006--far fewer than the number of orders in
               force at that time.49

               o CBP has no process for ensuring that its Trade Alerts are
               adjusted to reflect changes in the status of exclusion orders. For
               example, CBP initially provided data to indicate that it had
               issued Trade Alerts for 29 orders, but we determined that 5 of the
               Trade Alerts were for orders that had expired or been rescinded.
               CBP concurred with our findings and said it would adjust its Trade
               Alerts accordingly.

    45When it provided this data to us, CBP stated that enforcement activity
    based on exclusion orders can vary, depending on the nature of trade in
    the product covered by the order. These orders may result in a flurry of
    enforcement activity for a few weeks, months, or years, depending on trade
    trends. For example, the order may cover a product for which demand is
    high for a short period of time. However, orders may continue to be
    legally in effect after trade in the product has ceased.

    46According to CBP officials, issuing exclusion orders is a multi-step
    process that involves, among other steps, coordinating with the U.S.
    International Trade Commission prior to an order's issuance, making legal
    and other determinations after an order issues, often in consultation with
    the company filing for an order, and coordinating enforcement efforts
    within CBP after instructions have been crafted.

    47CBP provided exclusion order issue and Trade Alert dates for the 29
    orders it said it was enforcing as of July 2007. However, the Trade Alert
    date it provided for 11 orders was not the date that the Alert was
    originally posted to its Web site, so we removed these orders from our
    analysis. The time lag for posting the Trade Alerts we analyzed ranged
    from 1 week to slightly over 10 months.

    48CBP said that two of the orders for which it performed no targeting
    involved products that typically enter the United States via express mail
    consignment (e.g., Federal Express or similar providers), a mode of
    transport for which its electronic targeting is not used. For two other
    orders, it said that targeting action by CBP was not required due to the
    lack of import activity. CBP provided no explanation for its lack of
    targeting for the remaining three orders.

    49The specific orders for which instructions existed varied during this
    time period, with instructions for older orders being removed and
    instructions for new orders being added. Of the 25 orders for which
    targeting instructions existed in 2003, 14 were still in effect as of
    February 2008. However, only one of these orders was continuously enforced
    from fiscal years 2003 through 2006.

    			    The Number of Investigative Agency IP Cases Have Fluctuated,
    				 but Arrests, Indictments, and Convictions for IP Crimes Have
    				 Generally Increased

               The number of criminal IP enforcement cases opened annually by
               ICE, FBI, and FDA during fiscal years 2001 through 2006 have
               fluctuated, but the enforcement outcomes--arrests, indictments,
               and convictions--from those cases grew during that same time
               period. As shown in figure 5, ICE opened the most IP cases each
               year, averaging 445 cases per fiscal year, compared to FBI's and
               FDA's average of 306 and 39 cases per fiscal year, respectively.50
               The number of IP cases that ICE and FBI opened during the period
               fluctuated, with the number of ICE cases lower in 2006 than in
               2001 and the number of FBI cases in 2006 about the same as their
               2001 level. In general, the number of FDA cases grew during this
               time period.

               Figure 5: Number of Criminal Cases Opened by ICE, FBI, and FDA
               Related to IP Investigations, Fiscal Years 2001-2006

               Despite the fluctuations in numbers of IP cases by the two major
               investigative agencies, the number of arrests, indictments, and
               convictions stemming from ICE and FBI investigations of IP-related
               crimes generally increased for fiscal years 2001 through 2006 (see
               fig. 6), as they did for FDA. For some enforcement actions, the
               agencies' investigative activity showed fairly steady growth. For
               other actions, investigative activity peaked in fiscal year 2004,
               but had levels in 2006 that were still well above their 2001
               levels.51

    50The number of FDA's cases opened is much lower than ICE's and FBI's
    number of cases because of FDA's narrow jurisdiction.

               Figure 6: Number of Arrests, Indictments, and Convictions by FBI,
               ICE, and FDA, Fiscal Years 2001-2006

               Note: In instances where joint investigations occurred, IP
               enforcement actions may be counted by each agency involved; as a
               result, these statistics may include some double counting.

               As figure 6 illustrates, each agency's enforcement activity
               generally increased from fiscal year 2001 to 2006; however,
               activity levels within and across agencies varied over the 6-year
               period.

    			    DOJ's IP Enforcement Has Generally Increased

               DOJ tracks its IP enforcement activity in terms of the number of
               cases filed, the number of defendants in cases filed, and the
               number of defendants convicted. While the number of IP cases filed
               by DOJ fluctuated around 150 from fiscal years 2001 through 2005,
               the number of cases grew to 204 in fiscal year 2006 (see fig. 7).

    51The data we report for ICE differ from data that ICE has provided in the
    past to NIPLECC's IP Coordinator for inclusion in the IP Coordinator's
    quarterly updates on federal IP enforcement efforts (see
    [53]www.stopfakes.gov ). In many instances, the numbers we report are
    lower. We discussed these differences with ICE, which explained that
    enforcement data pulled from its systems may vary each time the data are
    requested because its systems are continually updated. More importantly,
    the parameters ICE used to create the data for the IP Coordinator differed
    somewhat from the parameters that ICE advised us to use. We believe our
    parameters provide a more accurate representation of ICE's IP enforcement
    activities. Data on ICE's arrests, indictments, and convictions were not
    included in the IP Coordinator's quarterly update for the fourth quarter
    of 2007.

               Figure 7: Number of IP-Related Cases Filed by DOJ, Fiscal Years
               2001-2006

               Note: IP statistics include charges for the following criminal
               statutes: Title 17 U.S.C. 506, 1201, 1202, 1203, 1204, and 1205;
               Title 18 U.S.C. 1831, 1832, 2318, 2319, 2319A, 2319B, and 2320;
               Title 47 U.S.C. 553, 605.

               The results of IP-related cases that DOJ filed during fiscal years
               2001 through 2006 varied. Table 2 shows that for fiscal years 2001
               through 2006, DOJ received referrals for 3,548 defendants in IP
               matters from the investigative agencies and filed charges against
               a total of 1,523 defendants. During this period, a total of 891
               defendants were convicted and 373 received prison sentences.52
               According to DOJ officials, the data for the number of IP-related
               defendants referred to federal prosecutors from investigative
               agencies should be considered independent of the data for
               defendants charged with IP violations. Additionally, the
               difference between the number of referred IP defendants and the
               number of defendants charged with IP offenses in a given year, or
               period of years, may be explained in part by the fact that IP
               suspects may never be charged with IP offenses because they are
               instead charged with crimes carrying higher statutory maximum
               sentences, or because the IP charges are dismissed pursuant to
               plea agreements to more serious charges.53 We found that over the
               6-year period of our review, about 17 percent of the total number
               of defendants received prison sentences of more than 3 years,
               while about 45 percent were sentenced to imprisonment of 12 months
               or less.54

    52Not all persons who are investigated for, or charged with, IP crimes are
    convicted and sentenced for those crimes, although they still may receive
    prison sentences. According to DOJ officials, persons who are investigated
    for the commission of both IP crimes and related crimes that carry
    potentially lengthier sentences may receive convictions and sentences for
    the more serious crimes in lieu of IP convictions. In such a case, an IP
    charge may be dismissed pursuant to plea negotiations, or it may not be
    filed at all. Additionally, if an IP offense is charged only as a
    conspiracy, DOJ states that the conspiracy charge will generally not be
    recorded as an IP charge or an IP conviction in DOJ's database for
    prosecutions by U.S. Attorney's Offices.

               Table 2: DOJ's IP Crime Sentencing Outcomes, Fiscal Years 2001 -
               2006

    Fiscal year: 2001;
    Number of IP-related defendants referred from investigative
    agencies[A]: 514;
    Number of defendants charged with IP-related violations[A]: 200;
    Number of defendants convicted of IP-related crimes[B]: 153;
    Number of defendants imprisoned for IP-related crimes: 52.

    Fiscal year: 2002;
    Number of IP-related defendants referred from investigative
    agencies[A]: 497;
    Number of defendants charged with IP-related violations[A]: 215;
    Number of defendants convicted of IP-related crimes[B]: 165;
    Number of defendants imprisoned for IP-related crimes: 65.

    Fiscal year: 2003;
    Number of IP-related defendants referred from investigative
    agencies[A]: 563;
    Number of defendants charged with IP-related violations[A]: 246;
    Number of defendants convicted of IP-related crimes[B]: 141;
    Number of defendants imprisoned for IP-related crimes: 58.

    Fiscal year: 2004;
    Number of IP-related defendants referred from investigative
    agencies[A]: 565;
    Number of defendants charged with IP-related violations[A]: 177;
    Number of defendants convicted of IP-related crimes[B]: 134;
    Number of defendants imprisoned for IP-related crimes: 66.

    Fiscal year: 2005;
    Number of IP-related defendants referred from investigative
    agencies[A]: 724;
    Number of defendants charged with IP-related violations[A]: 346;
    Number of defendants convicted of IP-related crimes[B]: 122;
    Number of defendants imprisoned for IP-related crimes: 53.

    Fiscal year: 2006;
    Number of IP-related defendants referred from investigative
    agencies[A]: 685;
    Number of defendants charged with IP-related violations[A]: 339;
    Number of defendants convicted of IP-related crimes[B]: 176;
    Number of defendants imprisoned for IP-related crimes: 79.

    Fiscal year: Total;
    Number of IP-related defendants referred from investigative
    agencies[A]: 3,548;
    Number of defendants charged with IP-related violations[A]: 1,523;
    Number of defendants convicted of IP-related crimes[B]: 891;
    Number of defendants imprisoned for IP-related crimes: 373.

               Source: GAO analysis of DOJ data.

               aAccording to DOJ officials, the data for the number of IP-related
               defendants referred to federal prosecutors from investigative
               agencies should be considered independent of the data for
               defendants charged with IP violations. The difference between the
               number of referred IP defendants and the number of defendants
               charged with IP offenses in a given year, or period of years, is
               due, in part, to the fact that IP suspects may never be charged
               with IP offenses because they are instead charged with crimes
               carrying higher statutory maximum sentences, or because the IP
               charges are dismissed pursuant to plea agreements to more serious
               charges.

               bNumber of defendants convicted includes by plea or trial.
               According to DOJ officials, these statistics may under-represent
               total enforcement activity since some individuals charged with IP
               crimes may actually receive sentencing under another crime. Also,
               DOJ's total convictions may be less than those recorded by
               investigative agencies. DOJ collects information on the number of
               convictions specifically related to the IP rights violation while
               investigative agencies may record convictions for any case opened
               that includes an IP-related offense and for which a conviction is
               issued.

    53The IP statutes specify statutory maximum sentences for a first offense
    of 3 to 5 years for copyright violations, and up to 10 years for both
    trademark and trade secret violations.

    54According to DOJ, defendants are sentenced pursuant to the U.S.
    Sentencing Guidelines, and for most IP offenses are determined based on
    offense level 8 (0-6 months) for most IP offenses, with offense-level
    enhancements for, among other things, infringement amount, manufacturing
    or importation, and conscious or reckless risk of serious bodily injury.

               Agencies Have Not Taken Steps to Assess IP Law Enforcement Efforts

               Agencies have not taken key steps to assess IP enforcement
               achievements. Specifically, most agencies have not (1) conducted
               systematic analysis of their enforcement activity, (2) clearly
               identified which of their efforts relate to a key IP enforcement
               area--IP crimes that affect public health and safety--nor
               collected data to track these efforts, or (3) set performance
               measures or targets for carrying out IP enforcement. These steps
               are an important part of agencies' ability to effectively plan and
               assess their performance and report to Congress and others.

               Although agencies' statistics show general increases in the level
               of seizures, investigations, and prosecutions, they have not taken
               steps to understand the drivers behind these increases in ways
               that could better inform management and resource allocation
               decisions. For example, while all the agencies reported using IP
               enforcement statistics to compare outputs from one year to the
               next, our discussions with agency officials revealed that little
               has been done to systematically examine enforcement statistics.
               Such analysis might include looking at field offices or regions
               with higher or lower levels of activity to identify effective
               enforcement practices and inform resource allocation decisions. It
               might also include identifying the types of IP crimes that agency
               staff are enforcing to understand criminal activity and help focus
               enforcement efforts.

               Agencies are already collecting some data that could be used to
               examine enforcement efforts more systematically.55 In April 2007,
               we reported that CBP has not analyzed variations in its IP
               enforcement activity by port or conducted analysis of ports'
               relative enforcement outcomes.56 By analyzing available CBP data,
               we found pockets of enforcement activity in some areas. For
               example, a majority of CBP's seizure actions took place in a
               limited number of locations, with nearly three-fourths of
               aggregate seizure value accounted for by only 10 of more than 300
               ports. These are a mix of ports, including a few of the nation's
               largest and some that are smaller. In this report, we made
               recommendations to CBP to improve upon and better understand its
               IP enforcement activity through better analysis.57 We performed a
               similar analysis for DOJ using data on the number of defendants
               charged and number of cases filed by U.S. Attorney's Offices and
               also found concentrations of activity for prosecution activity.
               For example, about 50 percent of IP-related cases were filed by
               around 10 percent of U.S. Attorney's Offices during fiscal years
               2001 through 2006. The same results were true for the number of
               defendants charged with IP crimes.

    55We reviewed agency statistics by field office and aggregated by fiscal
    year. Field office level statistics are considered law enforcement
    sensitive so details on the locations are not provided in this report.

    56 [54]GAO-07-735 .

               We also compared the U.S. Attorney's Offices with the highest IP
               enforcement activity with the locations where CHIP units were
               created as of fiscal year 2006. Of the top 10 offices, ranked by
               number of IP cases filed in 2006, 7 had CHIP units, and the 2 most
               active offices had the largest CHIP units, measured by the number
               of attorneys working in the unit. This analysis suggests that the
               number of resources in a particular field office contributes to
               higher levels of activity; however, according to DOJ, other
               factors, such as crime level, can also affect activity levels. Our
               analyses illustrate the types of analysis that agencies can
               perform using their data, and insights they can obtain, to better
               inform management and resource allocation decisions. DOJ said that
               it performed similar analysis before deciding where to place CHIP
               units, but did not provide evidence that it conducts such analysis
               on a routine basis.

               While all the agencies collected statistics to report broadly on
               their IP-related enforcement activities, most of the agencies have
               not clearly identified which IP enforcement actions relate to
               public health and safety and do not have data to track their
               efforts in this area, despite making this a priority enforcement
               area. By virtue of its mission, FDA's data on IP-related
               enforcement specifically reflects its efforts to address IP
               violations that affect public health and safety. CBP has recently
               begun to monitor IP seizures related to public health and safety.
               In January 2008, it released seizure data for fiscal year 2007
               that for the first time identified seizures in product categories
               that may involve public health and safety, e.g., pharmaceutical,
               electrical articles, and sunglasses. CBP officials told us that
               defining public health and safety seizures is difficult because
               not all seizures in a given category pose public health and safety
               risks, and such risks can be found across a broad range of
               products.

    57We recommended that CBP use existing data to understand and improve IP
    enforcement activity by analyzing IP enforcement outcomes across ports and
    other useful categories, such as modes of transport. See [55]GAO-07-735 .

               The other agencies lack data for identifying IP enforcement
               actions related to public health and safety. For example, ICE
               records IP enforcement under a general data field that applies to
               all types of IP cases. FBI and DOJ have some sub-categories for
               the types of IP investigations and prosecutions they pursue, but
               none is specific to public health and safety. Without specific
               data and definitions for IP-related enforcement efforts that
               impact public health and safety, agencies are unable to
               effectively track outcomes, inform management and resource
               allocation decisions, and report to Congress on an area of
               significant public importance.

               Agencies have also taken few steps to clearly identify performance
               measures specifically for their efforts related to IP-related
               enforcement activities or establish performance targets to track
               their progress towards these efforts. We reviewed agencies'
               strategic plans and, while none had specific goals on IP
               enforcement, the CBP and DOJ plans listed IP enforcement as one
               issue to be addressed as part of working toward broader
               enforcement goals. 58 We also examined agencies' public and
               internal planning documents or memos for IP enforcement and found
               that some had goals and objectives, but contained few performance
               measures or targets.59 Moreover, most of these are internal agency
               documents that are not available to the public.60 Neither ICE nor
               FDA have any additional planning documents for IP enforcement.

    58We reviewed the most recent agency strategic plans available, including
    DHS's 2004 strategic plan; CBP's strategic plan for fiscal years
    2005-2010; ICE's interim strategic plan dated July 2005; DOJ's strategic
    plan for fiscal years 2007-2012; and FDA's strategic plan, dated August
    2003.

    59CBP has an IP Rights Trade Strategy that contains certain performance
    measures and targets for IP enforcement, such as improving by 15 percent
    the efficiency of its efforts to target shipments containing IP violations
    and increasing the number and value of seizures meeting the strategy's
    goal by 15 percent. However, the document lacks baselines against which to
    measure progress. FBI articulates annual IP enforcement goals in a memo to
    its field offices, but does not include performance measures or targets.
    DOJ task force reports on IP enforcement contain recommendations for DOJ
    action, but no measures or targets. In 2007, DOJ developed its first IP
    enforcement strategy with enforcement objectives and some performance
    measures, but this document is for internal government use only, and we
    cannot disclose its contents.

    60For example, we found in our April 2007 report that CBP's IP Rights
    Trade Strategy is an internal document with limited distribution
    throughout CBP and therefore has limited usefulness as a tool to guide the
    agency's IP enforcement efforts. See GAO -07-735. DOJ's 2007 strategy is
    also for internal use only.

               We asked agencies how they monitor their performance of IP
               enforcement activities. Most said they regarded their increasing
               trends in aggregate IP statistics (or outputs) as indicative of
               their progress. However, without performance measures related to
               these statistics, it is not clear how these statistics should be
               assessed because it is not clear what the agencies sought to
               achieve. We recognize that establishing measures and setting
               specific targets in the law enforcement area can be challenging.
               It is important that agencies carry out law enforcement actions
               that are based on merit and avoid the appearance that they strive
               to achieve certain numerical quotas, regardless of case quality.
               By definition, performance measures are a particular value or
               characteristic used to quantify a program's outputs - which
               describe the products and services delivered over a period of time
               - or outcomes - which describe the intended result of carrying out
               the program. A performance target is a quantifiable characteristic
               that establishes a goal for each measure; agencies can determine
               the program's progress, in part, by comparing the program's
               measures against targets.

               The Government Performance and Results Act of 199361 incorporated
               performance measures as one of its most important features, and
               the establishment and review of performance measures are a key
               element of the standards for internal control within the federal
               government.62 We believe that measures and targets remain
               important components of measuring agency performance and enhancing
               accountability, particularly setting outcome-based measures that
               provide insight into the effectiveness of agencies' efforts, not
               just levels of activity.63 More refined performance measurements
               that include outcome measures would allow agencies to better track
               their IP enforcement performance against their goals and give
               managers crucial information on which to base their organizational
               and management decisions. Performance assessment is also important
               in reporting progress to others, such as the IP Coordinator and
               NIPLECC. Doing so could help NIPLECC address its strategic
               planning weaknesses that we previously identified in our November
               2006 report.64

    61The Government Performance and Results Act of 1993 (GPRA, Pub. L. No.
    103-62) requires federal agencies to develop strategic plans with
    long-term, outcome-oriented goals and objectives, annual goals linked to
    achieving the long-term goals, and annual reports on the results achieved.

    62GAO, Internal Controls: Standards for Internal Controls in the Federal
    Government, [56]GAO/AIMD-00-21 .3.1 (Washington, D.C.: November 1999).

    63GAO, Executive Guide: Effectively Implementing the Government
    Performance and Results Act, [57]GAO/GGD-96-118 (Washington, D.C.: June
    1996).

               The National Intellectual Property Rights Coordination Center Has
    			  Not Achieved Its Mission, and Staff Levels Have Decreased

               The National Intellectual Property Rights Coordination Center, an
               interagency mechanism created by the executive branch to improve
               federal IP enforcement and coordinate investigative efforts
               between ICE and FBI, has not achieved its mission or maintained
               the staffing levels set for it upon its creation. The
               center--intended to collect, analyze, and disseminate IP-related
               complaints from the private sector to ICE and FBI field offices
               for investigation--has suffered from a slow start, a lack of
               common understanding about its purpose and agencies' roles, and
               limited private sector complaint information. As a result, the
               center has gradually shifted its focus toward educating the
               private sector about federal IP enforcement efforts. Congressional
               appropriators expressed support for the center's original concept
               through various conference reports, which, over time, directed
               participating agencies to allocate appropriated funds to staff and
               operate the center. However, staffing levels have declined and the
               FBI no longer participates in the center. Plans are underway to
               move the center to a new location in early 2008, and according to
               officials from the other four key agencies, they have met with ICE
               to discuss what role their agencies might play in the center in
               the future.

    			  Created to Improve and Coordinate IP Enforcement, the Center Focuses
    			  Primarily on Private Sector Outreach

               The National Intellectual Property Rights Coordination Center is
               one of several interagency mechanisms for coordinating federal IP
               enforcement efforts. Unlike NIPLECC, which was established in law
               by Congress in 1999, the idea for creating the center arose from
               the work of the National Security Council's Special Coordination
               Group on Intellectual Property Rights and Trade Related Crime,
               co-chaired by the FBI and legacy Customs. This group was formed in
               order to implement Presidential Decision Directive 42, issued in
               1995, concerning international crime. In 1999, a consensus of the
               group members resulted in a multi-agency plan to improve the U.S.
               government's efforts in IP enforcement, and the center was
               created. According to ICE officials at the center, the center was
               directed by legacy Customs and included staff from Customs and
               FBI. After the formation of DHS, ICE took over legacy Customs'
               role in directing the center and providing most of the DHS staff
               that were assigned to the center.

    64We reported that NIPLECC's strategy was limited because it did not fully
    address the characteristics of an effective national strategy, missing
    elements such as a discussion of performance measures, resources, risk
    management, and designation of oversight responsibility. Although the
    strategy cites some output-related performance measures provided by the
    different agencies, we reported that these figures were presented without
    historical data on prior years or goals, limiting their usefulness to
    guide policy and decision makers in assessing performance, allocating
    resources, and balancing priorities. See [58]GAO-07-74 .

               While the center and NIPLECC were both created to improve
               coordination among law enforcement agencies, the concept for the
               center gave it a greater operational focus than NIPLECC. The
               executive branch intended that the center would act as a hub for
               the collection, analytical support, and dissemination to
               investigative agencies of IP-related complaints from the private
               sector, including copyright infringement, trademark infringement,
               and theft of trade secrets. It envisioned that the center would
               coordinate and direct the flow of criminal referral reports on IP
               violations to the participating agencies' investigative resources
               in headquarters and the field. In carrying out these roles, the
               center was expected to help integrate domestic and international
               law enforcement intelligence, consult regularly with the private
               sector, and generally act as a resource for IP complaints.

               Congressional support for the center's creation and role was noted
               through directives in various conference reports related to
               appropriations laws in fiscal years 2001 through 2004. These
               reports indicate that Congress also expected the center to be a
               dedicated effort to improve intelligence and analysis related to
               IP rights violations and gather IP enforcement information from
               other federal and state law enforcement agencies to augment
               investigations.65

               Like NIPLECC, the center has had difficulty defining its purpose
               and carrying out its law enforcement coordination mission.66
               According to ICE, FBI, and DOJ officials and our analysis, the
               center has not achieved its original mission for several reasons:

               o The center got off to a slow start with limited operations in
               fiscal year 2000, and it took several years for it to become fully
               operational. For example, in 2004, we reported that many center
               staff were reassigned after the events of September 11, 2001,
               according to an FBI official.67 In addition, a change in
               leadership after the formation of DHS and the relocation of the
               center to new physical space in 2006 further impacted the
               continuity of the center's operations.68

               o The flow of complaint information from the private sector to the
               center never materialized sufficiently to make the concept work,
               according to ICE and FBI officials. We reported in 2004 that the
               center was not widely used by industry,69 and this situation has
               persisted. For example, few of the private sector representatives
               that we contacted described working through the center to address
               their IP complaints.

               o Participating agencies never reached agreement on how the center
               would operate and what their respective roles would be. FBI
               provided us a copy of a draft memorandum of understanding that it
               said it presented to ICE in fiscal years 2003, 2004, and 2005, to
               clarify operating procedures and agency roles. FBI also provided a
               copy of a 2004 letter from ICE acknowledging receipt of the draft
               memorandum and associated documents and indicating its intent to
               meet with FBI to discuss the matter. However, FBI officials said
               that neither ICE nor DHS followed up with FBI on this issue. ICE
               officials acknowledged having seen the memorandum of understanding
               in draft form but had no record or recollection of any discussions
               being held with FBI to discuss the memorandum.

    65See Conference Reports: 106-1005, accompanying P.L. 106-553; 107-253,
    accompanying P.L. 107-67; 108-10 accompanying P.L. 108-7 and 108-280
    accompanying P.L. 108-90.

    66In 2004, we reported that after its creation, NIPLECC struggled to
    define its purpose, had leadership problems, and was regarded by Congress
    and the private sector as having had little discernable impact, having
    done little else in its early years than issue annual reports on federal
    IP enforcement efforts. This was due in part to a lack of clear
    expectations in its authorizing legislation. See [59]GAO-04-912 . Congress
    clarified NIPLECC's mission in the 2005 Consolidated Appropriations Act,
    calling on it to (1) establish policies, objectives, and priorities
    concerning international IP protection and enforcement; (2) promulgate a
    strategy for protection of American IP overseas; and (3) coordinate and
    oversee implementation of the policies, objectives, priorities, and
    overall strategy for protection of IP overseas by agencies with IP
    responsibilities. See [60]GAO-07-74 .

               Over time and in the absence of complaint information, the center
               began focusing on educating the private sector about federal IP
               enforcement agencies, approaches, and contacts, according to ICE
               officials at the center. Center staff participate in conferences,
               training programs, and trade shows around the country in which
               they disseminate information about federal IP enforcement to the
               private sector. For example, center staff participated in 60
               outreach and training events in fiscal year 2006 and 95 in fiscal
               year 2007. In addition, in 2007, ICE officials said the center
               began scheduling training sessions in selected cities around the
               country in which they bring together appropriate federal, state,
               and local law enforcement agencies and private sector
               representatives. The purpose of the training is to explain the
               region's IP enforcement structure and strengthen involvement of
               the participants.

    67 [61]GAO-04-912 .

    68In 2006, the center was moved from its original physical location to a
    temporary location that lacked the required security precautions to
    install FBI's classified computer system. As a result, FBI removed its
    staff and computers from the center because it could no longer assure the
    security of its data.

    69 [62]GAO-04-912 .

               Despite Congressional Expectations, the Center's Staffing Levels Have Declined

               Through various conference reports, congressional appropriators
               supported the creation and staffing of the center by FBI, legacy
               Customs, and ICE, but agencies' staffing levels at the center have
               declined. According to ICE officials, the center's original
               concept envisioned 24 staff--16 from Customs and 8 from FBI. They
               said staff were to include a Director, investigative agents,
               intelligence analysts, and administrative support. The types of
               staff envisioned for the center further distinguish it as an
               operational entity compared to NIPLECC, which is not designed to
               carry out law enforcement.70 After the formation of DHS, the 16
               Customs positions were transferred to DHS and taken over by as
               many as 16 ICE staff and 2 CBP staff. However, according to ICE
               and FBI officials, each agency's staffing allotment has only
               periodically met the envisioned levels, and total staff currently
               at the center are about one-third of the level originally
               envisioned.

               Conference reports for fiscal years 2001 through 2004
               appropriations bills, at various times, indicated a desire for
               FBI, legacy Customs, and ICE to allocate funding for staffing
               and/or operations of the center. For example, in fiscal year 2001,
               the conference report directed FBI to allocate $612,000 to provide
               eight positions to the center.71 In fiscal years 2002, the
               conference report directed legacy Customs to allocate $5 million
               to support the hiring of agents dedicated to IP enforcement and to
               support and enhance the operation of the center.72 In fiscal year
               2003, the conference report directed legacy Customs to allocate $5
               million to continue center operations and $1.4 million to expand
               the center and its staffing. Congressional conferees encouraged
               Customs to use a portion of the funds to establish the
               clearinghouse for referrals.73 In fiscal year 2004, the conference
               report directed ICE to allocate $6.4 million to the center.74

    70NIPLECC's staff include the IP Coordinator, a policy analyst, press and
    legislative assistants, and various trade- or policy-oriented detailees
    from the participating agencies.

    71Specifically, the conference report directed FBI to allocate "$612,000
    (8 positions and 4 workyears, including 2 agents)." Conference Report
    106-1005, accompanying P.L. 106-553.

    72Conference Report 107-253, accompanying P.L. 107-67.

    73Conference Report 108-10 accompanying P.L. 108-7. The purpose of the
    clearinghouse was to gather IP rights information from other federal as
    well as state and local agencies. According to CBP officials, the funding
    that Customs was directed to provide in fiscal year 2003 was recurred at
    about $4.6 million to reflect the absence in that fiscal year of one-time
    costs that were present in fiscal year 2002. Also, CBP officials said that
    the direction to Customs to allocate an additional $1.4 million was
    reduced to $1.39 million following a $9,100 rescission.

    74Conference Report 108-280 accompanying P.L. 108-90. According to ICE
    officials, the funding that it was directed to provide in fiscal year 2004
    was reduced to about $6.36 million due to a rescission contained in the
    Consolidated Appropriations Act, 2004 (P.L. 108-199).

               We asked agencies how they responded to the conference report
               directives, with agencies responding as follows:

               o FBI officials told us that the funding enabled them to authorize
               and begin filling positions noted in the congressional conference
               reports. FBI filled or nearly filled all eight positions during
               fiscal years 2001 through 2005. In fiscal year 2006, FBI continued
               to fill six of the positions, but removed its computers from the
               center due to security concerns and gradually had its staff spend
               less time working out of the center.75 Since fiscal year 2007, due
               to resource constraints, none of the FBI positions has been
               filled, and the FBI no longer participates in the center.

               o CBP officials said that their records showed that in fiscal year
               2002 legacy Customs placed seven staff (including two agents and
               four intelligence research specialists) in the center and assigned
               additional agents and intelligence research specialists to certain
               field offices and overseas locations to carry out IP enforcement.
               In fiscal year 2003, Customs officials told us they placed more
               agents and intelligence analysts in certain field locations and
               headquarters, but could not provide us with specific numbers.
               According to the Director of the center, following the formation
               of DHS, the two CBP positions were filled in 2004 but have been
               vacant for several years.

               o ICE provided data indicating that, since fiscal year 2004, it
               spent about $3 million on investigative activities, set aside
               about $1.9 million for future construction costs for the center,
               spent about $1.2 million on direct salary costs, and spent the
               remainder on operating costs for the center. ICE staffing levels
               at the center have declined from 15 in 2004 to 8 in 2007.

    75See footnote 66.

               ICE Views Center's Relocation as an Opportunity to Revisit Center's
    			  Purpose and Agency Roles

               In early 2008, ICE plans to move the center to a new location that
               is being configured specifically for the center and some
               additional functions. According to ICE officials, the new center
               will continue to focus on private sector outreach.76 The role that
               the center will play in coordinating referrals and investigations
               among the IP enforcement agencies, however, remains unclear. ICE
               officials said they view the relocation as an opportunity to
               return the center to its original concept and purpose. NIPLECC's
               IP Coordinator said that as an entity staffed by, and located in,
               a law enforcement agency, the center can play a role in
               facilitating law enforcement coordination at an operational level
               that NIPLECC cannot. However, the IP Coordinator agreed that there
               are mixed views among IP enforcement agencies about the usefulness
               of the center.

               In preparation for the move, ICE officials said they had met with
               FBI, DOJ, CBP, and FDA to offer them space in the center and ask
               them to permanently assign staff there; however, agencies'
               reactions are mixed. FDA plans to staff one special agent at the
               center initially and will send additional agents later if its
               workload at the center justifies additional staff. FDA officials
               said that the agency decided to staff an agent at the center
               despite its limited resources because counterfeit drugs pose a
               significant threat to the public health and are a high priority to
               FDA. According to an official in FDA's Office of Criminal
               Investigations, a significant portion of FDA's counterfeit drug
               investigations are conducted jointly with ICE, and the center may
               facilitate a coordinated law enforcement approach.

               According to DOJ and FBI officials, staff will not be placed at
               the center unless there is a more operational focus in addition to
               the training and outreach currently provided. More specifically,
               DOJ and FBI would like there to be some initial analysis and
               investigation after an industry referral is received at the center
               before information is passed on to field investigative agents.
               Further, even if FBI sees the center taking a more operational
               focus, the agency would have to request additional staff resources
               to be able to assign personnel, since currently none is available.
               CBP officials said they do not plan to allocate any staff to the
               center.

    76The center will be co-located with two other ICE initiatives: ICE Mutual
    Agreement between Government and Employers (IMAGE) and the Washington
    Field Office's Document and Benefit Fraud Task Force.

               According to ICE and FDA officials, no discussions have taken
               place to outline the purpose of the new center or define how
               agencies would coordinate their enforcement activities at the
               center.

    			  Conclusions

               Federal IP enforcement agencies confront growing challenges in
               protecting the United States against counterfeit and pirated
               goods. IP crimes appear to be on the rise, and the key law
               enforcement agencies and FDA need to work efficiently and
               effectively to contend with this trend. Most federal IP
               enforcement activity has increased in recent years. However,
               because IP enforcement is generally not a top agency priority, few
               resources are dedicated solely to this task, and agencies may
               spend fewer resources on IP enforcement than on higher priority
               issues. Despite the general increases in IP enforcement activity,
               agencies have taken little initiative to improve their data or
               evaluate their enforcement activity in ways that would enable them
               to identify and track certain trends or enforcement outcomes, like
               regional variations in enforcement activity and types of
               IP-infringing goods commonly enforced. Performing this type of
               analysis could help the agencies make further improvements in
               their IP enforcement activity by making more effective management
               decisions and resource allocations. At the same time, setting
               performance measures and targets for IP enforcement activities
               could help the agencies better assess their progress toward their
               goals. Finally, collecting better data, analyzing them, and
               reporting on progress toward goals could help make the key IP
               enforcement agencies more accountable to the public and Congress,
               particularly regarding their efforts to address IP-infringement
               that affects public health and safety. The need for such
               improvements among IP enforcement agencies mirrors weaknesses we
               found previously with NIPLECC, in which the lack of clarity over
               performance measures, resource requirements, and oversight
               responsibilities limited NIPLECC's ability to prioritize, guide,
               implement, and monitor the combined efforts of multiple agencies
               to protect and enforce IP rights.

               One area where IP enforcement has not increased is CBP's
               enforcement of exclusion orders. U.S. companies spend millions of
               dollars to argue their allegations of IP infringement before the
               U.S. International Trade Commission, but the Commission relies on
               CBP to enforce its decisions. CBP has allocated few resources to
               carry out its role in this complex area, lacks data to track its
               enforcement of exclusion orders, and has not given sufficient
               attention to addressing the procedural weaknesses that we
               identify. Given the potential for these orders to affect large
               volumes of trade, CBP has a responsibility to improve its
               enforcement of exclusion orders.

               As agencies consider ways to further improve federal IP
               enforcement, the relocation of the National Intellectual Property
               Rights Coordination Center presents an opportunity for NIPLECC and
               the key IP enforcement agencies to reassess the need for law
               enforcement coordination in this area and the best way to achieve
               it. As part of this discussion, NIPLECC and the agencies need to
               examine the center's mission, what outcomes they expect from the
               center, and what role key agencies should play, if any, in the
               center's future. Given Congress' sustained interest in improving
               federal IP enforcement and its past support for the center,
               providing this information to Congress could help better inform
               Congress about what contributions to IP enforcement it should
               expect from the center.

    			  Recommendations for Executive Action

               To better inform management and resource allocation decisions and
               report on agency achievements, we recommend that the Attorney
               General and the Secretaries of Homeland Security and Health and
               Human Services direct their agencies to take the following four
               actions:

               For ICE, FBI, FDA, and DOJ:

               o systematically analyze enforcement statistics to better
               understand variations in IP-related enforcement activity.

               For CBP:

               o continue to take steps to better identify IP seizures that pose
               a risk to the public health and safety of the American people, and
               collect and report this data throughout the agency and to
               Congress.

               For ICE, FBI, and DOJ:

               o take steps to better identify enforcement actions against
               IP-infringing goods that pose a risk to the public health and
               safety of the American people, and collect and report this data
               throughout each agency and to Congress.

               For CBP, ICE, FBI, and DOJ:

               o establish performance measures and targets for IP-related
               enforcement activity and report such measures, targets, and actual
               performance to NIPLECC and Congress.

               To better inform Congress and affected rights holders regarding
               its enforcement of exclusion orders and address certain procedural
               weaknesses, we recommend that the Secretary of Homeland Security
               direct the Commissioner of CBP to take the following three
               actions:

               o identify factors currently limiting their enforcement
               capabilities and develop a strategy for addressing those
               limitations along with a timeline for implementing the strategy;

               o begin collecting data on the number of exclusions, in total and
               per exclusion order; and

               o examine CBP's ability to develop regulations to allow
               notification of exclusions to affected rights holders, and if
               authorized, develop such regulations.

               To clarify the mission and structure of the National Intellectual
               Property Rights Coordination Center, we recommend that the
               Attorney General and the Secretary of Homeland Security, in
               consultation with NIPLECC, direct their IP enforcement agencies to
               take the following three actions:

               o reassess the National Intellectual Property Rights Coordination
               Center's mission and how its future performance will be assessed;

               o define agencies' role in the center and the number and types of
               resources needed to operate the center; and

               o report to Congress on the center's redefined purpose,
               operations, required resources, and progress within 1 year of the
               center's relocation.

               We provided a draft of this report to DHS, DOJ, and HHS for their
               review and comment. CBP and ICE provided comments through DHS.
               DHS, CBP, and ICE concurred with our recommendations. DOJ did not
               indicate whether it agreed or disagreed with our recommendations.
               HHS commented that it disagreed with our recommendation that FDA
               develop performance measures and targets for IP enforcement. In
               light of the agency's public health and safety mission, we
               determined that it was inappropriate to require FDA to develop law
               enforcement-related measures and targets, and no longer recommend
               this. However, given the importance of understanding the nature of
               IP violations that affect public health and safety, we now
               recommend instead that FDA more systematically analyze its IP
               enforcement statistics (see p. 43). We believe this is a more
               appropriate recommendation because FDA said that it already
               monitors its IP enforcement criminal investigations to discern
               trends. In response to other comments the agencies made, we also
               modified two recommendations to give the agencies more flexibility
               in identifying which of their IP enforcement actions relate to
               public health and safety. Instead of recommending that the
               agencies create categories and definitions of such actions, as we
               did in the draft report, we recommend that they take steps to
               better identify these actions (see p. 43). A summary of each
               agency's comments and our evaluation follows.

               Agency Comments and Our Evaluation

               CBP commented that the report inaccurately states that it lacks
               data and definitions for IP-related enforcement efforts that
               impact public health and safety, saying it reported this data in
               its fiscal year 2007 seizure statistics. In response, we modified
               the final report to note that CBP began reporting on IP seizures
               related to public health and safety for the first time in January
               2008 (see p. 33). CBP also commented that the report's finding
               that it lacks performance measures for IP enforcement is not
               completely accurate and cited its "National IPR Trade Strategy."
               We added information to the final report about this document (see
               p. 34), but continue to believe that CBP needs to incorporate IP
               enforcement measures and targets into its agency-wide strategic
               plan, which it has said it intends to do. Finally, CBP repeated
               comments made about our April 2007 report regarding an analysis
               that we proposed it could undertake to better understand its
               enforcement outcomes.77 We disagreed with CBP's comments at that
               time and continue to believe that CBP, and the other agencies, can
               make better use of existing data to understand their IP
               enforcement efforts and outcomes. DHS's written comments and our
               detailed response appear in appendix IV.

               DOJ made several comments about ways in which it believes the
               report understates its IP enforcement achievements. For example,
               DOJ cited percent increases between select years for certain
               indicators to demonstrate its increased enforcement results.
               However, the report takes a more systematic approach to evaluating
               overall federal IP enforcement efforts by examining multiple
               indicators at multiple agencies over a 6-year period. We believe
               that the report's approach and assessment is fair and valid. DOJ
               also commented we did not sufficiently acknowledge increases in
               training and resource allocations for IP enforcement, particularly
               as relates to its CHIP units. In fact, as was true for the draft
               report, the final report discusses growth in CHIP units and
               numbers of IP-trained attorneys (see p. 20). Finally, DOJ
               commented that the report inaccurately characterizes its efforts
               to analyze IP enforcement statistics by district. We modified the
               report to add information that DOJ analyzed IP enforcement
               statistics when deciding where to place CHIP units; however, DOJ
               never provided evidence that it conducts such analysis on a
               routine basis (see p. 33). We continue to believe that
               systematically conducting such analysis can help DOJ determine
               whether its allocation of resources is producing the kind of
               increases in IP enforcement outcomes that it desired.

    77 [63]GAO-07-735 .

               DOJ commented that the report inaccurately describes its efforts
               to establish performance measures or goals to assess its IP
               enforcement achievements. In response, we added information to the
               discussion of performance measurement about certain DOJ documents
               that contain such goals and measures, and cited again the DOJ task
               force reports on IP enforcement, which had been mentioned earlier
               in the report (see p. 34). However, the task force reports contain
               only recommendations for DOJ action, not goals with associated
               performance measures. A few of these recommendations are
               structured like performance goals, such as "target large, complex
               organizations that commit IP crime" or "prosecute IP offenses that
               endanger the public's health or safety," but the task force report
               provides no indication of how DOJ will measure progress toward
               these recommendations. DOJ commented that developing numeric or
               percentage targets linked to its performance measures could create
               the potential for case quotas or thresholds. We agree that setting
               performance measures and targets in the law enforcement arena is
               difficult, and we added information to the report to further
               clarify the sensitivities associated with doing this (see p. 35).
               However, we continue to believe that it is important, and
               possible, for DOJ to develop performance measures and targets to
               help it, and others, determine whether its overall IP enforcement
               efforts are achieving performance goals and focused on the right
               issues, and whether its resource allocations devoted to this area
               are contributing to the desired results. DOJ's written comments
               and our detailed response appear in appendix V.

               HHS expressed concerns about setting performance measures and
               targets that were similar to those raised by DOJ. While we no
               longer direct this recommendation to FDA, we continue to believe
               that is it important and possible for law enforcement agencies to
               set useful performance measures and targets to guide and assess
               their efforts. FDA's written comments and our detailed response
               appear in appendix VI.

               DHS, DOJ, and HHS also provided technical comments, which we
               incorporated as 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 to appropriate congressional committees and the Secretaries
               of the Departments of Homeland Security and Health and Human
               Services; the Attorney General; the Chairman of the U.S.
               International Trade Commission; and NIPLECC's IP Coordinator. We
               will also make copies available to others on request. In addition,
               the report will be available at no charge on the GAO Web site at
               http://www.gao.gov.

               If you or your staff have any questions about this report, please
               contact me at (202) 512-4347 or [52]yagerl@gao.gov . Contact
               points for our Office of Congressional Relations and Public
               Affairs may be found on the last page of this report. GAO staff
               who made major contributions to this report are listed in appendix
               VII.

               Sincerely yours,

               Loren Yager, Director
    			  International Affairs and Trade

    			  Appendix I: Scope and Methodology

               The Ranking Minority Member of the Senate Subcommittee on
               Oversight of Government Management, the Federal Workforce and the
               District of Columbia, Committee on Homeland Security and
               Governmental Affairs, asked us to (1) examine federal agencies'
               roles, priorities, and resources devoted to intellectual property
               (IP) enforcement, (2) evaluate agencies' IP-related enforcement
               statistics and achievements, and (3) examine the status of the
               National Intellectual Property Rights Coordination Center.

               Based on our previous work and background research, we determined
               that the key federal law enforcement agencies carrying out IP
               enforcement are Customs and Border Protection (CBP), Immigration
               and Customs Enforcement (ICE), the Federal Bureau of Investigation
               (FBI), and the Department of Justice (DOJ). In addition, we
               included the Food and Drug Administration (FDA) due to its role in
               investigating counterfeit versions of products it regulates. To
               describe the federal structure that carries out IP enforcement, we
               met with CBP, ICE, DOJ, FBI, and FDA officials at the agencies
               headquarters, and, for all agencies except FDA, met with officials
               in multiple field locations. The locations we visited are not
               disclosed in this report for law enforcement reasons.1 We also met
               with the International IP Enforcement Coordinator (IP
               Coordinator). We reviewed agency documents to understand policies
               and practices related to IP enforcement and discussed the
               processes by which these agencies interact with each other in
               conducting IP enforcement. We also reviewed prior GAO reports that
               examined the federal IP enforcement structure, agencies' role, and
               key coordinating mechanisms.2 To determine agencies' IP
               enforcement priorities, we examined strategic and other planning
               documents, including agency memos detailing goals and objectives
               related to IP enforcement. In some instances, agency documents
               were law enforcement sensitive; therefore, the details have not
               been included in the report and only information that was
               discussed openly in interviews or in public documents and forums
               has been used.

               To determine resources dedicated to IP enforcement, we spoke with
               agency officials, obtained data on the number of staff dedicated
               to IP enforcement, and analyzed data, where available, on staff
               time spent on IP enforcement. In particular, we obtained data on
               (1) the number of criminal investigative case hours that ICE and
               FDA field offices recorded under codes used to track IP
               enforcement; and (2) the average number of agents on board that
               were working IP criminal cases, as reported by FBI field offices.
               We obtained data covering fiscal years 2001 through 2006, except
               for FDA investigative case hours for counterfeit products, which
               the agency has only been tracking since fiscal year 2003. We
               reviewed these data for obvious errors and consistency with
               publicly reported data, where possible. When we found
               discrepancies, we brought them to the attention of relevant agency
               officials and worked with them to correct the discrepancies before
               conducting our analyses. On the basis of these efforts, we
               determined that these data were sufficiently reliable for our
               purposes. To make similar comparisons across the agencies, we
               converted ICE and FDA data on criminal case hours into full-time
               equivalents (FTE) using information that the agencies provided and
               confirmed with FBI officials that we could use FBI's measurement
               as equivalent to the FTE measurement for time spent by ICE and FDA
               IP investigations.

    1Our April 2007 report included analysis and information about IP
    enforcement at the ports we visited. We withheld information on these
    ports' identity for law enforcement reasons. Therefore, we cannot disclose
    this information in this report.

    2 [64]GAO-04-912 ; [65]GAO-07-74 ; and [66]GAO-07-735 .

               To examine agencies' IP enforcement activity, we analyzed data
               from fiscal year 2001 to fiscal year 2006 on CBP IP seizures,
               penalties, and exclusion activities; the number of criminal cases
               opened in ICE, FBI, and FDA's Office of Criminal Investigation
               field offices that were recorded as IP enforcement cases; ICE,
               FBI, and FDA arrests, indictments, and convictions stemming from
               their IP investigations; and the numbers of referrals of IP cases
               to DOJ from the investigative agencies, IP cases that DOJ filed,
               defendants charged in those cases, defendants convicted of IP
               crimes, defendants imprisoned, and sentences awarded. Information
               on CBP seizures and penalties is drawn from our April 2007 report.
               In addition, we obtained data from CBP on its Trade Alerts as of
               July 2007, as well as the number of targeting instructions it had
               in place for each Trade Alert in each of fiscal years 2003 through
               2006 and the number of exams, IP violations, and seizures it has
               recorded as a result of those instructions. We discussed key law
               enforcement activities with ICE, FBI, FDA, and DOJ and determined
               what data the agencies record and what activities they report on
               internally. We then requested them to extract data from their
               systems on these key activities when they were performed for IP
               enforcement. For the most part, investigative agency data reflect
               activities that are coded as IP enforcement, while DOJ data
               reflect activities in which key IP enforcement statutes are cited.
               In general, the agencies said that the data they provided
               reflected most, but perhaps not all, of their activity related to
               IP enforcement.

               In order to collect uniform data on IP enforcement activities, we
               worked with each agency to develop the parameters by which we
               would request data from their systems. In addition, we worked with
               officials at each agency to develop a thorough understanding of
               the data that we received. We reviewed the data we obtained for
               obvious errors and consistency with publicly reported data, where
               possible. When we found discrepancies, we brought them to the
               attention of relevant agency officials and worked with them to
               correct the discrepancies before conducting our analyses. For
               example, we determined that CBP provided information on Trade
               Alerts that related to Exclusion Orders that were no longer in
               effect. CBP agreed and revised the number of Trade Alerts on its
               Web site. Also, the data we report on ICE's arrests, indictments,
               and convictions are different from data it has reported publicly
               in the IP Coordinator's quarterly IP enforcement updates.3 ICE
               officials said that the system from which it obtains this data is
               a "live system," meaning that data pulled from the system on
               different dates may not be the same. ICE officials cited updates
               to case information as one reason that data might differ over
               time. In addition, the parameters that ICE advised us to use when
               requesting ICE's data on IP enforcement cases differed somewhat
               from the parameters that ICE used. Finally, we found some
               inconsistencies with FBI's IP enforcement data. We discussed these
               discrepancies with FBI and made changes to the data accordingly.
               We asked FBI officials familiar with the agency's IP enforcement
               efforts to review the final data set for accuracy. We did not find
               discrepancies with FDA or DOJ data and used the most current data
               sets they provided for the 6 fiscal years we requested. Based on
               our discussions of internal controls and ability to address data
               discrepancies with the agencies, we determined that the data are
               sufficiently reliable to report IP enforcement activity. To assess
               federal agencies' achievements in IP-related enforcement activity,
               we reviewed agency priorities, goals, and objectives and compared
               them to the types of data agencies collected. We also asked
               program officials how they used their IP enforcement data to
               assess performance and inform management and resource allocation
               decisions.

               We also talked to private sector representatives to better
               understand how counterfeit and piracy affects their businesses and
               obtain their views on federal IP enforcement. We obtained
               different company contacts from conferences, federal agencies
               working with private sector, and our own research. We developed
               structured interview questions to understand industry views
               regarding federal IP enforcement efforts and private companies'
               own efforts to protect their IP. We selected eight sectors based
               on our participation in trade conferences and discussions and
               information from organizations such as the U.S. Chamber of
               Commerce that have anti-counterfeiting campaigns and are affected
               by counterfeiting and piracy. We interviewed 22 companies and 8
               industry associations across those sectors. The sectors we
               selected were: consumer electronics, entertainment and media,
               luxury goods and apparel, health and food, Internet,
               pharmaceutical, software, and manufacturing. For the most part, we
               interviewed at least one industry association and two companies in
               each sector. Most of the companies we spoke with were large
               companies because the prevalence of their brand in the market has
               made them targets for counterfeiting and piracy. We analyzed
               industry interviews using a systematic coding scheme to identify
               common themes and responses to our questions.

    3The IP Coordinator reports quarterly on IP enforcement. These reports are
    posted on the Stop Fakes Web site ( [67]http://www.stopfakes.gov ) and
    have been distributed at public events such as the U.S. Chamber of
    Commerce's Coalition Against Counterfeiting and Piracy monthly meetings.
    Several of these reports, including the report for the third quarter of
    2007, have contained data on ICE's arrest, indictments, and convictions.
    However, the data was not included in the fourth quarter report for 2007.

               To examine the intended purpose and funding of the National
               Intellectual Property Rights Coordination Center, we met with ICE
               and FBI officials associated with the center to discuss its
               evolution, role, and staffing levels; reviewed agency documents
               that articulated the center's purpose; and analyzed Congressional
               budget documents that reflected funding related to the center.
               Specifically, we reviewed appropriation legislation and related
               reports of the House and Senate Committees on Appropriations and
               relevant subcommittees for fiscal years 2001 through 2006 to
               determine what funds and additional instructions were provided to
               ICE, FBI, and legacy Customs related to staffing and operating the
               center. We then requested information from ICE, FBI, and CBP about
               what funds were received and how the funds were used. We also
               discussed the center's future role with ICE, FBI, FDA, and DOJ
               officials, and the NIPLECC IP Coordinator.

               We conducted this performance audit from December 2006 through
               March 2008 in accordance with generally accepted government
               auditing standards. Those standards require that we plan and
               perform the audit to obtain sufficient, appropriate evidence to
               provide a reasonable basis for our findings and conclusions based
               on our audit objectives. We believe that the evidence obtained
               provides a reasonable basis for our findings and conclusions based
               on our audit objectives.

    			  Appendix II: Federal Protection and Enforcement of IP Rights under
    			  U.S. Law

               The federal government plays a role in granting protection for and
               enforcing IP rights. It grants protection by approving patents or
               registering copyrights and trademarks. These IP rights grant
               registrants limited exclusive ownership over the reproduction or
               distribution of protected works (copyright), the economic rewards
               the market may provide for their creations and products
               (trademark), or the right to exclude others from using, making,
               and selling devices that embody a claimed invention (patent). The
               federal government enforces IP rights by taking actions against
               those accused of their theft or misuse. Enforcement actions
               include both civil and criminal penalties. U.S. laws criminalize
               certain types of IP violations, primarily copyright and trademark
               violations, and authorize incarceration or fines. These laws are
               directed primarily toward those who knowingly produce and
               distribute IP-infringing goods, rather than those who consume such
               goods. Although U.S. laws do not treat patent violations as a
               crime, the federal government does take actions to protect patents
               and authorizes civil enforcement actions against infringers.

               Table 3 summarizes federal protection and enforcement of IP rights
               under U.S. law. 1

    1In addition to the laws cited in the table, the Federal Food, Drug and
    Cosmetic Act (21 U.S.C. 301 et seq.) provides legal authority for FDA to
    conduct counterfeit product investigations and enforcement actions.

    Table 3: Summary of Federal Protection and Enforcement of IP Rights under
    U.S. Law

    Type of IP protection: U.S. Copyright: Criminal Infringement for Profit
    17 USC 506(a)(1)(A) and 18 USC 2319(b);
    Criminal penalties: Individuals: 1st offense, maximum 5 years
    imprisonment and $250,00 fine or twice gain/loss; 2nd offense, maximum
    10 years imprisonment; Corporations: 1st offense, $500,000 fine or
    twice gain/loss; Criminal forfeiture available;
    Non-criminal actions and penalties (by federal government): Civil
    forfeiture available (of infringing copies, and plates, mold,
    tapes, or other equipment from which infringing copies can be made);
    Civil remedies and penalties (available to rights holders and other
    victims): Copyright infringement (even where it is neither willfully
    committed nor for profit) is actionable under 17 U.S.C. � 501 et seq.
    For willful copyright infringement, copyright owners may obtain
    injunctions, ex parte orders to seize infringing items, and recover
    actual damages or statutory damages of up to $150,000 per work
    infringed, as well as attorneys' fees and costs.

    Type of IP protection: U.S. Copyright: Bootleg Recordings of Live
    Musical Recordings (unauthorized fixation of and trafficking in sound
    recordings and music videos of live musical performances) 18 USC 2319A;
    Criminal penalties: Individuals: 1st offense, maximum 5 years
    imprisonment and $250,000 fine or twice gain/loss; 2nd offense, 10
    years imprisonment; Corporations: $500,000 or twice gain/loss; Criminal
    forfeiture available;
    Non-criminal actions and penalties (by federal government): Civil
    forfeiture available (for bootlegs imported into the U.S.);
    Civil remedies and penalties (available to rights holders and other
    victims): Performers whose performances are recorded or distributed
    without authorization may, pursuant to 17 U.S.C. � 1101, obtain
    injunctions and recover damages equivalent to those available for
    copyright infringement under 17 U.S.C. �� 502-505.

    Type of IP protection: U.S. Copyright: Camcording (unauthorized
    recording of motion pictures in motion picture exhibition facility) 18
    USC 2319B;
    Criminal penalties: Individuals: 1st offense, maximum 3 years
    imprisonment and $250,000 fine or twice gain/loss; 2nd offense, maximum
    6 years imprisonment; Corporations: $500,000 fine or twice gain/loss;
    Criminal forfeiture available;
    Non-criminal actions and penalties (by federal government): [Empty];
    Civil remedies and penalties (available to rights holders and other
    victims): No specific civil remedies for camcording, although
    camcording is actionable as copyright infringement.

    Type of IP protection: U.S. Copyright: Large-Scale Infringement without
    Profit Motive (reproduction or distribution over any 180-day
    period/more than $1,000 total retail value) 17 USC 506(a)(1)(B) and 18
    USC 2319(c);
    Criminal penalties: Individuals: 1st offense, maximum 3 years
    imprisonment and $250,000 fine or twice gain/loss; 2nd offense, 6 years
    imprisonment; Corporations: $500,000 fine or twice gain/loss; Criminal
    forfeiture available;
    Non-criminal actions and penalties (by federal government): Civil
    forfeiture available;
    Civil remedies and penalties (available to rights holders and other
    victims): Copyright infringement (even where it is neither willfully
    committed nor for profit) is actionable under 17 U.S.C. � 501 et seq.
    For willful copyright infringement, copyright owners may obtain
    injunctions, ex parte orders to seize infringing items, and recover
    actual damages or statutory damages of up to $150,000 per work
    infringed, as well as attorneys' fees and costs.

    Type of IP protection: U.S. Copyright: Distribution of Pre-Release
    Works or Material over Publicly-Accessible Computer Network for
    Commercial Purposes (17 USC 506(a)(1)(C) and 18 USC 2319(d));
    Criminal penalties: Individuals: 1st offense, maximum 5 years
    imprisonment and $250,00 or twice gain/loss; subsequent offense, 10
    years imprisonment; Corporations: $500,000 fine or twice gain/loss;
    Criminal forfeiture available;
    Non-criminal actions and penalties (by federal government): Civil
    forfeiture available;
    Civil remedies and penalties (available to rights holders and other
    victims): Actionable as copyright infringement (see above).

    Type of IP protection: U.S. Copyright: Distribution of Pre-Release
    Works or Material over Publicly-Accessible Computer Network Not for
    Commercial Purposes (17 USC 506(a)(1)(C) and 18 USC 2319(d));
    Criminal penalties: Individuals: 1st offense, maximum 3 years
    imprisonment and $250,000 fine or twice gain/loss; subsequent offense,
    6 years imprisonment; Corporations: $500,000 fine or twice gain/loss;
    Criminal forfeiture available;
    Non-criminal actions and penalties (by federal government): Civil
    forfeiture available;
    Civil remedies and penalties (available to rights holders and other
    victims): Actionable as copyright infringement (see above).

    Type of IP protection: U.S. Copyright: Use of Technology to Violate
    Anti-Circumvention Systems and Anti-Piracy Protections and Protection
    of Integrity of Copyright Management Information (17 USC 1201-1204);
    Criminal penalties: Individuals: 1st offense, maximum 5 years
    imprisonment and $500,000 fine or twice gain/loss; 2nd offense, maximum
    10 years imprisonment and $1 million fine or twice gain/loss;
    Non-criminal actions and penalties (by federal government): [Empty];
    Civil remedies and penalties (available to rights holders and other
    victims): Civil court action available, including: temporary or
    permanent injunction; impoundment; actual and statutory damages; costs;
    attorney's fees; remedial modification or destruction of violating
    product; triple damages for repeat violations within 3 years of initial
    violation.

    Type of IP protection: U.S. Copyright: Trafficking in counterfeit
    labels, illicit labels, or counterfeit documentation or packaging (18
    USC 2318);
    Criminal penalties: Individuals: Maximum 5 years imprisonment and
    $250,000 fine or twice gain/loss; Corporations: $500,000 fine or twice
    gain/loss; Criminal forfeiture available;
    Non-criminal actions and penalties (by federal government): Civil
    forfeiture available;
    Civil remedies and penalties (available to rights holders and other
    victims): Available civil remedies include: temporary or permanent
    injunction; -impoundment; attorney's fees and costs; actual damages and
    any additional profits; statutory damages of up to $25,000 per
    violation.

    Type of IP protection: U.S. Trademark: Trafficking in Counterfeit Goods
    or Services (using counterfeit mark) (18 U.S.C. � 2320); Criminal
    penalties: Individuals: 1st offense, maximum 10 years imprisonment and
    maximum $2,000,000 fine or twice gain/loss; 2nd offense, maximum 20
    years imprisonment and maximum $5,000,000 fine or twice the gain/loss;
    Corporations: 1st offense, maximum $5,000,000 fine or twice gain/loss;
    subsequent offense, maximum $15,000,000 fine or twice the gain/loss;
    Criminal forfeiture available;
    Non-criminal actions and penalties (by federal government): Civil
    forfeiture available;
    Civil remedies and penalties (available to rights holders and other
    victims): Available civil remedies include: temporary or permanent
    injunction; impoundment; attorney's fees and costs; actual damages and
    any additional profits; statutory damages of up to $100,000 per type of
    goods (up to $1 million if violation is willful).

    Type of IP protection: U.S. Patent: False Patent Marking (35 U.S.C. �
    292);
    Criminal penalties: No criminal penalties, but criminal fines based on
    criminal conduct related to patents;
    Non-criminal actions and penalties (by federal government): Maximum
    $500 fine for every offense;
    Civil remedies and penalties (available to rights holders and other
    victims): Any private individual may sue for the civil penalty of $500,
    which is split with the government.

    Type of IP protection: U.S. Trade Secrets: Economic Espionage (18
    U.S.C. � 1831);
    Criminal penalties: Individuals: maximum 15 years imprisonment or
    $500,000 fine or twice gain/loss, or both; Corporations: $10,000,000
    fine or twice gain/loss; Criminal forfeiture available;
    Non-criminal actions and penalties (by federal government): The
    Attorney General may obtain injunctions against violations;
    Civil remedies and penalties (available to rights holders and other
    victims): No express federal cause of action, although remedies are
    available for trade secret theft under state law.

    Type of IP protection: U.S. Trade Secrets: Theft of Trade Secrets (18
    USC 1832);
    Criminal penalties: Individuals: 1st offense, maximum 10 years
    imprisonment or $250,000 or twice gain/loss; 2nd offense, 10 years
    imprisonment; Corporations: Maximum $5,000,000 fine or twice gain/loss;
    Criminal forfeiture available;
    Non-criminal actions and penalties (by federal government): The
    Attorney General may obtain injunctions against violations;
    Civil remedies and penalties (available to rights holders and other
    victims): No express federal cause of action, although remedies are
    available for trade secret theft under state law.

    Source: GAO analysis of DOJ documents and review by DOJ's Criminal
    Division.

    Appendix III: Private Sector Views on Federal IP Enforcement Efforts

    A number of companies have been affected by counterfeiting and piracy,
    particularly as criminal activity has increased in recent years. As part
    of our review of federal IP enforcement efforts, we identified companies
    and industry associations that are actively involved in
    anti-counterfeiting and piracy activities. We interviewed 8 industry
    associations and 22 companies across 8 sectors, including consumer
    electronics, luxury goods and apparel, pharmaceuticals, and software.1 The
    views obtained through these interviews cannot be generalized across
    sector or industry overall given that our sample size was small. Industry
    responses produced a mix of views on federal efforts to enforce
    intellectual property rights, with some companies reporting positively
    about specific agency actions and others that were more critical of
    federal actions. A selection of industry views by sector are presented
    below based on analysis and synthesis of interview responses around common
    themes. For the most part, each bullet represents a different company or
    association representative. These views are not direct quotes and have
    been edited as needed for clarity and readability.

      Various Companies Are Impacted by Counterfeiting and Piracy

    Table 4 highlights industry views on the impact of counterfeiting and
    piracy.

    1Most of the companies we interviewed were large companies with
    anti-counterfeiting and/or piracy initiatives.

    Table 4: Summary of Industry Representatives' Views on the Impact of
    Counterfeiting and Piracy, by Sector

    Sector: Consumer electronics;
    Comments:
    * Federal law enforcement efforts have improved very impressively over
    the past three years. There is better coordination and more resources,
    but the problem is growing and now there is an economic and health and
    safety issue�The magnitude of the federal law enforcement effort is
    still not commensurate with magnitude of [counterfeit and pirated]
    products.

    Sector: Luxury goods/apparel;
    Comments:
    * Beyond a loss to businesses, there is a huge loss to the Treasury and
    the national infrastructure that results from the sale of counterfeit
    goods;
    * Most counterfeit goods are sold by small businesses that
    intentionally mix real products with counterfeit products so people
    can't tell.

    Sector: Health/food;
    Comments:
    * The main issue with regard to counterfeiting and piracy is fast
    moving consumer goods. It has become an increased problem as personal
    care products that have safety issues are found in large retail stores
    and grocery stores.

    Sector: Internet;
    Comments:
    * Losses to property rights owners from counterfeiting and piracy can
    occur through Internet/online auctions.

    Sector: Pharmaceutical;
    Comments:
    * Counterfeit medicines place public health and safety at risk, have
    the potential to damage patient confidence in the branded medicine, and
    negatively impact sales of the authentic medicines.

    Sector: Software;
    Comments:
    * The impact of software piracy and counterfeit software varies by
    company and losses are difficult to calculate. Most pirated software is
    in the form of Internet downloads or mail order piracy that reduces
    company profits and taxes paid to the government, while counterfeit
    software poses greater risks to consumers in terms of potential damage
    to their computers.

    Sector: Manufacturing;
    Comments:
    * It is difficult to calculate direct losses for some companies, but
    estimated losses in this sector have been reported as high as $1
    billion.

    Source: GAO analysis of private sector responses.

      Industry Concerned over Lack of Resources to Carry Out IP Enforcement

    Some industry representatives expressed concern about the federal
    government's ability to carry out IP enforcement due, in part, to a lack
    of dedicated resources. While several companies said that federal IP
    enforcement efforts have increased, 14, or nearly half, of the
    representatives we contacted said there is a shortage of resources to
    carry out IP enforcement. For example, one company we interviewed said
    that CBP has made improvements over the last couple of years, but the
    scope of its efforts is still not up to the problem, and that more
    resources are needed to perform risk analysis and modeling to determine
    the origin of counterfeit goods. Another company representative said that
    the task is large compared to the federal resources applied, especially
    because the number of counterfeiters is increasing but federal resources
    have remained constant. Companies reported increasing their own resources
    to focus on IP enforcement, with 15 stating that they employ or contract
    private investigators and/or have in-house resources dedicated to IP
    investigations and anti-counterfeiting activity. Table 5 highlights
    specific representatives' statements about the level of federal resources
    dedicated to IP enforcement.

    Table 5: Summary of Industry Representatives' Views on Federal Resources
    Dedicated to IP Enforcement, by Sector

    Sector: Consumer electronics;
    Comments:
    * CBP has greatly improved over the past couple of years, but the scope
    of the effort is still not up to the problem - they need more staff
    resources that do risk analysis and modeling to determine where
    counterfeit goods may be coming from and to help them target
    inspections more;
    * There is some need in some places around the country for specific CBP
    resources dedicated to the IP issue. It doesn't have to be the case at
    every port. With more dedicated resources to IP, we would see seizure
    numbers go up even more;
    * Federal IP law enforcement agencies are challenged because of their
    limited staff resources.

    Sector: Luxury goods/apparel;
    Comments:
    * There is a lack of resources and money available to CBP, and it would
    have to increase in both those areas to improve on the number of
    seizures.

    Sector: Health/food;
    Comments:
    * CBP is able to screen only a certain percentage of goods
    that come in, so additional resources would be helpful.

    Sector: Pharmaceutical;
    Comments:
    * There is a need for increased and dedicated human and financial
    resources in the federal government;
    * Federal agencies have to prioritize, but at the same time everyone
    knows that the number of counterfeiters is increasing while available
    federal resources are constant.

    Sector: Software;
    Comments:
    * Federal IP enforcement efforts are hampered by the limited resources,
    such as staff, technology, and funding devoted to IP enforcement. CBP
    staff at ports face incredible challenges in carrying out their jobs
    given the quantity of U.S. trade. Federal law enforcement staff are
    overworked, need more high-tech equipment and technology, and should
    have additional training.

    Source: GAO analysis of private sector responses.

      Industry Cites Lack of Information Sharing and Unclear Agency Roles as Barrier
      to Effective Enforcement and Coordination

    Representatives from 12 out of 30 companies and associations we
    interviewed told us that better information sharing is needed between the
    public and private sector; for example, one company representative said
    that agencies should let companies know whether the information they pass
    on to law enforcement is useful. In the case of CBP seizures, some
    representatives remarked on the need to obtain more detailed information
    about imports suspected of infringing on their products, such as the
    origin of the shipments. One company representative commented that it used
    to get information on suspect products from CBP officers, but it has not
    received this type of information from CBP recently. One company
    representative said that the company has referred information to the
    National Intellectual Property Rights Coordination Center, but has rarely
    received feedback on whether the information it provided was useful.
    Another company said that it has to continuously follow up to get updates.

    Several companies and associations we interviewed remarked that the
    federal IP enforcement structure is not very clear, and companies,
    particular smaller ones, have a hard time knowing who to contact for IP
    issues. For example, one association said that there is no formal process
    for referring cases to law enforcement and that information on the
    structure needs to be clearer and more efficient. While larger companies
    may be more familiar with [law enforcement] agencies' procedures and
    contacts, smaller companies don't know where to begin. Another association
    said that agency responsibilities are unclear and may overlap. Table 6
    highlights industry representatives' general comments on their
    coordination with federal IP enforcement agencies.

    Table 6: Summary of Industry Representatives' Views on Coordination with
    Federal IP Enforcement Agencies, by Sector

    Sector: Consumer electronics;
    Comments:
    * It would be helpful if there was more information about the right
    levels of government to contact regarding law enforcement issues. The
    Chamber of Commerce's Coalition against Counterfeiting and Piracy
    provides a lot of support in this area;
    * When leads are referred to the National Intellectual Property Rights
    Coordination Center, we don't hear back from them and have not received
    feedback on whether the information we provided is helpful in leading
    to an enforcement action.

    Sector: Entertainment/media;
    Comments:
    * Most of our referrals go to local law enforcement because they are
    more nimble to follow up and investigate cases, particularly smaller
    ones. We do not refer cases to federal investigators that we don't feel
    are worth federal resources;
    * CBP does well when and where it can with regards to IP enforcement.
    Five years ago, our relationship with them was pretty good, but they
    have fewer resources now.

    Sector: Luxury goods/apparel;
    Comments:
    * Communication with CBP is not consistent. One company is still trying
    to understand how CBP detects IP violations.

    Sector: Internet;
    Comments:
    * We work very closely with state and local law enforcement and
    coordinate with federal agencies on specific investigative matters,
    such as CBP checking corporate shipments at ports or companies
    providing information for federal cases on an ongoing basis.

    Sector: Pharmaceutical;
    Comments:
    * We have forged effective partnerships with law enforcement agencies,
    including providing referrals, support to the investigating agency and
    assistance in determining the authenticity of products suspected as
    counterfeit. We note that the good working relationship that exists in
    New York between ICE, the FBI and the FDA is one to be emulated;
    * We will work with any law enforcement agency that can develop strong
    IP cases leading to successful criminal prosecutions.

    Sector: Software;
    Comments:
    * We coordinate some with local law enforcement on IP cases that can be
    completed more quickly through the local systems or that do not warrant
    federal attention and resources.

    Sector: Manufacturing;
    Comments:
    * Our experience to date with CBP has not been very successful. The key
    to success would be a closer business relationship. Some companies we
    represent are still developing relationships with federal agencies;
    * We have not had much success with CBP. Counterfeit auto parts are
    coming to the United States but not being stopped. Ten years ago the
    counterfeit packaging was poor but now packaging is sophisticated and
    it is harder to detect real from fake.

    Source: GAO analysis of private sector responses.

      Industry Has Cited Some IP Enforcement Improvements Following Training
      Provided to Agency Officials

    Several of the company representatives commented that increased training
    efforts for federal officials that carry out IP enforcement have
    strengthened IP enforcement efforts. Table 7 highlights private sector
    comments on this issue.

    Table 7: Summary of Industry Representatives' Views on Effectiveness of
    Training on IP Enforcement Activity, by Sector

    Sector: Luxury goods/apparel;
    Comments:
    * After we provide training to federal law enforcement officials, we do
    see a momentary increase in action by federal law enforcement agencies.
    We also participate in industry seminars to stay up to date on
    investigation methods and remedies offered to us. This improves our
    ability to better coordinate our efforts with federal law enforcement
    on anti-counterfeiting investigations.

    Sector: Internet;
    Comments:
    * Training has certainly increased the level of cooperation and number
    of instances where we were able to pursue a prosecution. Just having
    someone to call or put together a package of supporting evidence can
    make a difference in whether a case will be prosecuted.

    Sector: Pharmaceutical;
    Comments:
    * Participating in training programs sponsored by federal agencies or
    private associations provides us with an opportunity to network and
    exchange intelligence information with representatives of other
    pharmaceutical companies and law enforcement officials who are also
    engaged in the battle against counterfeit pharmaceuticals;
    * It appears that a number of seizures have occurred since private
    sector led training with federal officials has taken place and the
    level of communication has increased with CBP officials at those ports.

    Sector: Software;
    Comments:
    * Training provided to federal officials by industry has heightened
    awareness and helped to establish relationships between CBP port
    officials and companies.

    Source: GAO analysis of private sector responses.

      Increased Training and Consumer Awareness Cited as Areas for Improved IP
      Enforcement

    Industry representatives cited various areas that could be improved upon
    to increase overall IP enforcement, including a need to better train
    federal prosecutors and better inform consumers about the risks posed from
    counterfeit and pirated goods. Table 8 highlights areas private sector
    representatives identified for improved IP enforcement.

    Table 8: Summary of Industry Representatives' Views on Areas for Improved
    IP Enforcement, by Sector

    Sector: Consumer electronics;
    Comments:
    * If DOJ or some other federal agency were able to facilitate contacts
    with local law enforcement through periodic seminars or national
    conferences, it would be very helpful...A good coordinating body would
    enable that to be done more effectively. It would ensure members know
    the tools and resources available;
    * To improve CBP seizures, there should be industry specific training
    and better communication between CBP and industry;
    * Federal prosecutors need more training on IP crimes so that they
    understand the nature of the problem and feel more comfortable
    prosecuting cases.

    Sector: Entertainment/media;
    Comments:
    * It would be great if we could follow the "status" of the seizure.
    There is no central place to get updated on enforcement actions, so one
    has to chase the CBP inspector. We get Notice of Seizure letters but
    that is about it - and would like to get "the number of widgets" in
    those seizure notices;
    * Federal prosecutors and judges need more training�Judges don't want
    to hear from rights holders. Often times they need to understand the
    economic impact of these crimes.

    Sector: Luxury goods/apparel;
    Comments:
    * More consumer awareness is needed, such as education by the media. If
    government and television, radio, and print journalists developed a
    passion for this issue, demand for counterfeit goods would be reduced.
    It is also important to educate consumers on the ills of counterfeiting
    such as child labor laws, tax evasion, and the support of terrorism. We
    also would recommend that companies write to government officials and
    supervising officers when officers or agents make a large seizure of
    counterfeit goods expressing appreciation and pointing out the good
    work accomplished by defeating counterfeiting;
    * We would like to have a better understanding of the problem from a
    brand perspective as well as a better understanding of the laws and how
    to work with the prosecuting attorneys at both the state and federal
    level. We would also like to see more dedicated federal resources.

    Sector: Health/food;
    Comments:
    * We would like to see an increase in the amount of federal penalties
    assessed and collected;
    * We recommend increased resources for CBP, as it is the country's
    first line of defense against counterfeit products. The federal
    penalties on the criminal side are generally satisfactory, but we want
    them to be more punitive. We want federal laws enforced with more
    resources.

    Sector: Internet;
    Comments:
    * There is a need for increased cooperation and transparency in how
    federal agencies work together and with industry;
    * There is a need for strengthened information-sharing and
    communication between industry and federal law enforcement;
    * There is a need for continued training and education of federal law
    enforcement officials on issues specific to industry.

    Sector: Pharmaceutical;
    Comments:
    * Federal programs that encourage transportation, customs brokers, and
    forwarding and express companies to cooperate in the identification of
    potential counterfeit traffickers would be helpful. The application of
    targeting approaches used for anti-terrorism will help CBP to be more
    effective in identifying high-risk transactions;
    * We would like to see more coordinated communication and dialogue with
    the pharmaceutical industry on the part of federal government;
    * The growth of the Internet complicates law enforcement efforts, both
    in the United States and abroad. Federal law enforcement agencies will
    need to be well prepared to address two types of counterfeiting threats
    that may evolve in multiple and complex ways: first, agencies must
    deter and stop sophisticated and organized counterfeiters that prey on
    patients in an effort to profit from unsuspecting consumers; second,
    officials must be prepared to manage threats from counterfeiters who
    may be motivated by an intent to harm people (e.g., terrorist
    activity)�It is critical that federal agencies, including the
    Departments of Justice and Commerce and the U.S. Trade Representative's
    office, make IP infringement and counterfeit activity top priorities.
    This effort must call for more criminal prosecutions, stiffer penalties
    and asset seizures. All of these activities will necessitate increased
    and dedicated human and financial resources.

    Sector: Software;
    Comments:
    * FBI's Cyber Crime squad in Los Angeles is doing great work;
    however, IP should be made a higher priority for other law enforcement
    agencies. Positive partnerships are imperative for successful IP
    protection and enforcement;
    * To improve border enforcement, federal agencies need more
    investigators on the job. The current amount of staff are sorely
    overworked. For high-tech goods, law enforcement needs more and better
    equipment because they currently use slow, clunky technology to go
    after the best and brightest cyber criminals.

    Sector: Manufacturing;
    Comments:
    * Simply recording one's product with CBP does not guarantee that
    seizures will be made of goods that infringe on the recorded product.
    Companies have to be proactive about protecting their products in other
    ways;
    * There needs to be strengthened communication and better information
    sharing between industry and federal government so that enforcement
    efforts are more focused;
    * There should be an effort to reduce the federal financial burden of
    protecting IP, such as more information-sharing within the private
    sector and with agencies and more collaborative enforcement efforts;
    * There is a need for increased educational awareness for both federal
    agencies and industry on how to work together. There is also a need to
    increase consumer awareness of counterfeit parts.

    Source: GAO analysis of private sector responses.

    Appendix IV: Comments from the Department of Homeland Security

    Note: GAO comments supplementing those in the report text appear at the
    end of this appendix.

    See comment 2.

    See comment 1.

    See comment 4.

    See comment 3.

    The following are GAO's comments on the Department of Homeland Security's
    letter dated February 26, 2008.

    GAO Comments

               1. We discussed health and safety issues with CBP during our
               review. In January 2008, CBP released seizure data for fiscal year
               2007 that for the first time identified seizures in product
               categories that may involve public health and safety, e.g.,
               pharmaceuticals, electrical articles, and sunglasses. We commend
               CBP for taking this step and modified our report to reflect this
               new data (see p. 33). These data are publicly available;
               therefore, GAO did not have to request them from CBP. We added
               information to the draft report to state that CBP officials also
               told us that creating a definition of IP seizures that affect
               public health and safety is difficult because not all products
               within a given category necessarily pose such risks and the
               potential for such risks cuts across a broad range of products
               (see pp. 33-34). We modified our recommendation to state that CBP
               should continue to take steps toward better identifying IP
               seizures that pose a risk to public health and safety of the
               American people, and collect and report this data throughout the
               agency and to Congress (see p. 43).
               2. We reported on CBP's IP Rights Trade Strategy (a document that
               CBP refers to in its letter as the National IPR Trade Strategy) in
               our April 2007 report. 1 We added information to this report to
               describe this trade strategy and note that it contains certain
               measures and indicators related to IP enforcement (see p. 34.)
               However, we also noted, as we did in our April 2007 report, that
               CBP officials told us this trade strategy was an internal planning
               document, and we determined it had limited distribution across
               CBP. For example, we found that revisions to the document had not
               been distributed to CBP ports since 2003 and given the document's
               status as "For Official Use Only," it is not distributed to
               Congress or the public. Therefore, we concluded in April 2007 that
               this document, while containing certain measures and indicators,
               has limited usefulness for holding CBP accountable for its
               performance on IP enforcement. At that time, we recommended that
               CBP work with OMB to include IP enforcement-related measures in
               its strategic plan and are pleased that CBP states in its current
               comment letter that it is in the process of taking such action.
               3. We do not understand why CBP is making comments in this report
               about analysis that appeared in our April 2007 report, but that is
               not reproduced in this report. That analysis showed that among the
               top 25 IP-importing ports in fiscal year 2005, many ports' IP
               seizure rates (measured by value of IP seizures over value of IP
               imports) were lower than the group average. We did this analysis
               because CBP had not attempted to analyze its IP enforcement
               outcomes in this way. CBP made these same comments in April 2007;
               we disagreed with how CBP characterized our work at that time and
               continue to stand by our analysis. In that report, we said that
               this and other types of analysis contained in our April 2007
               report represented approaches that CBP could take to better
               understand variations in IP enforcement outcomes across ports,
               inform resource allocations and management decisions, and further
               improve its IP enforcement. We continue to believe that CBP, and
               the other agencies, can better use existing data to understand
               their IP enforcement outcomes across field locations or product
               types as a way of further improving overall IP enforcement.
               4. See comment 1.

    1 [68]GAO-07-735 .

    Appendix V: Comments from the Department of Justice

    Note: GAO comments supplementing those in the report text appear at the
    end of this appendix.

    U.S. Department of Justice:
    Washington, D.C. 20530:

    February 21, 2008:

    Ms. Christine Broderick:
    Assistant Director:
    International Affairs and Trade:
    U.S. Government Accountability Office:
    441 G Street, NW:
    Washington, DC 20548:

    Dear Ms. Broderick:

    On February 5, 2008, you provided the Department of Justice (DOJ or
    Department) with a copy of the General Accountability Office (GAO)
    draft report entitled Intellectual Property: Federal Enforcement Has
    Generally Increased, but Assessing Performance Could Strengthen Law
    Enforcement Efforts (08-157, Job Code 320471)(Report). The Department
    of Justice appreciates the time and effort put into this draft Report
    by GAO staff, as well as the professional courtesy you extended. We
    appreciate the opportunity to comment on the draft. In that regard, DOJ
    has objections and concerns with the report's findings.

    A. The Report Understates DOJ Enforcement Activity

    First, although the Report acknowledges "general increases" in
    enforcement activity by all agencies in recent years, it severely
    understates the recent increases in enforcement production by the
    Department of Justice since FY 2004 � that is, the year in which the
    Task Force on Intellectual Property began its aggressive work to
    improve the Department's IP enforcement program in all phases. The
    number of defendants charged with IP offenses increased dramatically
    from FY 2004 (177) to FY 2006 (339) �an increase of more than 90
    percent. This increase can be attributed, at least in part, to the
    Department's increased emphasis on multi-district and international
    prosecutions, which in turn led to more multi-defendant cases. Even
    with the increase in multi-defendant cases, the number of cases
    themselves also increased substantially, by more than 20 percent � from
    169 in FY 2005 to 204 in to FY 2006. To be fair, these kinds of
    enforcement results deserve better than a watered-down characterization
    as "general increases." [See comment 1]

    Moreover, the significant increases in prosecutions by the Department
    continued into FY 2007. For example, 287 defendants were sentenced on
    intellectual property charges in FY 2007, representing a 35 percent
    increase over FY 2006 (213) and a 92 percent increase over FY 2005
    (149). In addition, case filings also continued to increase: the
    Department filed 217 intellectual property cases in FY 2007,
    representing a 33 percent increase over cases reported in FY 2005
    (169). See, Table 1, below. [See comment 2]

    Table 1: Total Number of Intellectual Property Cases Filed FY 2001 -
    2007:

    Fiscal year: 2001;
    Cases filed: 151.

    Fiscal year: 2002;
    Cases filed: 129.

    Fiscal year: 2003;
    Cases filed: 163;

    Fiscal year: 2004;
    Cases filed: 129.

    Fiscal year: 2005;
    Cases filed: 164.

    Fiscal year: 2006;
    Cases filed: 204.

    Fiscal year: 2007;
    Cases filed: 217.

    [End of table]

    The Report also fails to adequately acknowledge the significant
    increase in training and resource allocation accomplished by the
    Department since 2001. For instance, in January 2001, there was only
    one CHIP Unit in the United States, in San Jose, California. Subsequent
    expansions that year, as well as in 2002, 2005, and 2006 have increased
    the total number of CHIP Units nationwide to 25. These Units consist of
    between two and eight Assistant U.S. Attorneys who receive specialized
    training annually in prosecuting intellectual property and computer
    crimes. See, Tables II and III, below.

    Table 2: Computer Hacking and Intellectual Property (CHIP) Units
    Installed Cumulative Total - FY 2000-2006:

    Fiscal year: 2000;
    Units installed: 1.

    Fiscal year: 2001;
    Units installed: 10.

    Fiscal year: 2002;
    Units installed: 13.

    Fiscal year: 2003;
    Units installed: 13.

    Fiscal year: 2004;
    Units installed: 18.

    Fiscal year: 2005;
    Units installed: 18.

    Fiscal year: 2006;
    Units installed: 25.

    [End of table]

    Table 3:

    Fiscal Year: 2000;
    Judicial Districts Where CHIPs Units Installed: NDCA.

    Fiscal Year: 2001;
    Judicial Districts Where CHIPs Units Installed: CDCA; SDCA; NDGA; DMA;
    EDNY; SDNY; NDTX; EDVA; WEWA.

    Fiscal Year: 2002;
    Judicial Districts Where CHIPs Units Installed: WDMO; NDIL; SDFL.

    Fiscal Year: 2003;
    Judicial Districts Where CHIPs Units Installed: None.

    Fiscal Year: 2004;
    Judicial Districts Where CHIPs Units Installed: EDCA; MDFL; WDPA; DDC;
    MDTN.

    Fiscal Year: 2005;
    Judicial Districts Where CHIPs Units Installed: None.

    Fiscal Year: 2006;
    Judicial Districts Where CHIPs Units Installed: WDTX; DMD; DCO; EDMI;
    DNJ; DCT; EDPA.

    [End of table]

    The growth of the CHIP Unit program reflects the Department's deep
    commitment to the prosecution of intellectual property and computer
    crimes, and it has resulted in tangible increases in prosecution
    successes. For example, in FY 2007, CHIP Units were responsible for
    sentencing 199 defendants for IP offenses, which represents an 80
    percent increase over the 110 defendants sentenced in CHIP Unit
    districts in 2006.

    Statistics alone are insufficient to accurately show the quality of
    improvements in the Department's prosecution activity. For instance,
    there have been numerous groundbreaking investigations and prosecutions
    during the past year, including: [See comment 4]

    * Three Indicted and Arrested in One of Largest Counterfeit Goods
    Prosecutions in U.S. History: On January 16, 2008, in Richmond,
    Virginia, a seven-count indictment was unsealed in one of the largest
    counterfeit goods prosecutions in U.S. history. The indictment charges
    three individuals with one count of conspiracy to traffic in
    counterfeit goods imported from the People's Republic of China (PRC),
    four counts of trafficking in counterfeit handbags, wallets, purses,
    and carry-on bags, and two counts of illegally smuggling counterfeit
    goods into the United States. ICE agents arrested the three defendants
    and executed a court order restraining defendants' numerous assets,
    including 29 bank accounts and three properties in New York. According
    to the indictment, the three defendants operated a massive
    international import and wholesale counterfeit goods business from 2002
    until at least Oct. 31, 2005, engaging in a corporate shell game
    whereby they conspired to, and in fact imported, over 300,000
    counterfeit luxury handbags and wallets into the United States from the
    PRC in the names of different companies, all under their control. The
    value of the corresponding authentic luxury goods manufactured by
    Burberry, Louis Vuitton, Gucci, Coach, and others, whose legitimate
    sales were displaced, is estimated to be over $100 million.
    Ms. Christine Broderick	Page 4

    * Largest Ever Joint U.S.-China Criminal Enforcement Operation Nets 25
    Arrests and Over $500 Million in Counterfeit Software: On July 23,
    2007, Chinese officials arrested 25 Chinese nationals and seized more
    than half a billion dollars worth of counterfeit software as a result
    of the largest ever joint investigation conducted by the FBI and the
    People's Republic of China, code-named Operation Summer Solstice."
    China's Ministry of Public Security also searched multiple businesses
    and residential locations, seized more than $7 million in assets, and
    confiscated over 290,000 counterfeit software CDs and Certificates of
    Authenticity.

    * First Ever Extradition for Online Software Piracy/Extradited
    Australian Ringleader Sentenced to 51 Months in Prison: On June 22,
    2007, in Alexandria Virginia, Hew Raymond Griffiths was sentenced to 51
    months in prison for crimes committed as leader of one of the oldest
    and most renowned Internet software piracy groups worldwide, known as
    "Drink Or Die." From his home in Australia, Griffiths violated the
    criminal copyright laws of the United States by leading this criminal
    group which caused the illegal reproduction and distribution of more
    than $50 million worth of software, movies, games and music. This was
    one of the first ever extraditions for an intellectual property
    offense.

    * 50th Conviction in Largest Online Software Piracy Enforcement Action:
    On May 14, 2007, in Alexandria Virginia, the Department obtained the
    50th conviction in Operation FastLink, the largest and most successful
    global online piracy enforcement initiative ever conducted. This
    Operation culminated in the execution of more than 120 searches and
    arrests in 12 countries, the seizure of more than 200 computers, the
    complete dismantlement of 30 Internet distribution sites, and the
    confiscation of hundreds of thousands of counterfeit software titles
    valued at more than $50 million. This 50th conviction represented a
    milestone never before achieved in an online piracy prosecution.

    B. DOJ Has Appropriately Analyzed Its Enforcement Statistics:

    The Report concludes that the federal enforcement agencies � including
    DOJ � have done little "to systematically examine enforcement
    statistics." Report at 40. As one example of this type of systematic
    analysis, the Report analyzed the number of cases filed by U.S.
    Attorney's Offices by district and concluded that there was a "high
    correlation between IP enforcement activity and offices with resources
    dedicated to IP enforcement." Report at 41. [See comment 5]

    It is simply inaccurate to state that DOJ does not analyze its
    prosecution statistics, much less that it does not analyze them by
    district. We conduct such analysis routinely, and that analysis has
    helped inform the placement of additional CHIP Units around the
    country. Indeed, one of the IP Task Force's principal recommendations
    in its 2004 Report was to increase resource allocations to CHIP Units
    in key regions: [See comment 6]

    "The Department of Justice should reinforce and expand existing CHIP
    Units located in key regions where intellectual property offenses have
    increased, and where the CHIP Units have effectively developed programs
    to prosecute CHIP-related cases, coordinate law enforcement activity,
    and promote public awareness programs."

    The Department implemented this recommendation in January 2005, after a
    thorough assessment of CHIP Unit production nationwide, including
    analysis of case statistics by district. The Attorney General provided
    additional, full-time funding for a total of three AUSAs to serve as
    CHIP prosecutors in the Central and Northern District of California.
    Time has shown the wisdom of that decision: in FY 2006, the CHIP Units
    in the Northern and Central Districts of California charged a total of
    50 IP cases, out of a nationwide total of 204 IP cases, accounting for
    approximately 25 percent of the national total.

    Additionally, the Department considered case filings by district when
    it determined the locations of the 12 additional CHIP Units established
    since 2004, and it will continue to evaluate the need for additional
    CHIP Units in districts with a high incidence of IP and computer crime,
    or where additional prosecutors are best matched to local investigative
    resources.

    Although the Department does routinely conduct this type of statistical
    analyses to identify trends in domestic IP crime, we would not
    necessarily draw the same absolute conclusion that the GAO staff
    apparently reached � i.e., that more prosecutors in a district results
    in more prosecutions (and the underlying assumption that IP crime
    occurs at the same rate and magnitude in all districts). Report at 41.
    It is true that some of the largest CHIP Units, such as in the Central
    District of California (8 prosecutors) are also the most active in
    terms of IP case filings. But that is because, at least in part, the
    Department has tried to establish CHIP Units in areas of greater
    criminal activity (IP or cybercrime), and has allocated additional
    resources to those U.S. Attorneys Offices, like Los Angeles, that are
    most active, receive more case referrals, and/or have the highest level
    of commitment from local investigative agencies. [See comment 7]

    C. DOJ Has Established Appropriate Performance Measures and Goals to
    Assess Its Progress:

    The Report suggests in numerous places that DOJ has not established
    performance measures or goals that adequately assess its achievements.
    This is inaccurate. The Department has taken unprecedented steps to
    assess its achievements in the area of intellectual property
    enforcement. It has been especially aggressive in providing progress
    reports on the implementation of the 31 recommendations issued by its
    Task Force on Intellectual Property in 2004. This includes the Task
    Force's Progress Report in June 2006, as well as its annual reporting
    to the President and Congress as part of NIPLECC. See, e.g., "Report to
    the President and Congress on Coordination of Intellectual Property
    Enforcement and Protection" (January 2008). These reports can be
    accessed online through the following links:

    2007 NIPLECC Report (Jan 2008):

    [hyperlink,
    http://crmin05.crm.doj.gov:7778/pls/portal/docs/PAGE/CRIMLINK/PRESSROOM/
    PRESSRELEASES/YR2008/01/012008-NIPLECCRPRT.PDF]

    2006 NIPLECC Report (Sept 2006):

    [hyperlink,
    http://www.commerce.gov/opa/press/Secretary_Gutierrez/2006Releases/Septe
    mber/2006%20IP%20report.pdf]

    2006 DOJ IP Task Force Progress Report (June 2006):

    [hyperlink, http://www.cybercrime.gov/2006IPTFProgressReport6-19-
    06).pdf]

    The above reports are replete with performance measures and goals. The
    DOJ has aggressively and thoroughly monitored its performance with
    respect to improving IP criminal enforcement. For example, the IP Task
    Force issued a detailed Progress Report in June 2006, providing
    extensive detail on which of its 31 recommendations had been
    implemented, and on which implementation was still ongoing. The Task
    Force has continued to set ambitious goals and objectives, and evaluate
    their achievement, on an annual basis. No other federal agency has been
    more aggressive in reviewing and improving its IP enforcement programs
    as the DOJ in the past few years, nor has any agency been more thorough
    in rating its progress and performance.

    What the Department of Justice's IP Task Force did not do, however, was
    set performance measures based on case quotas, numerical thresholds, or
    percentage "targets." The GAO views the absence of such numerical or
    percentage targets as a deficiency. The Department views it as a
    necessity.

    The GAO criticism reflects a failure to appreciate the core justice
    principle that criminal prosecutions should never be initiated � or
    judged -- based on actuarial tables or case quotas. As the GAO Report
    notes, many of the Task Force's recommendations called for "more"
    enforcement in critical areas, such as increases in the number and
    quality of prosecutions. As noted above, the DOJ achieved these goals
    with substantial increases in prosecution activity. For instance, in FY
    2006, 213 defendants were sentenced on intellectual property charges,
    representing nearly 50 percent increase over FY 2005 (149). Moreover,
    in FY 2005, 350 defendants were charged with intellectual property
    offenses, nearly double the 177 defendants charged in FY 2004 �
    representing a 98 percent increase. [See comment 9]

    The GAO report discounts these substantial increases because "without
    [numeric or percentage] measures or targets, it is not clear how
    certain achievements, such as increases in arrests or numbers of
    defendants charged with IP crimes, should be assessed because it is not
    clear what the agencies sought to achieve." Report at 43. As we
    attempted to explain in meetings with GAO drafters, however, the
    Department of Justice has intentionally resisted setting numeric or
    percentage "targets" as performance measures because it creates a risk
    that prosecutions could be initiated � or at least could be perceived
    as having been initiated � for the improper purpose of meeting
    prosecution quotas or the expectations of White House and Congressional
    officials.

    Federal prosecutors file criminal charges based on the individual
    merits of each case, and only where the prosecutor "believes that the
    person's conduct constitutes a Federal offense and that the admissible
    evidence will probably be sufficient to obtain and sustain a
    conviction." U.S. Attorney's Manual 9-27.220. Criminal actions should
    never be motivated by prosecution quotas or numerical/percentage goals,
    nor should the Department risk creating an appearance of improper
    motivation by setting this particular types of performance measure.
    There are other ways to assess performance. Indeed, the Department
    believes that doubling the number of defendants charged with IP crimes
    within a one year period, or increasing by 50 percent the number of
    defendants sentenced, are commendable results using any performance
    measure. They should not be discounted simply because the Department
    declined to set a specific numerical or percentage "target." [See
    comment 10]

    Thank you for the opportunity to submit our formal comments for
    inclusion in the final Report. The Department of Justice is committed
    to improving its intellectual property enforcement efforts, and we
    share with you the belief that accountability to the public and
    Congress are an important component of our law enforcement mission.

    Sincerely,

    Signed by Michael H. Allen:
    for: Lee J. Lofthus:
    Assistant Attorney General for Administration:

    Glossary Of Judicial Districts With CHIP Units Installed (in order of
    appearance in Table 3):

    Northern District California, MDCA:
    Central District California, CDCA:
    Southern District California, SDCA:
    Northern District of Georgia, NDGA:
    District of Massachusetts, DMA:
    Eastern District of New York, EDNY:
    Southern District of New York, SDNY:
    Northern District of Texas, NDTX:
    Eastern District of Virginia, EDVA:
    Western District of Washington, WDWA:
    Western District of Missouri, WDMO:
    Northern District of Illinois, NDIL:
    Southern District of Florida, SDFL:
    Eastern District of California, EDCA:
    Middle District of Florida, MDFL:
    Western District of Pennsylvania, WDPA:
    District of the District of Columbia, DDC:
    Middle District of Tennessee, MDTN:
    Western District of Texas, WDTX:
    District of Maryland, DMD:
    District of Colorado, DCO:
    Eastern District of Missouri, EDMI:
    District of New Jersey, DNJ:
    District of Connecticut, DCT:
    Eastern District of Pennsylvania, EDPA.

    The following are GAO's comments on the Department of Justice letter
    dated February 21, 2008.

    GAO Comments:

    1. We disagree that our report severely understates DOJ's enforcement
    activities. Our analysis of federal IP enforcement efforts is a
    systematic evaluation of trends in key agencies' enforcement indicators
    over a 6-year period. Although there were fluctuations (i.e., increases
    and decreases) in individual indicators from year to year, we concluded
    that all the indicators, when taken as a whole, showed a general
    increase in federal IP enforcement efforts from the beginning to the
    end of the period examined. Moreover, we considered all indicators
    together because no single indicator from any one agency sufficiently
    reflects overall trends. The DOJ statistics we examined also showed
    increases and decreases during the time period. However, in its letter,
    DOJ selected statistics that only reflect increases, and it did so in
    one instance by comparing the lowest and highest levels for a given
    indicator, regardless of the year in which they occurred, which
    generated the highest possible percent increase for that indicator. We
    do not believe DOJ's analysis is useful for discerning overall long-
    term trends.

    2. Our report is based on agency data covering fiscal years 2001
    through 2006. In several cases, fiscal year 2007 data became available
    as we were finalizing our report. However, given the challenges we
    faced in obtaining sufficiently reliable data from all agencies for the
    period we studied (see appendix I, pp. 48-51), we were unable to
    systematically update our data in a timely fashion to include fiscal
    year 2007 statistics.

    3. We disagree that our report gives insufficient attention to resource
    increases at DOJ for IP enforcement. Our report discusses the creation
    and growing number of CHIP units and also notes that the number of
    Assistant U.S. Attorneys trained to prosecute IP cases has grown in
    recent years (see p. 20).

    4. We agree with DOJ that statistics alone are not sufficient to
    accurately show the quality of improvements in IP enforcement activity.
    This is why we recommend that DOJ and the other agencies develop IP
    enforcement performance measures and targets to more systematically
    measure and report on their efforts. While the examples that DOJ
    provides of recent enforcement cases are useful illustrations of the
    types of enforcement activity that DOJ has undertaken, they do not
    provide a complete picture of DOJ's overall efforts over time. For
    example, as we state in our report, agencies including DOJ could
    analyze the types of IP cases it most commonly prosecutes or could
    report on the number of cases it has prosecuted involving IP crimes
    that posed a health and safety risk (see p. 32).

    5. In section B of its letter (pp. 4-5), DOJ addresses the issue of
    whether additional IP enforcement resources necessarily result in more
    IP prosecutions. On page 5 of its letter, DOJ provides information that
    demonstrates a correlation between increased IP resources in two U.S.
    Attorney's Offices and the number of IP cases prosecuted by those
    units, but then goes on to state that it would not necessarily
    conclude, as it said GAO did, that more prosecutors in a district
    results in more prosecutions. We agree that existing data across all
    U.S Attorney's Offices with CHIP units does not necessarily show a high
    correlation between increased CHIP unit resources and increased IP
    prosecutions, and removed this language. We modified our report to note
    that various factors, including crime levels, can affect the level of
    IP enforcement activity (see p. 33).

    6. We modified our report to state that DOJ reviewed its data on U.S.
    Attorney's Office prosecutions when deciding where to place additional
    CHIP units. However, at no time during this audit did DOJ indicate, or
    provide documentation reflecting, that it routinely analyzed IP
    prosecution data by district. We commend DOJ for examining the fiscal
    year 2006 IP enforcement activity of two of the CHIP units. Our
    analysis of DOJ's data on IP enforcement activity by all 94 U.S.
    Attorney's Offices showed a mix of activity among field offices across
    the 6-year period, including those with CHIP units. We believe that
    conducting such analysis on a more systematic basis can better inform
    DOJ about whether its allocation of resources is appropriate and not
    just inform placement of CHIP units.

    7. See comment 5.

    8. We mentioned in the draft report, under our discussion of agency
    priorities that DOJ has established some goals related to its IP
    enforcement efforts that are contained in an internal agency document
    not available to the public (see p. 15). We added information to refer
    again to this in our discussion of performance measures (see p. 35).
    However, we disagree that DOJ's Task Force report is replete with goals
    and measures. The Task Force report makes multiple recommendations for
    improving IP enforcement efforts, but recommendations are not the same
    as performance goals, and the report does not contain performance
    measures. Moreover, many of these recommendations are task-oriented
    actions rather than outcome-oriented. For example, one of DOJ's Task
    Force recommendations is to prosecute aggressively intellectual
    property offenses that endanger the public's health or safety; yet, DOJ
    does not provide any details on how they plan to achieve this
    recommendation and how they will measure their progress. Further, as we
    report, DOJ has not taken steps to capture enforcement statistics to
    assess their progress in this area. As we discuss in our report,
    strategic planning and assessment requires agencies to articulate
    outcome-oriented goals and objectives and to develop performance
    measures and targets that will enable them and others to determine
    whether they are making progress toward these goals. We added language
    to our report to better define outcome-oriented performance measures.

    9. We added information to the report to further explain the challenges
    associated with setting performance measures and targets in the law
    enforcement area (see p. 35). Our example of a performance measure and
    target was not intended to suggest that the agencies should adopt
    numerical case quotas or take any steps that would otherwise negatively
    affect the quality of their investigations. However, because it was
    interpreted in this way, and distracted attention from the more
    important discussion of adopting appropriate performance measures and
    targets, we removed the example. We continue to believe that DOJ can
    develop reasonable and acceptable measures and targets for IP
    enforcement.

    10. See comments 1 and 4.

    Appendix VI: Comments from the Department of Health and Human Services

    Note: GAO comments supplementing those in the report text appear at the
    end of this appendix.

    Department Of Health & Human Services:
    Office of the Assistant Secretary for Legislation:
    Washington, D.C. 20201:

    February 15, 2008:

    Loren Yager:
    Director, International Affairs and Trade:
    U.S. Government Accountability Office:
    Washington, DC 20548:

    Dear Mr. Yager:

    Enclosed are the Department's comments on the U.S. Government
    Accountability Office's (GAO) draft report entitled: Intellectual
    Property: Federal Enforcement has Generally Increased, but Assessing
    Performance Could Strengthen Law Enforcement Efforts" (GAO 08-157).

    The Department appreciates the opportunity to review and comment on
    this report before its publication.

    Sincerely,

    Signed by:

    Jennifer R. Luong:
    for: Vince Ventimiglia:
    Assistant Secretary for Legislation:

    General Comments Of The U.S. Department Of Health And Human Services
    (HHS) On The U.S. Government Accountability Office's (GAO) Draft
    Entitled: "Intellectual Property: Federal Enforcement Has Generally
    Increased, But Assessing Performance Could Strengthen Law Enforcement
    Efforts" (GAO 08-157):

    The Department does not agree with GAO's recommendation to "establish
    performance measures and targets for IP-related enforcement activity
    and report measures, targets, and performance to Congress and NIPLECC."
    As GAO notes, such measures and targets are difficult to establish in
    the law enforcement arena. For FDA, such measures and targets would not
    be meaningful, would be difficult to set, and might even be
    counterproductive. [See comment 1]

    The amount of criminal activity involving FDA-regulated products cannot
    be known in advance, or accurately predicted, for any given year. More
    specifically, the universe of potential cases cannot be accurately
    identified, making it difficult to set performance measures for their
    investigation.

    In its report, GAO offers an example of a performance target for DOJ
    as: "...to `increase by "yy" percent the number of prosecutions filed
    based on investigative agency referrals.'" FDA undertakes criminal
    investigations of counterfeit FDA-regulated products in response to
    reports and other information gathered by the agency. FDA evaluates
    these leads and potential cases to ascertain whether or not a full
    criminal investigation should be pursued. Imposing a percentage-based
    target might negatively affect the quality of cases brought if
    achievement of this percentage goal, rather than the merits of the
    cases, were to become a driving force for pursuing investigations. [See
    comment 2]

    GAO noted in its report that FDA already tracks its "achievements"
    regarding counterfeit FDA-regulated products. More precisely, FDA
    monitors the number of criminal investigations to identify any trends
    in product areas and to develop an understanding of the scope of
    counterfeiting in those areas. FDA plans to continue these monitoring
    efforts as a means to assess and refine our investigational approaches
    as appropriate. In addition, FDA collaborates, and will continue to
    collaborate, with other law enforcement agencies, as well as private
    sector entities, to advance FDA's efforts to address counterfeit
    products in accordance with the agency's mission to protect public
    health. However, for the reasons described above, establishing and
    reporting on performance measures for FDA's conduct of criminal
    investigations of counterfeit FDA-regulated products would not be
    meaningful or feasible, and might even be counter-productive. [See
    comment 3]

    Therefore, the Department does not concur with GAO's recommendation.

    The following are GAO's comments on the Department of Health and Human
    Services letter dated February 25, 2008.

    GAO Comments:

    1. While we acknowledged in our draft report that setting performance
    measures and targets in a law enforcement area is difficult, we added
    information to further explain why setting such measures and targets is
    a sensitive issue (see p. 35). We continue to believe that setting
    performance measures and targets is important, even in the law
    enforcement environment. However, because FDA's primary mission is to
    protect public health and safety, we reconsidered our recommendation
    that FDA set law enforcement-related measures and targets, and no
    longer direct this particular recommendation to FDA.

    2. We modified our report to provide additional information on the
    definition of output and outcome performance measures and targets (see
    p. 35). Our example of a performance measure and target was not
    intended to suggest that the agencies should adopt numerical case
    quotas or take any steps that would otherwise negatively affect the
    quality of their investigations. However, because it was interpreted in
    this way, and distracted attention from the more important discussion
    of adopting appropriate performance measures and targets, we removed
    the example.

    3. We commend FDA for monitoring the number of criminal investigations
    to identify any trends in product areas and to develop an understanding
    of the scope of counterfeiting in those areas. FDA mentioned for the
    first time in December 2007 that it conducts such analysis, but given
    the challenges we faced in obtaining sufficiently reliable data from
    all agencies for the period we studied (see appendix I, pp 48-51), we
    did not ask FDA to provide this analysis to us. Given the increasing
    threat posed by IP-infringing products that affect public health and
    safety, we believe it is important that the government improves its
    understanding of this threat. Therefore, we modified our recommendation
    to ICE, FBI and DOJ that agencies conduct analysis of their IP
    enforcement outcomes to also address this recommendation to FDA and to
    clarify that such analysis should be done systematically (see p. 43).

    Appendix VII: GAO Contact and Staff Acknowledgments

    GAO Contact

    Loren Yager (202) 512-4347 or yagerl@gao.gov

    Staff Acknowledgments

    Christine Broderick, Assistant Director; Shirley Brothwell; and Adrienne
    Spahr made significant contributions to this report. Virginia Chanley,
    Karen Deans, Ernie Jackson, Mark Molino, Jackie Nowicki, Dimple Pajwani,
    Suneeti Shah, Jena Sinkfield, Stephen Caldwell, Tony DeFrank, Rebecca
    Gambler, Michael Simon, Tom Costa, and Jennifer Young also provided
    assistance.

    (320471)

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    To view the full product, including the scope
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    Highlights of [76]GAO-08-157 , a report to the Ranking Member,
    Subcommittee on Oversight of Government Management, the Federal Workforce,
    and the District of Columbia, Committee on Homeland Security and
    Governmental Affairs, U.S. Senate

    March 2008

    INTELLECTUAL PROPERTY

    Federal Enforcement Has Generally Increased, but Assessing Performance
    Could Strengthen Law Enforcement Efforts

    Federal law enforcement actions against criminals who manufacture and
    distribute counterfeit and pirated goods are important to enforcing
    intellectual property (IP) rights and protecting Americans from unsafe or
    substandard products. GAO was asked to: (1) examine key federal agencies'
    roles, priorities, and resources devoted to IP-related enforcement; (2)
    evaluate agencies' IP-related enforcement statistics and achievements; and
    (3) examine the status of the National Intellectual Property Rights
    Coordination Center. GAO reviewed relevant documents, interviewed
    officials in five key agencies, and analyzed agency IP enforcement data
    from fiscal years 2001 through 2006.

    [77]What GAO Recommends

    GAO recommends that the Attorney General and the Secretaries of Homeland
    Security (DHS) and Health and Human Services (HHS) take steps to better
    assess and report on their agencies' IP enforcement efforts; the Secretary
    of DHS direct the Commissioner of Customs and Border Protection to address
    the weaknesses in enforcement of exclusion orders; and the Attorney
    General and the Secretary of DHS clarify the purpose and structure of the
    National Intellectual Property Rights Coordination Center. DHS agreed with
    the recommendations. Justice did not comment on them. HHS disagreed with
    setting a law enforcement related performance measure. The recommendations
    were revised in response.

    Five key agencies play a role in IP enforcement, and their enforcement
    functions include seizures, investigations, and prosecutions (see figure
    below). While IP enforcement is generally not their highest priority, IP
    crimes with a public health and safety risk, such as production of
    counterfeit pharmaceuticals, is an IP enforcement priority at each agency.
    Determining agencies' IP enforcement resources is challenging because few
    staff are dedicated to this area, and not all agencies track staff time
    spent on IP enforcement. Agencies carry out some enforcement actions
    through their headquarters, but significant enforcement takes place in the
    field.

    Federal enforcement actions generally increased during fiscal years
    2001-2006, but the key agencies have not taken key steps to assess their
    achievements. For example, most have not systematically analyzed their IP
    enforcement statistics to inform management and resource allocation
    decisions, collected data on their efforts to address IP crimes that
    affect public health and safety, or established IP-related performance
    measures or targets to assess their achievements. Also, Customs and Border
    Protection's enforcement of exclusion orders, which stop certain
    IP-infringing goods from entering the country, has been limited due to
    certain procedural weaknesses.

    The National Intellectual Property Rights Coordination Center, an
    interagency mechanism created to coordinate federal investigative efforts,
    has not achieved its mission and staff levels have decreased. Currently,
    only one agency participates in the center's activities, which focus on
    private sector outreach. Agencies have lacked a common understanding of
    the center's purpose and agencies' roles. The center's upcoming move to a
    new location presents an opportunity to reconsider its mission.

    Key Agencies Involved in IP-Related Enforcement and Their Enforcement
    Function and Structure

    References

    Visible links
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      42. http://www.gao.gov/cgi-bin/getrpt?GAO-07-735
      43. http://www.gao.gov/cgi-bin/getrpt?GAO-07-735
      44. http://www.gao.gov/cgi-bin/getrpt?GAO-07-74
      45. http://www.gao.gov/cgi-bin/getrpt?GAO-07-74
      46. http://www.gao.gov/cgi-bin/getrpt?GAO-07-735
      47. http://www.gao.gov/cgi-bin/getrpt?GAO-07-735
      48. http://www.usdoj.gov/criminal/cybercrime/ip.html
      49. http://www.gao.gov/cgi-bin/getrpt?GAO-08-219
      50. http://www.gao.gov/cgi-bin/getrpt?GAO-07-529
      51. http://www.gao.gov/cgi-bin/getrpt?GAO-07-735
      52. mailto:yagerl@gao.gov
      53. http://www.stopfakes.gov/
      54. http://www.gao.gov/cgi-bin/getrpt?GAO-07-735
      55. http://www.gao.gov/cgi-bin/getrpt?GAO-07-735
      56. http://www.gao.gov/cgi-bin/getrpt?GAO/AIMD-00-21.3.1
      57. http://www.gao.gov/cgi-bin/getrpt?GAO/GGD-96-118
      58. http://www.gao.gov/cgi-bin/getrpt?GAO-07-74
      59. http://www.gao.gov/cgi-bin/getrpt?GAO-04-912
      60. http://www.gao.gov/cgi-bin/getrpt?GAO-07-74
      61. http://www.gao.gov/cgi-bin/getrpt?GAO-04-912
      62. http://www.gao.gov/cgi-bin/getrpt?GAO-04-912
      63. http://www.gao.gov/cgi-bin/getrpt?GAO-07-735
      64. http://www.gao.gov/cgi-bin/getrpt?GAO-04-912
      65. http://www.gao.gov/cgi-bin/getrpt?GAO-07-74
      66. http://www.gao.gov/cgi-bin/getrpt?GAO-07-735
      67. http://www.stopfakes.gov/
      68. http://www.gao.gov/cgi-bin/getrpt?GAO-07-735
      69. http://www.gao.gov/
      70. http://www.gao.gov/
      71. http://www.gao.gov/fraudnet/fraudnet.htm
      72. mailto:fraudnet@gao.gov
      73. mailto:dawnr@gao.gov
      74. mailto:youngc1@gao.gov
      75. http://www.gao.gov/cgi-bin/getrpt?GAO-08-157
      76. http://www.gao.gov/cgi-bin/getrpt?GAO-08-157
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