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Before the Subcommittee on Government Management, Organization, and 
Procurement, Committee on Oversight and Government Reform, House of 

United States Government Accountability Office: 

For Release on Delivery: 
Expected at 9:30 a.m. EST:
Wednesday, November 4, 2009: 

Intellectual Property: 

Enhancements to Coordinating U.S. Protection and Enforcement Efforts: 

Statement of Loren Yager, Director:
International Affairs and Trade: 


[End of section] 

Madam Chairwoman and Members of the Subcommittee: 

Thank you for the opportunity to appear again before the Committee to 
discuss our work on U.S. efforts to protect intellectual property (IP) 
rights. We appreciate the opportunity to contribute to the record that 
this Committee has established on IP protection. As you know, IP is an 
important component of the U.S. economy. U.S. government efforts to 
protect and enforce IP rights domestically and overseas are crucial to 
safeguarding innovation and preventing significant losses to U.S. 
industry and IP rights owners as well as addressing health and safety 
risks resulting from the trade in counterfeit and pirated goods. 

This hearing is timely, as Congress recently overhauled the U.S. 
structure for coordinating IP protection. The Prioritizing Resources 
and Organization for Intellectual Property Act of 2008 (PRO-IP Act) 
created a new interagency IP enforcement advisory committee and 
authorized the President to appoint an Intellectual Property 
Enforcement Coordinator (IPEC) position within the Executive Office of 
the President to chair the new committee.[Footnote 1] In September 
2009, the President submitted his nomination to the Senate for 

In my statement today, I will address two topics on IP protection and 
enforcement in anticipation of some of the challenges ahead in 
implementing the PRO-IP Act: (1) lessons learned from past efforts to 
coordinate IP protection and enforcement and (2) observations on a 
recent initiative to place IP attachés overseas to promote and protect 
IP rights, based on our field work at four posts in three case study 

My remarks are based on a variety of assignments that GAO has conducted 
over the past 3 years on the international and domestic efforts 
undertaken by U.S. agencies to coordinate their efforts to address IP 
theft and piracy issues.[Footnote 2] Most recently, we conducted field 
work in March 2009 at four posts in three countries: Beijing and 
Guangzhou, China; New Delhi, India; and Bangkok, Thailand. We have made 
several recommendations over the course of our work, with which the 
recipient agencies generally agreed. We conducted our work 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 the 
evidence obtained provided a reasonable basis for our findings and 
conclusions based on our audit objectives. 


The PRO-IP Act of 2008 eliminates the old structure for coordinating IP 
efforts and creates a new interagency advisory committee composed of 
eight federal entities. The responsibility of the IPEC, among other 
things, is to lead the committee in the development of a joint 
strategic plan to reduce counterfeiting and other types of IP 
infringement, and to assist in the implementation of the joint 
strategic plan when requested by the advisory committee members. 

As we have reported in our prior work on IP protection, multiple 
federal agencies undertake a wide range of activities that fall under 
three categories: policy initiatives, training and technical 
assistance, and law enforcement. 

* U.S. international trade policy initiatives to increase IP protection 
and enforcement are primarily led by the Office of the U.S. Trade 
Representative (USTR), in coordination with the Departments of State 
and Commerce, U.S. Patent and Trade Office (USPTO), and Copyright 
Office, among other agencies. 

* Key training and technical assistance activities are undertaken by 
the Departments of Commerce, Homeland Security, Justice, and State; the 
Federal Bureau of Investigation (FBI); USPTO; and the Copyright Office. 

* A smaller number of agencies and their entities are involved in 
investigating IP violations and enforcing U.S. IP laws. Working in an 
environment where counterterrorism is the central priority, the 
Department of Justice, including the FBI, and the Department of 
Homeland Security take actions that include engaging in multicountry 
investigations and seizures of goods that violate IP rights. The Food 
and Drug Administration (FDA) also investigates IP violations for FDA- 
regulated products as part of its mission to assure consumer safety. 

In many cases, IP enforcement is generally a small part of the 
agencies' much broader missions; however, federal agencies are placing 
new emphasis on IP protection and enforcement. In particular, USPTO 
recently established eight IP attaché positions overseas that have IP 
protection and enforcement as their primary mission.[Footnote 3] The IP 
attachés work on a range of IP activities in coordination with other 
federal agencies, U.S. industry, and foreign counterparts. 

U.S. IP Coordinating Structure and Strategy Lacked Strong Leadership 
and Permanence: 

The PRO-IP Act of 2008 enacted several changes that address weaknesses 
that we described with the prior IP coordinating structure. The prior 
structure was initiated under two different authorities and lacked 
clear leadership and permanence, hampering its effectiveness and long- 
term viability. In 1999, Congress created the National Intellectual 
Property Law Enforcement Coordination Council (NIPLECC) as a mechanism 
to coordinate U.S. efforts in the United States and overseas. In 2004, 
the Bush Administration announced the Strategy Targeting Organized 
Piracy (STOP), which included a similar group of U.S. agencies under a 
Presidential Initiative. 

In our reporting, we described how NIPLECC had struggled to define its 
purpose and retained an image of inactivity within the private sector. 
[Footnote 4] In a report undertaken for this Committee in 2004, we 
noted that NIPLECC had little discernible impact and had not undertaken 
any independent activities since it was created, according to 
interviews with agency officials and its own reports. Congress 
subsequently made enhancements to NIPLECC in December 2004 to 
strengthen its role,[Footnote 5] but we reported to this Committee in 
2006 that it continued to have leadership problems. 

In contrast, the presidential initiative called STOP had a positive 
image compared to NIPLECC, but lacked permanence, since there was no 
assurance that its authority and influence would continue in successive 
administrations. Unlike NIPLECC, STOP from its beginning was 
characterized by a high level of active coordination and visibility. 
Many agency officials said that STOP has increased attention to IP 
issues within their agencies and the private sector, as well as abroad, 
and attributed that to the fact that STOP came out of the White House, 
thereby lending it more authority and influence. 

STOP was also a first step toward an integrated strategy to protect and 
enforce U.S. IP rights. However, we found that STOP's potential as a 
national strategy was limited because it did not fully address 
important characteristics of an effective strategy. For example, its 
performance measures lacked targets to assess how well the activities 
were being implemented. In addition, the strategy lacked a risk 
management framework and a discussion of current or future costs-- 
important elements to effectively balance the threats from counterfeit 
products with the resources available. Although STOP identified 
organizational roles and responsibilities with respect to individual 
agencies' STOP activities, it did not specify who would provide 
oversight and accountability among the agencies carrying out the 

While its impact will depend on its implementation, the PRO-IP Act of 
2008 enacted several changes that address weaknesses we found in the 
prior coordinating structure. For example, the PRO-IP Act specifically 
requires the new interagency advisory committee to prepare a Joint 
Strategic Plan that addresses key elements of an effective national 
strategic plan, building in mechanisms for accountability and 
oversight. Also, the PRO-IP Act requires the IPEC to submit the Joint 
Strategic Plan to Committees of Congress every third year after the 
development of the first strategic plan. In contrast, STOP, a 
presidential initiative, has not been updated since September 2007, 
affirming doubts about its long-term viability. In addition, the PRO-IP 
Act places leadership in the Executive Office of the President--a 
status similar to that of STOP--in contrast with NIPLECC, whose 
leadership resided within the Department of Commerce. In September 
2009, the administration announced that the IPEC would be located 
within the Office of Management and Budget. The PRO-IP Act repeals 
NIPLECC upon confirmation of the IPEC by the Senate. Currently, there 
is no IP Coordinator or NIPLECC staff. In addition, the most recent 
NIPLECC annual report was published in January 2008.[Footnote 6] 

Facing Significant Challenges Overseas, USPTO IP Attachés Have Adopted 
Practices to Enhance Collaboration: 

An additional theme of the PRO-IP Act is the emphasis on federal 
efforts to strengthen the capacity of foreign governments to protect 
and enforce IP rights. In September 2009, we reported that the USPTO IP 
attachés were generally effective in collaborating with other agencies 
at the four posts we visited, primarily by adopting practices, such as 
acting as effective focal points, establishing working groups and 
leveraging resources through joint activities.[Footnote 7] At one post, 
the IP attaché had worked with other agencies to develop a joint work 
plan for the post. 

U.S. government officials in our three case study countries face a 
range of challenges in their efforts to promote the protection and 
enforcement of IP rights. The U.S. government has identified weak 
enforcement as a key IP issue in the three case study countries; 
however, weaknesses also persist in their IP laws and regulations. The 
U.S. government describes enforcement of existing IP laws and 
regulations and adjudication of suspected infringements as limited and 
inconsistent, and penalties are not typically sufficient to serve as an 
effective deterrent. Several factors contribute to this limited and 
inconsistent enforcement, including flawed enforcement procedures; a 
lack of technical skills and knowledge of IP among police, prosecutors, 
and judges; a lack of resources dedicated to IP enforcement efforts; 
and the absence of broad-based domestic support for strong IP 

We found that the USPTO IP attachés have adopted several practices that 
enhanced collaboration on federal IP efforts overseas, such as: 

* Acting as effective focal points: Agreement on agency roles and 
responsibilities of the IP attachés, particularly vis-à-vis the State 
economic section and post leadership, while challenging, was achieved 
in most posts. Prior to the creation of the IP attaché position at the 
four posts, State economic officers had primary responsibility for IP; 
now, they are the most involved in IP issues after the IP attachés. IP 
attachés also imparted their subject matter expertise, which enhanced 
their effectiveness as focal points. In addition, IP attachés have the 
advantage of working full time on IP, influencing agency officials at 
the posts to increase attention to IP issues despite other competing 
demands. Several agency officials from all four posts said that they 
had multiple responsibilities required by their broad portfolios, and 
some officials in some posts said they spent relatively little time on 

* Establishing IP working groups: The IP attachés played a key role in 
creating inter-agency IP working groups at the embassies in New Delhi 
and Beijing soon after their arrival. Several agency officials at these 
posts said that the working groups provided several benefits, such as 
increasing awareness of IP issues and trends, exchanging information on 
respective IP activities, and increasing coordination on training and 
other activities. The importance of the IP working group and the role 
of the attaché in Beijing was demonstrated when the working group 
became inactive after the attaché left the post in August 2008 and the 
position became vacant. Two agency officials at the post said that, 
without these meetings, there was less focus on IP at the post and that 
it was more difficult to ensure that the embassy spoke with one voice 
on IP. 

* Leveraging resources through joint activities: The IP attachés 
complemented the efforts of other agencies to enhance IP protection and 
enforcement at all four posts by leveraging resources through joint IP 
activities. For example, the IP attachés helped the Department of 
Commerce's Foreign Commercial Service efforts to assist and encourage 
individuals to do business in the country by providing advice on how to 
avoid IP problems and answering IP-related questions. 

Economic officers in two posts provided several examples of IP 
attachés' expertise enhancing the officers' relationship with host 
country officials. For instance, the economic officer in New Delhi said 
that the IP attaché had used his expertise to build rapport with the 
host government on IP issues and complement the economic officer's 
diplomacy with details on potential solutions. A public affairs officer 
in Guangzhou said that the IP attaché had met with stakeholders such as 
academics, students, and industry groups on IP that provided the public 
affairs officer new contacts for his work. 

* Developing joint strategies: The IP attaché in New Delhi led an 
effort to develop a joint strategy in the form of an interagency IP 
work plan. The plan established specific IP objectives and helped 
agencies at the working level identify and implement IP activities that 
address the key issues identified by the United States. For example, 
the work plan listed the implementation of an optical disk law and a 
meaningful system for protecting undisclosed data against unfair 
commercial use as key goals. In addition, the plan identified day-to- 
day activities, such as meetings that the post intended to hold with 
various Indian ministries, outreach it planned to perform with the 
private sector, IP training it planned to provide, and data it planned 
to collect to bolster the U.S. position on certain IP issues.[Footnote 
8] In general, we found that other existing post-level guidance was too 
high-level and did not guide agencies' day-to-day efforts to reach IP 

Joint strategies can help agencies maintain focus on IP given numerous 
competing issues and periodic changes in key IP personnel at the posts. 
Some agency officials noted that the long-term nature of many IP 
efforts--such as implementing optical disk laws, developing public 
outreach to convince consumers of the importance of IP rights, or 
building the relationships with foreign law enforcement officials 
necessary to conduct joint IP investigations--require sustained and 
focused attention over time. In the absence of such sustained 
attention, the impacts of U.S. efforts can be diminished. For instance, 
one official noted that he had observed a cycle in which the post would 
exert pressure on the host country's police to more aggressively 
enforce IP laws, and enforcement would increase; however, after a time, 
pressure would ease and previous enforcement levels would return. In 
our 2009 report, we recommended that the Secretary of State direct post 
leadership to work with USPTO IP attachés in countries with such 
attachés to develop annual IP interagency post work plans with input 
from relevant agencies. The Department of State and USPTO agreed with 
our recommendation. 

While our observations on USPTO's IP attachés overseas are largely 
positive, our prior work has also demonstrated that the long-term 
success of operations abroad requires attention to human capital 
planning. In particular, we observed that other agencies attempting to 
establish a presence abroad had to make additional efforts to ensure 
that they could recruit and retain sufficient personnel with the 
technical and cultural expertise that is important in those posts. 
These considerations may be important as USPTO makes decisions about 
the scale and permanence of this program. 

Concluding Observations: 

Madam Chairwoman, thank you for the opportunity to appear before the 
Committee to summarize our work on IP protection. GAO has performed a 
number of studies on both domestic and international efforts to protect 
IP since my last testimony on this subject before this Committee in 
2004. As I have noted in my statement, we believe that the PRO-IP Act 
enacted last year has taken a number of positive steps to clarify the 
structure of IP agency coordination, and Congress has also tasked the 
coordinator to provide information we believe will be useful in 
oversight of U.S. agency efforts. Our most recent report also suggests 
that efforts such as those of the USPTO to place specialist attachés 
abroad has had a positive impact in the posts we visited because of 
their expertise and focus on this issue. Notwithstanding these positive 
developments, our work suggests that IP enforcement will continue to be 
a daunting task and that the U.S. agencies still need to demonstrate 
that they can collaborate effectively over the long term to help 
address these challenges. 

GAO Contacts and Staff Acknowledgments: 

Should you have any questions about this testimony, please contact 
Loren Yager at (202) 512-4347, or Contact points for 
our Offices of Congressional Relations and Public Affairs may be found 
on the last page of this statement. Individuals who made key 
contributions to this statement include Christine Broderick (Assistant 
Director), Jeremy Latimer, Catherine Gelb, Nina Pfeiffer, and Ryan 

[End of section] 


[1] PL 110-403, Title III. 

[2] GAO, Intellectual Property: Enhanced Planning by U.S. Personnel 
Overseas Could Strengthen Efforts, [hyperlink,] (Washington, D.C.: Sept. 30, 
2009); GAO, Overseas U.S. Government Personnel Involved In Efforts to 
Protect and Enforce Intellectual Property Rights, [hyperlink,] (Washington, D.C.: Feb. 26, 
2009); GAO, Intellectual Property: Federal Enforcement Has Generally 
Increased, but Assessing Performance Could Strengthen Law Enforcement 
Efforts, [hyperlink,] 
(Washington, D.C.: Mar. 11, 2008); GAO, Intellectual Property: Strategy 
Targeting Organized Piracy (STOP) Requires Changes for Long-term 
Success, [hyperlink,] (Washington 
D.C.: Nov. 8, 2006). 

[3] USPTO's first IP attaché was posted in Beijing, China, in 2004. 
During 2006 and 2007, USTPO added a second attaché position in Beijing 
and an attaché position in Guangzhou, China, and expanded the program 
to five other countries: Egypt, Thailand, Russia, Brazil, and India. 
Since then, the Egypt position has been eliminated and a new position 
in Doha, Qatar, is in the planning stages. 

[4] GAO, Intellectual Property: U.S. Efforts Have Contributed to 
Strengthened Laws Overseas, but Challenges Remain, [hyperlink,] (Washington, D.C.: Sept. 8, 
2004); and [hyperlink,]. 

[5] In December 2004, Congress augmented NIPLECC's capabilities in the 
Consolidated Appropriations Act of 2005. The act called for NIPLECC to 
(1) establish policies, objectives, and priorities concerning 
international IP protection and enforcement; (2) promulgate a strategy 
for protecting American IP overseas; and (3) coordinate and oversee 
implementation of the policies, objectives, and priorities and overall 
strategy for protecting American IP overseas by agencies with IP 
responsibilities. The act appropriated funds for NIPLECC's expenses. It 
also created the position of the Coordinator for International 
Intellectual Property Enforcement, also known as the "IP Coordinator," 
to head NIPLECC. 

[6] In fiscal year 2009, NIPLECC received an appropriation of $1 
million. No budget request was made for fiscal year 2010. 

[7] See [hyperlink,]. 

[8] As the plan had been in place for a relatively short period of time 
when we conducted our field work in New Delhi, in March 2009, the IP 
Working Group had not yet assessed progress that had been made. 

[End of section] 

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