In 1999, Congress created the interagency  National Intellectual Property Law Enforcement Coordination Council  (NIPLECC) as a mechanism to coordinate U.S. efforts to protect and  enforce IP rights in the United States and overseas. In October 2004, the  Bush Administration announced the Strategy Targeting Organized Piracy  (STOP) to “smash criminal networks that traffic in fakes, stop trade in  pirated and counterfeit goods at America’s borders, block bogus goods  around the world, and help small businesses secure and enforce their  rights in overseas markets.” Although both NIPLECC and STOP were  created to improve the United States’ IP enforcement and protection  efforts, they were established under different authorities – NIPLECC as a  congressional mandate and STOP as a presidential initiative led by the  White House under the auspices of the National Security Council. Lack of Leadership and Permanence Hampers Effectiveness and Long-Term Viability of IP Enforcement Coordinating Structure

The U.S. government has a coordinating structure for IP enforcement, but  the structure’s effectiveness is hampered by a lack of clear leadership and  permanence, and despite some progress, it has not been developed in a  manner that makes it effective and viable for the long term. However, NIPLECC continues to have problems in  providing leadership despite enhancements made by Congress, and  STOP’s authority and influence, which result from its status as a  presidential initiative, could disappear after the current administration  leaves office. While NIPLECC adopted STOP as its strategy for  protecting IP overseas in February 2006, its commitment to implementing  STOP as a successful strategy remains unclear. Improvements Needed to Achieve an Effective National IP Enforcement Strategy

STOP is a first step toward an integrated national strategy for IP  protection and enforcement and has energized agency efforts. Figure 2 provides the results of our analysis and  indicates the extent to which STOP addresses the desirable characteristics  of an effective national strategy. Although STOP identifies five main goals, it does not consistently  articulate their objectives and is missing key elements related to assessing  performance such as priorities, milestones, and a process for monitoring  and reporting on progress. Further it does not discuss other risks  such as potential threats to consumer health and safety from counterfeited  products or discuss how resources will be allocated given these risks. STOP partially addresses organizational roles, responsibilities, and  coordination but lacks a framework for oversight or integration. For instance, there is no  mention of STOP meetings, objectives, or agendas. While some of these elements of a  national strategy are addressed in individual agency documents, the  absence of clear linkages and the need to consult multiple agency  documents underscores the strategy’s lack of integration and limits the  usefulness of STOP as a management tool for long-term effective oversight  and accountability. GAO Recommended Actions to Improve IP Leadership and Accountability Among U.S. We recommended that the IP Coordinator, in consultation with  the National Security Council and the six STOP agencies, clarify in the  STOP strategy how NIPLECC will carry out its oversight and  accountability responsibilities in implementing STOP as its strategy. In  addition, we recommended that the IP Coordinator, in consultation with  the National Security Council and the six STOP agencies, take steps to  ensure that STOP fully addresses the six characteristics of a national  strategy. Coordinator for International Property  Enforcement has taken some steps to address GAO’s recommendations. This limits its usefulness  as a management tool for effective oversight and accountability by  Congress as well as the private sector and consumers who STOP aims to  protect.
Why GAO Did This Study

U.S. government efforts to protect and enforce intellectual property (IP) rights domestically and overseas are crucial to preventing billions of dollars in losses to U.S. industry and IP rights owners and to avoiding health and safety risks resulting from the trade in counterfeit and pirated goods. IP protection and enforcement cut across a wide range of U.S. agencies and a coordinating structure has evolved to address coordination issues. First, Congress created the interagency National Intellectual Property Rights Law Enforcement Coordination Council (NIPLECC) in 1999. Later, in October 2004, the Bush administration initiated the Strategy Targeting Organized Piracy (STOP). GAO's testimony focuses on (1) the effectiveness of NIPLECC and STOP as a coordinating structure to guide and manage U.S. government efforts; and (2) the extent to which STOP meets the criteria for an effective national strategy. This statement is based on GAO's November 2006 report (GAO-07-74), which included an assessment of STOP using criteria previously developed by GAO. In this report, we recommended that head of NIPLECC, called the IP Coordinator, in consultation with the National Security Council and relevant agencies (1) clarify in the STOP strategy how NIPLECC will carry out its oversight and accountability roles and (2) take steps to ensure that STOP fully addresses the characteristics of a national strategy. The IP Coordinator concurred with our recommendations.

What GAO Found

The current coordinating structure that has evolved for protecting and enforcing U.S. intellectual property rights lacks leadership and permanence, presenting challenges for effective and viable coordination for the long term. NIPLECC has struggled to define its purpose and retains an image of inactivity among the private sector. It continues to have leadership problems despite enhancements made by Congress in December 2004 to strengthen its role. In contrast, the presidential initiative called STOP, which is led by the National Security Council, has a positive image compared to NIPLECC, but lacks permanence since its authority and influence could disappear after the current administration leaves office. While NIPLECC adopted STOP in February 2006 as its strategy for protecting IP overseas, its commitment to implementing STOP as an effective national strategy remains unclear, creating challenges for accountability and long-term viability. While STOP has energized agency efforts for protecting and enforcing intellectual property, its potential as a national strategy is limited since it does not fully address the desirable characteristics of an effective national strategy. For example, its performance measures lack baselines and targets to assess how well the activities are being implemented. In addition, STOP is missing key elements such as a discussion of risk management and designation of oversight responsibility. For instance, the strategy lacks a discussion of current or future costs, the types or sources of investments needed to target organized piracy, and processes to effectively balance the threats from counterfeit products with the resources available. While STOP partially addresses organizational roles and responsibilities, it does not discuss a framework for accountability among the STOP agencies, such as designating responsibility for oversight. Agency documents clarify some of the key elements of an effective national strategy that were not incorporated into STOP directly; however, the need to consult multiple documents underscores the strategy's lack of integration and limited usefulness as a management tool for effective oversight and accountability.