United States Government Accountability Office

GAO 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

INTELLECTUAL 

PROPERTY 

Federal Enforcement 

Has Generally 

Increased, but 

Assessing 

Performance Could 

Strengthen Law 

Enforcement Efforts 

March 2008 

 

GAO-08-157 
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

March 2008

INTELLECTUAL PROPERTY 

Federal Enforcement Has Generally Increased, but 

Assessing Performance Could Strengthen Law 

Highlights of GAO-08-157, a report to the Enforcement Efforts

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 

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. 

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 IPinfringing 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 

Agency

Structure

Function

Customs and

Border Protection

Department

of Justice

Office of International

Trade and Office of

Field Operations

(325 ports of entry)

Immigration

and Customs

Enforcement

Office of

Investigations

(26 field offices)

Federal

Bureau of

Investigation

Cyber Crime

Division

(56 field offices)

Office of

Criminal

Investigations

(6 field offices)

Food and

Drug

Administration

Criminal Division and 

U.S. Attorney’s

Office (94 field offices)

Seizing Investigating Prosecuting IP

Sources: GAO analysis of agency data; Art Explosion (images).

To view the full product, including the scope Department of Justice Department of Health and Human Services Department of Homeland Security

and methodology, click on GAO-08-157. 

For more information, contact Loren Yager at 

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

Page i GAO-08-157 Federal IP Enforcement
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 

Page ii GAO-08-157 Federal IP Enforcement
Figure 7: Number of IP-Related Cases Filed by DOJ, Fiscal Years 

2001-2006 30

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 

IMAGE ICE Mutual Agreement between Government and 

 Employers 

IP Intellectual Property 

NIPLECC National Intellectual Property Law Enforcement 

 Coordinating Council 

STOP Strategy Targeting Organized Piracy

This is a work of the U.S. government and is not subject to copyright protection in the 

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Page iii GAO-08-157 Federal IP Enforcement
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 

 1

The Economic Impact of Counterfeiting and Piracy, Organization for Economic 

Cooperation and Development (Paris, 2007).

Page 1 GAO-08-157 Federal IP Enforcement
(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

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 

 2

We 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. 

3

FDA’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. 

4

We have previously reported on NIPLECC. See GAO, Intellectual Property: Strategy for 

Targeting Organized Piracy (STOP) Requires Changes for Long-Term Success, 

GAO-07-74 (Washington, D.C.: Nov. 8, 2006).

5

GAO, Intellectual Property: Better Data Analysis and Integration Could Help U.S. 

Customs and Border Protection Improve Border Enforcement Efforts, GAO-07-735 

(Washington, D.C.: Apr. 26, 2007). 

Page 2 GAO-08-157 Federal IP Enforcement
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. 

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 

Results in Brief 

 6

The field locations we selected were based on the locations we examined in our April 2007 

report on CBP (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. 

Page 3 GAO-08-157 Federal IP Enforcement
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. 

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, 

 7

CBP 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. 

Page 4 GAO-08-157 Federal IP Enforcement
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 IPrelated 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. 

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 

 8

The 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.

Page 5 GAO-08-157 Federal IP Enforcement
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. 

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.

Page 6 GAO-08-157 Federal IP Enforcement
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. 

Background 

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 

 9

Stephen 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).

Page 7 GAO-08-157 Federal IP Enforcement
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. 

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. 

Page 8 GAO-08-157 Federal IP Enforcement
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). 

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 nondedicated staff who carry out this function. The information we were able 

Multiple Agencies 

Carry Out IP 

Enforcement, but 

Their IP Priorities 

Vary, and Few

Resources Are 

Dedicated Exclusively 

to IP Enforcement 

 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 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 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. 

Page 9 GAO-08-157 Federal IP Enforcement
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. 

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 

Agencya

Office of International

Trade and Office of

Field Operations

(325 ports of entry)

Office of

Investigations

(26 investigative

field offices)

Cyber Crime

Division

(56 investigative

field offices)

Office of

Criminal

Investigations

(6 investigative

field offices)

Criminal Division and 

U.S. Attorney’s

Office

(94 field offices)

Structure

Function

CBP ICE FBI FDA DOJ

Seizing Investigating Prosecuting

IP

Sources: GAO analysis of agency data; Art Explosion (images).

a

The 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 GAO-07-735. 

Page 10 GAO-08-157 Federal IP Enforcement
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. 

Responsible Agencies 

Have Broad Missions, and 

IP Enforcement Is Not a 

Top Priority at Most 

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 Exclusions IP

• 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. 

Page 11 GAO-08-157 Federal IP Enforcement
• 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. 

• 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

• Function: ICE conducts investigations of IP-related criminal activity, 

including infringement of trademark and copyright law. 

• 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. 

• Structure: Within ICE’s Office of Investigations, the Critical 

Infrastructure and Fraud Division develops the agency’s IP policies and 

 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 GAO-07-735. 

Page 12 GAO-08-157 Federal IP Enforcement
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. 

FBI Criminal Investigations

• Function: FBI conducts investigations of IP-related criminal activity, 

including infringement of trademark and copyright law, as well as theft of

trade secrets. 

• 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 

 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 hightechnology 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.

Page 13 GAO-08-157 Federal IP Enforcement
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. 

• 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

• Function: FDA investigates illegal activity pertaining to food, drugs, 

medical devices, and other products because of the impact on public 

health.27

• 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 IPrelated 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).

Page 14 GAO-08-157 Federal IP Enforcement
• 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

• Function: DOJ prosecutes IP cases referred from ICE, FBI, and FDA, as 

well as from private sector representatives and other sources. 

• 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, http://www.usdoj.gov/criminal/cybercrime/ip.html. The

Task Force continues to monitor DOJ’s implementation of these recommendations. 

Page 15 GAO-08-157 Federal IP Enforcement
• 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 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, 

Determining the Total 

Resources Allocated to IPRelated Enforcement Is 

Challenging 

 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 multidistrict investigations; and providing training and community outreach regarding computerrelated issues. 

Page 16 GAO-08-157 Federal IP Enforcement
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. 

Information on each agency’s resources for IP-related enforcement are 

detailed below. 

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 

CBP - Seizures, Penalties, and Exclusions IP

 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.

Page 17 GAO-08-157 Federal IP Enforcement
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. 

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

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

ICE, FBI, and FDA - Criminal Investigations

 32GAO, Border Security: Despite Progress, Weaknesses in Traveler Inspections Exist at

Our Nation’s Ports of Entry, GAO-08-219 (Washington, D.C.: Nov. 5, 2007). 

33GAO, Customs Revenue: Customs and Border Protection Needs to Improve Workforce 

Planning and Accountability, 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. 

Page 18 GAO-08-157 Federal IP Enforcement
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.

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. 

Investigative resources spent on IP-related enforcement

0

50

100

150

200

250

FDA

FBI

ICE

2001 2002 2003 2004 2005 2006

Fiscal year

Source: GAO analysis of agency data.

Page 19 GAO-08-157 Federal IP Enforcement
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.

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 

Agency Enforcement Roles 

and Actions Are Often 

Interdependent 

 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. 

Page 20 GAO-08-157 Federal IP Enforcement
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. 

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. 

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’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 

IP Enforcement 

Generally Increased, 

but Agencies Have 

Not Taken Key Steps 

to Assess 

Enforcement Efforts 

IP Enforcement Statistics 

Show an Increase in 

Activity 

CBP Seizure Activity Has 

Grown, but Penalty Collections 

Remain Low 

 36GAO-07-735. 

Page 21 GAO-08-157 Federal IP Enforcement
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

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

2006 

0

3

6

9

12

15

2001 2002 2003 2004 2005 2006

0

20

40

60

80

100

120

140

160

2001 2002 2003 2004 2005 2006

Number of seizures (numbers in thousands) Domestic value of seizures (dollars in millions)

Fiscal year Fiscal year

Source: GAO analysis of CBP data.

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 IPrelated 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 

 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. 

Page 22 GAO-08-157 Federal IP Enforcement
violator, dismissal due to criminal prosecutions, and the nature of 

counterfeit importation.38

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

Years 2001- 2006 

Dollars in millions 

2001 2002 2003 2004 2005 2006

Total penalty amount assessed $52.0 $65.0 $45.0 $442.9 $423.9 $136.6

Total penalty amount collected $0.5 $0.3 $0.4 $0.5 $0.4 $0.6

Percent collected 0.90 0.48 0.91 0.11 0.10 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 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 

CBP’s Enforcement of 

Exclusion Orders Has Been 

Limited 

 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. 

Page 23 GAO-08-157 Federal IP Enforcement
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

 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.

Page 24 GAO-08-157 Federal IP Enforcement
Figure 4: Number of CBP Exclusion Order Exams Performed and IP Discrepancies Found, Fiscal Years 2002-2006 

Number of exams Number of IP discrepancies

Fiscal year Fiscal year

Source: GAO analysis of agency data.

0

10

20

30

40

50

2002 2003 2004 2005 2006

0

1,000

2,000

3,000

4,000

5,000

6,000

2002 2003 2004 2005 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 

 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)). 

Page 25 GAO-08-157 Federal IP Enforcement
owners, and they did not know whether CBP had legal authority under the 

relevant statute to make such notifications. 

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. 

• 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

• 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 

 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. 

Page 26 GAO-08-157 Federal IP Enforcement
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. 

• 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

• 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. 

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, 

The Number of Investigative 

Agency IP Cases Have 

Fluctuated, but Arrests, 

Indictments, and Convictions 

for IP Crimes Have Generally 

Increased 

 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. 

Page 27 GAO-08-157 Federal IP Enforcement
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

Number of investigations opened

0

100

200

300

400

500

FDA

FBI

ICE

2001 2002 2003 2004 2005 2006

Fiscal year

Source: GAO analysis of agency data.

 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. 

Page 28 GAO-08-157 Federal IP Enforcement
peaked in fiscal year 2004, but had levels in 2006 that were still well above 

their 2001 levels.51

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 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). 

0 50 100 150 200 250

2006

2005

2004

2003

2002

2001

2006

2005

2004

2003

2002

2001

2006

2005

2004

2003

2002

2001

0 50 100 150 200 250 0 50 100 150 200 250

FBI FDA ICE

Source: GAO analysis of agency data.

Arrests

Indictments

Convictions

DOJ’s IP Enforcement Has 

Generally Increased 

 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 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. 

Page 29 GAO-08-157 Federal IP Enforcement
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 

Number of cases filed

0

50

100

150

200

250

300

2001 2002 2003 2004 2005 2006

Fiscal year

Source: GAO analysis of DOJ data.

 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. 

Page 30 GAO-08-157 Federal IP Enforcement
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

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

Fiscal year 

Number of IPrelated defendants 

referred from

investigative 

agenciesa

Number of 

defendants

charged

with IPrelated

violationsa

Number of 

defendants

convicted of IPrelated crimesb

Number of 

defendants

imprisoned 

for IP-related

crimes

2001 514 200 153 52

2002 497 215 165 65

2003 563 246 141 58

2004 565 177 134 66

2005 724 346 122 53

2006 685 339 176 79

Total 3,548 1,523 891 373

Source: GAO analysis of DOJ data. 

a

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. 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. 

 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. 

Page 31 GAO-08-157 Federal IP Enforcement
b

Number 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. 

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 

Agencies Have Not Taken 

Steps to Assess IP Law 

Enforcement Efforts 

 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. 

56GAO-07-735. 

Page 32 GAO-08-157 Federal IP Enforcement
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. 

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 IPrelated 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 IPrelated 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 

 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 GAO-07-735. 

Page 33 GAO-08-157 Federal IP Enforcement
seizures in a given category pose public health and safety risks, and such

risks can be found across a broad range of products. 

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. 

Page 34 GAO-08-157 Federal IP Enforcement
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. 

 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, 

GAO/AIMD-00-21.3.1 (Washington, D.C.: November 1999). 

63GAO, Executive Guide: Effectively Implementing the Government Performance and

Results Act, GAO/GGD-96-118 (Washington, D.C.: June 1996). 

Page 35 GAO-08-157 Federal IP Enforcement
Doing so could help NIPLECC address its strategic planning weaknesses 

that we previously identified in our November 2006 report.64

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. 

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 

The National 

Intellectual Property 

Rights Coordination 

Center Has Not 

Achieved Its Mission, 

and Staff Levels Have 

Decreased 

Created to Improve and 

Coordinate IP 

Enforcement, the Center 

Focuses Primarily on 

Private Sector Outreach 

 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 

GAO-07-74. 

Page 36 GAO-08-157 Federal IP Enforcement
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. 

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, 

 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 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 GAO-07-74. 

Page 37 GAO-08-157 Federal IP Enforcement
FBI, and DOJ officials and our analysis, the center has not achieved its 

original mission for several reasons: 

• 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 

• 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. 

• 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. 

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 

 67GAO-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. 

69GAO-04-912. 

Page 38 GAO-08-157 Federal IP Enforcement
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. 

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

Despite Congressional 

Expectations, the Center’s

Staffing Levels Have 

Declined 

 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. 

Page 39 GAO-08-157 Federal IP Enforcement
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

We asked agencies how they responded to the conference report 

directives, with agencies responding as follows: 

• 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. 

• 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. 

• 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 

 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). 

75See footnote 66. 

Page 40 GAO-08-157 Federal IP Enforcement
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. 

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 

ICE Views Center’s

Relocation as an 

Opportunity to Revisit 

Center’s Purpose and 

Agency Roles 

 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. 

Page 41 GAO-08-157 Federal IP Enforcement
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. 

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. 

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 

Conclusions 

Page 42 GAO-08-157 Federal IP Enforcement
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. 

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: 

Recommendations for 

Executive Action 

• systematically analyze enforcement statistics to better understand 

variations in IP-related enforcement activity.

For CBP: 

• 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: 

• 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: 

Page 43 GAO-08-157 Federal IP Enforcement
• 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: 

• identify factors currently limiting their enforcement capabilities and 

develop a strategy for addressing those limitations along with a timeline 

for implementing the strategy; 

• begin collecting data on the number of exclusions, in total and per 

exclusion order; and 

• 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: 

• reassess the National Intellectual Property Rights Coordination Center’s 

mission and how its future performance will be assessed; 

• define agencies’ role in the center and the number and types of resources 

needed to operate the center; and 

• 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 

Agency Comments 

and Our Evaluation 

Page 44 GAO-08-157 Federal IP Enforcement
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. 

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 

 77GAO-07-735. 

Page 45 GAO-08-157 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. 

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 

Page 46 GAO-08-157 Federal IP Enforcement
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 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 

Page 47 GAO-08-157 Federal IP Enforcement
Appendix I: Scope and Methodology 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 

 1

Our 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

GAO-04-912; GAO-07-74; and GAO-07-735. 

Page 48 GAO-08-157 Federal IP Enforcement
Appendix I: Scope and Methodology 

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. 

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 

Page 49 GAO-08-157 Federal IP Enforcement
Appendix I: Scope and Methodology 

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 

 3

The IP Coordinator reports quarterly on IP enforcement. These reports are posted on the

Stop Fakes Web site (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.

Page 50 GAO-08-157 Federal IP Enforcement
Appendix I: Scope and Methodology 

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 anticounterfeiting 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. 

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. 

Page 51 GAO-08-157 Federal IP Enforcement
Appendix II: Federal Protection and Appendix II: Federal Protection and Enforcement of IP Rights under U.S. Law

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

 1

In 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. 

Page 52 GAO-08-157 Federal IP Enforcement
Appendix II: Federal Protection and

Enforcement of IP Rights under U.S. Law

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

Type of IP protection Criminal penalties

Non-criminal actions

and penalties

(by federal government) 

Civil remedies and penalties 

(available to rights holders 

and other victims) 

U.S. Copyright 

Criminal Infringement for Profit

17 USC 506(a)(1)(A) and 

18 USC 2319(b) 

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 

Civil forfeiture available 

(of infringing copies, and plates, 

mold, tapes, or other equipment 

from which infringing copies can 

be made) 

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. 

Bootleg Recordings of Live 

Musical Recordings 

(unauthorized fixation of and 

trafficking in sound recordings

and music videos of live musical 

performances)

18 USC 2319A

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 

Civil forfeiture available 

(for bootlegs imported into the 

U.S.) 

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. 

Camcording (unauthorized 

recording of motion pictures in

motion picture exhibition facility) 

18 USC 2319B

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 

No specific civil remedies for 

camcording, although 

camcording is actionable as 

copyright infringement. 

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) 

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 

Civil forfeiture available 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. 

Page 53 GAO-08-157 Federal IP Enforcement
Appendix II: Federal Protection and

Enforcement of IP Rights under U.S. Law

Type of IP protection Criminal penalties

Non-criminal actions

and penalties

(by federal government) 

Civil remedies and penalties 

(available to rights holders 

and other victims) 

Distribution of Pre-Release 

Works or Material over PubliclyAccessible Computer Network 

for Commercial Purposes 

(17 USC 506(a)(1)(C) and 18

USC 2319(d)) 

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 

Civil forfeiture available Actionable as copyright 

infringement (see above). 

Distribution of Pre-Release 

Works or Material over PubliclyAccessible Computer Network 

Not for Commercial Purposes

(17 USC 506(a)(1)(C) and 18

USC 2319(d)) 

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 

Civil forfeiture available Actionable as copyright 

infringement (see above). 

Use of Technology to Violate 

Anti-Circumvention Systems 

and Anti-Piracy Protections and 

Protection of Integrity of 

Copyright Management 

Information 

(17 USC 1201-1204) 

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 

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 

Trafficking in counterfeit labels, 

illicit labels, or counterfeit 

documentation or packaging

(18 USC 2318)

Individuals

Maximum 5 years imprisonment 

and $250,000 fine or twice 

gain/loss 

Corporations

$500,000 fine or twice gain/loss 

Criminal forfeiture available 

Civil forfeiture available 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 

Page 54 GAO-08-157 Federal IP Enforcement
Appendix II: Federal Protection and

Enforcement of IP Rights under U.S. Law

Type of IP protection Criminal penalties

Non-criminal actions

and penalties

(by federal government) 

Civil remedies and penalties 

(available to rights holders 

and other victims) 

U.S. Trademark 

Trafficking in Counterfeit Goods 

or Services 

(using counterfeit mark) 

(18 U.S.C. § 2320) 

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. 

Civil forfeiture available. 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) 

U.S. Patent 

False Patent Marking 

(35 U.S.C. § 292) 

No criminal penalties, but 

criminal fines based on criminal 

conduct related to patents. 

Maximum $500 fine for every

offense 

Any private individual may sue 

for the civil penalty of $500, 

which is split with the 

government. 

U.S. Trade Secrets 

Economic Espionage 

(18 U.S.C. § 1831) 

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 

The Attorney General may 

obtain injunctions against 

violations. 

No express federal cause of 

action, although remedies are

available for trade secret theft 

under state law. 

Theft of Trade Secrets 

(18 USC 1832)

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 

The Attorney General may 

obtain injunctions against 

violations. 

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. 

Page 55 GAO-08-157 Federal IP Enforcement
Appendix III: Private Sector 

Views on Federal IP Appendix III: Private Sector V Enforcement Efforts iews 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. 

Table 4 highlights industry views on the impact of counterfeiting and 

piracy. 

Various Companies Are 

Impacted by Counterfeiting and 

Piracy 

 1

Most of the companies we interviewed were large companies with anti-counterfeiting 

and/or piracy initiatives.

Page 56 GAO-08-157 Federal IP Enforcement
Appendix III: Private Sector 

Views on Federal IP 

Enforcement Efforts 

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

Sector Comments

Consumer electronics • 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. 

Luxury goods/apparel • 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. 

Health/food • 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. 

Internet • Losses to property rights owners from counterfeiting and piracy can occur through 

Internet/online auctions. 

Pharmaceutical • 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. 

Software • 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. 

Manufacturing • 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. 

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 

Industry Concerned over Lack 

of Resources to Carry Out IP 

Enforcement 

Page 57 GAO-08-157 Federal IP Enforcement
Appendix III: Private Sector 

Views on Federal IP 

Enforcement Efforts 

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 Comments

Consumer electronics • 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. 

Luxury goods/apparel • 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. 

Health/food • CBP is able to screen only a certain percentage of goods that come in, so additional 

resources would be helpful. 

Pharmaceutical • 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. 

Software • 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. 

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. 

Industry Cites Lack of 

Information Sharing and 

Unclear Agency Roles as 

Barrier to Effective 

Enforcement and Coordination 

Page 58 GAO-08-157 Federal IP Enforcement
Appendix III: Private Sector 

Views on Federal IP 

Enforcement Efforts 

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 Comments

Consumer electronics • 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. 

Entertainment/media • 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. 

Luxury goods/apparel • Communication with CBP is not consistent. One company is still trying to understand 

how CBP detects IP violations. 

Internet • 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.

Pharmaceutical • 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. 

Software • 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. 

Page 59 GAO-08-157 Federal IP Enforcement
Appendix III: Private Sector 

Views on Federal IP 

Enforcement Efforts 

Sector Comments

Manufacturing • 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. 

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. 

Industry Has Cited Some IP 

Enforcement Improvements 

Following Training Provided to 

Agency Officials 

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

Sector Comments

Luxury goods/apparel • 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. 

Internet • 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. 

Pharmaceutical • 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. 

Software • 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. 

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. 

Increased Training and 

Consumer Awareness Cited as 

Areas for Improved IP 

Enforcement 

Page 60 GAO-08-157 Federal IP Enforcement
Appendix III: Private Sector 

Views on Federal IP 

Enforcement Efforts 

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

Sector Comments

Consumer electronics • 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. 

Entertainment/media • 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. 

Luxury goods/apparel • 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. 

Health/food • 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. 

Internet • 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. 

Page 61 GAO-08-157 Federal IP Enforcement
Appendix III: Private Sector 

Views on Federal IP 

Enforcement Efforts 

Sector Comments

Pharmaceutical • 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 antiterrorism 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. 

Software • 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. 

Manufacturing • 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. 

Page 62 GAO-08-157 Federal IP Enforcement
Appendix IV: Comments from the Department Appendix IV of Homeland Security : 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 1. 

See comment 2. 

Page 63 GAO-08-157 Federal IP Enforcement
Appendix IV: Comments from the Department 

of Homeland Security

See comment 3. 

See comment 4. 

Page 64 GAO-08-157 Federal IP Enforcement
Appendix IV: Comments from the Department 

of Homeland Security

Page 65 GAO-08-157 Federal IP Enforcement
Appendix IV: Comments from the Department 

of Homeland Security

Page 66 GAO-08-157 Federal IP Enforcement
Appendix IV: Comments from the Department 

of Homeland Security

The following are GAO’s comments on the Department of Homeland 

Security’s letter dated February 26, 2008. 

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). 

GAO Comments 

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. 

 1

GAO-07-735. 

Page 67 GAO-08-157 Federal IP Enforcement
Appendix IV: Comments from the Department 

of Homeland Security

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. 

Page 68 GAO-08-157 Federal IP Enforcement
Appendix V: Comments from the Department Appendix V of Justice : Comments from the Department 

of Justice 

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix. 

See comment 1. 

See comment 2. 

Page 69 GAO-08-157 Federal IP Enforcement
Appendix V: Comments from the Department 

of Justice 

See comment 3. 

Page 70 GAO-08-157 Federal IP Enforcement
Appendix V: Comments from the Department 

of Justice 

See comment 4. 

Page 71 GAO-08-157 Federal IP Enforcement
Appendix V: Comments from the Department 

of Justice 

See comment 5. 

See comment 6. 

Page 72 GAO-08-157 Federal IP Enforcement
Appendix V: Comments from the Department 

of Justice 

See comment 7. 

See comment 8. 

Page 73 GAO-08-157 Federal IP Enforcement
Appendix V: Comments from the Department 

of Justice 

See comment 9. 

Page 74 GAO-08-157 Federal IP Enforcement
Appendix V: Comments from the Department 

of Justice 

See comment 10. 

Page 75 GAO-08-157 Federal IP Enforcement
Appendix V: Comments from the Department 

of Justice 

Page 76 GAO-08-157 Federal IP Enforcement
Appendix V: Comments from the 

Department of Justice 

The following are GAO’s comments on the Department of Justice letter 

dated February 21, 2008. 

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. 

GAO Comments 

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 

Page 77 GAO-08-157 Federal IP Enforcement
Appendix V: Comments from the 

Department of Justice 

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 outcomePage 78 GAO-08-157 Federal IP Enforcement
Appendix V: Comments from the 

Department of Justice 

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. 

Page 79 GAO-08-157 Federal IP Enforcement
Appendix VI: Comments from the Department Appendix VI: Comments from the of Health and Human Services 

Department of Health and Human Services 

Note: GAO comments 

supplementing those in 

the report text appear at 

the end of this appendix. 

Page 80 GAO-08-157 Federal IP Enforcement
Appendix VI: Comments from the Department 

of Health and Human Services 

See comment 1. 

See comment 2. 

See comment 3. 

Page 81 GAO-08-157 Federal IP Enforcement
Appendix VI: Comments from the Department 

of Health and Human Services 

The following are GAO’s comments on the Department of Health and 

Human Services letter dated February 25, 2008. 

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. 

GAO Comments 

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). 

Page 82 GAO-08-157 Federal IP Enforcement
Appendix VII: 

A

GAO Contact and Staff 

cknowledgments 

Page 83 GAO-08-157

Appendix VII: GAO Contact and Staff 

Acknowledgments 

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

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. 

Federal IP Enforcement

GAO Contact 

Staff 

Acknowledgments 

(320471) 
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