Intellectual Property: Enhanced Planning by U.S. Personnel Overseas Could Strengthen Efforts
Published: 2009-09-30T00:00:00

Fast Facts:

Highlights:
section_title: Why GAO Did This Study
paragraphs: Intellectual property (IP) protection and enforcement is inadequate in parts of the world, resulting in significant losses to U.S. industry and increased public health and safety risks. GAO was asked to evaluate U.S. government efforts to enhance protection and enforcement of IP overseas. Using a case study approach, this report (1) describes the key IP protection and enforcement issues at four posts in China, India, and Thailand; (2) assesses the extent to which the U.S. Patent and Trademark Office (USPTO) IP attach?s and the Department of Justice (DOJ) IP Law Enforcement Coordinator (IPLEC) effectively collaborate with other agencies at the posts; and (3) evaluates the extent to which each of the posts has undertaken interagency planning in collaborating on its IP-related activities. GAO examined U.S. government documents and interviewed headquarters and post agency officials as well as U.S. private-sector and host-country representatives.
section_title: What GAO Found
paragraphs: The U.S. government has identified weak enforcement as a key IP issue in the three case study countries; however, weaknesses also persist in their IP laws and regulations. According to the U.S. government, enforcement of existing IP laws and regulations and adjudication of suspected infringements are limited and inconsistent, and penalties are not typically sufficient to serve as an effective deterrent. U.S. government documents and U.S. officials we interviewed cited several factors that contribute to this limited and inconsistent enforcement, including flawed enforcement procedures; a lack of technical skills and knowledge of IP among police, prosecutors, and judges; a lack of resources dedicated to IP enforcement efforts; and the absence of broad-based domestic support for strong IP enforcement. The USPTO IP attach?s were generally effective in collaborating with other agencies at the four posts, primarily by acting as IP focal points, while the DOJ IPLEC collaborated with both post agencies and agency headquarters via IP forums. The IP attach?s shared common characteristics that made them effective, such as IP expertise, the ability to work full time on IP, and having roles and responsibilities for which there was general agreement among post agencies and leadership. At two posts, several agency officials stated that the IP attach?s were instrumental in establishing and maintaining interagency IP working groups to share ideas and coordinate on activities, enabling the agencies to speak with one voice on IP. The IPLEC collaborated through country and regional IP forums that provided technical assistance to foreign law enforcement agencies and judges on IP law enforcement issues and facilitated a network among U.S. and foreign government officials for sharing information on IP criminal investigations. The IPLEC also collaborated on case work for an array of mostly non-IP criminal activities, including money laundering, fraud, human trafficking, and child exploitation, in fulfilling his other duties as DOJ attach?. While the four posts have adopted several practices to collaborate effectively on IP, three out of the four have not adopted interagency plans to address key IP issues. Current policy guidance on IP at the posts, such as the annual Special 301 report and embassy mission strategic plans, is high level and not generally used for planning agencies' day-to-day IP efforts. Posts could potentially enhance collaboration by developing joint strategies to translate the key IP issues identified by the U.S. government into specific objectives and activities. One post, the U.S. embassy in New Delhi, has developed a joint strategy in the form of an interagency IP work plan with specific objectives and prescribed activities for addressing key IP issues. Joint strategies can help agencies prioritize existing efforts, avoid duplication of efforts, formulate a common IP message to foreign governments, and maintain focus on IP given competing issues and personnel changes at posts.

section_title: Letter
paragraphs: 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  protection and enforcement of IP rights is inadequate in some parts of the  world, making U.S. goods subject to substantial counterfeiting and piracy  activity abroad. Transnational IP crimes have been increasing, with  infringers attracted by high-profit potential, ease of market entry, and  relatively low risk of detection and prosecution. U.S. government efforts to  protect and enforce IP rights overseas are crucial to preventing significant  losses to U.S. industry and IP rights owners resulting from the trade in  counterfeit and pirated goods. Additionally, many IP-violating products,  such as counterfeit pharmaceuticals, have the potential to threaten public  health and safety in the United States and abroad. However, federal IP  protection and enforcement is complex and cuts across a wide range of  functions and U.S. agencies. Federal agencies are placing new emphasis  on IP protection—improving countries’ IP laws and regulations—and on  enforcement of those laws and regulations. For instance, the U.S. Patent  and Trademark Office (USPTO) created eight IP attaché positions and the  Department of Justice (DOJ) created two Intellectual Property Law  Enforcement Coordinator (IPLEC) positions in U.S. embassies overseas.
Congress is concerned about the effectiveness of U.S. government efforts  to protect and enforce IP rights overseas and recently passed the  Prioritizing Resources and Organization for Intellectual Property Act of  2008. Title III of that legislation created a new interagency intellectual  property enforcement advisory committee composed of representatives of  specified departments and agencies involved in IP enforcement. It  authorizes the President to appoint an Intellectual Property Enforcement  Coordinator position within the Executive Office of the President to chair  the new advisory committee. Among other things, the new Coordinator is  to lead the committee in the development of a joint strategic plan to  reduce counterfeiting and other types of IP infringement, and to assist in  the implementation of the joint strategic plan when requested by advisory  committee members.
At your request, to help the new Coordinator assess the resources  available to promote and protect IP rights overseas, we issued a report in  February 2009 that describes the federal agencies that have personnel  posted overseas who conduct activities related to IP enforcement and  protection and their respective roles and responsibilities. As the second  part of that same request, this report examines U.S. government efforts to  enhance protection and enforcement of IP overseas by focusing on four  posts in three countries: Beijing and Guangzhou, China; New Delhi, India;  and Bangkok, Thailand. The U.S. government has identified each of these  countries as having significant IP problems and each is an area of focus for  U.S. IP efforts overseas. Specifically, this report (1) describes the key IP  protection and enforcement issues that the U.S. government has identified  in China, India, and Thailand; (2) assesses the extent to which the USPTO  IP attachés and the DOJ IPLEC effectively collaborated with other  agencies at posts in China, India, and Thailand to improve IP protection  and enforcement; and (3) evaluates the extent to which each of the four  posts has undertaken interagency planning in collaborating on their IP- related activities.
To address these objectives, we interviewed U.S. government officials and  obtained and reviewed documentation on overseas U.S. government  personnel and their IP activities from the Departments of Commerce  (Commerce), Health and Human Services (HHS), Homeland Security  (DHS), Justice (DOJ), and State (State), and from the Office of the U.S.  Trade Representative (USTR). We also collected and analyzed  documentation from these agencies that discussed key IP protection and  enforcement issues around the world and that identified those countries  where the U.S. government believes IP problems are most acute, including  the Special 301 reports for 2008 and 2009. We also reviewed other  documents discussing key IP issues, including the 2008 and 2009 National  Trade Estimate Report on Foreign Trade Barriers, talking points from  presentations, internal U.S. government IP newsletters, agency reports to  their headquarters offices, and materials produced to assist U.S.  businesses. Our discussion on foreign laws and regulations is based  primarily on interviews with U.S. officials and U.S. government  documentation. Determining that a case study approach was the best way  to focus our work, we selected three case study countries using a set of  criteria that included: the extent to which the U.S. government has  identified the country and its region as having significant IP problems, the  types and range of IP problems that exist in the country, and the presence  of U.S. government personnel posted in the country involved in IP  activities, including USPTO IP attachés; CBP, ICE, and FBI attachés; and  DOJ personnel, particularly the IPLEC in Asia. Based upon our criteria, we  conducted fieldwork at posts in Beijing and Guangzhou, China; Bangkok,  Thailand; and New Delhi, India, in March 2009.
In each location, we met with those U.S. government personnel from  Commerce, HHS, DHS, DOJ, State, USTR, and the Department of  Agriculture (USDA) that were present at the post and performed IP-related  functions. We held these meetings to learn about the types of IP activities  they undertake, the factors that drive their work, and how the USPTO IP  attachés and the DOJ IPLEC collaborated with their counterparts at the  post and in headquarters, with the private sector, and with their host  government. We also met with representatives from various industry  associations and individual companies in each location to obtain their  perspectives on the key IP issues in the country and to learn about how  they seek to protect their IP, including through collaboration with the U.S.  government and the host government. Finally, in each location, we met  with foreign government officials to learn about the challenges they face in  improving IP protection and enforcement and to obtain their perspectives  on the effectiveness of their collaboration with the U.S. government on IP  issues. We also obtained and reviewed documents from each post that  outlined IP problems in the countries, strategies and plans for addressing  the problems, and the types of IP-related activities that are being  undertaken. Using the information from our interviews and the  documentation we collected at each post, we evaluated the extent to  which the USPTO attachés and DOJ’s IPLEC have adopted good practices  to collaborate with other agencies at the posts on promoting IP protection  using the following GAO criteria: agreeing upon agency roles and  responsibilities; establishing compatible policies, procedures, and other  means to operate across agency boundaries; identifying and addressing  needs by leveraging resources; and establishing mutually reinforcing or  joint strategies. We broke out the last criteria–establishing mutually  reinforcing or joint strategies–to evaluate the extent to which the posts  have undertaken interagency planning to guide their IP collaboration  efforts. This report covers only the IP attachés’ activities in the three case  study countries–China, India, and Thailand—and not their regional  responsibilities. Because we utilized a case study approach, our findings  cannot be generalized and do not necessarily apply to countries or posts  other than those we visited. We solicited comments from all the key  agencies discussed in the report and incorporated their comments as  appropriate.
We conducted this performance audit from August 2008 through  September 2009 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.
subsections: section_title: Background
paragraphs: Generally, individual countries grant and enforce IP rights. Intellectual  property is any innovation, commercial or artistic, or any unique name,  symbol, logo, or design used commercially. Intellectual property rights  protect the interests of the creators of these works by giving them  property rights over their creations.
Patent: Exclusive rights granted to inventions for a fixed period of time,  whether products or processes, in all fields of technology, provided they  are new, not obvious (involve an inventive step), and have utility (are  capable of industrial application).
Copyright: A set of exclusive rights subsisting in original works of  authorship fixed in any tangible medium of expression now known or later  developed, for a fixed period of time. For example, works may be literary,  musical, or artistic.
Trademark: Any sign or any combination of signs capable of  distinguishing the source of goods or services is capable of constituting a  trademark. Such signs, in particular, words including personal names,  letters, numerals, figurative elements and combinations of colors as well  as any combination of such signs are eligible for registration as  trademarks.
Trade secret: Any type of valuable information, including a formula,  pattern, compilation, program device, method, technique, or process that  gains commercial value from not being generally known or readily  obtainable; and for which the owner has made reasonable efforts to keep  secret.
Geographical indication: Indications that identify a good as originating in  a country, region, or locality, where a given quality, reputation, or other  characteristic of the good is essentially attributable to its geographic  origin.  “Pirated copyright goods” means any goods that are copies made without  the consent of the right holder or person duly authorized by the right  holder. “Counterfeit goods” means any goods, including packaging,  bearing, without authorization, a trademark that is identical to a  trademark validly registered for those goods, or that cannot be  distinguished in its essential aspects from such a trademark, and that  thereby infringes the rights of the owner of the trademark in question.
While determining the exact magnitude of the problem is difficult, industry  groups suggest that counterfeiting and piracy are on the rise and that an  increasingly broad range of products, from auto parts to razor blades, and  from vital medicines to infant formula, are subject to counterfeit  production. High profits and low risk have drawn in organized criminal  networks and technology has facilitated the manufacture and distribution  of counterfeit and pirated products, resulting in a global illicit market that  competes with genuine products. Although the public is often not aware of  the issues and consequences surrounding IP theft, many counterfeit  products raise serious public health and safety concerns, and the annual  losses that companies face from IP violations are substantial.
Legal protection of IP varies greatly around the world, and several  countries, including China, India, and Thailand are havens for the  production and sale of counterfeit and pirated goods. Under its annual  Special 301 process, the United States has designated China, India, and  Thailand as Priority Watch List countries, meaning that they are not  providing an adequate level of IP protection or enforcement, or market  access for persons relying on IP protection. Priority Watch List countries  are the focus of increased bilateral attention regarding IP issues. China,  India, and Thailand are also members of the World Trade Organization  (WTO) and must comply with the WTO’s Agreement on Trade-Related  Aspects of Intellectual Property Rights (TRIPS), which provides minimum  standards for IP protection and enforcement.
Seven federal agencies, and entities within them, undertake the primary  U.S. government activities in support of IP rights overseas. These agencies  are: Commerce, State, DOJ, DHS, HHS, USTR, and the U.S. Agency for  International Development (USAID). Key entities include Customs and  Border Protection (CBP), the Food and Drug Administration (FDA),  Immigration and Customs Enforcement (ICE), the Federal Bureau of  Investigation (FBI), the International Trade Administration (ITA) and  USPTO.
USPTO and DOJ recently established positions overseas that have IP  protection and enforcement as their primary mission, in order to enhance  U.S. efforts. USPTO created its IP attaché program to address country- specific and regional IP problems in key parts of the world. USPTO’s first  IP attaché was posted in Beijing, China, in 2004. USPTO added an attaché  in Beijing, China, in 2006; and an attaché in Guangzhou, China, in 2007.  During 2006 and 2007, USPTO also expanded the program to five other  countries: Egypt, Thailand, Russia, Brazil, and India. Since then, the Egypt  position has been eliminated and a new position in Doha, Qatar, is in the  planning stages. Table 1 shows the current IP attaché positions, their  country and post locations, and their geographic areas of coverage. The IP  attachés work on a range of IP activities in coordination with other federal  agencies, U.S. industry, and foreign counterparts.
At the time of our audit work overseas in March 2009, both IP attaché  positions in Beijing were vacant, with the two IP attachés departing in  August and November of 2008, respectively. According to USPTO, the IP  attaché in Guangzhou helped manage the office in Beijing in the absence  of an IP attaché there; and from December 2008 through August 2009, on a  regular basis, USPTO headquarters sent attorneys with expertise and  experience on China IP matters from the Office of IP Policy and  Enforcement to Beijing on short-term assignments to manage the office. In  March 2009, USPTO officials told us that a candidate had been selected to  fill one of the vacant attaché positions. The new attaché arrived in early  September 2009. USPTO stated that it intends to fill the other vacancy in  Beijing and will be putting out a vacancy announcement in the near future.
DOJ placed two federal prosecutors with IP expertise to serve as IPLECs,  in Bangkok, Thailand, and Sofia, Bulgaria, in January 2006 and November  2007, respectively. The IPLECs are tasked with advancing the criminal  enforcement of laws in their respective regions through a combination of  training, technical assistance, and outreach. The IPLEC in Thailand also  serves as a DOJ attaché and thus, according to DOJ officials, performs  case work, including investigations on IP. Although IP is a central part of  the mission of the IPLEC in Thailand, as DOJ attaché, this person is also  responsible for a range of DOJ functions beyond IP.
In addition to the IP attachés and the IPLECs, there are a variety of other  types of U.S. government personnel posted overseas who perform IP  functions. For instance, State economic, political, and public affairs  officers may be involved in IP activities at posts. ICE and CBP attachés  may also be involved. Other personnel such as FBI legal attachés,  Commerce’s Foreign Commercial Service (FCS) officers, FDA  investigators and technical experts, and USDA Foreign Agricultural  Service officers are among the other U.S. government personnel that may  be involved in IP activities at posts.
As described in our February 2009 report, the various U.S. personnel  posted overseas conduct a range of activities related to IP enforcement  and protection within their agencies’ respective roles and responsibilities.  These responsibilities generally include advancing U.S. IP policy,  dialoguing with foreign counterparts on IP, providing training and  technical assistance, supporting U.S. companies, facilitating enforcement  of IP laws and regulations, and conducting public awareness campaigns.  Table 2 elaborates on these responsibilities and the types of activities they  entail, and provides examples of how such activities are undertaken by  U.S. personnel in China, India, and Thailand.
section_title: While Weak Enforcement Is a Key IP Issue, Weaknesses also Persist in IP Laws and Regulations
paragraphs: The U.S. government has identified weak enforcement as a key IP issue in  the three case study countries; however, weaknesses also persist in their  IP laws and regulations. According to the U.S. government, enforcement of  existing IP laws and regulations and adjudication of suspected  infringements are limited and inconsistent and penalties are not typically  sufficient to serve as an effective deterrent. U.S. government documents  and U.S. officials we interviewed cited several factors that contribute to  this limited and inconsistent enforcement including flawed enforcement  procedures; a lack of technical skills and knowledge of IP among police,  prosecutors, and judges; a lack of resources dedicated to IP enforcement  efforts; and the absence of broad-based domestic support for strong IP  enforcement. While acknowledging progress in recent years, the U.S.  government also continues to cite various weaknesses in the three  countries’ IP laws and regulations that need to be addressed.
subsections: section_title: Limited and Inconsistent IP Enforcement Is Influenced by a Variety of Factors
paragraphs: The U.S. government has identified weak enforcement as a key IP issue in  China, India, and Thailand. According to the U.S. government, the extent  to which existing IP laws and regulations are enforced and pursued  through the courts in the three case study countries is limited and  inconsistent. According to various U.S. officials we interviewed overseas,  enforcement tends to be particularly weak and inconsistent outside of  major commercial centers. For instance, some U.S. officials in China noted  that cases of IP enforcement are much more common in large cities such  as Beijing and Shanghai than in other parts of the country. In India, U.S.  officials noted that IP enforcement is weak in much of the country with  significant variations in the level of enforcement among India’s 28 states.
While the three countries have taken some steps to demonstrate an  increased emphasis on IP enforcement, various U.S. officials in the three  countries stated that there continues to be an uneven commitment to such  efforts. A range of U.S. officials and private-sector representatives we met  with made the point that all three countries are increasingly looking to be  centers of innovation and that there is a growing awareness that domestic  production of IP is important for their economic development. As this  process occurs, various U.S. officials and private-sector representatives  we interviewed believe that the three countries will have a greater  incentive for strong IP enforcement. At this point though, various U.S.  officials and private-sector representatives noted that the three countries’  continue to not be fully committed to strong and sustained enforcement  efforts. For instance, in the 2009 Special 301 Report, the U.S. government  reported that during the 2008 Beijing Olympics, China took unprecedented  steps to crackdown on the unauthorized retransmission of broadcasts and  other infringing activities over the Internet; however, the report also noted  the need for China to demonstrate this type of resolve more generally in  combating piracy and counterfeiting on the Internet. Additionally, the U.S.  government reported in the 2009 Special 301 Report that an innovative  agreement brokered by the Beijing municipal courts between IP rights  holders and the landlord of a commercial center that was a well-known  source for an array of violating goods has not been enforced despite initial  optimism. In India, 23 states have created specialized IP units within their  police forces, but U.S. officials we interviewed stated that only a few of  these units are currently operational. Furthermore, the officials noted that  even these specialized units have other priorities, with IP not always being  at the top of the list. Thailand has set up a specialized IP court, but the U.S.  embassy in Thailand has reported that the court is not living up to its full  potential with most convictions resulting in minimal sentences, such as  small fines or required community service. The U.S. embassy in Thailand  has also reported that Thai authorities have labeled parts of Bangkok and  other Thai cities that are well-known retail centers for infringing products  as “red zones;” however, the embassy noted that since the designations,  there have not been any sustained efforts to reduce the availability of  pirated and counterfeit goods in these zones.
subsections: section_title: Flawed Enforcement Procedures
paragraphs: The U.S. government has identified a variety of problems with the  countries’ IP enforcement procedures and subsequent judicial proceedings  that limit the effectiveness of actions against infringers. For instance,  several U.S. officials in China stated that high thresholds for criminal  violations mean that most cases are handled using administrative  enforcement actions, rather than criminal prosecutions that have the  potential to result in more serious punishments for violators. With an  administrative enforcement action, the violator is ordered to stop  performing the infringing activity and is levied a fine. The 2009 Special 301  report states that administrative fines are not consistently levied in China  and are too low to be an effective deterrent for infringers with most seeing  the fines simply as part of the cost of doing business. In the 2009 National  Trade Estimate Report on Foreign Trade Barriers, the U.S. government  reported that documentary and procedural requirements in India have  created impediments to the prosecution of IP violators. The 2009 National  Trade Estimate Report on Foreign Trade Barriers also stated that in  Thailand, police are at times reluctant to involve themselves in raids due  to limited legal protections, even when acting in an official capacity.
section_title: Lack of Technical Skills and Knowledge of IP among Police, Prosecutors, and Judges
paragraphs: Enforcement is also hampered by a lack of technical skills and knowledge  of IP among police, prosecutors, and judges in the three countries. For  example, a U.S. law enforcement official we interviewed in India stated  that a lack of basic technical skills and awareness of investigative  techniques limits the Indian police’s ability to successfully conduct IP  enforcement actions. Additionally, the U.S. embassy in India has noted  that many government prosecutors lack even a basic awareness of IP  rights. In Thailand, a representative from the private sector said that Thai  police are uncertain as to what to do after they have conducted a raid and  are reluctant to do the necessary paperwork that is required to turn a  strong case over to a prosecutor. In China, U.S. officials stated that  historically, Chinese judges were not required to have law degrees, with  many judicial appointees being former army officers. While some U.S.  officials we interviewed noted that China has increased the requirements  for judges in recent years, the officials said that there continues to be a  great deal of inconsistency in judges’ knowledge level and competency.  One representative from the private sector noted as an example that there  is a need for more IP case law to be published in China since many judges  have little awareness of previous IP cases and cannot capitalize on  precedent to guide them in their decisions.
section_title: Limited Resources for IP Enforcement
paragraphs: The three countries are also faced with limited resources that challenge  their ability to dedicate sufficient time and energy to IP enforcement,  particularly given other competing priorities. For example, the U.S.  embassy in Thailand has reported that the Thai police generally lack the  resources to undertake enforcement actions apart from those cases  initiated by rights holders, with the Thai police typically relying on rights  holders to perform the majority of investigative work and evidence  collection. Additionally, the embassy has noted that rights holders are  generally required to pay the costs of such raids. As a consequence, rights  holders often find it cost-prohibitive to seek out police action in areas  much beyond Bangkok. In India, the U.S. embassy has reported that the  courts are extremely backlogged with it taking years before cases are  resolved; however, U.S. officials noted that India has taken some steps to  reduce the backlog of IP cases in the criminal courts in Delhi and  Bangalore. In China, the U.S. government has noted that the National  Copyright Administration, which is responsible for administrative  enforcement actions against copyright violators, does not have sufficient  personnel to carry out such actions on a wide scale.
section_title: Lack of Domestic Support for IP Enforcement
paragraphs: Support for strong IP enforcement among politicians and government  officials, domestic industry, and the general public is also lacking in the  three countries. For instance, a U.S. official we interviewed noted that in  India there has been a long history of anti-IP rights sentiment among many  in the government. According to U.S. embassy officials, this attitude has  started to change among some senior Indian officials in the last few years;  however, the U.S. embassy in India has reported that it has not yet  translated into concrete action at the national level. In Thailand, a U.S.  official noted that political instability over the last few years has made it  challenging to get the Thai government to focus on IP enforcement at the  national level. Increased enforcement is also at times viewed as  contributing to economic harm and as being counter to local interests. For  instance, in the 2009 Special 301 Report, the U.S. government reported that  some Chinese officials are encouraging more lenient enforcement of IP  laws due to concerns about the financial crisis and the potential loss of  jobs. U.S. government officials also stated that while companies in all  three countries are increasingly looking to be innovators and create their  own intellectual property, domestic industry has not always been a strong  voice for IP enforcement and has at times seen it as being counter to their  interests. For instance, a U.S. official and a private-sector representative in  India noted that India’s generic pharmaceutical industry has often been at  odds with international innovating companies over strong enforcement of  IP patent rights. Finally, various U.S. officials we interviewed stated that  members of the general public in the three countries are not always  supportive of strong IP enforcement. For instance, a U.S. official we met  with in China noted that a view expressed by some Chinese citizens is that  IP is simply a tool to help the rich get richer at the expense of ordinary  citizens.
section_title: Weaknesses in IP Laws and Regulations Persist despite Some Improvements
paragraphs: The U.S. government generally believes that all three countries have made  progress in strengthening their IP laws and regulations in recent years. For  instance, U.S. officials have noted that at this point, all three countries  have made progress bringing their laws into compliance with the WTO’s  TRIPS agreement. The U.S. government has also cited other positive  developments. For instance, China has established rules that now require  computers sold in the country to be pre-installed with licensed operating  system software in an effort to reduce purchases of pirated software. In  2008, India passed a law strengthening penalties for spurious and  adulterated pharmaceuticals. Additionally, India has approved initiating  action for accession to the Madrid Protocol and has passed a bill to  amend provisions of its trademark law to reflect this accession. Thailand  has implemented provisions of its 2007 Film and Video Act that target the  unauthorized sale of DVDs.
subsections: section_title: Copyrights
paragraphs: The U.S. government has cited various weaknesses in the three countries’  legal protections for copyrighted works. For instance, India and Thailand  have not yet joined the World Intellectual Property Organization’s  Copyright Treaty or its Performances and Phonograms Treaty. These two  treaties, which are commonly referred to as the World Intellectual  Property Organization Internet Treaties, are designed to protect digital  works and works distributed over the Internet. The U.S. government cites  Thailand and India’s accession to these treaties and the revision of their  copyright laws to implement the treaties as key steps that the two  countries must take to ensure adequate protections for copyrighted works  given advances in technology. Another key area of concern the U.S.  government has in all three countries relates to the production of optical  disks, such as CDs and DVDs. For instance, one U.S. official at the  embassy in Thailand noted the need for Thailand to amend its Optical Disk  Manufacturing Act to increase the government’s power to shut down  operations where illegal infringements are occurring. In its WTO case  against China, the U.S. government alleged that China’s Copyright Law did  not protect copyrighted works, such as movies, that did not meet China’s  content review standards. The U.S. government contended that this  blanket denial of protection limited certain rights holders’ ability to pursue  enforcement actions to prevent infringing copies from being produced in  China and distributed there or exported to other markets. The WTO  subsequently ruled in favor of the United States on this issue, finding that  this denial of protection was impermissible under TRIPS.
section_title: Patents
paragraphs: The U.S. government has also raised several issues with the laws  governing patent protections in the three countries. For instance, while  the U.S. government has credited India for several positive changes made  as part of the revisions to its patent law in 2005, it has also raised concerns  that many pharmaceutical companies’ applications for incremental patents  are not patentable under the revised law. According to a U.S. official in  India, this is problematic because much of the pharmaceutical innovation  that occurs today is incremental in nature and builds upon existing  patents. U.S. officials also cited problems with the structure of India’s  system for challenging patent applications. According to these officials,  under India’s current system, patents cannot be granted until all  challenges made by parties are resolved and India’s patent law and  implementing regulations do not set a specific time frame in which such  challenges can be brought against a patent application. Thus, parties can  file sequential challenges to significantly delay patent approvals.
The U.S. embassies in India and Thailand also noted concerns with patent  linkage issues in the two countries. For instance, a U.S. official in India  stated that India’s Ministry of Health has been at odds with India’s Patent  Office and has granted approvals for generic drugs to be brought onto the  market while the innovating drugs were still eligible for exclusive  marketing rights under the terms of the patent granted by the Patent  Office. Similar issues exist in Thailand where the U.S. embassy has  reported that there is not a formal system in place to prevent generic  producers from being given approval to bring their products to market  while the originals are still under patent.
In addition, the U.S. government has raised concerns or sought  clarification regarding China, India, and Thailand’s protections against the  unfair commercial use of undisclosed test and other data generated to  obtain marketing approval for pharmaceutical and agricultural chemical  products. For instance, the 2009 National Trade Estimate Report on  Foreign Trade Barriers reports that Indian law does not provide for  effective protection against the unfair commercial use of test or other data  that companies have submitted in order to get government approval for  their pharmaceutical and agricultural chemical products.
The U.S. government has also raised concerns or sought clarification  regarding compulsory licensing in China, India, and Thailand. For  example, Thailand has issued several compulsory licenses in recent years  on pharmaceutical products, although no new licenses have been issued in  2009. The Thai government maintains that its actions did not violate its  WTO commitments and the U.S. government has acknowledged Thailand’s  right to issue compulsory licenses; however, the U.S. government has  raised concerns regarding the transparency of the process and has noted  industry complaints regarding the Thai government’s unwillingness to  negotiate in good faith with rights holders before issuing the licenses. In  the 2009 Special 301 Report, the U.S. government noted concerns with the  scope and role of compulsory licensing under China’s revised patent law,  which will go into effect on October 1, 2009.
section_title: Trademarks
paragraphs: Recently, the U.S. government has raised fewer concerns with the three  countries’ existing trademark laws and regulations than with those  protecting other types of intellectual property; however, the U.S. continues  to identify certain issues. For instance, the U.S. embassy in Thailand has  reported that Thailand has not implemented the Madrid Protocol on  Trademarks, which allows trademark owners the ability to apply for  trademark protection in all of the Protocol’s signatory countries through  the filing of a single application in their own national trademark offices. In  China, the U.S. government has reported that there are no requirements to  provide evidence of prior use or ownership when filing a trademark  application, resulting in “trademark squatting” whereby third parties are  able to register popular foreign trademarks for their own use.
section_title: Market Barriers
paragraphs: The U.S. government has also cited certain market barriers, in China in  particular, as being key areas of concern, since it believes that some of  these barriers create incentives for piracy and counterfeiting. For instance,  the 2009 Special 301 Report and U.S. officials we interviewed stated that  China’s restrictions on the number of foreign films allowed to enter its  market every year minimize access to legitimate versions of films, which in  turn drives up the demand for pirated versions. The U.S. government has  also noted in the 2009 Special 301 Report that China needs to add, on a  regular basis, new drugs to its national formulary, which determines which  medicines consumers will be able to legally access.
section_title: The IP Attachés Generally Collaborated Effectively with Others at the Posts; the IPLEC Collaborated Via IP Forums
paragraphs: The USPTO IP attachés were generally effective in collaborating with  other agencies at the four posts primarily by acting as IP focal points,  establishing IP working groups, and leveraging resources through joint  activities. The DOJ IPLEC collaborated on IP with post and agency  headquarters personnel via country and regional forums such as training  U.S. and foreign, police, prosecutors, and customs officials on  enforcement practices. While the IPLEC collaborated with FBI and ICE  officials at the posts and with DOJ headquarters on criminal casework, the  cases mostly involved non-IP criminal activities under the IPLEC’s dual  role as DOJ attaché.
subsections: section_title: Posts Have Adopted Several Practices That Can Enhance Collaboration
paragraphs: GAO has found that while collaboration among federal agencies can take  different forms, practices that generally enhance collaboration include  agreeing upon agency roles and responsibilities; establishing compatible  policies, procedures, and other means to operate across agency  boundaries; and identifying and addressing needs by leveraging  resources. We found several instances where the IP attachés  demonstrated these practices in collaborating with other agencies at the  posts: agreeing on roles; establishing policies and procedures; and  leveraging resources. (The practice of “establishing mutually reinforcing  or joint strategies” is discussed later in this report under our third  objective regarding interagency planning.)
subsections: section_title: Agreeing on Roles Contributed to the IP Attachés’ Effectiveness as Focal Points
paragraphs: Several agency officials in each of the four posts noted common factors  that were important to enabling the IP attachés to serve as effective focal  points. First, agreement on roles and responsibilities of the IP attachés  particularly vis-à-vis the State economic section and post leadership, while  challenging, was achieved in most posts. Prior to the creation of the  attaché position at the four posts, State economic officers had primary  responsibility for IP; now, they are the most involved in IP issues after the  IP attachés. Thus, it was important that State officials and the IP attaché at  each post agree on their respective roles. State economic officers in  Guangzhou and Beijing raised some challenges regarding such agreement,  but they and the IP attachés have successfully worked out their  appropriate roles on IP, including dealing with the Chinese government.
For example, in Guangzhou, the economic officer said that he gathered  information and applied diplomacy to convince the Chinese to improve  their IP protection and that IP attaché played a similar role, but also  offered the host government practical means, such as technical assistance.  The economic officer in Beijing said it took some work, but he was able to  balance his role with the subject matter expertise of the attaché, for  example, deciding when the IP attaché should use his expertise to support  the economic officer’s diplomatic efforts and when the IP attaché should  work directly with the Chinese government. However, at the post in  Thailand, the lack of consensus between the IP attaché and the economic  section and post leadership on the attaché’s role negatively affected  collaboration. For instance, a State economic officer expressed the view  that the IP attaché should primarily provide training and technical  assistance on IP and should have little involvement in policy and  diplomacy matters as the economic section was the primary U.S. face to  the Thai government on IP. According to USPTO officials, the regional role  of the IP attaché may have contributed to the perception that the attaché  was not intended to be the IP focal point at the post. Although the IP  attaché was able to promote IP protection and enforcement through  technical assistance programs, the attaché wanted to be more fully  included in the embassy’s IP policy considerations, such as more  opportunities to provide her expertise during all phases of the Special 301  process. As a result, one private-sector representative and another U.S.  agency official at the post with whom we spoke expressed confusion  about who to contact on IP at the embassy.
Another element that contributed to the IP attachés’ ability to serve as  effective focal points was that they imparted their subject matter  expertise. For example, IP attachés pro-actively shared their IP expertise  among the other agencies such as providing updates on IP laws and  regulations, which had increased awareness of the issue at the posts. A  Foreign Agricultural Service official in Bangkok said that with the IP  attaché’s expertise, he was able to identify and address IP violations of  agricultural products. He gave an example where an agricultural  cooperator contacted him about the packaging and labeling of one of its  products being copied and sold on host country grocery shelves. The  Foreign Agricultural Service official said that without the IP attaché’s help,  he would have sent a sample to Washington where it likely would have  been considered a labeling issue rather than the more accurate  designation of counterfeiting.
In addition, the IP attachés had the advantage of working full time on IP.  Several agency officials from all four posts said that they had multiple  responsibilities required by their broad portfolios, and some officials in  some posts said they spent relatively little time on IP. In particular, the  officials from the law enforcement agencies, such as ICE and FBI, at the  posts where they had a presence, stated that IP was not a top priority  given all the other issues they address such as counterterrorism and  internet fraud. A State economic officer in Beijing said that the IP attaché  compelled agency officials at the post to make time for IP despite other  competing demands, while a State economic officer in New Delhi said that  having the IP attaché take the lead on IP had been very helpful and an ICE  official said that the arrival of the IP attaché had energized the same post  on IP issues.
Finally, agency officials cited working with other agencies as a team and  fostering trust and support among U.S. agency and host country  government counterparts as key elements contributing to the attachés’  successful role as focal points. For instance, two agency officials at one  post said that the IP attaché was a team player who really encouraged  communication on IP with the agencies at the posts. At another post, an  agency official said that the IP attaché was very effective in building  relationships with the host government, which, in turn, gave other U.S.  agencies entrée to state their case on IP with the host government  officials.
section_title: Some IP Attachés Created IP Working Groups as Mechanisms for Collaboration
paragraphs: At the embassies in New Delhi and Beijing, the IP attachés played a key  role in creating interagency IP working groups soon after their arrival.  Several agency officials at these two posts said that the multiple duties,  heavy demands in terms of official visitors, and the large number of  personnel at the post made it difficult to rely solely on informal  communications to address IP. Accordingly, the IP attachés facilitated the  formation of IP working groups for agencies to meet and share  information on IP and update each other on their respective IP activities.  The meetings were usually led by the IP attaché and might include  attendees from USTR, the State economic section, the Foreign Agricultural  Service, and the FCS as well as enforcement agencies such as ICE, CBP,  FBI, and DOJ, depending on the agencies located at the two posts.
Several agency officials in New Delhi and Beijing said that the working  groups provided several advantages. For instance, the working group  meetings allowed agencies to learn, on a regular basis, of each other’s  upcoming activities on IP, hear about news and trends in IP, and  complement each other’s efforts such as arranging to attend each other’s  training programs to lend their particular expertise. One agency official  said that when she first arrived at the post in Beijing, the working group  helped her get up to speed on the IP issues and priorities and take  advantage of opportunities to raise them in her meetings with the host  government.
The importance of the IP working group and the role of the attaché in  Beijing was demonstrated when the working group became inactive after  the attaché left the post in August 2008 and the position became vacant.  Two agency officials at the post said that presently without these  meetings, there was less focus on IP at the post. One of these two officials  said that although agency officials had actively exchanged emails since the  attaché’s departure, a more formal collaborative process would be useful  to ensure that the embassy spoke with one voice on IP. In addition, the  same official said that the meetings were particularly important to  maintain connection with the enforcement side, which he said tends to be  more reluctant to share information with other agencies at the post. At the  consulate in Guangzhou, one agency official said that he had participated  in the embassy’s working group meetings in Beijing by phone until they  were discontinued with the departure of the IP attaché; he hoped that the  embassy working group meetings would be resumed when the IP attaché  vacancy was filled, saying that the meetings kept him informed of IP  events at the capital.
In Thailand, IP issues are covered in two regular, large interagency  meetings at the post: the Economic Cluster and the Law Enforcement  Working Group. In addition, according to the IP attaché, for the past  couple of years, the attaché held periodic informal meetings on IP with  officials from State, DOJ, and DHS to discuss IP issues. The IP attaché said  that although participants’ regional responsibilities and travel schedules  prevented regularly scheduled meetings, this group met at least 10 times  from October 2006 to the end of 2008. In late 2008, the IP attaché worked  with the Deputy Chief of Mission to establish a more formal IP working  group. The first meeting of the IP working group was in January 2009,  chaired by the Deputy Chief of Mission, and coordinated by the IP attaché.  As of June 2009, USPTO had instituted a new requirement that the IP  attachés and State Department embassy staff in all the posts where IP  attachés are posted form an “IPR task force” that meets on a regular  basis.
section_title: The IP Attachés also Leveraged Resources through Joint Activities
paragraphs: The IP attachés complemented the efforts of other agencies to enhance IP  protection and enforcement at all four posts by leveraging resources  through joint IP activities with other agency officials. For example, the IP  attachés helped FCS’ efforts to assist and encourage individuals to do  business in the country by providing advice on how to avoid IP problems,  and answering IP-related questions. For example, the attaché explained  host country IP regulations to U.S. companies in order to avoid customs  related delays, and produced educational materials on IP for industry  trade shows. In China, an FCS official and the IP attaché from Guangzhou  said these efforts helped avoid situations that would lead to more WTO  dispute settlement cases down the road. An FCS official in New Delhi said  that the IP attaché has worked to remove the silos between FCS and  USPTO at post, such as providing FCS clients with information on the IP  situation in India.
Economic officers in two posts provided examples of where the IP  attachés expertise enhanced the officers’ access to and relationship with  host country officials on IP. For instance, the economic officer in New  Delhi said that the IP attaché had used his expertise to build trust and  rapport with the host government on IP issues and complement the  economic officer’s diplomacy with details on potential solutions.
Another economic officer in Guangzhou said that he worked closely with  the IP attaché on a daily basis to sell the idea that IP rights and their  enforcement was important and that the attaché facilitated this joint effort  by cutting through the bureaucratic layers in the host government.
A public affairs officer in Guangzhou said that he had worked with the IP  attaché on a series of public affairs events and that the attaché has also  met with other stakeholders such as academics, students, and industry  groups on IP that provided the public affairs officer with new contacts for  his work. He said that the IP attaché had been very successful in  amplifying the issue by making sure that IP was being discussed in the  media. The public affairs officer in Bangkok said that the IP attaché  provided talking points on IP for the U.S. ambassador at media events.  Also in Bangkok, the IP attaché worked with CBP counterparts on  customs enforcement training.
section_title: The IPLEC Collaborated on IP with Post and Headquarters Personnel through Forums, and Primarily Addressed Non- IP Casework
paragraphs: The IPLEC collaborated on IP primarily through IP forums with other U.S.  agency officials posted in several countries in the region, including  Thailand and to a lesser extent China and India, as well as with agency  headquarters personnel. With regard to case work, his primary focus was  on his responsibilities as the DOJ attaché in which he works with U.S. and  foreign law enforcement officials, prosecutors, and judges on an array of  mostly non-IP criminal cases and investigations in the region that involve,  among other things, money laundering, fraud, human trafficking, and child  exploitation.
subsections: section_title: The IPLEC Collaborated on IP with Post and Headquarters Agencies through IP Forums
paragraphs: The IPLEC collaborated with other post and headquarters officials via  regional and country IP forums. According to the IPLEC, an important part  of his collaborative efforts was creating an IP Crimes Enforcement  Network (IPCEN), establishing a network of law enforcement officials in  the region. To facilitate the IPCEN, the IPLEC hosted a 4-day and a 3-day,  regional IPCEN conference, held in 2007 and 2009, respectively, in  Bangkok, Thailand. The 2007 conference was co-organized by USPTO,  DOJ, and ASEAN;  and the 2009 conference by USPTO and DOJ. Both  conferences were funded by the State’s Bureau for International Narcotics  and Law Enforcement Affairs. The goals of the two IPCEN conferences  were to work directly with police, prosecutors, and customs officials  attending from the United States and numerous countries in the region to  share best practices on fighting IP crimes. The IPCEN conferences were  also meant to create a vehicle through which participants could develop  relationships and opportunities for sharing information on transnational IP  criminal investigations. In addition, the IPCEN conferences were meant to  strengthen communication channels in the law enforcement community  and promote coordinated, multinational prosecutions of the most serious  IP offenders.
In hosting the IPCEN conferences, the IPLEC collaborated with  enforcement agencies at posts in the region, including CBP, ICE, and  FBI. In addition, the Deputy Chief of Mission in Bangkok spoke at  both  conferences, and the IP attaché from Thailand assisted in arranging both  IPCEN conferences and spoke at the conference in 2007. The IP attachés  from China and India were not involved in either conference. In addition,  an official from USPTO headquarters was a moderator in 2009. Non-U.S.  government speakers at the conferences included law enforcement  officials and investigators from several countries including China, South  Korea, Australia, and Japan, and some ASEAN countries as well as U.S.  rights holders from a range of industries.
Examples of topics at the IPCENs included effective strategies for prosecuting internet- based piracy, illegal production of optical discs, and retail piracy; developing positive  relations between investigators and prosecutors; effective border enforcement strategies;  and presentations on the perspectives of several countries regarding effective IP rights  criminal enforcement strategies. headquarters officials from DOJ and USPTO on more than 50 IP programs  (2006-2009), providing legal and technical assistance to foreign law  enforcement agencies and judges on IP law enforcement issues in multiple  countries in the ASEAN region. Examples included IP workshops and  seminars for U.S. and foreign judges, prosecutors, and investigators, and  for U.S. business groups.
With regard to collaboration with State officials and IP attachés at the  posts, the IPLEC said that he sometimes attended host government  meetings with the State economic officers in Bangkok and also attended  several Bangkok IP working group meetings. However, he said that while  he had attended some IP programs sponsored by the IP attachés earlier in  his tenure in Bangkok, more recently he had not collaborated regularly  with the IP attachés in Bangkok, Guangzhou, Beijing, or New Delhi. The  IPLEC collaborated frequently with USPTO headquarters, specifically with  an official from the Office of Intellectual Property Policy and  Enforcement, which organized most IP events in the region from 2006 to  2009. This USPTO official, who worked closely with the IPLEC,  commented that the IPLEC’s expertise as a prosecutor added depth and  perspective to the programs. The IPLEC said that he had collaborated less  with the IP attachés due to his many responsibilities working on regional  forums and his role as a DOJ attaché, commenting that he was one person  in a large region and that they had a broader set of concerns on IP than his  more narrow focus on law enforcement. The IP attachés in Bangkok, New  Delhi, and Guangzhou said that they viewed the IPLEC as a valuable  resource and that, ideally, they would like to take advantage of his  expertise more often, but found him busy with other priorities. One IP  attaché commented that the IPLEC was “stretched thin” and another  observed that he had a “full plate” due to the wide region and many issues  he covered in addition to IP.
section_title: The IPLEC also Collaborated on Criminal Case Work, but Mostly Non-IP Related
paragraphs: With regard to case work, the IPLEC said he collaborated with other law  enforcement agencies at the posts on a daily basis, including the FBI and  ICE attachés in Thailand and other ASEAN countries, but primarily on  non-IP cases in his role as DOJ attaché. The IPLEC also said he  collaborated with the CBP attachés, though somewhat less. The FBI  attaché in Thailand told us that he works with the IPLEC on a regular  basis on various non-IP extradition cases, but knew of no recent IP cases.  According to the IPLEC, since his arrival in Bangkok, there has been one  IP case involving the extradition of a criminal from Thailand, in March  2008, for counterfeit pharmaceuticals, the first ever related to  pharmaceuticals in the region. According to DOJ officials, extraditions  based on IP offenses are very rare. The IPLEC assists U.S. prosecutors and  investigative agencies develop cases by facilitating evidence and  extradition requests as well as communication between U.S. authorities  and foreign law enforcement.
The IPLEC said that one focus of the IPCENs was to promote  collaboration among U.S. and regional law enforcement authorities on IP  cases. The IPLEC said that feedback from IPCEN attendees has been  positive in terms of case-related communication. However, according to  DOJ officials, the IPCEN network does not have a means to track any  resulting sharing of evidence and other information, or resulting joint  investigative efforts on IP cases. Ultimately, the IPLEC said that he would  like to continue working on IP cases with his foreign counterparts, but  finding areas where their interests coincide with those of the United States  is challenging. The IPLEC further explained that although targeted  prosecution of the most egregious IP offenders could result in higher  sentences and have the greatest deterrent effect, countries such as  Thailand have sought to improve the perception of their enforcement  efforts by bringing a large number of low-value cases to trial.
The IPLEC maintained that his two roles, IPLEC and DOJ attaché, were  complementary in that wearing the DOJ attaché hat gave him more  credibility as the IPLEC to push countries to investigate and prosecute IP  criminals. First, host country officials could see that as a prosecutor he  understood that IP was one among many large-scale crimes in the region  and that addressing them, given scarce resources, was a challenge.  Second, other types of criminal cases have been known to generate IP  cases, as IP is often intertwined with money laundering, fraud and other  criminal activities. He said that his main goal as both IPLEC and DOJ  attaché is to convince countries to target their criminal investigations on  the most egregious transnational cases, ideally for IP crimes, but  realistically not restricted to them, which in the long run would result in  reducing piracy and counterfeiting along with other crimes.
section_title: Three of the Four Posts Do Not Have Interagency Plans Addressing the Key IP Issues
paragraphs: While the four posts have adopted several practices to collaborate  effectively on IP, only one has adopted an interagency plan to address key  IP issues. Existing post guidance on IP is high level and does not generally  guide agencies’ day-to-day efforts to reach IP goals. Agencies can plan by  using joint strategies that translate high level goals into specific objectives  and activities. At one post, agencies collaborated to develop a joint  strategy in the form of an interagency IP work plan that has established  specific IP objectives and helped agencies at the working level identify and  implement IP activities that address the key IP issues identified by the  United States. Joint strategies can help agencies prioritize among existing  IP efforts, avoid duplication of IP efforts, convey a common message on IP  to foreign governments, and maintain focus on IP given numerous  competing issues and periodic changes in key IP personnel at the posts.
subsections: section_title: Post Guidance on IP Lacks Specificity to Guide IP Efforts
paragraphs: Agencies at the posts are provided high-level guidance on IP issues,  including guidance from U.S. headquarters’ interagency mechanisms and  post-wide plans in which IP is included among other relevant issues.  Individual agencies may also have their own IP guidance for a country.  However, overall, existing guidance is generally either too high level to be  applied to agencies’ day-to-day IP efforts to achieve IP goals or not shared  widely among the agencies at the posts.
subsections: section_title: The Special 301 Process, Bilateral Forums, and Mission Strategic Plans Provide High Level Guidance
paragraphs: The annual Special 301 report provides the posts guidance on key IP  issues, although there are significant differences in the level of detail  provided for each country. For instance the section on China in the Special  301 report has in recent years been longer than the sections for India and  Thailand. USTR headquarters officials reported that in addition to the  report, USTR sends cables to posts identifying IP priorities for their host  countries. However, U.S. officials we interviewed at the four posts did not  generally report that they utilized either the final Special 301 report or  subsequent cables to guide them in conducting their IP activities on a day- to-day basis. As part of the Special 301 process, posts are also responsible  for submitting a cable that outlines their perspectives on the key IP issues  in their host countries. At the posts we visited, this effort was led by the  State economic section with assistance from the IP attachés and input  from other agencies. While these submissions identify a wide range of  issues in each country, posts did not report that they utilized this  interagency effort at the post level as a foundation from which to establish  specific IP objectives to guide their IP efforts.
The outcomes of bilateral forums such as the U.S./China Joint Commission  on Commerce and Trade and the U.S./India Trade Policy Forum also  provide high-level guidance to posts on IP issues that the U.S. government  is seeking to collaboratively address with its foreign counterparts. For  instance, in the context of the Trade Policy Forum, the United States and  India agreed to work together to build enforcement agencies’ awareness of  IP laws and systems in each country by, among other things, exchanging  information on best practices and undertaking capacity building programs.  While some U.S. officials we met with at the posts noted that these forums  help establish U.S. policy goals for IP, as with the Special 301 process, post  officials did not generally report relying on the outcomes of these forums  to drive their IP activities on a day-to-day basis.
Each U.S. embassy in the three countries also has a fiscal year 2010  Mission Strategic Plan (MSP) that discusses IP. While the mention of IP  in the MSPs indicates that the embassy leadership in that country views IP  as a priority, MSPs are designed to set general goals for posts rather than  provide extensive guidance on particular issues. Thus, the MSPs are not  meant to guide agencies’ day-to-day IP efforts. For example, India’s MSP  has a general statement about supporting improved protection of  intellectual property to attract more foreign direct investment and one IP- related performance target that relates to a reduction in the software  piracy rate. To the extent that IP is discussed in the three countries’ MSPs,  it is primarily within the sections on economic issues rather than in the  sections on law enforcement. Only the MSP for Thailand mentions IP as a  law enforcement issue. Even there, the discussion is limited to a broad  statement about IP violations being one of a list of crimes that the mission  will combat in partnership with the Thai government and does not include  any specific categories of violations or potential strategies related to  criminal IP enforcement in the law enforcement section of the plan.
section_title: USPTO Has IP Plans, but These Are Not Widely Shared with Other Agencies
paragraphs: While other agencies may have broader plans that discuss IP, USPTO is  the only agency we identified that has developed its own IP-specific plans  for each of the three countries. USPTO’s headquarters-based country  teams have developed IP plans for China, India, and an ASEAN regional  plan that covers several countries, including Thailand. Additionally, the  India, Thailand, and Guangzhou IP attachés have developed individual IP  work plans for their areas of responsibility. However, USPTO officials  stated that these plans tend to serve primarily as internal guidance and are  not widely shared with officials from other U.S. agencies. Some USPTO  headquarters officials we interviewed acknowledged that there would be  benefits to having the IP attachés work with other relevant agencies on a  post-wide IP plan at each location where there is an IP attaché. The  officials stated that this would help ensure that agencies’ IP activities at  the posts are in alignment with agreed upon long-term objectives and that  there is a clear assignment of responsibilities. Additionally, the officials  noted that such buy-in is essential since USPTO does not have the  authority to direct the U.S. agenda at a post, with the ambassador having  final say on the priorities. At the time of our review, however, USPTO had  decided to give the attachés the discretion to determine whether or not to  work with agencies at the post to develop such a plan, rather than making  it a requirement. A USPTO headquarters official stated that this allowed  the attachés greater flexibility in deciding how best to work with other  agencies at post.
section_title: One Post Has a Joint Strategy in the Form of an Interagency Work Plan to Guide Agencies’ Efforts on IP
paragraphs: GAO has found that agencies can enhance collaboration by establishing  mutually reinforcing or joint strategies that articulate clear objectives and  align activities, core processes, and resources to achieve a common  outcome. While the four posts have adopted several practices to  collaborate on IP, only one has adopted such a joint strategy.
The U.S. embassy in New Delhi has developed a joint strategy in the form  of an interagency IP work plan that translates key IP issues into a clear set  of objectives and provides details on the post’s planned IP activities. The  IP attaché in New Delhi led the effort to draft the plan under the auspices  of the IP working group. Completed in December 2008, the plan  incorporated input from several agencies at the embassy, including  USPTO, CBP, ICE, FCS, and the State economic section. The interagency  work plan lists specific IP objectives that the working group intends to  work towards in India, such as the implementation of an optical disk law  and the implementation of a meaningful system for protecting undisclosed  data against unfair commercial use. The plan also identifies specific day- to-day activities in support of each objective that the IP working group  hopes to undertake. For instance, it discusses meetings that the post  intends to hold with various Indian ministries, outreach it plans to perform  with the private sector, IP training it plans to provide, and data it plans to  collect to bolster the U.S. position on certain IP issues.
As the plan had been in place for a relatively short period of time when we  conducted our fieldwork in New Delhi, in March 2009, the IP working  group had not yet assessed progress that had been made. Agency officials  told us that they intended to revisit the plan at the 6-month point, assess  progress, and determine what revisions, if any, were needed. As of the end  of July 2009, the IP attaché reported that he had met with the State  economic section to discuss updates to the plan and that the full IP  working group would discuss the plan at an upcoming meeting in August  with intentions to finalize the revisions shortly after that. In revising the  plan, he said that he expected that the working group would maintain the  original objectives in the plan, which are long term in nature, but that  there would likely be some minor modifications to the approach outlined  for meeting them.
section_title: Using Joint Strategies to Collaborate on IP at the Posts Can Have Several Benefits
paragraphs: While agencies at the four posts have undertaken IP activities that are  relevant and support U.S. interests, joint strategies such as interagency  work plans can potentially assist posts in prioritizing among their various  demands and help ensure that their activities are part of a strategic  approach to address key IP issues identified by the U.S. government.  Various U.S. officials and private-sector representatives stated that the  level of IP activity has increased at the posts in recent years in large part  due to the arrival of the IP attachés and the attention they bring to IP  issues. However, agency officials generally noted that on a day-to-day  basis their activities were not undertaken as part of the implementation of  particular plans to address key IP issues. For example, one agency official  in China stated that his strategy for IP was to simply “juggle” issues as they  arose.
The development of interagency work plans can also help to encourage  sustained attention to key IP activities. Some agency officials noted that  the long-term nature of many IP efforts—such as implementing optical  disk laws, developing public outreach to convince consumers of the  importance of IP rights, or building the relationships with foreign law  enforcement officials necessary to conduct joint IP investigations—require  sustained and focused attention over time. In the absence of such  sustained attention, the impacts of U.S. efforts can be diminished. For  instance, an official at one post noted that he had observed a cycle where  the post would exert pressure on the host country’s police to more  aggressively enforce IP laws, and enforcement would increase; however,  after a time, pressure would ease and previous enforcement levels would  return. An official in Beijing noted the challenges to staying focused on  particular issues at such a large post. Whereas, a written plan has helped  the embassy stay on target and not loose focus on IP issues, according to  an official in New Delhi. A different official in New Delhi stated that the  plan would allow the post to keep up momentum on IP and helped ensure  that all the relevant agencies were engaged. Post-level plans can also  minimize the reduction in focus on IP as agency officials transfer in and  out of posts. For instance, one U.S. official in Beijing noted that the IP  attaché had driven the post’s day-to-day IP activities, and that when he left  the post, there was no plan to consult to help ensure that agencies  continued to focus on key IP issues. In addition, new personnel can  consult joint strategies to help them more quickly contribute to IP issues.
Given the cross-cutting nature of IP, interagency post work plans may also  assist agencies in identifying opportunities to avoid redundant activities or  divergent messages, particularly given the multiple agencies at each of the  posts we visited that play some role in IP activities. For example, we  identified over 10 agencies or agency sections that perform IP-related  work at the embassy in Beijing. An agency official in Beijing stated that  there was not a cohesive embassy strategy on IP, with agencies tending to  pursue their individual projects. In addition, we found evidence of  disagreement among agencies in Thailand regarding the appropriate  strategy for working with the host government and upon what issues to  focus. An agency official in Thailand stated that an IP work plan for the  post would help ensure that agencies at the post were knowledgeable  about what was happening on IP and would reduce the risk of duplicative  efforts or inconsistent messages to the host government. An agency  official in India stated that, through the work plan, the post hoped to  maintain a common message on IP.
section_title: Conclusion
paragraphs: Improving IP protection and enforcement overseas is challenging because  IP issues are complex and multifaceted. Many IP issues are symptoms of  broader problems the countries face such as weak government institutions  or the lack of a strong historical respect for the rule of law. Addressing the  many challenges associated with improving countries’ IP laws and  regulations and strengthening their enforcement efforts requires extensive  knowledge of a country’s IP regime and the ability to influence a complex  web of policies and procedures under an array of legislative,  administrative, and judicial authorities. The best ways for the United  States to motivate change are not always obvious, particularly while  seeking to preserve good relations and pursue other foreign policy goals.  Adding to the complexity, multiple U.S. agencies are involved in IP and  most of their overseas personnel do not consider IP their primary mission  because they have numerous and more pressing responsibilities.
U.S. agencies at the four posts are generally collaborating effectively and  have adopted certain key practices to enhance and sustain collaboration,  with the exception of developing joint strategies such as interagency IP  work plans. Such plans can further improve collaboration and maximize  the effectiveness of U.S. government IP efforts at posts by bringing  agencies together to develop and commit to specific objectives and  activities that address the key IP issues. Interagency IP work plans  increase the likelihood that interagency efforts will be sustained  throughout the inevitable shifts in key IP personnel at overseas posts, and  despite the competing demands placed on many agencies for which IP is  not their main mission. By acting as focal points, IP attachés have already  spearheaded collaboration among the agencies by facilitating joint U.S.  agency IP efforts and, in some cases, generating mechanisms like IP  working groups for sharing ideas and planning IP events. Recognizing the  importance of such mechanisms, USPTO has recently required that all  posts with IP attachés form such working groups. However, currently,  neither the IP attachés nor any other post agency official has the  responsibility for facilitating post-wide planning on IP. Instead, planning to  address the key IP issues is dependent on the individual initiative of post  personnel and, thus, to date has been limited to only one of the four posts.
section_title: Recommendation for Executive Action
paragraphs: To more effectively ensure that activities at U.S. posts with USPTO IP  attachés consistently address the key IP protection and enforcement  issues identified by the U.S. government, we recommend that the  Secretary of State direct post leadership in countries with USPTO IP  attachés to work with the USPTO IP attachés to take the following action:    Develop annual IP interagency work plans to be used by the post IP  working groups with input from relevant agencies, which set objectives  and identify activities for addressing key IP protection and enforcement  issues defined by the U.S. government, taking into account the range of  expertise of responsible agencies, available resources, and agency specific  IP goals.
section_title: Agency Comments and Our Evaluation
paragraphs: We provided a draft of this report to the Secretaries of Commerce, Health  and Human Services, Homeland Security, and State; the Attorney General;  the U.S. Trade Representative; and the Director of the U.S. Patent and  Trademark Office. We received written comments from the Department of  State Assistant Secretary and Chief Financial Officer, the Department of  Commerce Acting Under Secretary for International Trade, and the Acting  Chief Financial Officer of the U.S. Patent and Trademark Office, which are  reprinted in appendices II through IV. The Department of State and the  U.S. Patent and Trademark Office officials concurred with our  recommendation. The Departments of State, Commerce, Justice, and  Health and Human Services; the U.S. Patent and Trademark Office; and the  Office of the U.S. Trade Representative chose to provide technical  comments. We modified the report where appropriate. The Secretary of  Homeland Security chose not to provide comments.
We are sending copies of this report to appropriate congressional  committees and the Secretaries of Commerce, Health and Human  Services, Homeland Security, and State; the Attorney General; the U.S.  Trade Representative; and the Director of the U.S. Patent and Trademark  Office. 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 has 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 V.
section_title: Appendix I: Scope and Methodology
paragraphs: To address Congress’ concern about U.S. government efforts to protect  and enforce intellectual property (IP) rights overseas and assist the new  advisory committee headed by the Intellectual Property Enforcement  Coordinator, recently created by the Congress, this report evaluates U.S.  government efforts to enhance protection and enforcement of IP overseas  in three countries at four posts, including posts in Beijing and Guangzhou,  China; New Delhi, India; and Bangkok, Thailand. Specifically, this report  (1) describes the key IP protection and enforcement issues that the U.S.  government has identified in China, India, and Thailand; (2) assesses the  extent to which the U.S. Patent and Trademark Office (USPTO) IP  attachés and the Department of Justice (DOJ) Intellectual Property Law  Enforcement Coordinator (IPLEC) effectively collaborated with other  agencies at posts in China, India, and Thailand to improve IP protection  and enforcement; and (3) evaluates the extent to which each of the four  posts has undertaken interagency planning in collaborating on their IP- related activities.
Overall, to determine the scope of our work, we obtained documentation  and interviewed cognizant officials from the Departments of Commerce  (Commerce), Health and Human Services (HHS), Homeland Security  (DHS), Justice (DOJ), and State (State); and from the Office of the U.S.  Trade Representative (USTR). We reviewed documentation on overseas  U.S. government personnel and their IP activities, including which  countries had personnel dedicated to IP issues. We collected and analyzed  documentation that discussed key IP protection and enforcement issues  around the world and that identified those countries where the U.S.  government believes IP problems are most acute, such as documents  related to the Special 301 process, and other agency assessments of  countries’ IP laws and regulations. We determined that our scope would  focus on IP efforts at the embassy/post level and that we would utilize a  case study approach, focusing on selected countries. To select the case  study countries, we used a set of criteria that included: the extent to which  the U.S. government has identified the country and its region as having  significant IP problems, the types and range of IP problems that exist in  the country, and the presence of U.S. government personnel posted in the  country involved in IP activities, including USPTO IP attachés and  coverage by a DOJ IPLEC. Based upon our criteria, we chose China, India,  and Thailand. We then conducted fieldwork in Beijing and Guangzhou,  China; Bangkok, Thailand; and New Delhi, India; in March 2009. Because  we utilized a case study approach, our findings cannot be generalized and  do not necessarily apply to countries or posts other than those we visited.
To address all three objectives, we met with U.S. government personnel in  all four locations who perform IP-related functions to learn about the  types of activities they undertake, the factors that drive their work, and  how they collaborate with their counterparts at the post and in  headquarters, with the private sector, and with their host government.  Table 3 lists the agencies and agency sections we met with at each post.
We also met with representatives from various industry associations and  individual companies in each location to obtain their perspectives on the  key IP issues in the country and to learn about how they seek to protect  their IP, including through collaboration with the U.S. government and the  host government. Finally, in each location, we met with foreign  government officials to learn about the challenges they face in improving  IP protection and enforcement and to obtain their perspectives on the  effectiveness of their collaboration with the U.S. government on IP issues.
To address the first objective, we reviewed U.S. government documents  identifying key IP protection and enforcement issues in each of the case  study countries, including each embassy’s Special 301 submission for 2009  and also the final Special 301 reports for 2008 and 2009. Additionally, we  reviewed the 2009 National Trade Estimate Report on Foreign Trade  Barriers. We also reviewed other post documentation discussing key IP  issues, including talking points from presentations, internal U.S.  government IP newsletters, agency reports to their headquarters offices,  and materials produced to assist U.S. businesses. Additionally, we  interviewed U.S. government personnel and private-sector representatives  in each of the countries to obtain their perspectives on the key IP  protection and enforcement issues. Our discussion on foreign laws and  regulations in the objective is based primarily on interviews with U.S.  officials and U.S. government documentation, rather than GAO analysis of  those laws.
To address the second objective, we used information from our interviews  and documentation we collected at each post to evaluate the extent to  which the USPTO attachés and DOJ’s IPLEC have adopted good practices  to collaborate with other agencies at the posts on promoting IP protection.  Documents included attaché activity summaries, IP seminar agendas, the  IPCEN agendas, IP working group minutes, and technical assistance work  plans. In evaluating the collaboration practices at the four posts, we relied  upon past work that GAO has done that identified key practices that  agencies can adopt in order to sustain and enhance collaboration. For this  objective, we examined select key practices and assessed the extent to  which agencies followed them in carrying out their IP activities at the  posts. Specifically, we evaluated the extent to which agencies at the four  posts had identified and addressed needs by leveraging resources, agreed  on role and responsibilities, and established compatible policies,  procedures, and other means to operate across agency boundaries.
To address the third objective, we reviewed the 2008 and 2009 Special 301  Reports to determine the extent to which they provide guidance to posts  on IP activities to undertake. We also reviewed each embassy’s fiscal year  2010 Mission Strategic Plan and assessed the extent to which the plans  discuss IP. We assessed the submissions of the embassies in Thailand and  India for the 2009 Special 301 report to determine the extent to which the  embassies had prioritized among various IP issues and set actionable  objectives as well. Additionally, we reviewed the USPTO headquarters  country plans covering the three countries and the USPTO IP attachés’  individual work plans and analyzed the types of objectives established in  these plans and the actions that plans call for to address these objectives.  We also reviewed the IPR Working Group Action Plan for the embassy in  New Delhi and assessed the extent to which it serves as a reasonable  guide for the posts’ IP activities. We interviewed U.S. government officials  at all four posts to determine how they select IP activities to undertake  and the extent to which they use interagency planning to guide their  efforts. Based on the information collected through document review and  interviews, we evaluated the extent to which the four posts have utilized  interagency planning on IP to establish mutual reinforcing or joint  strategies. This is a key practice that GAO has identified as contributing to  enhanced and sustained collaboration. Finally, we utilized evidence  collected in our interviews, as well as findings from past GAO work, to  identify potential benefits the posts might achieve by performing  interagency planning to establish joint strategies.
We conducted this performance audit from August 2008 through  September 2009 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.
section_title: Appendix II: Comments from the Department of State
section_title: Appendix III: Comments from the U.S. Patent and Trademark Office
section_title: Appendix IV: Comments from the Department of Commerce
section_title: Appendix V: GAO Contact and Staff Acknowledgments
subsections: section_title: GAO Contact
section_title: Staff Acknowledgments
paragraphs: In addition to the individual named above, Christine Broderick, Assistant  Director; Nina Pfeiffer; and Ryan Vaughan made significant contributions  to this report. Shirley Brothwell, Elizabeth Curda, Martin De Alteriis,  Karen Deans, and Ernie Jackson also provided assistance.