Intellectual Property: USPTO Has Made Progress in Hiring
Examiners, but Challenges to Retention Remain (17-JUN-05,
GAO-05-720).
The U.S. Patent and Trademark Office (USPTO) is responsible for
issuing U.S. patents that protect new ideas and investments in
innovation and creativity. Recent increases in both the
complexity and volume of patent applications have increased the
time it takes to process patents and have raised concerns about
the validity of the patents USPTO issues. Adding to these
challenges is the difficulty that USPTO has had attracting and
retaining qualified staff. In this context, GAO was asked to
obtain information about USPTO's patent organization.
Specifically GAO reviewed (1) overall progress in implementing
the initiatives in its strategic plan; (2) efforts to attract and
retain a qualified patent workforce; and (3) remaining
challenges, if any, in attracting and retaining a qualified
patent workforce.
-------------------------Indexing Terms-------------------------
REPORTNUM: GAO-05-720
ACCNO: A26978
TITLE: Intellectual Property: USPTO Has Made Progress in Hiring
Examiners, but Challenges to Retention Remain
DATE: 06/17/2005
SUBJECT: Employee retention
Intellectual property
Internal controls
Labor force
Patents
Personnel recruiting
Quality assurance
Strategic planning
Trademarks
Human capital
Human capital management
Human capital planning
******************************************************************
** This file contains an ASCII representation of the text of a **
** GAO Product. **
** **
** No attempt has been made to display graphic images, although **
** figure captions are reproduced. Tables are included, but **
** may not resemble those in the printed version. **
** **
** Please see the PDF (Portable Document Format) file, when **
** available, for a complete electronic file of the printed **
** document's contents. **
** **
******************************************************************
GAO-05-720
United States Government Accountability Office
GAO Report to Congressional Committees
June 2005
INTELLECTUAL PROPERTY
USPTO Has Made Progress in Hiring Examiners, but Challenges to Retention Remain
a
GAO-05-720
[IMG]
June 2005
INTELLECTUAL PROPERTY
USPTO Has Made Progress in Hiring Examiners, but Challenges to Retention Remain
What GAO Found
USPTO has made more progress in implementing its strategic plan
initiatives to increase the agency's capability than initiatives aimed at
decreasing patent pendency. USPTO has fully or partially implemented all
23 capability initiatives that focus on improving the skills of employees,
enhancing quality assurance, and altering the patent system through
changes in existing laws or regulations. In contrast, the agency has
partially or fully implemented only 8 of the 15 initiatives aimed at
reducing pendency. Lack of funding was cited as the primary reason for not
implementing these initiatives. With passage of legislation in December
2004 to increase fees available to USPTO for the next two years, the
agency is re-evaluating the feasibility of implementing some of these
initiatives.
Since 2000, USPTO has taken steps intended to help attract and retain a
qualified patent examination workforce, such as enhancing its recruiting
efforts and using many of the human capital benefits available under
federal personnel regulations. However, it is too soon to determine the
long-term success of the agency's recruiting efforts because they have
been in place only a short time and have not been consistently sustained
due to budgetary constraints. Long-term uncertainty about USPTO's hiring
and retention success is also due to the unknown impact of the economy. In
the past, when the economy was doing well, the agency had more difficulty
in recruiting and retaining the staff it needed.
USPTO faces three long-standing challenges that could also undermine its
efforts to retain a qualified workforce: the lack of an effective strategy
to communicate and collaborate with examiners; outdated assumptions in the
production quotas it uses to reward examiners; and the lack of required
ongoing technical training for examiners. According to patent examiners,
the lack of communication and a collaborative work environment has
resulted in low morale and an atmosphere of distrust that is exacerbated
by the contentious relationship between management and union officials.
Also, managers and examiners have differing opinions on the need to update
the monetary award system that is based on assumptions that were
established in 1976. As a result, examiners told us they have to contend
with a highly stressful work environment and work voluntary overtime to
meet their assigned quotas. Similarly, managers and examiners disagree on
the need for required ongoing technical training. Examiners said they need
this training to keep current in their technical fields, while managers
believe that reviewing patent applications is the best way for examiners
to remain current.
United States Government Accountability Office
Contents
Letter 1
Results in Brief 3
Background 6
USPTO Has MadeGreater Progress on Strategic Plan InitiativesThat
Enhance the Agency's Capability Rather Than Productivity and
Agility 9 USPTO Has Taken Steps to Help Attract and Retain a Qualified
Patent Examiner Workforce, but Long-Term Success Is Uncertain 16
USPTO Faces Long-standing Human Capital Challenges That Could
Undermine Its Recruiting and Retention Efforts 24 Conclusions 32
Recommendations for Executive Action 32 Agency Comments and Our Evaluation
32
Appendixes
Appendix I: Scope and Methodology 34 Appendix II: Comments from the U.S.
Patent and Trademark Office 36 Appendix III: Progress on Strategic Plan
Initiatives 40 Appendix IV: GAO Contact and Staff Acknowledgments 50
Tables Table 1:
Table 2:
Table 3:
Table 4:
Table 5: Table 6: Table 7:
Table 8: Table 9:
USPTO Average Patent Pendency by Technology Center,
2004 8
Status of Capability Initiatives to Improve Workforce
Skills 10
Status of Capability Initiatives to Enhance Quality
Assurance 11
Status of Capability Initiatives to Change Legislation and
Rules 12
Status of Productivity Initiatives 13
Status of Agility Initiatives 14
USPTO Patent Examiner Hiring Data, Fiscal Years 2000-
2004 22
USPTO Capability Initiatives 40
USPTO Productivity Initiatives 45
Table 10: USPTO Agility Initiatives 47 Figures Figure 1: USPTO's 2004 Brand
Image 18
Contents
Figure 2: USPTO's 2002 Brand Image 19 Figure 3: Examiner Attrition as Percentage
of Staff 23
Abbreviations
EPO European Patent Office
OIG Office of Inspector General
OMB Office of Management and Budget
OPM Office of Personnel Management
OPQA Office of Patent Quality Assurance
PCT Patent Cooperation Treaty
POPA Patent Office Professional Association
USPTO U.S. Patent and Trademark Office
This is a work of the U.S. government and is not subject to copyright
protection in the United States. It may be reproduced and distributed in
its entirety without further permission from GAO. However, because this
work may contain copyrighted images or other material, permission from the
copyright holder may be necessary if you wish to reproduce this material
separately.
A
United States Government Accountability Office Washington, D.C. 20548
June 17, 2005
The Honorable F. James Sensenbrenner Jr.
Chairman
Committee on the Judiciary
House of Representatives
The Honorable Frank R. Wolf
Chairman
Subcommittee on Science, the Departments of State, Justice, and Commerce,
and Related Agencies
Committee on Appropriations
House of Representatives
The U.S. Patent and Trademark Office (USPTO) is responsible for issuing
U.S. patents that protect new ideas and investments in innovation and
creativity.1 However, recent increases in both the complexity and volume
of patent applications have lengthened the time it takes USPTO to process
patents ("pendency") and have raised concerns among intellectual property
organizations, patent holders, and others about the quality of the patents
that are issued. Over the last 10 years, the number of patent applications
filed annually with USPTO has increased 91 percent from about 185,000 in
1994 to over 350,000 in 2004. USPTO's resources have not kept pace with
the rising number and complexity of patent applications it must review.
Moreover, at times, USPTO officials acknowledge they have had difficulty
competing with the private sector to attract and retain staff with the
high degree of scientific, technical, and legal knowledge required to be
patent examiners. To help the agency address these challenges, Congress
passed a law requiring USPTO to improve patent quality, implement
electronic government,2 and reduce pendency.3
1USPTO, an agency within the Department of Commerce, consists of two
organizations, one for patents and one for trademarks. This report focuses
on the patent organization, which accounts for about 76 percent of the
agency's resources.
2Electronic government refers to an increased reliance on information
technology to conduct government operations and accomplish agency
missions.
3Patent and Trademark Office Authorization Act of 2002, Pub. L. No.
107-273, S: 13104, 116 Stat. 1899, 1900, required USPTO to develop a
5-year strategic plan for meeting these three requirements.
In response to the law, USPTO in June 2002 embarked on an aggressive 5year
modernization plan outlined in its 21st Century Strategic Plan (Strategic
Plan), which was updated to include stakeholder input and rereleased in
February 2003.4 USPTO's Strategic Plan includes 38 initiatives related to
the patent organization that focus on three crosscutting strategic themes:
capability, productivity, and agility. The capability theme includes
efforts to enhance patent quality through workforce and process
improvements; the productivity theme includes efforts to decrease pendency
of patent applications; and the agility theme includes initiatives to
electronically process patent applications. To fully fund the initiatives
in its Strategic Plan, the agency requested authority from Congress to
increase the user fees it collects from applicants and to spend all of
these fees on patent processing.5 Legislation to increase the fees was
enacted in December 2004; 6 however, the changes will be effective only in
fiscal years 2005 and 2006. Although USPTO's Strategic Plan includes some
initiatives to improve the skills of its examination workforce, the
agency's more detailed summary of its actions to attract and retain a
qualified workforce is contained in the Strategic Workforce Restructuring
Plan (Workforce Plan), which the agency developed in 2001.
In the context of the various efforts being undertaken by USPTO, you
requested that we obtain information about its (1) overall progress in
implementing the initiatives in the 21st Century Strategic Plan related to
the patent organization; (2) efforts to attract and retain a qualified
patent workforce; and (3) remaining challenges, if any, in attracting and
retaining a qualified patent workforce.
To determine USPTO's progress toward implementing the Strategic Plan
initiatives for the patent organization, we reviewed the initiatives
contained in the plan, as well as agency documents regarding USPTO's
progress in implementing each initiative. We also interviewed key USPTO
officials and
4USPTO also prepared the Strategic Plan as part of the requirements of the
Government Performance and Results Act.
5USPTO is funded by fees collected from the public for specific activities
related to processing applications. The spending of those fees is subject
to provisions in annual appropriations acts.
6Consolidated Appropriations Act, 2005, S: 801, Pub. L. No. 108-447, 118
Stat. 2809, 2924 (Dec. 8, 2004).
union officials about the plan's implementation.7 We focused our review on
tasks that were to have been completed by December 2004. To determine what
actions USPTO has taken to attract and retain a qualified patent workforce
and what challenges, if any, the agency faces in this area, we reviewed
USPTO's Workforce Plan and other policies and practices related to human
capital. We interviewed USPTO management and union officials, as well as
officials from the Department of Commerce, its Office of Inspector General
(OIG), and the Office of Personnel Management (OPM) about human capital
initiatives undertaken by USPTO. We also reviewed results from USPTO and
OPM employee surveys and compared human capital policies and practices
with those recommended by GAO, OPM, and others. In addition, we attended a
USPTO career fair for patent examiners to observe agency recruiting
efforts and conducted focus groups with patent examiners and supervisory
patent examiners to obtain their views on various issues related to
USPTO's ability to attract and retain a qualified patent examination
workforce. Our review focused exclusively on the activities of the patent
organization and not those of the trademark organization. We are issuing a
separate report addressing the agency's strategy for automating its patent
process.8 Appendix I contains a detailed discussion of the scope and
methodology for our review. We conducted our review from June 2004 through
April 2005 in accordance with generally accepted government auditing
standards.
Results in Brief USPTO has made greater progress in implementing its
Strategic Plan's initiatives to improve the patent organization's
capability than it has in implementing initiatives to improve its
productivity and agility. Specifically, of the actions planned to have
been implemented by December 2004, USPTO has fully or partially
implemented all 23 of the initiatives related to its capability theme,
which focuses on improving the skills of employees, enhancing quality
assurance, and altering the patent system through changes in existing laws
or regulations. For example, USPTO established programs to periodically
test the skills of patent examiners, and revised and expanded reviews to
ensure the quality of examiners' work. In
7Patent examiners are represented by, but not required to join, the Patent
Office Professional Association (POPA), an independent union of
professional employees formed in 1964.
8GAO, Intellectual Property: Key Processes for Managing Patent Automation
Strategy Need Strengthening, GAO-05-336 (Washington, D.C.: June 17, 2005).
contrast, the agency has partially implemented only 1 of the 4 initiatives
related to the productivity theme to help reduce pendency, and has fully
implemented only 1 and partially implemented 6 of the 11 initiatives
related to the agility theme to help improve electronic processing of
patent applications. Agency officials primarily cited the need for
additional funding as the reason for not implementing these initiatives.
With passage of the legislation in December 2004 to increase fees
available to USPTO, the agency is re-evaluating the feasibility of
implementing those initiatives that it had previously deferred or
suspended.
Since 2000, USPTO has taken steps intended to help attract and retain a
qualified patent examination workforce. Specifically, the agency enhanced
its recruiting efforts by, among other things, identifying the knowledge,
skills, and abilities that patent examiners need to effectively fulfill
their responsibilities and establishing a permanent recruiting team
composed of senior and line managers. In addition, USPTO has used many of
the human capital benefits available under federal personnel regulations
to attract and retain qualified examiners, including the two benefits most
frequently cited as important by examiners: flexible working schedules and
competitive salaries. However, it is too soon to determine the long-term
success of the agency's efforts, in part because neither recruiting
efforts nor availability of benefits have been consistently sustained
during the limited time they have been in effect. In 2002, for example,
USPTO suspended reimbursements to examiners for law school tuition, in
part because of funding limitations, although the agency resumed
reimbursement in 2004 when funding from the fee legislation became
available. Examiners in our focus groups expressed dissatisfaction with
the inconsistent availability of these benefits, in some cases saying that
suspension of benefits provides them with an incentive to leave the
agency. Another reason adding to the uncertainty of USPTO's recruiting
efforts is the impact of the economy, which, according to agency officials
and examiners, has a greater effect on recruitment and retention than any
actions the agency may take. Both agency officials and examiners told us
that when the economy picks up, more examiners tend to leave USPTO and
fewer qualified candidates are attracted to the agency. On the other hand,
when there is a downturn in the economy, USPTO's ability to attract and
retain qualified examiners increases because of perceived job security and
competitive pay. This correspondence between the economy and USPTO's
hiring and retention success is part of the reason why USPTO has been able
to meet its hiring goals for the last several years, but recently has
experienced a rise in attrition rates.
While USPTO has undertaken a number of important and necessary actions to
attract and retain qualified patent examiners, the agency continues to
face three long-standing human capital challenges that could also
undermine its recent efforts if not addressed.
o First, the agency lacks effective mechanisms for helping managers to
communicate and collaborate with examiners. Organizations with effective
human capital models have strategies to communicate with employees and
involve them in decision making; however, USPTO officials acknowledged
that they do not have a formal communication strategy or actively seek
input from examiners on management decisions. Most of USPTO's
communication mechanisms emphasize communication between managers and not
between managers and examiners. Patent examiners and supervisory patent
examiners in our focus groups frequently said that communication with
management was poor or nonexistent, and they reported little involvement
in providing input to key agency decisions. Prior employee surveys and
participants in our focus groups indicated that the lack of communication
and involvement has created an atmosphere of distrust of USPTO management
and lowered examiner morale, which is further exacerbated by the
contentious relationship between USPTO management and the examiners'
union.
o Second, human capital models suggest that agencies should periodically
assess their monetary awards systems to ensure that they help attract and
retain qualified staff. Patent examiners' awards are based largely on the
number of applications they process, but the assumptions underlying their
application processing quotas have not been updated since 1976. USPTO
management and examiners have differing opinions on whether these
assumptions need to be updated. For example, according to examiners, the
assumptions do not reflect the impact of the increased use of electronic
tools that has reduced the time required to find relevant patent
literature but at the same time has increased the amount of literature
that must be reviewed. As a result, many of the examiners and supervisory
patent examiners in our focus groups and respondents to previous agency
surveys reported that examiners do not have enough time to conduct
high-quality reviews of patent applications. According to agency surveys,
these inadequate time frames create a stressful work environment and is
cited in the agency's exit surveys as a primary reason examiners leave the
agency.
o Finally, counter to current workforce models, USPTO does not require
ongoing technical education for patent examiners, which could negatively
affect the quality of its patent examination workforce. According to
agency officials, examiners automatically maintain currency with their
technical fields by just doing their job of examining applications, which
they believe contains the most cutting-edge information. However, patent
examiners and supervisory patent examiners disagreed and said that the
literature they review in applications is outdated, particularly in
rapidly evolving technologies. USPTO offers some voluntary in-house
training, but the agency could provide no data on the extent to which
examiners have taken advantage of such training. Moreover, patent
examiners told us that they are reluctant to attend such training, given
the time demands involved. In contrast, USPTO's policy requires examiners
to attend extensive training provided by the agency on legal issues on
which examiners are periodically tested.
Although USPTO has taken a number of steps to enhance its recruiting
efforts and better target a qualified pool of candidates, in light of its
longstanding human capital challenges, we are recommending that it develop
formal strategies to improve communication and collaboration across all
levels of the organization, which will also help resolve differences of
opinion between management and examiners on such issues as the assumptions
underlying the quota system and requirements for technical training. In
its written comments on a draft of our report (reprinted in appendix II),
USPTO agreed with our findings, conclusions, and recommendations. In
addition, the agency provided technical comments that we have incorporated
as appropriate.
Background USPTO administers U.S. patent and trademark law to encourage
innovation and advance science and technology in two ways. First, USPTO
grants to inventors exclusive rights to their inventions for a limited
period of time, usually 20 years. During this time, the inventor can
exclude others from making, using, selling or importing the invention.
Second, the agency preserves and disseminates patent information, for
example on issued patents and most patent applications. Such information
allows other inventors to improve upon the invention in the original
application and apply for their own patent.
To obtain a patent, inventors-or more usually their attorneys or agents-
submit to USPTO an application that fully discloses and clearly describes
one or more distinct innovative features of the proposed invention (called
claims) and pays a filing fee to begin the examination process. USPTO
evaluates the application for completeness, classifies it by the type of
patent and the technology involved,9 and assigns it for review to one of
its operational units, called technology centers, that specialize in
specific areas of science and engineering.10 Supervisors in each
technology center then assign the application to a patent examiner for
further review. For each claim in the application, the examiner searches
and analyzes relevant United States and international patents, journals,
and other literature to determine whether the proposed invention merits a
patent-that is, whether the invention is a new and useful process,
machine, manufacture, or composition of matter, or any new and useful
improvement to one that already exists. The examiner may contact the
applicant on one or more occasions to resolve questions and obtain
additional information to determine the proposed invention's potential
patentability. If the examiner determines that the proposed invention
merits a patent, the applicant is informed, and, upon payment of a fee,
USPTO issues a patent. The applicant may abandon the application at any
time during the examination process. If the application is denied a
patent, the applicant may appeal the decision within an established time.
Each examiner typically reviews applications in the order in which they
are received by USPTO.
The time from the date an application is filed until a patent is granted,
denied, or the application is abandoned is called "overall pendency." Over
the past decade, overall pendency has increased on average from 20 to
almost 28 months. However, pendency varies by technology center, ranging
from 24 months for applications in such fields as transportation,
agriculture, electronic commerce, mechanical engineering, and
manufacturing to 41 months for applications in the fields of computer
9Patents typically fall into one of three categories: (1) utility-for
useful inventions, such as processes, machines, articles of manufacture,
or composition of matter; (2) design-for changes in configuration, shape,
or surface ornamentation that do not involve changes in function; or (3)
plant-for asexually reproducible plants. A fourth category, "reissue
patents," refers to patents USPTO grants as replacements for any patent
that was in some way defective; these patents constituted less than
one-half of 1 percent of patents issued in fiscal year 2003.
10USPTO's eight technology centers are: (1) Biotechnology and Organic
Chemistry; (2) Chemical and Materials Engineering; (3) Computer
Architecture, Software, and Information Security; (4) Communications; (5)
Semiconductors, Electrical and Optical Systems and Components; (6)
Transportation, Electronic Commerce, Construction, Agriculture, National
Security and License and Review; (7) Mechanical Engineering,
Manufacturing, and Products; and (8) Designs for Articles of Manufacture.
architecture, software and information security (see table 1). In addition
to overall pendency, USPTO monitors the time from when an application is
filed until the examiner makes an initial assessment of the proposed
invention's patentability and informs the applicant, called first action
pendency. First action pendency also has generally increased in the past
decade from 8 to over 20 months. In 2004, first action pendency ranged
from an average of 14 months for applications in such fields as
semiconductors and optical systems to 33 months for computer architecture
and software applications. Such measures of pendency help USPTO assess its
effectiveness in reviewing patent applications.
Table 1: USPTO Average Patent Pendency by Technology Center, 2004
Months
Technology center Overall pendency First action pendency
Biotechnology and Organic Chemistry 29.9 19.2
Chemical and Materials Engineering 27.6 17.9
Communications 40.5 31.4
Computer Architecture, Software and
Information Security 41.1 33.3
Mechanical Engineering, Manufacturing,
Products and Design 24.1 15.2
Semiconductor, Electrical, Optical Systems
and Components 23.9 14.0
Transportation, Construction, Agriculture,
and Electronic Commerce 24.1 15.6
Average 27.6 20.2
Source: USPTO.
USPTO Has Made Greater Progress on Strategic Plan Initiatives That Enhance
the Agency's Capability Rather Than Productivity and Agility
USPTO has made greater progress in implementing its Strategic Plan
initiatives to make the patent organization more capable than it has been
in implementing its productivity and agility initiatives. Specifically, of
the activities planned for completion by December 2004, the agency has
fully or partially implemented all 23 of the initiatives related to its
capability theme to improve the skills of employees, enhance quality
assurance, and alter the patent process through legislative and rule
changes. In contrast, USPTO has partially implemented only 1 of the 4
initiatives related to the productivity theme to restructure fees and
expand examination options for patent applicants and has fully or
partially implemented 7 of the 11 initiatives related to the agility theme
to increase electronic processing of patent applications and reduce
examiners' responsibilities for literature searches. In explaining why
some initiatives have not been implemented, agency officials primarily
cited the need for additional funding. With passage of the legislation in
December 2004 to restructure and increase the fees available to USPTO, the
agency is re-evaluating the feasibility of many initiatives that it had
deferred or suspended. For more details on USPTO's progress in
implementing the 38 initiatives in the Strategic Plan, see appendix III.
USPTO Has Made To improve the quality of its reviews of patent
applications through Substantial Progress on Its workforce and process
improvements, USPTO developed 23 capability Capability Initiatives
initiatives: 9 to improve the skills of its workforce, 5 to enhance its
quality
assurance program, and 9 to improve processes through legislative and rule
changes.
Workforce Skills Improvements As shown in table 2, USPTO has implemented 5
and partially implemented 4 of the 9 workforce skills initiatives.
Table 2: Status of Capability Initiatives to Improve Workforce Skills
Partially
Initiatives Implemented implemented Not implemented
Increase the pool of qualified
management candidates by
adding awards to total X
compensation
Explore alternate organizational X
structures for the workplace
Develop interim pre-employment
measures to assess English
language skills X
Recertify the skills of examiners
with authority to issue patents
(primary examiners) through
examinations and expanded work
product reviews X
Certify that examiners possess the
requisite knowledge, skills,
and abilities prior to promotion
to a position with authority to
negotiate on behalf of USPTO X
Improve the selection and training
of supervisory patent
examiners X
Use examinations and other means
to ensure that new patent
examiners possess the requisite X
skills prior to promotion
Implement a pre-employment test to
assess English language
skills X
Create an Enterprise Training X
Division
Source: GAO analysis of USPTO data.
Although the agency has not estimated how much funding would be needed to
implement the final 4 initiatives, their full implementation was hindered,
in part by funding constraints, agency officials said. The current status
of these partially completed initiatives is as follows:
o To improve the selection and training of managers, USPTO has added
proficiency in supervisory skills to the requirements for a supervisory
examiner and in 2004 required applicants for such positions to pass an
examination, but the agency has not fully developed the supervisory
curriculum or trained supervisors.
o To help ensure that new examiners have the requisite skills prior to
promotion, USPTO has identified the knowledge, skills, and abilities
needed for patent examiners and established training units in work groups
for new examiners, but has not developed a structured process for
subsequent promotions.
o To implement a pre-employment test to assess English language
communication skills of new patent examiners, USPTO has, among
other things, revised its vacancy announcements to include English
language proficiency as a required skill but has not developed an
automated pre-employment test of such skills.
o USPTO has developed an action plan to establish an Enterprise Training
Division, which was to have been in place in 2003, to consolidate
responsibility for conducting legally required and other agencywide
training, developing training policy, and monitoring funds spent on
training.
Quality Assurance As shown in table 3, USPTO has implemented 3 and
partially implemented Enhancements 2 of the 5 capability initiatives to
enhance its quality assurance program.
Table 3: Status of Capability Initiatives to Enhance Quality Assurance
Partially
Initiatives Implemented implemented Not implemented
Expand current quality assurance
program to include works in
progress
(in-process reviews) X
Establish "second pair of eyes" X
reviews in each technology center
Survey customer regarding
transactions with USPTO on
specific
applications to supplement X
comprehensive customer surveys
Evaluate the quality of examiners' X
literature searches
Enhance the reviewable record for
each patent application with
additional
information from the applicant and
examiner X
Source: GAO analysis of USPTO data.
The status of the initiatives USPTO has partially implemented is as
follows:
o The agency has begun to develop a plan and criteria to review the
quality of searches and anticipates incorporating such reviews in the
quality assurance program during fiscal year 2006.
o To enhance the reviewable record for patent applications, USPTO has
developed guidance and amended forms to allow both examiners and
applicants to provide additional information on the content of interviews
and reason for decisions and strongly recommends, rather than requires,
applicants and examiners to do so.
Process Improvements Related As shown in table 4, of the 9 capability
initiatives to streamline patent
to Legislative and Rule Changes processing through legislative and rule
changes, USPTO has implemented 1 and partially implemented 8.
Table 4: Status of Capability Initiatives to Change Legislation and Rules
Partially
Initiatives Implemented implemented Not implemented
Delete the requirement for
physical surrender of the original
patent
papers X
Certify the legal knowledge of
patent attorneys and agents who
wish
to practice before USPTO and
periodically recertify the skills
of
practicing attorneys and agents X
Evaluate whether to adopt a unity X
of invention standard
Simplify adjustments to the patent X
term
Permit individuals who have been
assigned patent rights to sign an
oath declaring that the inventor X
is the original and first inventor
Permit individuals who have been
assigned patent rights to broaden
the claims in an application X
Correct an inconsistency regarding
unintentionally delayed
submission of certain claims X
Eliminate certain exemptions from
the requirement to publish most
patent applications within 18
months of when they were first X
filed
Amend current legislation
regarding certain limitations on
an
inventors' right to obtain a X
patent
Source: GAO analysis of USPTO data.
Although full implementation of these initiatives is largely dependent on
actions by Congress, the status of the 8 partially implemented initiatives
is as follows:
o To certify the legal knowledge of newly registering and practicing
patent attorneys and agents and to monitor their practice, the agency
offers registration examinations electronically year-round and issued
proposed rules to harmonize ethics and disciplinary actions with the
requirements in place in most states, but has not yet developed a formal
program of continuing legal education requirements to periodically
recertify the skills of practicing attorneys and agents.
o To evaluate whether to adopt a unity standard to harmonize U.S.
examination practices with international standards and allow U.S.
applicants to obtain a single patent on related claims that must currently
be pursued in separate patent applications in the United States, USPTO
began a study of the changes needed to adopt a unity standard and sought
public comment but has not completed its analysis, reached a decision, or
drafted and introduced implementing legislation.
o For the other 6 partially implemented initiatives, USPTO is drafting
proposed legislation or obtaining administrative clearance to introduce
it.
USPTO Has Made Less Progress Implementing Its Productivity and Agility
Initiatives
As shown in table 5, USPTO has not implemented 3 of the 4 initiatives that
focus on accelerating the time to process patent applications and expand
public input and has partially implemented only 1 of the productivity
initiatives that allow the agency to increase fees and retain the funds.
Following passage of legislation in 2004, USPTO has issued rules to
increase fees generally and restructure fees to include separate
components for different stages of processing both domestic and
international patent applications, and for filing the application,
searching the literature, and examining the claims. The separate
components could, under certain circumstances, be refunded to the
applicant. USPTO has not issued rules governing the refund of domestic
fees. The revised fees are effective for 2005 and 2006.
Table 5: Status of Productivity Initiatives
Partially
Initiatives Implemented implemented Not implemented
Restructure fees and provide for X
refunds
Offer patent applicants a choice
of up to five examination options,
based
in part on the ability to rely on X
searches conducted by others
Offer patent applicants the option X
of an accelerated examination
Revise postgrant review procedures X
to allow greater public input
Source: GAO analysis of USPTO data.
Similarly, as shown in table 6, USPTO has not implemented 4 of the 11
initiatives related to agility, has only implemented 1 and partially
implemented 6. These 11 initiatives are designed to further the agency's
goal to create a more flexible organization and include efforts to
increase electronic processing of patent applications, reduce examiners'
responsibilities for literature searches, and participate in worldwide
efforts to streamline processes and strengthen intellectual property
protection.
Table 6: Status of Agility Initiatives
Partially
Initiatives Implemented implemented Not implemented
Establish an information security X
program
Transition to electronic patent X
processing
Transition to electronic X
processing for postgrant reviews
Ensure availability of critical
data in the event of a
catastrophic systems
failure X
Promote international
harmonization and pursue goals to
strengthen
international intellectual X
property rights of U.S. inventors
Pursue international agreements to X
share patent search results
Accelerate Patent Cooperation X
Treaty reforms
Rely on other sources to classify X
patent documents
Rely on other sources to support
domestic and international
literature
searches X
Rely on other sources to
transition to a new global patent
classification
system X
Develop stringent conflict of X
interest clauses for search firms
Source: GAO analysis of USPTO data.
The status of the 6 partially implemented agility initiatives to increase
electronic processing and harmonize U.S. and international practices is as
follows:
o Although USPTO has largely accomplished the actions related to
implementing image-based electronic processing of patent applications, it
has not achieved the full extent of electronic sharing of patent documents
with the European Patent Office the initiative had anticipated and the two
offices continue to finalize security and protocols between their servers.
o USPTO has amended rules to generally allow electronic filing of
postgrant review documents and trained additional judges in streamlined
procedures, but it has not defined records management schedules for
electronic documents or implemented full electronic processing
capabilities to support these reviews, such as text searching and the
ability to receive, file, store, and view multimedia files.
o To ensure the availability of critical data in the event of a
catastrophic failure, USPTO has certified and accredited its classified
system and its mission-critical and business-essential systems, uses
scanning tools to identify security weaknesses, and uses intrusion
detection systems, but has not acquired the hardware, software, staff, and
facilities for a backup data center.
o To promote harmonization of patent processing among international
intellectual property offices and pursue goals to strengthen international
intellectual property rights of U.S. inventors, USPTO participated in
substantive patent treaty discussions that addressed such topics as the
first-to-file (European) versus the first-to-invent (U.S.) standards,
access to genetic resources, and definitions for such terms as prior art
and novelty.
o To pursue multi-and bilateral agreements with other intellectual
property offices, USPTO completed pilot programs to compare search results
with the Japan and European Patent Offices and with patent offices in
Australia and the United Kingdom.
o Regarding the acceleration of Patent Cooperation Treaty reforms, USPTO
indicated that many significant reform procedures have been adopted in the
last several years.
Although USPTO has not determined how much funding would be needed,
officials said that the lack of adequate funding largely limited its
ability to complete planned actions on productivity and agility
initiatives that had not been fully implemented. With passage of the
fee-restructuring legislation in December 2004, USPTO plans to commence
work on these suspended initiatives. For example, it has assigned new
teams to evaluate the feasibility of using contractors and international
intellectual property offices to conduct literature searches. For greater
detail on USPTO's progress in implementing the 38 initiatives in the
Strategic Plan, see appendix III.
USPTO Has Taken Steps to Help Attract and Retain a Qualified Patent
Examiner Workforce, but Long-Term Success Is Uncertain
Since 2000, USPTO has taken steps intended to help attract and retain a
qualified patent examination workforce. The agency has enhanced its
recruiting efforts and has used many human capital flexibilities to
attract and retain qualified patent examiners. However, during the past 5
years, the agency's recruiting efforts and use of benefits have not been
consistently sustained, and officials and examiners at all levels in the
agency told us that the economy has more of an impact on USPTO's ability
to attract and retain examiners than any actions taken by the agency.
Consequently, how the agency's actions will affect its long-term ability
to maintain a highly qualified workforce is unclear. While USPTO has been
able to meet its hiring goals, attrition has recently increased.
USPTO Has Enhanced Recruiting Efforts to Attract Qualified Examiners
USPTO's recent recruiting efforts have incorporated several measures
identified by GAO and others as necessary to attract a qualified
workforce.11 First, in 2003, to help select qualified applicants, USPTO
identified the knowledge, skills, and abilities that examiners need to
effectively fulfill their responsibilities. As part of this study, USPTO
conducted focus group meetings with, and surveys of, experienced examiners
to identify and validate key skills.12 In doing so, the agency was
responding to a recommendation from the Department of Commerce's OIG to
better target candidates likely to stay at USPTO.13
Second, in 2004, the agency's permanent recruiting team, composed of
senior and line managers,14 participated in various recruiting events,
including visits to the 10 schools that the agency targeted based on the
diversity of their student population and the strength of their
engineering
11See GAO, Human Capital: A Self-Assessment Checklist for Agency Leaders,
GAO/OCG00-14G, version 1 (Washington, D.C.: September 2000); and Office of
Personnel Management, Human Capital Assessment Accountability Framework
(Washington, D.C., Sept. 20, 2000).
12USPTO, KSA Work Team: Knowledge, Skills and Abilities Project
(Alexandria, Va., August 2003).
13Department of Commerce, Office of Inspector General, U.S. Patent and
Trademark Office: Patent Examiner Hiring Process Should be Improved, Final
Inspection Report No. BTD-14432-2-0001 (Washington, D.C., March 2002).
14USPTO's permanent recruiting team was established in 2002. However, the
agency suspended recruiting efforts in 2002 and 2003 in the face of
budgetary uncertainty.
and science programs.15 The team also visited 22 additional schools,
participated in two job fairs, and attended three conferences sponsored by
professional societies. To assist the recruiting team, USPTO hired a
consultant to develop a new brand image for the agency, shown in figure 1
below.16 As part of this effort, USPTO and the consultant surveyed USPTO
managers and supervisors and conducted focus groups with a range of
ethnically diverse audiences, from college seniors to experienced
professionals, to identify the characteristics of examiners and how the
target market perceives the agency, as well as to get a sense of their
work habits, values, and perceptions of work at USPTO. According to USPTO,
the agency's new brand focuses on the vital role intellectual property
plays in the U.S. economy and the career momentum of patent examiners.
Agency officials said that USPTO uses its employment brand image at every
opportunity, from Internet banner ads to print advertisements. They
believe that this has enhanced public awareness of the agency and has
helped distinguish USPTO from other employers.
15The 10 target schools selected are Florida International University,
North Carolina Agricultural and Technical State University, North Carolina
State University, University of Florida, University of Maryland,
University of Pennsylvania, University of Puerto Rico-Mayaguez, University
of Virginia, University of Wisconsin-Madison, and Virginia Polytechnic and
State University.
16TMP Worldwide Advertising and Communications, USPTO Task 1: Research and
Evaluation (Alexandria, Va., Mar. 10, 2004).
Figure 1: USPTO's 2004 Brand Image
Source: USPTO.
Figure 2: USPTO's 2002 Brand Image
Source: USPTO.
Finally, for 2005, USPTO developed a formal recruiting plan that, among
other things, identified hiring goals for each technology center and
described USPTO's efforts to establish ongoing partnerships with the 10
target schools. In addition, USPTO trained its recruiters in effective
interviewing techniques to help them better describe the production system
and incorporated references to the production-oriented work environment in
its recruitment literature. During a USPTO career fair in February 2005,
we observed that potential candidates were provided with a range of
information about the work environment at the agency, received handouts,
and heard a formal presentation about the agency and the role and
responsibilities of a patent examiner. The presentation also included
overviews of the basics of intellectual property, the patent examination
process, USPTO's production model, the skill set needed for a successful
patent examiner, and the benefits the agency offers.
USPTO Has Used Many Federal Human Capital Benefits to Attract and Retain
Examiners
USPTO has used many of the human capital benefits available under federal
personnel regulations to attract and retain qualified patent examiners.
Among other benefits, USPTO has offered
o recruitment bonuses ranging from $600 to over $10,000;
o a special pay rate for patent examiners that is 10 percent above
federal salaries for comparable jobs;
o noncompetitive promotion to the full performance level;
o flexible spending accounts that allow examiners to set aside funds for
expenses related to health care and care for dependents;
o reimbursement for law school tuition;
o a transit subsidy program that was recognized in 2003 and 2004 as one
of the best in the greater Washington, D.C., area;
o flexible working schedules, including the ability to schedule hours off
during midday;
o work at home opportunities for certain supervisory and senior
examiners;
o no-cost health screenings at an on-site health unit staffed with a
registered nurse and part-time physician;
o casual dress policy; and
o on-site child care and fitness centers at USPTO's new facility.
According to many of the supervisors and examiners in our focus groups,
these benefits were a key reason they were attracted to USPTO and are a
reason they continue to stay. The benefits most frequently cited as
important by examiners were the flexible working schedules and competitive
salaries. Many supervisors and examiners said that the ability to set
their own hours allowed them to better coordinate their work
schedules with their personal commitments, such as a child's school or day
care schedule. Concerning salaries, examiners also cited the special pay
rate offered by USPTO as increasing the agency's competitiveness with the
private sector. Although entry-level pay for examiners may not be as high
as in the private sector, examiners who have been with the agency for
about 5 to 7 years can earn up to $100,000 annually,17 and new examiners
can increase their pay relatively rapidly, in part because of the
noncompetitive promotion potential available at the agency. However, some
examiners commented that the benefit of the special pay rate is eroding
over time because examiners do not receive annual locality pay adjustments
to compensate for the high cost of living in the Washington, D.C., area.
According to USPTO management, in 2002 the agency sought such an
adjustment, but OPM denied the request because of a lack of justification.
In addition to basic salary, examiners may also earn various cash awards
based on production or other types of meritorious performance.
Lack of Consistent Recruiting Efforts and Benefits, along with Changes in
the Economy, Could Affect USPTO's Efforts
The long-term effect of USPTO's recruiting efforts and use of benefits is
difficult to predict for a variety of reasons. First, many of USPTO's
efforts have been in place for a relatively short duration and have not
been consistently maintained. For example, as shown in table 7, USPTO
suspended recruitment and hiring in fiscal year 2000, which agency
officials said resulted in its inability to meet its hiring goals for the
year. Except for 2002, in those years where USPTO used its recruiting
strategy consistently, such as 2001, 2003, and 2004, it not only met its
hiring goals, but exceeded them.
17Career opportunities for patent examiners continue through the senior
executive level. Historically, senior executives at USPTO have come from
the ranks of examiners.
Table 7: USPTO Patent Examiner Hiring Data, Fiscal Years 2000-2004
Fiscal year Examiner hiring goal Examiner hires
2000 475 375
2001 360 414
2002 788 769
2003 300 308
2004 250 443
Source: USPTO.
The second reason that creates uncertainty about USPTO's success in
retaining examiners is that USPTO has occasionally suspended some
important employee benefits. For example, funding constraints led USPTO to
discontinue reimbursing examiners for their law school tuition in 2002 and
2003, although the agency resumed reimbursement in 2004, when funding
became available. Examiners who participated in our focus groups expressed
dissatisfaction with the inconsistent availability of the benefits.
Regarding law school tuition reimbursement, one examiner said, "I started
when they started the [law school program] and then they cut it off and I
had to pay [tuition] myself, which creates a large incentive to leave the
office now that I have . . . student loans to pay off." Other examiners
expressed similar views. More recently in March 2005, USPTO proposed to
eliminate or modify other benefits such as examiners' ability to earn
credit hours and alter examiners' ability to set their own work schedules.
For example, unlike current practice, examiners would no longer be able to
schedule hours off during midday without a written request approved in
advance. These benefits were cited by examiners in our focus groups as key
reasons for working at USPTO, and eliminating such benefits may impact
future retention.
The third and possibly the most important factor that adds to the
uncertainty surrounding the success of USPTO's recruitment efforts is the
unknown potential impact of the economy. According to USPTO officials and
examiners, because USPTO competes directly with the private sector for
qualified individuals, changes in the economy have a greater impact on
USPTO's ability to attract and retain examiners than any actions taken by
the agency. They told us that when the economy picks up, more examiners
tend to leave USPTO and fewer qualified candidates accept employment
offers. Conversely, they said that when there is a downturn in the
economy, employment opportunities at USPTO become more attractive. When
discussing reasons for joining USPTO, many examiners in our focus groups
cited job security and lack of other employment opportunities, making
comments such as "I had been laid off from my prior job, and this was the
only job offer I got at the time"; "I looked towards the government
because I wanted job security"; and ". . . part of the reason I came to
the office is that when I first came out of college, the job market was
not great."
The relationship between the economy and USPTO's ability to attract and
retain examiners is reflected in its attrition rates over time. As shown
in figure 3, attrition among patent examiners declined from a high of
almost 14 percent in 2000 to just over 6 percent in 2003. This decline
coincided with a recession in 2001, a general slowdown of the economy, and
subsequent collapse of the "high tech bubble"-which caused many
Internet-based businesses to close, leaving computer scientists and
engineers out of work. The decline in attrition was preceded by a more
robust economy during a time when the high-tech industry was building up.
At that time, attrition at USPTO was steadily rising.
Figure 3: Examiner Attrition as Percentage of Staff
Percentage of examiner attrition staff
20
18
16
14
12
10
8
6
4
2
0 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003
2004
Fiscal year
Source: GAO.
Since 2004, attrition has risen again to almost 9 percent, fueled in part
by an increase in the number of examiners who retired. By the end of
fiscal year 2010, about 12 percent of examiners will be eligible to
retire.18 Another trend that could affect USPTO's efforts to maintain a
highly qualified patent examination workforce is the high level of
attrition among younger, less experienced examiners. While attrition among
examiners who have been at USPTO for 3 or fewer years has declined each
year since 2000, attrition among these examiners continues to account for
over half of all examiners who leave the agency. Attrition of examiners
with 3 or fewer years of experience is a particularly significant loss for
USPTO because the agency invests considerable time and money helping new
examiners become proficient during the first few years. Managers and
examiners told us that examiners usually become fully proficient in
conducting patent application reviews in about 4 to 6 years. Managers we
spoke with said the agency needs continuous recruiting efforts to offset
these trends and continue to attract the best candidates. They said they
hope to have constant recruitment efforts and year-round hiring in the
upcoming years.
USPTO Faces Longstanding Human Capital Challenges That Could Undermine Its
Recruiting and Retention Efforts
Although USPTO has taken a number of steps to attract and retain a
qualified patent examiner workforce, the agency continues to face three
human capital challenges of a long-standing nature that could also
undermine its efforts in the future if not addressed. Current workforce
models developed by GAO and others to help federal agencies attract and
retain a qualified workforce suggest, among other things, that agencies
establish an agencywide communication strategy, including opportunities
for feedback from employees; involving management, employees, and other
stakeholders in making key decisions; have appropriately designed
compensation and awards systems; and develop strategies to address current
and future competencies and skills needed by staff. However, USPTO lacks a
collaborative culture, has an awards system that is based on outdated
information, and requires little ongoing technical training for patent
examiners. USPTO management and examiners do not agree on the need to
address these issues.
18Governmentwide, about 40 percent of employees will be eligible to retire
by that time.
USPTO Has Not Established Effective Mechanisms for Managers to Communicate
and Collaborate with Examiners
Organizations with effective human capital models have strategies to
communicate with employees at all levels of the organization, as well as
involve them in key decision-making processes. However, lack of good
communication and collaboration has been a long-standing problem at USPTO.
For example, focus groups with examiners conducted by USPTO in 2000
identified a need for improved communication across all levels of the
agency to assist in its efforts to retain examiners.19 Accordingly, one of
the goals listed in the Commissioner of Patent's 2003 performance
appraisal plan was to establish an effective communication strategy.
However, when we asked for the agency's communication strategy, USPTO
management officials acknowledged the agency does not have a formal
strategy. Instead, USPTO officials provided us with a list of activities
undertaken by the agency to improve communication. However, most of these
activities focused on improving communication among managers but not
between managers and other levels of the organization, such as between
managers and patent examiners. The efforts to communicate with examiners
were largely confined to presenting information to examiners and generally
were not interactive, according to examiners.
Patent examiners and supervisory patent examiners that participated in our
focus groups frequently said that communication with USPTO management was
poor and that managers provided them with inadequate or no information.
They also said management is out of touch with examiners and their
concerns and that communication with managers tends to be one way and
hierarchical, with little opportunity for feedback. Management officials
told us that informal feedback can always be provided by anyone in the
organization-for example, through an e-mail to anyone in management.
However, some patent examiners believe they will be penalized for offering
any type of criticism of management actions or decisions and therefore do
not provide this kind of feedback.
The lack of communication between management and examiners is exacerbated
by the contentious working relationship between USPTO management and union
officials and the complexity of the rules about what level of
communication can occur between managers and examiners without involving
the union. Union officials stated that a more collaborative spirit existed
between USPTO and the examiners' union from
19U.S. Patent and Trademark Office, Retention Focus Sessions with
Examiners and Primary Examiners, Center for Quality Service (Alexandria,
Va., February 2000).
the late 1990s to about 2001. During this period, both parties actively
worked to improve their relationship. For example, in 2001, USPTO
management and the union quickly reached an agreement that led to
increased pay for examiners and paved the way for electronic processing of
patent applications by having examiners rely more heavily on electronic
searches of relevant patent literature. According to union officials, this
agreement was negotiated in about 1-1/2 weeks, improved the morale of
patent examiners, and made them feel valued and appreciated. Since that
time however, both USPTO management and union officials agree that their
working relationship has not been as productive. Both say that despite
several attempts, neither USPTO managers nor union officials have improved
this relationship and that issues raised by either side are routinely
presented for arbitration before the Federal Labor Relations Authority20
because the two sides cannot agree. USPTO and union officials are
currently disputing the validity of their 1986 collective bargaining
agreement, which USPTO deems defunct. 21 In February 2004, this issue was
presented for arbitration to determine the validity of the agreement.
According to union officials, the arbitrator agreed with their position
that the agreement was still valid and ordered a 1-year hiatus on
negotiations on a new agreement. USPTO contends that the arbitrator said
the two had "tacit agreements" but did not define the term. In March 2005,
without continuing any debate regarding the validity of the 1986
agreement, USPTO issued a proposed new collective bargaining agreement
with the union. The union denounced this proposal, reporting in its
newsletter to examiners that "USPTO declares war on employee
professionalism and patent system integrity."
Some USPTO managers alluded to this contentious relationship as one of the
reasons why they have limited communication with patent examiners, who are
represented by the union even if they decide not to join. Specifically,
they believe they cannot solicit the input of employees directly without
engaging the union. Another official, however, told us that nothing
prevents the agency from having "town hall" type meetings to discuss
20The Federal Labor Relations Authority was established by the Civil
Service Reform Act of 1978. It is charged with providing leadership in
establishing policies and guidance relating to federal sector
labor-management relations and with administering and resolving disputes
under Title VII of the Civil Service Reform Act of 1978.
21A collective bargaining agreement is an official contract between USPTO
and the union that sets forth the mutual understanding between the agency
and union officials relative to personnel policies and practices and
matters affecting the working conditions of patent examiners.
potential changes, as long as the agency does not promise examiners a
benefit that impacts their working conditions. Union officials agreed that
USPTO can invite comments from examiners on a plan or proposal; however,
if the proposal concerns a negotiating issue, the agency must consult the
examiners' union, which is their exclusive representative with regard to
working conditions. For example, union officials said that agency
management can involve examiners on discussions of substantive issues
related to patent law and practice, such as how to implement electronic
filing, but must consult the union to obtain examiners' views on issues
such as the development of the Strategic Plan which contains initiatives
that would entail, for example, additional reviews of examiners work and
other changes to working conditions.
Given the lack of effective communication mechanisms between management
and patent examiners and the poor relationship between management and the
union, patent examiners report little involvement in providing input to
key decision-making processes. For example, some of the examiners in our
focus groups stated that although they had heard of the agency's Strategic
Plan, they were not involved in developing it and had no idea what it
entailed or how it was to be implemented. USPTO management officials we
spoke to acknowledged that employees had no role in developing the
Strategic Plan even though USPTO identifies its employees as a key
stakeholder in the plan. This lack of employee involvement is not a new
problem for the agency. For example, a study about the agency's
performance measurement and rewards system conducted in 1995 by a private
consultant stated that the agency must strive to include employees at all
levels of the organization in the decisionmaking process to both introduce
a variety of perspectives and experiences and to generate the critical
support of employees to any new system developed.22 Additionally,
responses to employee surveys conducted in 1998 and 2001 by USPTO and
others indicate that employees believed that they did not play a
meaningful role in decision making.23 Specifically, a quarter of the
examiners surveyed in 1998 expressed satisfaction with their
22Booz-Allen & Hamilton Inc., PTO Goal Study-Task One: An Assessment of
the Current Performance Measurements and Rewards System (May 1995).
23Sirota Consulting, Patents: USPTO Survey Results (Alexandria, Va.,
November 2000); USPTO, Office of Quality Management and Training, Center
for Quality Services, Patents: 2001 Employee Survey, Summary of Findings
(Alexandria, Va., September 2001); and Center for Quality Services, 2002
Federal Human Capital Survey, Overview of USPTO Results (Washington, D.C.,
April 2003).
level of involvement in decisions that affect their work. In 2001, less
than half of examiners who responded to the survey said they believe USPTO
management trusts and respects them or values their opinions.
Agencyspecific data from the 2004 federal human capital survey conducted
by the Office of Personnel Management have not been released.
Managers told us that examiners do not need to be involved in decision
making because all of the agency's senior managers-from the Commissioner
down-"came up through the ranks." Moreover, they said the basic role of
the agency has not changed in 200 years. As a result, senior managers
believe they bring the staff perspective to all planning and
decision-making activities. However, examiners in our focus groups believe
that senior managers are out of touch with the role of examiners, making
comments such as "I think it would help if upper management who haven't
examined in decades could try to do some of it now-it's so drastically
different than when they were doing it-and realize how difficult it is,
and then maybe they might get a clue. I really don't think that they
realize how much work it takes to examine an application. It is so
different than when they were examining." Examiners in our focus groups
said that the lack of communication and involvement has created an
atmosphere of distrust in management officials by examiners and has
lowered examiners' morale.
Examiners' Monetary Awards Are Based on Outdated Assumptions about the
Time It Takes to Process a Patent Application
According to human capital models, an agency's compensation and rewards
system should help it attract, motivate, retain, and reward the people it
needs to achieve its goals. To ensure that their systems meet these
criteria, agencies should periodically assess how they compensate staff
and consider changes, as appropriate. Patent examiners' monetary awards
are based largely on the number of patent applications they process, but
the assumptions underlying their annual application-processing quotas
(called production quotas) have not been updated since 1976. Depending on
the type of patent and the skill level of the examiner, each examiner is
expected to process an average of 87 applications per year at a rate of 19
hours per application. Examiners who consistently do not meet their quotas
may be dismissed. Patent examiners may earn cash awards based
on the extent to which they exceed their production quotas.24 Although
examiners in our focus groups generally support production quotas as a way
to guide their work and provide an objective basis for cash awards, they
said that the time estimates involved are no longer accurate.
Examiners in our focus groups told us that, in the last several decades,
the tasks for processing applications have greatly increased while the
time allowed has not. For example, examiners said the number of claims per
application have increased, which in turn increases the amount of relevant
literature they must review and analyze for each application. Also, while
the greater use of electronic search tools has improved their access to
relevant patent literature, the use of such tools has also increased the
amount of literature they must review. In addition, the complexity of
applications in some fields has increased significantly, requiring more
time for a quality review. Neither USPTO nor the examiners union has
collected information on the effects that such changes as improvements in
electronic search capabilities have had on the time required to review
patent applications.
Moreover, many examiners in our focus groups said that the time
limitations of the current production quotas are inconsistent with
producing high-quality work and do not adequately reflect the actual tasks
and time required to examine applications. For example, examiners have
responsibilities included in their job expectations, such as responding to
calls from applicants and the public and providing more documentation for
their decisions, which are not accounted for in the production model.
Examiners expressed concern that although the agency's emphasis on quality
has increased under the Strategic Plan, examiners have not been allowed
more time to fulfill these increased responsibilities for quality, and
there are no negative consequences for examiners who produce low-quality
work. Examiners told us that voluntarily working overtime to meet quotas
is common at USPTO, and they find it demoralizing not to have enough time
to do a good quality job. In commenting on a draft of this report, USPTO
stated that quality is a critical element of an examiner's performance
standards and if an examiner does not maintain quality, their
24Individual goals are adjusted based on the technology in the application
and the skill level of the examiner. For example, a junior patent examiner
has more time to process an application than a senior examiner. Similarly,
examiners who process applications for biotechnology inventions have more
time than examiners who process applications for some manufactured items.
rating would reflect this deficiency. Consequences would depend on the
level of deficiency.
Employee surveys conducted since 1998 suggest that these concerns are not
new to the agency. Specifically, a quarter of the examiners who responded
to the agency's employee surveys during the period 1998 to 2001 said that
the amount of time available for their work was sufficient to produce
high-quality products and services. The 1995 study conducted by a private
consultant also noted that USPTO is production driven and that the
agency's emphasis on production placed considerable stress on examiners.
Although less than 25 percent of patent examiners who left USPTO in 2002
and 2004 actually completed an exit survey, about half who did cited
dissatisfaction with the nature of the job, the production system, and the
workload as factors that had the most impact on their decision to leave
the agency.
In contrast, USPTO managers had a different perspective on the production
model and its impact on examiners. They stated that the time estimates
used in establishing production quotas do not need to be adjusted because
the efficiencies gained through actions such as the greater use of
technology have offset the demands resulting from changes such as greater
complexity of the applications and increases in the number of claims.
Moreover, they said that for an individual examiner, reviews of
applications that take more time than the estimated average are generally
offset by other reviews that take less time.
USPTO Does Not Require Ongoing Technical Education for Patent Examiners
Current workforce models suggest that professional organizations such as
USPTO make appropriate investments in education, training, and other
developmental opportunities to help build the competencies of its
employees. Reviewing patent applications involves knowledge and
understanding of highly technical subjects, but USPTO does not require
ongoing training on these subjects. Instead, USPTO only requires newly
hired examiners to take extensive training on how to be a patent examiner
during the first year, and all other required training is focused on legal
training. For example, newly hired examiners are required, within their
first 10 months at the agency, to take about 200 hours of training on such
topics as procedures for examining patent applications, electronic tools
used in the examination process, and patent law and evidence. In addition,
almost all patent examiners are required to take a range of ongoing
training on legal matters, including patent law. As a result of the
implementation of some Strategic Plan initiatives, additional mandatory
training to help
examiners prepare for tests to certify their legal competency and ensure
their eligibility for promotion from a GS-12 level to a GS-13 is also
required. In addition, patent examiners who have the authority to issue
patents (generally GS-14s or above) must pass tests on the content of
legal training every 3 years. In contrast, patent examiners are not
required to undertake any ongoing training to maintain expertise in their
area of technology, even though the agency acknowledges that such training
is important, especially for electrical and electronic engineers.
Specifically, in its 2001 justification for examiners' special pay rates,
the agency stated, "Engineers who fail to keep up with the rapid changes
in technology, regardless of degree, risk technological obsolescence."
USPTO does offer some voluntary in-house training, such as technology
fairs and industry days at which scientists and others are invited to
lecture to help keep patent examiners current on the technical aspects of
their work. Because this training is not required by USPTO, patent
examiners told us they are reluctant to attend such training given the
time demands involved. USPTO also offers a voluntary external training
program for examiners to update their technical skills. Under this
program, examiners may take technical courses related to their area of
expertise at an accredited college or university. USPTO will pay up to
$5,000 per fiscal year for each participant and up to $150 per course for
required materials, such as books and lab fees. In addition, agency
managers told us the agency will pay registration fees for a small number
of examiners to attend conferences, although sometimes it will not pay
travel expenses. While USPTO officials told us they knew of examiners who
had taken advantage of these opportunities, the agency could provide no
data on the extent to which examiners had taken advantage of these
voluntary training opportunities. Some examiners in our focus groups said
that they did participate in these training opportunities, but others said
they did not because of the monetary costs or personal time involved.
USPTO believes that a requirement for ongoing technical training is not
necessary for patent examiners because the nature of the job keeps them
up-to-date with the latest technology. According to agency officials, the
primary method for examiners to keep current in their technical fields is
by processing patent applications. However, patent examiners and
supervisors in our focus groups said that often the literature cited in
the application they review for patents, particularly in rapidly
developing technologies, is outdated, can be too narrowly focused, and
does not provide them the big picture of the field. For example, in
certain fields, such as computer software and biotechnology, some
examiners told us that
the information cited in the application may be several years old even
though it may have been current at the time the application was submitted.
Conclusions To improve its ability to attract and retain the highly
educated and qualified patent examiners it needs, USPTO has taken a number
of steps recognized by experts as characteristic of highly effective
organizations. However, the lack of an effective communication strategy
and a collaborative environment that is inclusive of all layers within the
organization could undermine some of USPTO's efforts. Specifically, the
lack of communication and collaborative culture has resulted in a general
distrust of management by examiners and has caused a significant divide
between management and examiners on important issues such as the
appropriateness of the current production model and the need for technical
training. We believe that unless USPTO begins the process of developing an
open, transparent, and collaborative work environment, its efforts to hire
and retain examiners may be negatively impacted in the long run.
Recommendations for Executive Action
We recommend that the Secretary of Commerce direct the Under Secretary of
Commerce for Intellectual Property and Director of the U.S. Patent and
Trademark Office to take the following two actions: develop formal
strategies to (1) improve communication between management and patent
examiners and between management and union officials, and (2) foster
greater collaboration among all levels of the organization to resolve key
issues discussed in this report, such as the assumptions underlying the
quota system and the need for required technical training.
Agency Comments and Our Evaluation
In written comments on a draft of our report, the Under Secretary of
Commerce for Intellectual Property and Director of USPTO agreed with our
findings, conclusions, and recommendations. The agency's comments suggest
that USPTO will develop a communication plan and labor management strategy
and educate and inform employees about progress on initiatives, successes,
and lessons learned. In addition, USPTO indicated that it would develop a
more formalized technical program for patent examiners to ensure that
their skills are fresh and ready to address state-ofthe-art technology.
USPTO also provided technical comments that we have incorporated, as
appropriate. USPTO's comments are included in appendix
II.
We are sending copies of this report to interested congressional
committees; the Secretary of Commerce; the Under Secretary for
Intellectual Property and Commissioner of the U.S. Patent and Trademark
Office; and other interested parties. We will also make copies available
to others upon 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) 512-3841 or [email protected]. Contact points for our Offices of
Congressional Relations and Public Affairs may be found on the last page
of this report. GAO staff who made contributions to this report are listed
in appendix IV.
Anu K. Mittal Director, Natural Resources
and Environment
Appendix I
Scope and Methodology
We were asked to report on various efforts being undertaken by the U.S.
Patent and Trademark Office (USPTO) about its (1) overall progress in
implementing the initiatives in the 21st Century Strategic Plan related to
the patent organization; (2) efforts to attract and retain a qualified
patent workforce; and (3) remaining challenges, if any, in attracting and
retaining a qualified patent workforce.
To determine USPTO's progress toward implementing the Strategic Plan
initiatives for the patent organization, we reviewed the initiatives
contained in the plan, as well as agency documents regarding USPTO's
progress in implementing each initiative. We also interviewed key USPTO
officials and union officials about the plan's implementation.
To determine what actions USPTO has taken to attract and retain a
qualified patent workforce and what challenges, if any, the agency faces
in this area, we reviewed USPTO's Workforce Plan and other policies and
practices related to human capital. We interviewed USPTO management, union
officials, and relevant interest groups, as well as officials from the
Department of Commerce, its Office of Inspector General (OIG), and the
Office of Personnel Management (OPM) about human capital initiatives
undertaken by USPTO. We reviewed evaluations of USPTO human capital
management efforts by OIG and by a private consultant. We reviewed USPTO
employee surveys, USPTO documents on hiring and retention, and OPM reports
on USPTO. We also reviewed results from USPTO and OPM employee surveys and
compared human capital policies and practices with best practices
recommended by GAO and OPM. In addition, we attended a USPTO career fair
for patent examiners.
To obtain the perspective of patent examiners and supervisory patent
examiners on issues related to USPTO's ability to attract and retain a
qualified patent examination workforce, we conducted 11 focus groups.
Participants were randomly selected from all patent examiners and
supervisory patent examiners who had been at USPTO at least 9 months. A
total of 91 examiners and supervisory examiners attended the focus groups.
The number of participants in the groups ranged from 6 to 11; participants
in 8 of the groups were patent examiners while the other 3 groups
encompassed supervisory patent examiners. Participants were selected from
both USPTO locations (Alexandria and Crystal City, Virginia). We developed
questions for the focus groups based on literature reviews and by speaking
with USPTO management, union officials, and interest groups. In addition,
we developed a short questionnaire that asked for individual views of
issues similar to those being discussed in the
Appendix I Scope and Methodology
groups. Following each discussion question, participants filled out the
corresponding questions in their questionnaires. Trained facilitators
conducted the focus groups and transcripts were professionally prepared.
Prior to using the transcripts, we checked each for accuracy and found
that they were sufficiently accurate for the purposes of this study.
We conducted a content analysis in order to produce a summary of the
respondents' comments made during the focus groups. The classification
plan was developed by two GAO analysts who independently reviewed the
transcripts and proposed classification categories for each question. The
classification categories were finalized through discussion with a third
analyst. One analyst then coded all comments made during each discussion
question into the categories. The accuracy of the coding was checked by
another analyst, who independently coded a random sample of transcript
pages for each question. The accuracy of the content coding was
sufficiently high for the purposes of this report. Finally, the number of
comments in each category and subcategory was tallied, and the resulting
summary of the comments was verified by a second analyst. A quantitative
analysis was conducted on the data from the questionnaires.
Our review focused exclusively on the activities of the patent
organization and not those of the trademark organization. We conducted our
review from June 2004 through May 2005 in accordance with generally
accepted government auditing standards.
Appendix II
Comments from the U.S. Patent and Trademark Office
Appendix II
Comments from the U.S. Patent and
Trademark Office
Appendix II
Comments from the U.S. Patent and
Trademark Office
Appendix II
Comments from the U.S. Patent and
Trademark Office
Appendix III
Progress on Strategic Plan Initiatives
USPTO issued its 21st Century Strategic Plan in June 2002, then updated
and rereleased it in February 2003. The Strategic Plan responds to the
Government Performance and Results Act and direction from Congress. The
plan is centered on three themes-capability, productivity, and agility.
Strategic Theme: To become a more capable organization that enhances
quality through workforce and process improvements, USPTO developed
initiatives to
Capability improve the skills of its workforce (transformation), enhance
its quality assurance program (quality), and improve processes through
rule changes or proposed legislative changes (legislative/rules changes).
Table 8: USPTO Capability Initiatives Status of actions planned through
Capability initiatives December 2004 Implementation details
Transformation
Increase the pool of competent, qualified candidates
Implemented Actions implemented: USPTO developed award criteria
for management positions, and reward current managers by offering awards
of up to 10 percent of base salary as part of the compensation package.
and sought input from the supervisory examiners' professional association
and USPTO senior managers. The program was approved in 2003, and
performance appraisal plans for supervisory examiners were revised for
2004. As of November 2004, awards had been paid to all qualifying
managers.
Transform the workplace by exploring alternative Implemented Actions
implemented: Conducted preliminary
organizational concepts and structures. consultations and research with
the National Academy of Public Administration in 2002.
Develop interim pre-employment measures to assess Implemented Actions
implemented: Developed procedures for English language oral and written
communication supervisory patent examiners and hiring officials to use in
skills for new patent examiners. assessing communication skills, and
trained individuals in
their use.
Appendix III Progress on Strategic Plan Initiatives
(Continued From Previous Page)
Status of actions planned through
Capability initiatives December 2004 Implementation details
Recertify the skills of Actions implemented: Developed an
examiners with the authority Implemented examination to
to
issue patents (primary recertify primary examiners every
examiners) through 3 years. As of
examinations and expanded December 2004, approximately
reviews of work one-third of primary
products. examiners had successfully
completed the examination.
An additional one-third will be
tested in 2005 and 2006.
Thereafter, primary examiners
will be retested once every
3 years. Increase the number of
primary examiners' work
products that are reviewed in
annual quality reviews to
more than four. Require primary
examiners to pass
examinations on the content of
periodic training on
changes in patent law, practice,
or procedures.
Certify the knowledge, skills, and abilities of Implemented Actions
implemented: In 2003, USPTO developed a legal examiners before they are
promoted to a position with competency examination to certify the skills
of patent the authority to negotiate with applicants (partial examiners
prior to promotion to GS-13. From March signatory authority or GS-13
level). through December 2004, 152 examiners had
successfully completed the examination and been promoted. Another 85 had
taken the examination to help them prepare for future promotion. The
requirement to pass the examination became effective March 1, 2004.
Use examinations and other means to ensure that new patent examiners
possess the requisite knowledge, skills, and abilities prior to initial
promotion decisions.
Partial Actions implemented: In 2003, USPTO identified the knowledge,
skills, and abilities needed for patent examiners, established training
units in work groups for new examiners (Training Art Units), and developed
recruitment materials to better educate candidates on the nature of the
work.
Actions not implemented: USPTO has not sought OPM approval to extend the
probationary period for patent examiners to two years, developed a
structured process for promotions after the first 6 or 12 months, or
developed a pre-employment test to identify candidates with
characteristics of successful examiners.
Implement a pre-employment test to assess English language oral and
written communication skills for new patent examiners.
Partial Actions implemented: Vacancy announcements include English
language proficiency as a requirement; the automated application system
was modified to include a writing sample, and in-person interviews are
used to assess oral communication skills. To the extent possible, check
references regarding communication skills. USPTO assessed the
communication skills of all patent examiners hired from 2002 to 2004.
Actions not implemented: The design and implementation of an automated
pre-employment test was deferred due to a lack of funding, according to
USPTO officials.
Appendix III Progress on Strategic Plan Initiatives
(Continued From Previous Page)
Status of actions planned through
Capability initiatives December 2004 Implementation details
Improve the selection and training of supervisory patent examiners.
Partial Actions implemented: In November 2003, USPTO added proficiency in
supervisory skills to the requirements for selection as a supervisory
patent examiner. In 2004, applicants for supervisory positions were
required to pass a certification examination. Some training modules, such
as coaching and feedback, have been developed and offered.
Actions not implemented: Although a full complement of training was to be
in place by September 2004, some courses are being considered or under
development, including various management development courses.
Create an Enterprise Training Division in the Office of Partial Actions
implemented: USPTO developed a draft action
Human Resources to centralize responsibility for plan to create an
Enterprise Training Division in
legally required hard and soft skills, leadership, and November 2004 and
began work to select a USPTO-wide
other agencywide training as well as coordinating learning management
system, implement an e-learning
agencywide training policy and tracking funds spent pilot, and establish a
development center.
on training.
Actions not implemented: This initiative was to have been completed in
2003 but has not been implemented.
Quality
Expand the current internal quality review program to Implemented Actions
implemented: By October 2004 the Office of
include works in progress. Patent Quality Assurance (OPQA) had expanded
its quality reviews to include reviews of works in process. The results of
these reviews will be reported in the agency's fiscal year 2005
accountability report.
Establish in each technology Implemented Actions implemented: By October
center some level of 2004, managers for
"second pair of eyes" reviews each technology center have
of work products. designed and implemented
quality assurance reviews that
include some level of
second pair of eyes review. In
addition, results from
OPQA reviews identify work units
with high error rates for
more intensive second pair of
eyes reviews. Quality
reviewers in each technology
center also annually review
work products for examiners as
part of performance
appraisals.
Augment periodic comprehensive Implemented Actions implemented: Adjust the
customer surveys timing of comprehensive
with surveys on specific surveys to every other year and
applications (transactional conduct transactional
surveys). surveys in the off years. The
first transactional survey
was conducted in 2003. Although
USPTO has conducted
surveys under generic approval
from the Office of
Management and Budget (OMB)
since 1995, beginning
in 2004, each survey must be
reviewed and approved
separately by OMB, a process
that can take about 6
months. As a result, USPTO did
not conduct a
comprehensive survey in 2004.
Appendix III Progress on Strategic Plan Initiatives
(Continued From Previous Page)
Status of actions planned through
Capability initiatives December 2004 Implementation details
Evaluate the quality of searches conducted by patent Partial Actions
implemented: OPQA is developing a plan and a examiners. set of criteria.
Actions not implemented: OPQA reviews, both in process and end of
examination (allowance) reviews, do not include an examination of the
adequacy and comprehensiveness of the examiner's search. USPTO officials
will pilot their plan and commence such reviews in fiscal year 2006.
Enhance the quality of the reviewable record of the examination process.
Partial Actions implemented: Revised the interview summary form to provide
a means for applicants and examiners to provide additional information on
the content of interview. Revised the Manual of Patent Examining
Procedures to reflect the change, and informally trained examiners.
Examiners and applicants are strongly encouraged, but not required, to
elaborate on decisions or the content of interviews.
Actions not implemented: Examiners and applicants are not currently
required to provide additional information regarding the content of
interviews or elaborate on the reasons for decisions.
Legislative and rule changes
Delete the requirement for physical surrender of the Implemented Actions
implemented: Implemented through rules original patent when USPTO reissues
a patent that changes that became effective in September 2004. was
defective.
Certify the legal knowledge of patent attorneys and agents registering to
practice before USPTO, and periodically recertify the legal knowledge of
registered attorneys and agents and harmonize ethics standards with those
used by states.
Partial Actions implemented: In 2004, USPTO selected a contractor and
began offering registration examinations electronically year-round. In
December 2003, USPTO issued proposed rules to harmonize ethics and
disciplinary actions with the requirements in place in most states, and
obtained OMB approval for the ethics and disciplinary changes. USPTO will
adjust questions on the registration examination as needed to reflect
changes in patent law and practice.
Actions not implemented: USPTO did not acquire the hardware and software
to accept electronic registration forms due to funding limitations,
according to USPTO officials. As of December 2004, USPTO had not
implemented a continuing legal education program and recertification
examination that was to have been in place.
Appendix III Progress on Strategic Plan Initiatives
(Continued From Previous Page)
Status of actions planned through
Capability initiatives December 2004 Implementation details
Evaluate whether to adopt a unity Partial Actions implemented: In 2003,
standard to USPTO began a study of
harmonize U.S. examination the changes needed to adopt a
practices with unity standard and
international standards and allow sought public comment. Based on
U.S. applicants to the comments
obtain a single patent on related received, USPTO consulted with
claims that must stakeholders on other
currently be pursued in separate options. In 2004 the agency
patent applications conducted a business impact
in the United States. analysis of four options that is
currently under review.
Actions not implemented: USPTO
has not completed its
analysis, reached a decision, or
drafted and introduced
implementing legislation.
Simplify adjustments to the Partial Actions implemented: USPTO is
length of time during drafting proposed
which inventors can exclude legislation and obtaining
others from making, administrative clearance to
using, or selling an invention, introduce the draft legislation.
called the patent term.
Actions not implemented: Further
action depends upon
passage of the legislation, which
is anticipated by 2008.
Amend current legislation to permit individuals who Partial Actions
implemented: USPTO is drafting proposed
have been assigned the rights to a patent, called the legislation and
obtaining administrative clearance to
assignee, to sign an oath stating that the inventor is introduce the draft
legislation.
the original and first inventor of the invention
described in the patent application. Actions not implemented: Further
action depends upon
passage of the legislation, which is anticipated by 2008.
Permit assignees to seek to broaden the claims in an Partial Actions
implemented: The change requires legislation to
application without the signature of the inventor. amend current law and
subsequent rule making by USPTO. USPTO is drafting legislation.
Actions not implemented: Further action depends upon passage of the
legislation, which is anticipated by 2008. May be merged with the
initiative above.
Correct an inconsistency regarding Partial Actions implemented: The change
the treatment of requires legislation to
unintentionally delayed submission amend current law and
of claims related subsequent rule making by
to a previously filed provisional USPTO. USPTO is drafting
patent application. legislation.
Actions not implemented:
Further action depends upon
passage of the legislation,
which is anticipated by 2008.
Eliminate provisions that allow inventors to request Partial Actions
implemented: USPTO is drafting proposed
publications of redacted versions of their applications legislation and
obtaining administrative clearance to
and that require USPTO to publish applications for introduce the draft
legislation.
plant patents, which are typically granted in less time
than the 18-month requirement to publish Actions not implemented: Further
action depends upon
applications. passage of the legislation, which is anticipated by 2008.
Appendix III Progress on Strategic Plan Initiatives
(Continued From Previous Page)
Status of actions planned through
Capability initiatives December 2004 Implementation details
Amend current legislation regarding certain limitations on an inventor's
right to obtain a patent. Currently, inventors are barred from obtaining a
patent on one or more claims that have already been patented by another or
published in domestic or foreign applications, unless the applicant files
within one year of publication. Because examiners have not determined
whether claims in published applications are patentable, the initiative is
to delete the bar as it relates to published domestic or foreign
applications, and to retain the bar only as it relates to claims in
patents that have been granted.
Partial Actions implemented: The change requires legislation to amend
current law and subsequent rule making by USPTO. USPTO is drafting
legislation.
Actions not implemented: Further action depends upon passage of the
legislation, which is anticipated by 2008.
Source: GAO analysis of USPTO data.
Strategic Theme: The agency's productivity initiatives are designed to
accelerate the time to process patent applications by offering a range of
examination options to
Productivity applicants, reducing the responsibilities examiners have for
searches of literature related to applications (pendency and accelerated
examination), and creating financial incentives for applicants as well as
an improved postgrant review process (shared responsibility).
Table 9: USPTO Productivity Initiatives
Status of actions planned through
Productivity initiatives December 2004 Implementation details
Fee restructuring Partial
Actions implemented: For 2005 and 2006, Congress passed legislation
allowing USPTO to increase and restructure the fees it charges applicants
to include separate components for filing the application, the examiner's
search of relevant literature, and the review of specifications for the
proposed invention to determine their patentability. In addition the
legislation grants USPTO the authority to refund portions of the domestic
and international application fees under certain circumstances and to
charge higher fees for applications with claims and drawings for the
proposed invention that exceed 100 pages.
Actions not implemented: USPTO has not issued proposed or final rules to
allow for refunding domestic fees.
Appendix III Progress on Strategic Plan Initiatives
(Continued From Previous Page)
Status of actions planned through
Productivity initiatives December 2004 Implementation details
Offer patent applicants a choice of up to Not implemented Progress to
date: Preliminary planning only.
five examination options based in part on
the ability to rely on searches conducted Actions not implemented: This
initiative is related to the flexibility
by other entities and revise fees and work-sharing initiatives, and
implementation depends upon
accordingly. access to additional funds, according to USPTO officials. In
2005,
USPTO will continue efforts to select contractors and negotiate biand
multilateral agreements with other intellectual property offices.
Offer applicants seeking patents the Not implemented Actions implemented:
This initiative seeks to expand the option option for an accelerated
examination in for accelerated examination to applicants for all types of
patents. exchange for payment of a fee. The option is currently available
to applicants seeking utility patents but is not widely used.
Actions not implemented: USPTO has not conducted a pilot program or
drafted proposed rules or legislation.
Revise postgrant review Not implemented Actions implemented: USPTO
procedures to drafted proposed legislation that
allow for greater public was introduced in 2004 but not
input. passed. House members of both
parties have indicated they will
introduce the legislation for
consideration by the current
session.
Actions not implemented: Because
the legislation was not
enacted, no implementing rules or
other actions were taken. The
legislation and rule changes are
expected to be in place by 2008.
Source: GAO analysis of USPTO data.
Strategic Theme: To become an organization that responds quickly and
efficiently to changes in the economy, the marketplace, and the nature and
size of workloads,
Agility USPTO developed initiatives to implement electronic
beginning-to-end processing of patents (e-government), increase reliance
on the private sector or other intellectual property offices
(flexibility), and streamline international patent systems and strengthen
protection of patent rights as well as share search results with other
international patent offices (global development).
Appendix III Progress on Strategic Plan Initiatives
Table 10: USPTO Agility Initiatives
Status of actions
planned through Agility initiatives December 2004 Implementation details
Establish an information technology security program for fully certifying
and accrediting the security of automated information systems.
Implemented Actions implemented: In 2003 and 2004, USPTO achieved full
accreditation and certification for its seven mission critical systems,
its classified system, and its eight business essential systems. External
reviewers noted that many of the risks they identified could be addressed
in the course of routine administration, although some, such as
development of policy statements and monitoring programs, would need
strategic planning and resources to address. In 2004, the Office of the
Inspector General removed information security as a material weakness at
USPTO. The agency has an ongoing program to annually complete security
self-assessments of major systems including the use of scanning tools to
identify weaknesses and intrusion detection systems. In 2003 and 2004, all
USPTO staff and contractors completed the annual security training
requirements.
Implement an operational system to process patent applications
electronically, including electronic image capture of all incoming and
outgoing paper documents.
Partial Actions implemented: Using an incremental approach, USPTO adopted
an image-based electronic-processing system for examiners. In fiscal year
2004, examiners processed almost 90 percent of patent applications
electronically. In 2003, all paper files of pending applications and newly
received applications were scanned into image files, and applicants could
access their files over the Internet. In 2004, the public could access all
publicly available patent application files via the Internet.
Actions not implemented: USPTO did not achieve the ability to exchange
electronic documents with the European Patent Office (EPO) that had been
anticipated. Some tasks were eliminated due to both technical changes in
the electronic systems used by each office and budgetary concerns.
However, USPTO is still working with EPO to finalize security and protocol
between the two servers. In addition, USPTO is waiting for EPO to deliver
software that creates a submission package in compliance with USPTO's
national electronic filing standards.
Develop an automated information system Partial Actions implemented: Rules
have been changed to generally to support a postgrant patent review allow
for electronically filing of documents and for adopting process.
streamlined processes implemented since 1998. In 2002,
USPTO began a pilot program and trained additional judges in the
streamlined procedures.
Actions not implemented: USPTO has not defined e-records management
schedules, completed the design for basic electronic- processing, or
implemented full electronicprocessing capabilities, such as text searching
of all documents and the ability to receive, file, store, and view
multimedia files.
Appendix III Progress on Strategic Plan Initiatives
(Continued From Previous Page)
Status of actions
planned through Agility initiatives December 2004 Implementation details
Ensure continuity in the availability of business critical data in the
event of a catastrophic failure of the agency's data center.
Partial Actions implemented: USPTO has completed its analysis of the
impact to its business operations from the catastrophic loss of data and
efforts to recover essential data. Specifically, USPTO has identified
critical services and the associated applications required to provide
those services; assessed how critical applications are to business
operations; compiled recovery priority lists for each line of business;
and compiled vendor cost data to support its plan.
Actions not implemented: USPTO has not had sufficient funding to acquire
the hardware, software, staff, and facilities for a secondary data center.
Acquisition of the secondary data center, scheduled for operation in June
2004, has been postponed until 2005 and remains dependent on adequate
funding. Until USPTO acquires funding for the secondary data center, the
agency will continue to back up its critical data on a daily basis to
tapes that are stored in a separate location.
Promote substantive patent law Partial Actions implemented: Substantive
patent treaty discussions
harmonization in the framework of the were held in May 2004 during the
meeting of the WIPO Standing
World Intellectual Property Organization Committee on the Law of Patents
in Geneva. Major issues
(WIPO), resolve major issues, and pursue addressed included the
first-to-file (European standard) versus
harmonization goals to strengthen the the first-to-invent (U.S. standard),
subject matter eligibility, and
rights of American intellectual property access to genetic resources.
owners by making it easier to obtain
international protection for their inventions. Because of the sensitive
and confidential nature of this initiative,
specific details were not published and no date was given for
implementation.
Pursue bi- or multilateral agreements with other intellectual property
offices to share patent search results.
Partial Actions implemented: Pilot programs to compare search results were
completed in 2003 and 2004 with the Japan and European Patent Offices and
with patent offices in Australia and the United Kingdom. Analysis of the
results was hampered because the pilot programs did not allow for sharing
of search histories. A new pilot is ongoing that includes sharing
information on the areas searched and on the queries used. USPTO is
working to effect legal changes that would facilitate the use of searches
conducted by other intellectual property offices.
No date was given for completion of the ongoing pilot or implementation of
search sharing and legislative changes.
Accelerate Patent Cooperation Treaty Partial Actions implemented: USPTO
indicated that some reform
(PCT) reform efforts, focusing on USPTO's procedures were adopted in
January 2004.
proposal to simplify processing. Because of the sensitive and confidential
nature of this initiative, specific details were not published and no date
was given for implementation. USPTO indicated it would continue to press
for further reforms at the PCT Reform Working Group meeting in May 2005.
Appendix III Progress on Strategic Plan Initiatives
(Continued From Previous Page)
Status of actions
planned through Agility initiatives December 2004 Implementation details
Rely on private sector Not implemented Progress to date: In 2002 and 2003,
to classify patent USPTO began to identify
documents. potential contractors, obtained OMB
agreement to contract the
search activities, and began to
define the contract requirements.
According to agency officials,
funding constraints halted further
action. The efforts were planned
for implementation in the spring
of 2004.
Update: In 2005, USPTO will assign
a new team to determine
what changes, if any, are needed
because of the delayed
implementation.
Rely on private sector to support national Not implemented Progress to
date: In 2002 and 2003, USPTO began to identify application and Patent
Cooperation Treaty potential contractors, obtained OMB agreement to
contract the search activities. search activities, and began to define the
contract requirements.
According to agency officials, funding constraints halted further action.
The efforts were planned for implementation in the spring of 2004.
Update: In 2005, USPTO will assign a new team to determine what changes,
if any, are needed because of the delayed implementation.
Rely on private sector to transition to a Not implemented Progress to
date: In 2002 and 2003, USPTO began to identify new patent classification
system potential contractors, obtained OMB agreement to contract the
harmonized with the systems used by the search activities, obtained legal
advice, and began to define the Japan and European Patent Offices.
contract requirements. According to agency officials, funding
constraints halted further action. The efforts were planned for
implementation in the spring of 2004.
Update: In 2005, USPTO will assign a new team to determine what changes,
if any, are needed because of the delayed implementation.
Develop stringent Not implemented Progress to date: In 2002 and 2003,
conflict of interest USPTO began to identify
clauses for search potential contractors, obtained OMB
firms rather than a agreement to contract the
program to certify search activities, and began to
search firms. define the contract requirements.
According to agency officials,
funding constraints halted further
action. The efforts were planned for
implementation in the spring
of 2004.
Update: In December 2004,
legislation passed by Congress set
new requirements for outsourcing
searching functions, which no
longer includes certification of
search firms, but instead requires
stringent conflict of interest
clauses.
Source: GAO analysis of USPTO data.
Appendix IV
GAO Contact and Staff Acknowledgments
GAO Contact Anu K. Mittal, (202) 512-3841
Staff In addition to the contact named above, Cheryl Williams, Vondalee R.
Hunt, Lynn Musser, Cynthia Norris, and Ilga Semeiks made significant
Acknowledgmentscontributions to this report. Allen Chen, Amy Dingler,
Omari Norman, Don Pless, and Greg Wilmoth also contributed to this report.
GAO's Mission
Obtaining Copies of GAO Reports and Testimony
The Government Accountability Office, the audit, evaluation and
investigative arm of Congress, exists to support Congress in meeting its
constitutional responsibilities and to help improve the performance and
accountability of the federal government for the American people. GAO
examines the use of public funds; evaluates federal programs and policies;
and provides analyses, recommendations, and other assistance to help
Congress make informed oversight, policy, and funding decisions. GAO's
commitment to good government is reflected in its core values of
accountability, integrity, and reliability.
The fastest and easiest way to obtain copies of GAO documents at no cost
is through GAO's Web site (www.gao.gov). Each weekday, GAO posts newly
released reports, testimony, and correspondence on its Web site. To have
GAO e-mail you a list of newly posted products every afternoon, go to
www.gao.gov and select "Subscribe to Updates."
Order by Mail or Phone The first copy of each printed report is free.
Additional copies are $2 each. A check or money order should be made out
to the Superintendent of Documents. GAO also accepts VISA and Mastercard.
Orders for 100 or more copies mailed to a single address are discounted 25
percent. Orders should be sent to:
U.S. Government Accountability Office 441 G Street NW, Room LM Washington,
D.C. 20548
To order by Phone: Voice: (202) 512-6000 TDD: (202) 512-2537 Fax: (202)
512-6061
To Report Fraud, Contact:
Waste, and Abuse in Web site: www.gao.gov/fraudnet/fraudnet.htm
E-mail: [email protected] Programs Automated answering system: (800)
424-5454 or (202) 512-7470
Gloria Jarmon, Managing Director, [email protected] (202)
512-4400Congressional U.S. Government Accountability Office, 441 G Street
NW, Room 7125 Relations Washington, D.C. 20548
Public Affairs Paul Anderson, Managing Director, [email protected] (202)
512-4800 U.S. Government Accountability Office, 441 G Street NW, Room 7149
Washington, D.C. 20548
PRINTED ON RECYCLED PAPER
*** End of document. ***