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United States Patent and Trademark Office
Performance and Accountability Report Fiscal Year 2003
Inspector General

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Management and Performance Challenges Identified by the Inspector General

Inspector General’s Statement Summarizing the Major Management and Performance Challenges Facing the United States Patent and Trademark Office

James E. Rogan
Under Secretary of Commerce for Intellectual Property
Director of the United States Patent and Trademark Office

 

We herewith submit, for inclusion in the U.S. Patent and Trademark Office’s (USPTO) Performance & Accountability Report, a summary of the issues we have determined to be USPTO’s most critical management and performance challenges.

The Office of Inspector General considers the issues noted to be significant impediments to USPTO’s efforts to promote economy, efficiency, and effectiveness in its management and operations because they are complex, vital to the agency’s mission, involve sizable expenditures, or require significant management improvements. We believe that by addressing these issues USPTO can enhance program efficiency and effectiveness; eliminate serious operational problems; decrease fraud, waste, abuse and mismanagement; and achieve substantial cost savings.

Successfully Operate as a Performance-Based Organization

As a performance-based organization Read Footnote 1 1, USPTO has not only broad control over its budget allocations and expenditures, personnel decisions and processes, procurement, and information technology operations, it also has the ability to manage its operations more like a business.

In response to the concerns of its stakeholders, in June 2002, USPTO issued its 5-year, 21st Century Strategic Plan. The plan was intended to help the agency overcome the challenges accompanying its transition to performance-based operations - the need to successfully develop necessary personnel processes, systems, and capabilities; establish procurement and administrative policies as well as performance-oriented processes and standards for evaluating overall cost-effectiveness; and, simultaneously, meet its performance goals under the Government Performance and Results Act (GPRA) in addition to the timeliness standards of the American Inventors Protection Act.

According to USPTO, the 21st century plan is aggressive and far-reaching and provides a roadmap for major changes in patent and trademark processes, including steps to (1) move to a paperless environment and promote e-government, (2) enhance employee development, (3) explore competitive sourcing, and (4) improve and maintain quality assurance. The plan also calls for the agency to work with worldwide intellectual property offices to create a global framework for enforcing intellectual property rights.

Our office is reviewing selected aspects of major USPTO operations as they currently function and in light of changes proposed by the 21st century plan. These include the trademark application process and efforts to reduce trademark application pendencies; as well as patent examiner production goals, awards, and performance appraisal plans and their effect on employee productivity and patent pendency. In addition, we are reviewing certain policies and procedures related to the operation of USPTO’s Office of Human Resources Management. As changes in these and other areas occur, we will evaluate their impact on USPTO’s successful operation as a performance-based organization - an achievement we view as critical to its long-term viability and its success at addressing other challenges we have identified in recent years, as described below.

Information Technology Security Must Remain a Priority

USPTO’s patent and trademark information is essential to administering patent and trademark law, promoting industrial and technical progress, and strengthening the national economy. Loss of or serious damage to the critical systems that process this information could have devastating impacts, which makes identifying IT weaknesses and recommending solutions a continuing priority for OIG.

Our FY 2003 Federal Information Security Management Act (FISMA)Read Footnote 22 evaluation found that USPTO has begun to better integrate information technology security into its capital planning and investment control process, and is improving its system life-cycle information security requirements and processes. In addition, the agency continues to work to ensure that its senior program officials understand and accept their responsibilities for information security, a prerequisite for any effective and long-lived program.

USPTO is also well on its way to having its systems certified and accredited. Our FY 2002 Government Information Security Reform Act (GISRA)Read Footnote 33 evaluation found that USPTO lacked current certifications and accreditations for its systems and suggested that it report information security as a material weakness until its critical systems are fully certified and accredited. The agency did so in its FY 2002 Performance & Accountability Report and set a goal of certifying and accrediting all high-risk systems by the end of FY 2003. It subsequently revised its system inventory by consolidating more than 100 systems into 194 - 9 mission-critical and the remainder business essential. It planned to have the 9 mission-critical systems and 1 classified system certified and accredited by the end of FY 2003. By the end of FY2003, all 10 systems had undergone certification testing; 9 had been granted 120-day interim accreditations and 1 had received final accreditation.

We found that USPTO does not grant interim accreditations without comprehensive risk assessments, security plans, and testing; and uses a disciplined certification and accreditation process that includes rigorous testing of security controls. Using this approach the agency has gained a great deal of insight into system-specific weaknesses that must be corrected and organization-wide security policies, procedures, and processes that must be improved.

Because of the security weaknesses identified by the certification process and the lack of final accreditations, we believe USPTO should continue to report information security as a material weakness for FY 2003.

Construction of New Facility Warrants Close Management Oversight

As part of our effort to monitor USPTO’s performance-based operation, we are reviewing progress on the construction of the agency’s new headquarters complex in Alexandria, Virginia. Construction of this state-of-the-art office complex is one of the federal government’s largest real estate ventures. When completed in 2005, the five-building complex will consolidate the majority of the USPTO employees and contractors currently scattered among 18 buildings in Crystal City, Virginia. With construction well under way, USPTO must monitor progress to help ensure the project stays on schedule and to carefully implement the relocation of its facilities so as to minimize costs and adverse effects on operations, employees, patent and trademark applicants, and the public.

Emergency Preparedness, Safety, and Security of Facilities and Personnel — A National Priority

USPTO, along with other Commerce facilities in the Washington, D.C., area and like most federal entities across the nation, has taken steps to improve the safety and security of its people and property. As work on its new headquarters progresses, USPTO must be sure to incorporate all the necessary protections before occupying the space, and to periodically reassess its security status and adjust protective measures accordingly.

Signature of Johnnie E. Frazier

Johnnie E. Frazier
Inspector General

 

Notes:

Note 1: The American Inventors Protection Act of 1999 established the U.S. Patent and Trademark Office as a performance-based organization, giving it greater flexibility and independence to operate more like a business. (back to text)

Note 2: FISMA, signed into law on December 17, 2002, provides a comprehensive framework for ensuring that information resources supporting federal operations and assets employ effective security controls. FISMA requires agencies to conduct annual information security program reviews and Offices of Inspector General to perform annual independent evaluations of those programs. (back to text)

Note 3: FISMA replaced GISRA, which expired in December 2002. (back to text)

Note 4: After our FY 2003 evaluation report was published, USPTO further revised its system inventory, further reducing the number of systems to 18. (back to text)

 

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