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Message from the Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office

As the Under Secretary of Intellectual Property and Director of the United States Patent and Trademark Office (USPTO), I have the privilege of serving at the helm of the agency that is the Federal Government’s tangible expression of commitment to innovation and creativity. It is a commitment that goes back to the first days of our country. When the Founding Fathers created our new Republic, they carefully drafted our Constitution to be limited in scope and Federal authority. As they painstakingly crafted the institutions of our new government, the Founders also saw fit to include a clause anticipating the establishment of a patent system and the protection of intellectual property (IP). With their attention focused on the birth of a new Republic, why did they feel the need to deal with what appears to be, at first blush, an obscure area of law?

The answer is as important to our generation as it was to theirs. They understood that their agrarian colony would never grow to be an economic and technological giant unless there was an incentive for inventors to create, and for other inventors to study and improve upon those creations. From this foresight came the American systems of patents, trademarks, and copyright protection, which give inventors and authors the ability to enjoy, for a limited period of time, the exclusive economic benefits of their genius.

As the importance of patents, trademarks, and other forms of IP to our economy has grown, the USPTO workload has skyrocketed. For example, since 1992 the number of patent applications we receive has doubled. In addition, the complexity of the technology in these applications is increasing rapidly. As a result, processing times are increasing and the quality of examination is threatened.

As the clearinghouse for American innovation, the USPTO can ill afford to operate under these conditions. If we are to continue to serve as a catalyst for technological innovation, we must be equipped to meet the challenges of the 21st century. Our customers deserve – and the reality of trade and investment today demands – that we provide the highest quality services in the shortest possible timeframe.

Issuing a quality patent and registering a quality trademark is our primary goal. Issuing them in a timely manner is essential. Balancing quality and timeliness is our challenge.

Our 21st Century Strategic Plan, which I unveiled last year, provides a detailed road map for transforming the agency into a quality-driven, highly productive, cost-effective organization. The key features of the plan will:

• Enhance the quality of patent and trademark examining operations;
• Accelerate processing time by transitioning from paper to electronic government (e-Gov) processing;
• Control patent and trademark pendency and reduce time to first Office actions;
• Concentrate office expertise as much as possible on core examination functions;
• Provide for the hiring of almost 3,000 new patent examiners over the next five years; and
• Expand our bilateral and multilateral discussions to strengthen IP rights globally and, through work sharing, reduce duplication of effort among offices.

In July 2003, the House Judiciary Committee passed the fee-restructuring component of the Strategic Plan unanimously. As we work to get this enacted, the USPTO continues to move forward aggressively on a number of quality and e-Gov initiatives.

I am committed to hiring the people who make the best patent and trademark examiners, certifying their knowledge and competencies throughout their careers, and focusing on quality in all aspects of the examination of patent and trademark applications. To that end, this year we initiated programs to certify the knowledge and abilities of patent examiners and trademark examining attorneys – before they are hired and throughout their career. We also hosted a number of customer partnership meetings in the biotechnology/pharmaceutical/organic chemistry, semiconductor, and business method areas. By sharing concerns and information, establishing cooperative training programs for examiners, identifying sources of prior art, and helping applicants better understand the patent examination process, these meetings help to improve patent quality.

In addition to these quality enhancement initiatives, shifting from outmoded paper processing to more efficient, customer friendly electronic processing has been a major priority. The USPTO continues to be a government-wide leader in implementing e-Gov services for our customers. Despite budgetary limitations, this year we accelerated implementation time frames for the Patent e-Gov program by adapting existing software developed by the European Patent Office (EPO). Using Patent e-Gov, all of our customers will be able to file their applications, monitor application status, and provide supplemental materials on-line via the USPTO web site (www.uspto.gov).

Our achievements on the operational front have also been matched this year on the international policy front, as we work to protect American IP abroad. We seek a harmonized system that will allow for uniform worldwide treatment of patents and trademarks, which will eventually provide faster, more affordable one-stop shopping for American businesses and entrepreneurs who wish to protect their inventions and products abroad.

This year, through our newly established Offices of International Relations and Enforcement, we provided technical assistance to foreign governments to improve their IP systems, trained foreign officials on IP enforcement, and worked with the United States Trade Representative (USTR) in drafting IP sections in bilateral investment treaties and trade agreements. For example, USPTO experts helped to successfully conclude negotiations on IP issues in free trade agreements with Singapore and Chile, which were approved by Congress in July 2003. We also played a lead role in the ongoing negotiations of IP chapters of Free Trade Agreements (FTA) with Australia, Morocco, Central American countries, and Latin America.

Our Nation possesses creative talents that make the world a better place. We rely on inventors to improve our lives, and we all share the responsibility to make sure that our Nation's inventive tradition continues to flourish. Unbridled invention is one hallmark of our legacy of freedom. If we foster this freedom and disseminate it around the world, there is no end to what we can accomplish for tomorrow.

This Performance and Accountability Report summarizes the USPTO’s achievements and challenges for fiscal year 2003. I am pleased to certify, with reasonable assurance that, except for the one Federal Information Security Management Act (FISMA) material weakness regarding information technology (IT) security specifically identified in the management control section of this report, our agency’s systems of management control, taken as a whole, comply with Section 2 of the Federal Managers’ Financial Integrity Act (FMFIA) of 1982. Our agency is also in substantial compliance with applicable Federal accounting standards and the United States (U.S.) General Ledger at the transaction level and with Federal financial system requirements. Accordingly, our agency fully complies with Section 4 of the FMFIA, with no material nonconformances. In addition, we are confident that the USPTO’s financial and performance data is reliable, accurate, and consistent, as we improve our ability to measure progress toward performance objectives.

For the 11th consecutive year, we received an unqualified audit opinion on our annual financial statements. In addition, the independent auditors’ report did not identify any material weaknesses, reportable conditions, or instances of noncompliance.

JAMES E. ROGAN
Under Secretary of Commerce for Intellectual Property and
Director of the United States Patent and Trademark Office
December 1, 2003