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Report to Congressional Committees:
June 2005:
Intellectual Property:
USPTO Has Made Progress in Hiring Examiners, but Challenges to
Retention Remain:
[Hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-05-720]:
GAO Highlights:
Highlights of GAO-05-720, a report to congressional committees:
Why GAO Did This Study:
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.
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.
What GAO Recommends:
GAO recommends that USPTO develop formal strategies to improve
communication and collaboration between management, patent examiners,
and the union to help to address the issues identified in this report.
USPTO agreed with our recommendations.
www.gao.gov/cgi-bin/getrpt?GAO-05-720.
To view the full product, including the scope and methodology, click on
the link above. For more information, contact Anu K. Mittal at (202)
512-3841 or mittala@gao.gov.
[End of section]
Contents:
Letter:
Results in Brief:
Background:
USPTO Has Made Greater Progress on Strategic Plan Initiatives That
Enhance the Agency's Capability Rather Than Productivity and Agility:
USPTO Has Taken Steps to Help Attract and Retain a Qualified Patent
Examiner Workforce, but Long-Term Success Is Uncertain:
USPTO Faces Long-standing Human Capital Challenges That Could Undermine
Its Recruiting and Retention Efforts:
Conclusions:
Recommendations for Executive Action:
Agency Comments and Our Evaluation:
Appendixes:
Appendix I: Scope and Methodology:
Appendix II: Comments from the U.S. Patent and Trademark Office:
Appendix III: Progress on Strategic Plan Initiatives:
Appendix IV: GAO Contact and Staff Acknowledgments:
Tables:
Table 1: USPTO Average Patent Pendency by Technology Center, 2004:
Table 2: Status of Capability Initiatives to Improve Workforce Skills:
Table 3: Status of Capability Initiatives to Enhance Quality Assurance:
Table 4: Status of Capability Initiatives to Change Legislation and
Rules:
Table 5: Status of Productivity Initiatives:
Table 6: Status of Agility Initiatives:
Table 7: USPTO Patent Examiner Hiring Data, Fiscal Years 2000-2004:
Table 8: USPTO Capability Initiatives:
Table 9: USPTO Productivity Initiatives:
Table 10: USPTO Agility Initiatives:
Figures:
Figure 1: USPTO's 2004 Brand Image:
Figure 2: USPTO's 2002 Brand Image:
Figure 3: Examiner Attrition as Percentage of Staff:
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:
Letter 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.[Footnote 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,[Footnote 2] and reduce pendency.[Footnote 3]
In response to the law, USPTO in June 2002 embarked on an aggressive 5-
year modernization plan outlined in its 21st Century Strategic Plan
(Strategic Plan), which was updated to include stakeholder input and
rereleased in February 2003.[Footnote 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.[Footnote 5] Legislation to increase the fees was enacted in
December 2004;[Footnote 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 union officials about the plan's implementation.[Footnote
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.[Footnote 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 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.
* 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.
* 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.
* 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 long-standing 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,[Footnote 9] and assigns it for review to one of its
operational units, called technology centers, that specialize in
specific areas of science and engineering.[Footnote 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 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: Biotechnology and Organic Chemistry;
Overall pendency: 29.9;
First action pendency: 19.2.
Technology center: Chemical and Materials Engineering;
Overall pendency: 27.6;
First action pendency: 17.9.
Technology center: Communications;
Overall pendency: 40.5;
First action pendency: 31.4.
Technology center: Computer Architecture, Software and Information
Security;
Overall pendency: 41.1;
First action pendency: 33.3.
Technology center: Mechanical Engineering, Manufacturing, Products and
Design;
Overall pendency: 24.1;
First action pendency: 15.2.
Technology center: Semiconductor, Electrical, Optical Systems and
Components;
Overall pendency: 23.9;
First action pendency: 14.0.
Technology center: Transportation, Construction, Agriculture, and
Electronic Commerce;
Overall pendency: 24.1;
First action pendency: 15.6.
Average;
Overall pendency: 27.6;
First action pendency: 20.2.
Source: USPTO.
[End of table]
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 Substantial Progress on Its Capability Initiatives:
To improve the quality of its reviews of patent applications through
workforce and process improvements, USPTO developed 23 capability
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:
Initiatives: Increase the pool of qualified management candidates by
adding awards to total compensation: Implemented.
Initiatives: Explore alternate organizational structures for the
workplace: Implemented.
Initiatives: Develop interim pre-employment measures to assess English
language skills: Implemented.
Initiatives: Recertify the skills of examiners with authority to issue
patents (primary examiners) through examinations and expanded work
product reviews: Implemented.
Initiatives: Certify that examiners possess the requisite knowledge,
skills, and abilities prior to promotion to a position with authority
to negotiate on behalf of USPTO: Implemented.
Initiatives: Improve the selection and training of supervisory patent
examiners: Partially implemented.
Initiatives: Use examinations and other means to ensure that new patent
examiners possess the requisite skills prior to promotion: Partially
implemented.
Initiatives: Implement a pre-employment test to assess English language
skills: Partially implemented.
Initiatives: Create an Enterprise Training Division: Partially
implemented.
Source: GAO analysis of USPTO data.
[End of table]
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:
* 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.
* 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.
* 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.
* 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 Enhancements:
As shown in table 3, USPTO has implemented 3 and partially implemented
2 of the 5 capability initiatives to enhance its quality assurance
program.
Table 3: Status of Capability Initiatives to Enhance Quality Assurance:
Initiatives: Expand current quality assurance program to include works
in progress (in-process reviews): Implemented.
Initiatives: Establish "second pair of eyes" reviews in each technology
center: Implemented.
Initiatives: Survey customer regarding transactions with USPTO on
specific applications to supplement comprehensive customer surveys:
Implemented.
Initiatives: Evaluate the quality of examiners' literature searches:
Partially implemented.
Initiatives: Enhance the reviewable record for each patent application
with additional information from the applicant and examiner: Partially
implemented.
Source: GAO analysis of USPTO data.
[End of table]
The status of the initiatives USPTO has partially implemented is as
follows:
* 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.
* 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 to Legislative and Rule Changes:
As shown in table 4, of the 9 capability initiatives to streamline
patent 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:
Initiatives: Delete the requirement for physical surrender of the
original patent papers: Implemented.
Initiatives: 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: Partially implemented.
Initiatives: Evaluate whether to adopt a unity of invention standard:
Partially implemented.
Initiatives: Simplify adjustments to the patent term: Partially
implemented.
Initiatives: Permit individuals who have been assigned patent rights to
sign an oath declaring that the inventor is the original and first
inventor: Partially implemented.
Initiatives: Permit individuals who have been assigned patent rights to
broaden the claims in an application: Partially implemented.
Initiatives: Correct an inconsistency regarding unintentionally delayed
submission of certain claims: Partially implemented.
Initiatives: Eliminate certain exemptions from the requirement to
publish most patent applications within 18 months of when they were
first filed: Partially implemented.
Initiatives: Amend current legislation regarding certain limitations on
an inventors' right to obtain a patent: Partially implemented.
Source: GAO analysis of USPTO data.
[End of table]
Although full implementation of these initiatives is largely dependent
on actions by Congress, the status of the 8 partially implemented
initiatives is as follows:
* 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.
* 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.
* 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:
Initiatives: Restructure fees and provide for refunds: Partially
implemented.
Initiatives: Offer patent applicants a choice of up to five examination
options, based in part on the ability to rely on searches conducted by
others: Not implemented.
Initiatives: Offer patent applicants the option of an accelerated
examination: Not implemented.
Initiatives: Revise postgrant review procedures to allow greater public
input: Not implemented.
Source: GAO analysis of USPTO data.
[End of table]
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:
Initiatives: Establish an information security program: Implemented.
Initiatives: Transition to electronic patent processing: Partially
implemented.
Initiatives: Transition to electronic processing for postgrant reviews:
Partially implemented.
Initiatives: Ensure availability of critical data in the event of a
catastrophic systems failure: Partially implemented.
Initiatives: Promote international harmonization and pursue goals to
strengthen international intellectual property rights of U.S.
inventors: Partially implemented.
Initiatives: Pursue international agreements to share patent search
results: Partially implemented.
Initiatives: Accelerate Patent Cooperation Treaty reforms: Partially
implemented.
Initiatives: Rely on other sources to classify patent documents: Not
implemented.
Initiatives: Rely on other sources to support domestic and
international literature searches: Not implemented.
Initiatives: Rely on other sources to transition to a new global patent
classification system: Not implemented.
Initiatives: Develop stringent conflict of interest clauses for search
firms: Not implemented.
Source: GAO analysis of USPTO data.
[End of table]
The status of the 6 partially implemented agility initiatives to
increase electronic processing and harmonize U.S. and international
practices is as follows:
* 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.
* 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.
* 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.
* 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.
* 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.
* 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.[Footnote 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.[Footnote
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.[Footnote 13]
Second, in 2004, the agency's permanent recruiting team, composed of
senior and line managers,[Footnote 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 and science programs.[Footnote 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.[Footnote 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.
Figure 1: USPTO's 2004 Brand Image:
[See PDF for image]
[End of figure]
Figure 2: USPTO's 2002 Brand Image:
[See PDF for image]
[End of figure]
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:
* recruitment bonuses ranging from $600 to over $10,000;
* a special pay rate for patent examiners that is 10 percent above
federal salaries for comparable jobs;
* noncompetitive promotion to the full performance level;
* flexible spending accounts that allow examiners to set aside funds
for expenses related to health care and care for dependents;
* reimbursement for law school tuition;
* a transit subsidy program that was recognized in 2003 and 2004 as one
of the best in the greater Washington, D.C., area;
* flexible working schedules, including the ability to schedule hours
off during midday;
* work at home opportunities for certain supervisory and senior
examiners;
* no-cost health screenings at an on-site health unit staffed with a
registered nurse and part-time physician;
* casual dress policy; and:
* 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,[Footnote 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.
Table 7: USPTO Patent Examiner Hiring Data, Fiscal Years 2000-2004:
Fiscal year: 2000;
Examiner hiring goal: 475;
Examiner hires: 375.
Fiscal year: 2001;
Examiner hiring goal: 360;
Examiner hires: 414.
Fiscal year: 2002;
Examiner hiring goal: 788;
Examiner hires: 769.
Fiscal year: 2003;
Examiner hiring goal: 300;
Examiner hires: 308.
Fiscal year: 2004;
Examiner hiring goal: 250;
Examiner hires: 443.
Source: USPTO.
[End of table]
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:
[See PDF for image]
[End of figure]
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.[Footnote 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 Long-standing 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.
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.[Footnote 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 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 Authority[Footnote 20] 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.[Footnote 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 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 decision-
making process to both introduce a variety of perspectives and
experiences and to generate the critical support of employees to any
new system developed.[Footnote 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.[Footnote 23] Specifically, a quarter of the examiners surveyed
in 1998 expressed satisfaction with their 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. Agency-specific 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.[Footnote 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 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-of-the-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 [Hyperlink,
http://www.gao.gov].
If you or your staff have any questions about this report, please
contact me at (202) 512-3841 or [Hyperlink, mittala@gao.gov]. 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.
Signed by:
Anu K. Mittal:
Director, Natural Resources and Environment:
[End of section]
Appendixes:
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 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.
[End of section]
Appendix II: Comments from the U.S. Patent and Trademark Office:
UNITED STATES PATENT AND TRADEMARK OFFICE:
UNDER SECRETARY OF COMMERCE FOR INTELLECTUAL PROPERTY AND DIRECTOR OF
THE UNITED STATES PATENT AND TRADEMARK OFFICE:
JUN 7 2005:
Ms. Anu K. Mittal:
Director, Natural Resources and Environment:
U.S. Government Accountability Office:
441 G Street, N.W.:
Washington, D.C. 20548:
Dear Ms. Mittal:
Thank you for the opportunity to comment on the Government
Accountability Office (GAO) draft report GAO-05-720 entitled,
Intellectual Property: USPTO Has Made Progress in Hiring Examiners but
Challenges to Retention Remain.
We very much appreciate the effort your team made in reviewing: (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.
USPTO's first priority, as stated in the 21st Century Strategic Plan,
is improving the quality of the patents that we issue and trademarks
that we register. This priority rests on the premise that American
innovators deserve our absolute best efforts to ensure enforceable
intellectual property rights here and abroad. To implement this
priority, we have focused on both workforce and process improvements.
We appreciate the report's acknowledgment that the USPTO has fully or
partially implemented all 23 initiatives focused on improving the
skills of employees, enhancing quality assurance, and improving the
patent system through changes in existing laws or regulations. We are
proud that all of the capability initiatives have been partially or
fully implemented in such a short amount of time.
By way of update, after GAO concluded its review, the USPTO issued
three Requests for Proposals for the three outsourcing initiatives
aimed at reducing pendency, including Pre-Grant Publication
Classification, Reclassification, and Patent Cooperation Treaty Search.
As GAO states in its draft report, the USPTO has taken significant
steps to attract and train a qualified patent examination workforce.
Specifically, we have enhanced our recruiting efforts, using many of
the human capital benefits available under Federal personnel
regulations. Some aspects of the USPTO's recruitment practices are well
established. For example, our hiring and recruitment efforts have
always targeted schools with strong engineering and science programs.
USPTO recruiters have historically visited such schools, and have also
reached out to qualified candidates by hosting job fairs and attending
conferences sponsored by professional societies.
The USPTO makes every effort to maintain its highly attractive benefits
program, consistent with responsible fiscal management. While lack of
funding led the USPTO to suspend its popular law school program in
fiscal years 2002 and 2003, the program was reinstated in 2004 as soon
as funding was available. We are pleased that, with the full support of
the Administration and Congress, USPTO now has the funds available to
hire patent examiners at levels sufficient to keep pace with increased
patent application filings. While our inability to hire has resulted in
a record backlog of patent applications awaiting action, we hope to
secure a long-term fee structure that will permit necessary patent
examiner and support hiring, as well as the capacity to provide
valuable benefits to our workforce.
There is no USPTO without our employees. We must be able to recruit and
retain the best employees, and a strong human capital management
program is a prerequisite for success. Prior to this year, our Office
of the Chief Administrative Officer (CAO) had been combined with our
Office of the Chief Financial Officer. One SES manager had oversight
and responsibility for both budget and fiscal corporate planning
activities, as well as all human capital management functions. Clearly,
no one person could meaningfully cover so much territory. Recognizing
the practical limits of placing so much management responsibility with
one person, and acknowledging the importance of the CAO function to
USPTO's success, in March 2005,1 directed the realignment of the
functions, programs and activities under the former Chief Financial
Officer and Chief Administrative Officer into two distinct
organizational units: (1) the Chief Financial Officer, and (2) the
Chief Administrative Officer (CAO). This realignment created two
distinct organizations reporting to the Under Secretary and Director:
one for planning, financial management and outsourcing activities; and,
a second, for administrative and human capital management activities.
Separating these functions is designed to strengthen the Office's
ability to effectively direct management focus to critical human
capital efforts, including training, labor-management relations, and
performance issues.
Consistent with this realignment, in May 2005 the USPTO hired a new
CAO. Under the new CAO's leadership, the USPTO will establish a Human
Capital Council composed of senior-level representatives from all USPTO
business units, and will develop a Comprehensive Human Capital
Improvement Plan.
We agree with GAO's finding that key improvements still need to be
made, such as: (1) improving communication between management and
patent examiners and between management and union officials; and (2)
fostering greater collaboration among all levels of the organization.
The following are our comments on the specific recommendations
contained in the Draft Report:
Recommendation 1 - "improve communication between management and patent
examiners and between management and union officials"
The USPTO acknowledges that a formal method of obtaining input from
employees should be established. For that reason, management has
extended a standing offer to the examiners' union to meet regularly to
discuss any issues of concern.
The USPTO participated in the Office of Personnel Management's (OPM)
2004 Federal Human Capital Survey. We are working with OPM to further
analyze employees' response data. This effort will provide insights
into the areas to which we should initially direct our focus. We also
hope to use this data to develop a communication plan and labor-
management strategy directed at increasing awareness and understanding
of USPTO goals, objectives and programs; educating employees on how
they can contribute to these efforts and their impacts on the USPTO;
and continually informing our employees about progress on initiatives,
successes, and lessons learned.
Recommendation 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"
A recent report from the Office of the Inspector General (OIG) of the
Department of Commerce found that a reduction in examiner's goals would
be justified based on efficiencies that have been gained through
various automated systems that have been deployed by USPTO. We assume
that GAO's findings are not meant to suggest that more time may be
needed for examination. In this regard, it is important to note that a
new award package has been developed which is closely tied to the
USPTO's goals and is presently the subject of proposed negotiation with
the examiners' union.
The USPTO has an active program of technology-specific training for all
examiners. Examiners are encouraged to maintain current technical
knowledge in their fields through the offering of tuition reimbursement
for any job-related technical training, and through the use of on-site
technology fairs and technology-centered training seminars. To further
support examiners in their efforts to keep current with technological
trends, managers help plan and host technology specific events designed
for enhanced examiner learning. Examiners are encouraged to attend such
training, and are given non-production time to participate in these
activities. Most sessions are filled to capacity. Additionally,
examiners are granted non-production time for technical training
events, including Technology Forums in areas of emerging technologies,
regularly scheduled technical lectures series by outside scientists,
and off-site visits to meet with scientists from academia, government
and private industry.
In addition to these ongoing efforts, we will develop a more formalized
technical training program for patent examiners, to ensure that their
skills are fresh and ready to address state-of-the-art technology in
patent applications.
We have also provided an enclosure with a list of specific comments
that clarify and/or correct certain points covered in your report.
GAO employees worked long hours to prepare the draft report. I would
like to thank you and the GAO team, and specifically mention Ms. Cheryl
Williams, Ms. Vondalee Hunt, Ms. Ilga Semeiks, and Mr. Don Pless. I
understand that Ms. Williams, Ms. Hunt, and Ms. Semeiks spent many
hours talking to USPTO employees, conducting interviews and focus
sessions, and of course, reviewing documents and writing the draft
report itself. We thank you for your dedication to the highest
standards of professionalism in preparing the draft report.
Again, we appreciate this opportunity to comment on the draft report.
Sincerely,
Signed by:
JON W. DUDAS:
Under Secretary and Director:
Enclosure:
[End of section]
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: Capability:
To become a more capable organization that enhances quality through
workforce and process improvements, USPTO developed initiatives to
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:
Capability initiatives: Transformation: Increase the pool of competent,
qualified candidates for management positions, and reward current
managers by offering awards of up to 10 percent of base salary as part
of the compensation package;
Status of actions planned through December 2004: Implemented;
Implementation details: Actions implemented: USPTO developed award
criteria 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.
Capability initiatives: Transformation: Transform the workplace by
exploring alternative organizational concepts and structures;
Status of actions planned through December 2004: Implemented;
Implementation details: Actions implemented: Conducted preliminary
consultations and research with the National Academy of Public
Administration in 2002.
Capability initiatives: Transformation: Develop interim pre-employment
measures to assess English language oral and written communication
skills for new patent examiners;
Status of actions planned through December 2004: Implemented;
Implementation details: Actions implemented: Developed procedures for
supervisory patent examiners and hiring officials to use in assessing
communication skills, and trained individuals in their use.
Capability initiatives: Transformation: Recertify the skills of
examiners with the authority to issue patents (primary examiners)
through examinations and expanded reviews of work products;
Status of actions planned through December 2004: Implemented;
Implementation details: Actions implemented: Developed an examination
to recertify primary examiners every 3 years. As of December 2004,
approximately one-third of primary 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.
Capability initiatives: Transformation: Certify the knowledge, skills,
and abilities of examiners before they are promoted to a position with
the authority to negotiate with applicants (partial signatory authority
or GS-13 level);
Status of actions planned through December 2004: Implemented;
Implementation details: Actions implemented: In 2003, USPTO developed a
legal competency examination to certify the skills of patent examiners
prior to promotion to GS-13. From March 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.
Capability initiatives: Transformation: Use examinations and other
means to ensure that new patent examiners possess the requisite
knowledge, skills, and abilities prior to initial promotion decisions;
Status of actions planned through December 2004: Partial;
Implementation details: 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.
Capability initiatives: Transformation: Implement a pre-employment test
to assess English language oral and written communication skills for
new patent examiners;
Status of actions planned through December 2004: Partial;
Implementation details: 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.
Capability initiatives: Transformation: Improve the selection and
training of supervisory patent examiners;
Status of actions planned through December 2004: Partial;
Implementation details: 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.
Capability initiatives: Transformation: Create an Enterprise Training
Division in the Office of Human Resources to centralize responsibility
for legally required hard and soft skills, leadership, and other
agencywide training as well as coordinating agencywide training policy
and tracking funds spent on training;
Status of actions planned through December 2004: Partial;
Implementation details: Actions implemented: USPTO developed a draft
action plan to create an Enterprise Training Division in November 2004
and began work to select a USPTO-wide learning management system,
implement an e-learning pilot, and establish a development center;
Actions not implemented: This initiative was to have been completed in
2003 but has not been implemented.
Capability initiatives: Quality: Expand the current internal quality
review program to include works in progress;
Status of actions planned through December 2004: Implemented;
Implementation details: Actions implemented: By October 2004 the Office
of 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.
Capability initiatives: Quality: Establish in each technology center
some level of "second pair of eyes" reviews of work products;
Status of actions planned through December 2004: Implemented;
Implementation details: Actions implemented: By October 2004, managers
for each technology center have 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.
Capability initiatives: Quality: Augment periodic comprehensive
customer surveys with surveys on specific applications (transactional
surveys);
Status of actions planned through December 2004: Implemented;
Implementation details: Actions implemented: Adjust the timing of
comprehensive surveys to every other year and conduct transactional
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.
Capability initiatives: Quality: Evaluate the quality of searches
conducted by patent examiners;
Status of actions planned through December 2004: Partial;
Implementation details: Actions implemented: OPQA is developing a plan
and a 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.
Capability initiatives: Quality: Enhance the quality of the reviewable
record of the examination process;
Status of actions planned through December 2004: Partial;
Implementation details: 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.
Capability initiatives: Legislative and rule changes: Delete the
requirement for physical surrender of the original patent when USPTO
reissues a patent that was defective;
Status of actions planned through December 2004: Implemented;
Implementation details: Actions implemented: Implemented through rules
changes that became effective in September 2004.
Capability initiatives: Legislative and rule changes: 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;
Status of actions planned through December 2004: Partial;
Implementation details: 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.
Capability initiatives: Legislative and rule changes: 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;
Status of actions planned through December 2004: Partial;
Implementation details: Actions implemented: In 2003, USPTO began a
study of the changes needed to adopt a unity standard and sought public
comment. Based on the comments received, USPTO consulted with
stakeholders on other options. In 2004 the agency conducted a business
impact 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.
Capability initiatives: Legislative and rule changes: Simplify
adjustments to the length of time during which inventors can exclude
others from making, using, or selling an invention, called the patent
term;
Status of actions planned through December 2004: Partial;
Implementation details: Actions implemented: USPTO is drafting proposed
legislation and obtaining administrative clearance to introduce the
draft legislation; Actions not implemented: Further action depends upon
passage of the legislation, which is anticipated by 2008.
Capability initiatives: Legislative and rule changes: Amend current
legislation to permit individuals who have been assigned the rights to
a patent, called the assignee, to sign an oath stating that the
inventor is the original and first inventor of the invention described
in the patent application;
Status of actions planned through December 2004: Partial;
Implementation details: Actions implemented: USPTO is drafting proposed
legislation and obtaining administrative clearance to introduce the
draft legislation; Actions not implemented: Further action depends upon
passage of the legislation, which is anticipated by 2008.
Capability initiatives: Legislative and rule changes: Permit assignees
to seek to broaden the claims in an application without the signature
of the inventor;
Status of actions planned through December 2004: Partial;
Implementation details: 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.
May be merged with the initiative above.
Capability initiatives: Legislative and rule changes: Correct an
inconsistency regarding the treatment of unintentionally delayed
submission of claims related to a previously filed provisional patent
application;
Status of actions planned through December 2004: Partial;
Implementation details: 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.
Capability initiatives: Legislative and rule changes: Eliminate
provisions that allow inventors to request publications of redacted
versions of their applications and that require USPTO to publish
applications for plant patents, which are typically granted in less
time than the 18-month requirement to publish applications;
Status of actions planned through December 2004: Partial;
Implementation details: Actions implemented: USPTO is drafting proposed
legislation and obtaining administrative clearance to introduce the
draft legislation; Actions not implemented: Further action depends upon
passage of the legislation, which is anticipated by 2008.
Capability initiatives: Legislative and rule changes: 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;
Status of actions planned through December 2004: Partial;
Implementation details: 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.
[End of table]
Strategic Theme: Productivity:
The agency's productivity initiatives are designed to accelerate the
time to process patent applications by offering a range of examination
options to 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:
Productivity initiatives: Fee restructuring;
Status of actions planned through December 2004: Partial;
Implementation details: 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.
Productivity initiatives: Offer patent applicants a choice of up to
five examination options based in part on the ability to rely on
searches conducted by other entities and revise fees accordingly;
Status of actions planned through December 2004: Not implemented;
Implementation details: Progress to date: Preliminary planning only;
Actions not implemented: This initiative is related to the flexibility
and work-sharing initiatives, and implementation depends upon access to
additional funds, according to USPTO officials. In 2005, USPTO will
continue efforts to select contractors and negotiate bi-and
multilateral agreements with other intellectual property offices.
Productivity initiatives: Offer applicants seeking patents the option
for an accelerated examination in exchange for payment of a fee;
Status of actions planned through December 2004: Not implemented;
Implementation details: Actions implemented: This initiative seeks to
expand the option for accelerated examination to applicants for all
types of patents. 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.
Productivity initiatives: Revise postgrant review procedures to allow
for greater public input;
Status of actions planned through December 2004: Not implemented;
Implementation details: Actions implemented: USPTO drafted proposed
legislation that was introduced in 2004 but not 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.
[End of table]
Strategic Theme: Agility:
To become an organization that responds quickly and efficiently to
changes in the economy, the marketplace, and the nature and size of
workloads, 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).
Table 10: USPTO Agility Initiatives:
Agility initiatives: Establish an information technology security
program for fully certifying and accrediting the security of automated
information systems;
Status of actions planned through December 2004: Implemented;
Implementation details: 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.
Agility initiatives: Implement an operational system to process patent
applications electronically, including electronic image capture of all
incoming and outgoing paper documents;
Status of actions planned through December 2004: Partial;
Implementation details: 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.
Agility initiatives: Develop an automated information system to support
a postgrant patent review process;
Status of actions planned through December 2004: Partial;
Implementation details: Actions implemented: Rules have been changed to
generally allow for electronically filing of documents and for adopting
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 electronic- processing capabilities,
such as text searching of all documents and the ability to receive,
file, store, and view multimedia files.
Agility initiatives: Ensure continuity in the availability of business
critical data in the event of a catastrophic failure of the agency's
data center;
Status of actions planned through December 2004: Partial;
Implementation details: 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.
Agility initiatives: Promote substantive patent law harmonization in
the framework of the World Intellectual Property Organization (WIPO),
resolve major issues, and pursue harmonization goals to strengthen the
rights of American intellectual property owners by making it easier to
obtain international protection for their inventions;
Status of actions planned through December 2004: Partial;
Implementation details: Actions implemented: Substantive patent treaty
discussions were held in May 2004 during the meeting of the WIPO
Standing Committee on the Law of Patents in Geneva. Major issues
addressed included the first-to-file (European standard) versus the
first-to-invent (U.S. standard), subject matter eligibility, and access
to genetic resources. Because of the sensitive and confidential nature
of this initiative, specific details were not published and no date was
given for implementation.
Agility initiatives: Pursue bi-or multilateral agreements with other
intellectual property offices to share patent search results;
Status of actions planned through December 2004: Partial;
Implementation details: 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.
Agility initiatives: Accelerate Patent Cooperation Treaty (PCT) reform
efforts, focusing on USPTO's proposal to simplify processing;
Status of actions planned through December 2004: Partial;
Implementation details: Actions implemented: USPTO indicated that some
reform procedures were adopted in January 2004. 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.
Agility initiatives: Rely on private sector to classify patent
documents;
Status of actions planned through December 2004: Not implemented;
Implementation details: Progress to date: In 2002 and 2003, USPTO began
to identify 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.
Agility initiatives: Rely on private sector to support national
application and Patent Cooperation Treaty search activities;
Status of actions planned through December 2004: Not implemented;
Implementation details: Progress to date: In 2002 and 2003, USPTO began
to identify 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.
Agility initiatives: Rely on private sector to transition to a new
patent classification system harmonized with the systems used by the
Japan and European Patent Offices;
Status of actions planned through December 2004: Not implemented;
Implementation details: Progress to date: In 2002 and 2003, USPTO began
to identify potential contractors, obtained OMB agreement to contract
the search activities, obtained legal advice, 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.
Agility initiatives: Develop stringent conflict of interest clauses for
search firms rather than a program to certify search firms;
Status of actions planned through December 2004: Not implemented;
Implementation details: Progress to date: In 2002 and 2003, USPTO began
to identify 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 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.
[End of table]
[End of section]
Appendix IV: GAO Contact and Staff Acknowledgments:
GAO Contact:
Anu K. Mittal, (202) 512-3841:
Staff Acknowledgments:
In addition to the contact named above, Cheryl Williams, Vondalee R.
Hunt, Lynn Musser, Cynthia Norris, and Ilga Semeiks made significant
contributions to this report. Allen Chen, Amy Dingler, Omari Norman,
Don Pless, and Greg Wilmoth also contributed to this report.
(360475):
FOOTNOTES
[1] USPTO, 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.
[2] Electronic government refers to an increased reliance on
information technology to conduct government operations and accomplish
agency missions.
[3] Patent and Trademark Office Authorization Act of 2002, Pub. L. No.
107-273, § 13104, 116 Stat. 1899, 1900, required USPTO to develop a 5-
year strategic plan for meeting these three requirements.
[4] USPTO also prepared the Strategic Plan as part of the requirements
of the Government Performance and Results Act.
[5] USPTO 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.
[6] Consolidated Appropriations Act, 2005, § 801, Pub. L. No. 108-447,
118 Stat. 2809, 2924 (Dec. 8, 2004).
[7] Patent examiners are represented by, but not required to join, the
Patent Office Professional Association (POPA), an independent union of
professional employees formed in 1964.
[8] GAO, Intellectual Property: Key Processes for Managing Patent
Automation Strategy Need Strengthening, GAO-05-336 (Washington, D.C.:
June 17, 2005).
[9] Patents 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.
[10] USPTO'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.
[11] See GAO, Human Capital: A Self-Assessment Checklist for Agency
Leaders, GAO/OCG-00-14G, version 1 (Washington, D.C.: September 2000);
and Office of Personnel Management, Human Capital Assessment
Accountability Framework (Washington, D.C., Sept. 20, 2000).
[12] USPTO, KSA Work Team: Knowledge, Skills and Abilities Project
(Alexandria, Va., August 2003).
[13] Department 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).
[14] USPTO's permanent recruiting team was established in 2002.
However, the agency suspended recruiting efforts in 2002 and 2003 in
the face of budgetary uncertainty.
[15] The 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.
[16] TMP Worldwide Advertising and Communications, USPTO Task 1:
Research and Evaluation (Alexandria, Va., Mar. 10, 2004).
[17] Career opportunities for patent examiners continue through the
senior executive level. Historically, senior executives at USPTO have
come from the ranks of examiners.
[18] Governmentwide, about 40 percent of employees will be eligible to
retire by that time.
[19] U.S. Patent and Trademark Office, Retention Focus Sessions with
Examiners and Primary Examiners, Center for Quality Service
(Alexandria, Va., February 2000).
[20] The 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.
[21] A 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.
[22] Booz-Allen & Hamilton Inc., PTO Goal Study--Task One: An
Assessment of the Current Performance Measurements and Rewards System
(May 1995).
[23] Sirota 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).
[24] Individual 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.
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