U.S. DEPARTMENT OF COMMERCE

PATENT & TRADEMARK OFFICE

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In the matter of the:

PUBLIC ADVISORY COMMITTEE FOR TRADEMARK AFFAIRS MEETING

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Monday, November 2, 1998

Patent and Trademark Office
South Tower Building
Arlington/Alexandria Room
2900 Crystal Drive
Arlington, Virginia

The Meeting of the PUBLIC ADVISORY COMMITTEE FOR TRADEMARK AFFAIRS convened, pursuant to notice, at 10:00 a.m. on Monday, November 2, 1998.

APPEARANCES:

Committee Members:

GARY KRUGMAN, Chairman

MARILYN DARE

MARK I. FELDMAN

SHELDON H. KLEIN

JIM JOHNSON

TED HARPER

KIMBLEY L. MULLER

PATRICKP. PHILLIPS

JOHN P. RYNKIEWICZ

ROBERT W. SACOFF

SUSAN UPTON-DOUGLASS

PTO Staff:

CHRIS SIDOTI

CHRIS KEIRS

JOHN JENNISON

LYNNE BERESFORD

ROBERT M. ANDERSON

J. DAVID SAMS

SHARON MARSH

NANCY OMELKO

Also in Attendance:

TODD DICKINSON, Deputy Commissioner

HOWARD FRIEDMAN, President, NTEU 245

BRIAN USILANER, Westat

C O N T E N T S

INTRODUCTORY REMARKS

STATUS REPORT ON ISSUES DISCUSSED AT COMMITTEE MEETING OF APRIL 20, 1998

LETTER OF PROTEST PROCEDURE

GRADE-LEVEL OF EXAMINING ATTORNEYS

REPORT ON CUSTOMER SURVEY

OFFICE OF TRADEMARK QUALITY REVIEW REPORT

TRADEMARK LAW TREATY

PUBLIC ACCESS TO PENDING APPLICATION FILES

TRADEMARK TRIAL AND APPEAL BOARD

FEDERAL REGISTER NOTICE ON PROPOSED INTERNET USAGE POLICY

DESCRIPTION OF GOODS AND SERVICES IN TRADEMARK APPLICATIONS

(10:08 a.m.)

INTRODUCTORY REMARKS

MR. KRUGMAN: Folks, it's a few minutes after ten and we'd like to get started. I'm Gary Krugman, chairing the Public Advisory Committee Meeting and I represent the D.C. Bar, and Bob Anderson has some remarks to make and he has to leave at 10:30. So we wanted to get started right now and let Bob do his portion of the morning session.

Without any further ado, I'm going to turn it over to Bob Anderson.

MR. ANDERSON: I'd like to welcome everyone to this meeting. Todd Dickinson, the Deputy Commissioner, was supposed to make opening remarks, but he hasn't shown up yet. I talked to his assistant just before I came down and he hadn't arrived at work yet.

At about 10:30, I have to leave to go down to NPR to talk about trademark quality down -- oh, here's Todd.

DEPUTY COMMISSIONER DICKINSON: Welcome, I guess. My name is Todd Dickinson for those of you who don't know me. I'm the Deputy Commissioner. I just want to take the opportunity to welcome the Trademark Advisory Board here. It's very important to our mission of the Trademark Office to have you all share with us a lot of the issues and concerns that you have.

I had the opportunity, I guess, to address you all about six months ago and I'm pleased to be back. We've obviously had some changes, which I know will probably be addressed today. We have obviously had a change at the top at the Trademark Office. Commissioner Hampton has resigned and is in the private sector now.

We will hopefully be -- we've actually already begun to do a search or consideration of individuals to fill that vacancy and that will be ongoing over the next couple of months. We are fortunate, though, to be ably led in the interim by Bob Anderson and his team, so I'm very pleased that they are here. We don't have a sense yet of how long that recruitment process might take and if my own confirmation is any indication, that took about a year, so we'll see what happens in that regard.

I think you'll also talk about a number of the things that concern you today with regard to the twin goals of pendency and quality. We certainly want to make sure that as we push forward to try to achieve the pendency goals which we've set for ourselves and for the administration, we don't want to lose sight of the equally important goal of maintaining a consistent level of quality.

We've recently conducted a review of that quality process as well and I think we're comfortable -- we're pleased actually with the results and hopefully, we'll be able to share some of that discussion today.

We've also, since our last meeting, taken several other initiatives, one of which I'm particularly proud of which is the placing of the Trademark -- the Patent's as well, but the Trademark's first data up on the Internet. All of our Trademark database is now up, back to, I guess it's '76 I think, right? Full database -- the patent folks only go back to '76. We've got the full Trademark database up.

Both images and text are up now. They're accessible through our web site, WWW.USPTO.Gov and we're very pleased that that has been achieved. We've gotten good feedback on that. As we discussed last time, there was some feedback from you all about whether we should charge or not charge for that service.

We took away from that previous meeting that you wanted us to charge for it. We went a different direction, and if you still believe that we should be charging a fee for that service as opposed to doing it for free, we probably should hear that; though, I will tell you most of the feedback we've gotten is positive in terms of offering the service for free.

The other opportunity, which I know Bob will probably go into in greater depth, is our electronic filing program. It's now possible to file your trademark application electronically and pay for it by credit card, something which Bob took the lead in and is largely responsible for happening -- not only happening, but happening on a timely basis and I'm very pleased that we've accomplished that.

So those are some of the things that we've done and we, again, greatly appreciate the opportunity always to get your feedback and if anybody has any questions or anything, I'd be happy to take them, but I don't want to disrupt your program, Bob.

(No audible response.)

DEPUTY COMMISSIONER DICKINSON: Okay, I also see Judge Sams out here. We should also acknowledge the fact the TTAB is doing very well. We will soon -- I guess we are now up to full complement of judges. We've added three additional judges during the last fiscal year, the last of which, Dave Bucher, just came on.

That, of course, unfortunately leads to a vacancy because he was the Deputy Assistant Commissioner for Policy, but we'll also look to fill that vacancy as well. I know that Dave and I had the chance to review the TTAB's progress this past year and it's been very strong and we're pleased by that.

MR. ANDERSON: Todd mentioned most of what I wanted to say. As you know, Phil Hampton left on October 15th. As Todd indicated, we are looking, or the Agency will be looking for replacement.

I do want to mention TLT was signed on October 30th. We do not have a public law number yet. The implementation time for TLT will be one year. There will be some discussion regarding TLT later today. We need to get a rules package going fairly quickly and we would appreciate comments regarding proposals we have on the table.

Electronic filing began on October 1st. Based on the pilot which started last November and ended on October 1st, we had only had about 250 filings and we didn't have a lot of optimism that it would be all that well received. However, since October 1st, I was told this morning we've had over 830 filings with the electronic application.

One interesting thing that happened that initially, the bulk of the applications were coming from individuals. Last week, more applications came from corporate America than came from individuals, so there appears to be an increasing interest in corporate America in using the electronic application.

As Todd mentioned, we do accept credit card payment on it and thus far, most of the applications received since October 1st have used credit card payment as opposed to deposit account. Unfortunately, even though we process those applications fairly quickly and give feedback quickly, they will still sit in line for a fairly long period of time until they get a first examination.

For right now, that's about all I have time for. Both Todd and I need to get downtown to the old executive office building for a meeting. We will be leaving in just a few minutes. I think the next topic on the agenda --

DEPUTY COMMISSIONER DICKINSON: One more thing. One issue that I'll maybe just touch on briefly because you will talk about it in some depth is the new space consolidation project which has been ongoing for a number of years now.

As you know, we are spread out very thinly here at Crystal City. This is the farthest reach in one direction. If you go down to where the Board of Patent Appeals and Interferences is, it's about a mile and two-tenths the other direction. We have shuttle buses that take everybody around.

What we would like to do is consolidate down into no more than eight buildings. As you probably know, we have had this RFP out for some time to allow us to do that. We've narrowed down our search to three developers who will develop the space and then lease it to us.

The government does not allow us to build a new facility and own it because all that cost would be on our bottom line this budget year and when you're trying to balance a budget, putting an extra half a billion dollars on the bottom line is too big a bite to swallow. So we will continue to lease.

The project was a source of some controversy through the summer and early into the fall. Some watchdog groups have charged that we are reckless, I suppose you'd say, in their belief in terms of how spending might be made on furnishings and other things. Let me say if that is -- if you read a recent Washington Post article or Washington Times article, you'll know that that is largely a political debate as opposed to a real debate. We are not spending the kind of dollars on the kind of things they talked about in that article.

The project was also the subject at a couple of points of possible continuing study at the request of Congress. All of those amendments were beaten back. The last one we thought might come along was in the Appropriations Bill. That was not included. As a matter of fact, the Appropriations Bill went in a different direction. It lifted -- or it did not included the so-called "Brown-back Amendment" which would have capped the amount of money we could spend on furniture and build-out and other things, saying that it was premature.

So we are in relatively good shape relative to that project going forward. The final decision will be made on which of the three bidders that remain, probably in December. The three sites, as you may know, are here in Crystal City -- our current landlord is one of the finalists -- down in the Carlysle area, which is a new development in I guess it's the King Street metro stop and then the Eisenhower metro stop, which is just beyond that, both of which are south of here, but not too far south in Alexandria.

There was a certain political competition between Alexandria and Arlington to try to get this project and I think that will have an impact. There are some concerns about neighborhood groups as well, which I think will have potential impact if one of the sites, in particular, is chosen.

We won't make the choice decision, just so you're aware. It will be made by a five-person panel of procurement specialists. We have one representative on that panel, that's Kaz Kazinsky, but the others come from either GSA who is largely responsible for the reality of the project, or there is also one representative from the Department of Commerce.

MR. KRUGMAN: Thanks, Todd, and thanks Bob. You better come back. The agenda that you got in the mail about a week or so ago has been shuffled around. The revised agenda, I think, is on the desk. The shuffling was only because of Bob's schedule in terms of having to leave and come back later.

The next item on the revised agenda is a status report on the issues discussed at the last Public Advisory Committee meeting. Sharon, were you going to do that?

STATUS REPORT ON ISSUES DISCUSSED

AT COMMITTEE MEETING OF APRIL 20, 1998

MS. MARSH: We're not going to spend much time on that this morning. In your package of handouts, one of our staff attorneys went through the minutes of the last meeting and identified all the issues that someone on the committee had raised and in the handout, each of those issues is listed and there's a brief summary of what the office has done.

Given our limited time, I don't think we should spend any more time on it this morning. Take a look at it. If you've got further questions, we can answer them later in the day.

MR. KRUGMAN: Okay, then let's go to the next item, unless anybody has a question now, which we'd be happy to entertain, but I know we just got these things a few minutes ago.

(No audible response.)

MR. KRUGMAN: The letter of protest procedure, proposed change in practice, one of the Public Advisory Committee members asked me to contact the office and have this put on the agenda, and Sharon, did you want to address this?

LETTER OF PROTEST PROCEDURE

MS. MARSH: Yes. Through Gary, we were asked to put letter of protest procedure on the agenda. Jesse Marshal is the attorney in our office who handles letters of protest and due to a family emergency, she's not going to be able to be here today, but I think we should go ahead and discuss the issue.

I don't know who wanted the issue on the agenda or what their concern was, but when it came up in the office, after some discussion, we think there's a good argument for eliminating this procedure. There is a short discussion of it that you can take a look at.

This procedure predates my time at the office. We started it apparently about 20 years ago and it was at a time when examining attorneys had very few resources, and it was very difficult for examiners to prove that a mark was merely descriptive or to show that certain channels of trade were related. So it was a way that third parties could provide evidence to the office that would help us sustain a refusal.

Over the years, the practice has continued. A few years ago, we tightened up the procedure a little bit and made the standard clear error. The letter of protest will not be granted unless it would be a clear error for the examiner not to make the refusal. You're also limited in submitting a letter of protest. We'll only consider it if the mark is in examination or within 30 days after publication.

Anyway, if you look at the statistics in the third paragraph, Jesse went through and looked at how many letters of protest she gets and what the issues are. In fiscal years '96 and '97, she got 1,200 letters of protest and only 175 of those were actually granted, and she goes through and lays out the issues and how many were filed for each issue.

It's a significant amount of staff time and money spent on this at a time when examining attorneys have access to much better resources through Lexus, Nexus, and the Internet. They generally don't have a problem finding the evidence they need to support a refusal, and there's some concern on the part of the office that really this is merely a way for third parties to try to interject themselves into the ex-party examination procedure.

So we thought we'd put the issue in front of the committee. Our proposal is that we eliminate the procedure all together, but we, of course, want to hear what your thoughts are.

MR. KRUGMAN: John?

MR. RYNKIEWICZ: Well, I'll admit I'm the one that asked to address this issue, John Rynkiewicz. I think the office needs to take a look, Bob, and we ask you to take a look on the behalf of Trademark owners and practitioners at this procedure.

I think the fact that it's taken a lot of time and there's backlogs is not a reason to get rid of it. It serves a valid purpose and I think the focus predominantly centers around likely the confusion issues, but we must take a look at the types of letters of protest that are filed.

Common usage in the trade, a few years back, the office asked people outside to submit evidence and materials that could help the office. I understand the Internet is available now to help in that respect, but there are types of issues and a few of our members, for example, have shown me some of the problems they've experienced.

I won't get into specifics but there is a detailed letter of protest that was filed dealing with color and it showed common usage in the trade by about six different competitors. The letter of protest was lost and then once finally examined after publication, the simple form letter said that there's no clear error by the examiner, and I think the detailed evidence showing this color, common color being used, deserved more than just a simple form letter that's used most likely in the -- likelihood of confusion situation, so I think there's an example.

Another one that came to mind was litigation. Serious federal court litigation was brought to the attention of the office and it was brought before the application was examined. The examiner allowed the application and there was still a delay in pulling the applications. I find there's another major problem. These cases are not pulled quickly.

In David's situation, there's letters of protests after publication. They're not pulled and then the extensions of time have to be filed and David's group at times is criss-crossing trying to find the file or the Office of the Assistant Commissioner has not pulled the file.

So I think the procedure of pulling the file, identifying and acting on these, you know, going to the heart of the issue, I think the likelihood of confusion is an interparties issue most of the time, but there are other important issues that need to be addressed, and that would be, for example, the common usage in the trade of color, litigation, and the office needs a way of getting that information presented to it.

To say that it's a clear error standard, I don't think an examiner would have necessarily this type of evidence of usage in the trade. I don't think an examiner would have evidence of a litigation going on in federal courts. So I think it's an important thing. It could be refined, but I think the office needs to really improve some of the processing with it.

MS. MARSH: John, on the litigation, what we were thinking there was that yes, there would be no way to stop it necessarily because we might not know about the litigation, but as soon as the mark publishes, an opposition can be filed, and a request to suspend the proceedings made to the TTAB, and doesn't that get you the same result?

MR. RYNKIEWICZ: Well, it's putting a lot of pressure, I think, on the -- as it now stands, the PMBP does say litigation is a valid reason for a letter of protest, so you take that away and say you must file in the opposition is creating an extra step, which I don't know if it's really necessary.

MR. KRUGMAN: Susan?

MS. UPTON-DOUGLASS: I wanted to also say that some of the letters of protest involve what we would consider to be dead hits that are somehow missed by the Trademark examining attorneys and I have, at times, looked at the search strategy and the file wrappers and you could see from the search strategy that there's no way they could have found this with the way that they were searching it.

It's like one letter difference that's a vowel and you know, maybe there were only 175 granted or whatever, but that's 175 oppositions that don't need to be instituted, and the files made up, and the wheels put in motion, and a summary judgment motion filed, or whatever, and to the extent it catches things that should have been caught, it's a very good idea.

MR. KRUGMAN: Bob?

MR. FELDMAN: I also think that these are not granted all that often, but it seems like there's a place for it and looking at those search strategies, we've seen instances where someone's filed for a two-word mark, our client owns something for one of those words, but the search was done only for the two-word marks.

It just seems to me that's a valid basis for a letter of protest. I also, for the life of me, don't understand why some of these have been refused. We've gotten some refusals of letters of protest in that exact situation. We have a famous one-word mark and somebody filed for two words. We filed a letter of protest and we get back denied.

But I do think there's a place for it even though they're not often granted. Yes, we could oppose every time if the letter of protest was not available, but it does seem like a useful procedure.

MR. KRUGMAN: Shelly?

MR. KLEIN: Just to add my voice to those who are opposed to doing away with the letter of protest procedure, particularly, the mention of the expense of approximately $25,000 a year. I mean, that could equal one opposition that has been saved.

So I think it is an extremely cost-effective means of short-circuiting a potential interparte proceeding, and I don't think that there was a comment here that it really could be viewed as being counter to the statute and regs because it's, in effect, an interparties of proceeding. I don't think it is because of the way you handle it, you only give the evidence and the factual materials to the examiner and then it's still the examiner -- it's still up to the office to refuse or go ahead with an application.

So I would urge you -- I think the idea of formalizing it is a great idea. There's nothing wrong with that.

MS. MARSH: Yes, that was our -- in the event that the group, as it sounds like you do, believes that this is a useful procedure, we think it ought to be codified. It's not in the statute, it's not in the CFR rules. It's just an internal procedure that's been developed over the years and so, we were proposing coming up with a proposed set of rules on the issue.

MR. KRUGMAN: Bob?

MR. SACOFF: First of all, let me apologize for being late. My flight just came in.

MR. KRUGMAN: You told me that it would be.

MR. SACOFF: Forgive me if I'm duplicating comments somebody else made before I got here a couple of minutes ago. Just quickly on the letter of protest procedure, I did see the proposed change of practice and the outline. I didn't realize it was a proposed elimination of it.

I think it's a useful procedure. It's really not used all that often in my experience, but mistakes happen from time to time and there ought to be this vehicle for bringing in an overlooked or an oversight to the attention of the examiner and -- I don't think it's substitute for interparties' proceedings, but frankly, I'm presently astonished to see that the cost of this procedure is being calculated as a little as 25,000.

To further what Sheldon said, I think 25,000 would be a very inexpensive contested opposition. So I think it should be retained.

MR. SIDOTI: Yes, Chris Sidoti, ABA. I would concur with everybody what they've said here. First of all, a letter of protest is a means by way a clear error could be caught very early on and the damaged party or parties do not have to wait for an application to go through a long process, particularly, if it's an ITU application.

Beyond that, we don't know what the impact will be on the TTAB if all of these letters of protest turn into oppositions and we might be creating more of a difficult situation in terms of backlogs at the TTAB.

I think rather than just getting rid of the system because of inherent problems, it should be improved and it should be, as you say, possible codification, formalization, and then maybe staffing up the procedure enough so that it could be more efficient than it has been.

But it's clearly the only way that the outside bar can weigh in on something that's very critical and with the change in technology and what have you and the massive hirings that are going to go on, it's going to possibly be even a greater threat of clear error down the road in the near future.

MR. KRUGMAN: Yes, Patrick?

MR. PHILLIPS: Pat Phillips, the Ohio State Bar Association. After I got the proposed agenda for the meeting, I circulated it around to several people. One came back on the letter of protest and they would love it to be somehow codified because they were in a total quandary of how to do it, which is the right way, what's the wrong way, and how can I have the best likelihood of getting it through?

Another individual came back and their concern was similar to what John had talked about initially. They felt they had a slam dunk on their letter of protest and got back the form letter saying thank you, but it's denied, and then they had to go back and tell their client if this is the policy of the Trademark Office or the way they're viewing this.

We would tell you your likelihood of prevailing in an opposition would maybe be slim and next to none. They would have liked to have seen a little bit more thorough review in that particular case.

MR. KRUGMAN: I mean, I know I don't use the letter of protest in my practice because as a practical matter, it's so cumbersome and it's so unlikely to be granted, but that doesn't seem to me to be a reason to not have it. It seems to be a reason to improve it and maybe formalize it and just make it better.

Does anybody on the committee have a contrary view? Does anybody go along with the office's proposal to abolish it just so we can be heard on that, or is it pretty much unanimous?

(No audible response.)

MR. KRUGMAN: It sounds like it is. Sharon, one thing I --

MR. JENNISON: Gary, if they could just speed up the letter of protest too. It's an awful long backlog on it. I think it's a three or four-month backlog reviewing them, so that would help as well. Get the results back to the examiner.

MR. KRUGMAN: I think everybody would be happy with that. One thing I just wanted to say on this meeting, the charter of the advisory committee is that observers also are entitled to comment about the agenda items and I don't want to forget that. So if anybody is sitting in the observation area that has a comment about the letter of protest procedure or the proposal to do away with it, I'd be happy to entertain some brief remarks if anybody has anything to say and that's true with this topic and any other topics later on.

(No audible response.)

MR. KRUGMAN: Well, Sharon, it sounds like we've spoken as one.

MS. MARSH: It looks like you've got a unanimous point of view. I will pass this information on to Jesse and the office will discuss it, but it sounds like we should prepare a set of CFR rules to cover this practice.

MR. KRUGMAN: It sounds like one of the main problems with it -- I know it is from my perspective -- is the time. We can keep it and we can formalize it, and we can codify it, but if it's still going to be a real cumbersome, time-consuming process, is there any way that this could be speeded up?

MS. MARSH: I don't know. This is a question that Mr. Anderson should get because it probably means adding staff on this issue and I just don't know if we can do that or not.

MR. KRUGMAN: Okay, well maybe we'll surprise him with that one later. Anybody else have anything? Sharon, did I cut you off?

MS. MARSH: No. John, did you have something?

MR. RYNKIEWICZ: John Rynkiewicz. Sharon, I think I've just looked at this over the last couple of years and I think it's gotten away from how it was examined. I think there's, in talking to different people in the office, we've been told that instead of just waiting until the examiner reviews, the letters of protest are kind of watched.

So if you have a likelihood of confusion, they wait to see if the examiner does, in fact, cite. I think that's getting away from what the letter -- I think you deserve an answer. A lot of us have watch services for important marks. You find these marks within weeks after they're in the database, and I think you're entitled to getting an answer, not five or six months later when it gets examined.

So I think the procedures of when and looking for clear air, depending on the issue, I think that they should just be looked at fresh and not seeing whether the office is -- because I think there's a desire that maybe they'll take care of themselves, if they're cited and it just goes away. I think it should be -- you know, you're owed an answer or a reply on the letter of protest and I think that should be looked at early on.

MS. MARSH: Okay, I will pass that information along.

MR. RYNKIEWICZ: Okay.

MS. MARSH: Gary, the next item on the agenda was also one of Jesse Marshall's issues related to identification of goods and services, but I think in the interest of keeping us on schedule, if we could delay that one until this afternoon, we have the consultants coming to talk about the customer survey results at eleven and I want to leave time for Howard Friedman's issue first.

MR. KRUGMAN: Okay.

MS. MARSH: So, if we could go to that issue now.

MR. KRUGMAN: All right, so we're looking now at number five on the revised agenda which is a NTEU proposal for instituting a non-competitive GS-14 for examining attorneys, and Howard, who is the NTEU representative, I guess, will speak to that.

GRADE-LEVEL OF EXAMINING ATTORNEYS

MR. FRIEDMAN: Yes, good morning. My name is Howard Friedman and I'm president of NTEU-245. We represent the Trademark attorneys at the Trademark Office. First off, I appreciate the opportunity to speak before the committee today.

I wanted to discuss primarily why it is in this committee's best interest, our customers' best interest, to support increasing the number of GS-14 examining attorneys, but before I discuss those particular benefits, I wanted to first review how a Trademark attorney handles an application, discuss the time constraints that we face when we examine a trademark application, review our present classification system, and discuss how we are rated.

This, as you all have seen, is a trademark application. It, by the way, does have a search in here that would pass the letter of protest test, or at least I think it was since I did the search.

I think it's important, as I said, before getting into the benefits to walk through, particularly for those committee members who didn't work at the Patent and Trademark Office and I know there's at least three on this committee who did, but primarily for those that didn't.

We get this trademark application, we do a search. As others have alluded to, obviously, we have a wealth of resources that weren't available in the past, which means if you're looking for a translation, you're doing a translation search, you're doing lexus/nexus evidence, you're doing surname searching conceivably over the Internet which is what some of the people in our bargaining unit do now, and in effect, you're doing a lot of their resource material even before you get to the final refusal because you want to let the applicant know as best as possible where they stand after they get a first office action.

In doing all those actions, you're under a fairly strict time constraint and I think it's important for the committee to understand what those time constraints are, and in that regard, let me focus primarily on the GS-13 and GS-14 levels.

If you're a GS-13 attorney and you're operating at the fully successful production rate, you need to turn around an examination of an application every 49 minutes. If you're trying to be at the outstanding rate, which is at 110 percent, your turn around time is 45 minutes, and again, that's to get the application, to review it, to do your search, to gather the evidence, and of course, produce the office action.

As I'm sure many of you know, particularly those who are practiced or were at the office, conceivably, you're spending a lot more time than that when you're going fine because you need to gather the evidence because you never know which of the people here in your brethren might be going an appeal before the TTAB.

I think if you think about that production rate and then you tie what 13s and 14s do, if you're a 14, the turnaround time is 46 minutes in order to be fully successful. The turnaround time is 41 minutes if you're a GS-14, a little more than two-thirds of an hour.

When you think about that production rate and you rate how attorneys are classified, there is what's known as the GS-905 series which in the Federal Government classification series is the correct classification for attorneys, and when you're evaluated or when they classify what the appropriate series are, they look at two factors: number one, the independence of your work, and number two, the degree of complexity of your work.

Depending upon whether you're a GS-9, a GS-11, a GS-12, or a 13, or 14, those impact upon how difficult the cases are that you handle and how independent of your work is. Is your work reviewed?

It's important to note that in looking at those particular standards, which are really the only standards that are supposed to be evaluated. Production is not a standard in the 905 series. Now, it has become a de facto standard in our performance appraisal plan, but as it stands now, when you look at the difference between a GS-13 at the office and a GS-14, it shouldn't be production, it's really only two issues: complexity of the work and the degree of independence.

If we think of those factors and then we look at our current performance appraisal plan, and I provided the committee with our current performance appraisal plan a couple of weeks ago, there is really only two differences currently between a GS-13 at the office and a GS-14.

One is the production level that I've discussed and two, in order to become a GS-14, a GS-13 has to go through a competitive selection process. Those are the only distinctions between a 13 and a 14 in our office. Thirteens handle the same complexity of work that 14s handle; 13s and 14s both handle intent to use cases, trademark applications, service mark applications, 1A, 1B, 44D, 44E.

If you're a 13 or 14 in law office 101 and I'm a 14 in 101, the 13s in our office handle the exact same trademark applications that I and other 14s handle -- no distinction, and there's no distinction in our path between a GS-13 and a GS-14 again, with the exception of production.

MR. KRUGMAN: Aren't the 14s supposed to have some training responsibilities of younger examiners? Is that supposed to be the difference?

MR. FRIEDMAN: A couple of years ago, that was one of the primary differences. Now, Gary, there are a number of 13s in our bargaining unit who train. There are also 14s who do training, but there are also 14s who don't do training. So, really, the lines of demarcation when it comes to 14s who train and 13s who don't have blurred and frankly disappeared. It's really up to the law office manager to decide which people in their office amongst the 13s and 14s are allowed to do training.

Basically, the office has taken the position that they're going to pick those people who they think are the most qualified to do the training.

Now, as a result, primarily because of the fact that there is really no distinction between a GS-13 and a GS-14, other than the two distinctions that I've mentioned, a recently concluded report by NAPA, the National Academy of Public Administration, which was commissioned by Commissioner Lehman, noted that there was a basis for a change in classification to the full performance level from a GS-13 to a GS-14.

Again, the report focused on two aspects and that was the complexity of the work that 13s handle is the same as the complexity of the work that the 14s handle, and similarly, or related to that, there is no review. A 13, just like a 14, does not have their cases reviewed for pub. I think maybe when some of the gentlemen here were at the office, even when they were a 13, they'd do a case, they'd put it on the shelf, and their managing attorney would review it.

That's not the case anymore. Thirteens and 14s work, you do your pub or your registration. It goes on the shelf, not to be reviewed by a manager and that's the end of it for that purpose.

I should note that when the NAPA report was made, the Commissioner was concerned about the internal equities in pay amongst ten major occupations. The report did an exhaustive analysis of these ten major occupations and this was throughout the PTO, including patent examiners.

There was one, and only one, position where the report noted that there conceivably was a change in basis for classification upwards, and of those ten classifications, the one that they said there was a basis is the one I've just noted; the trademark attorneys.

Otherwise, the report basically noted that all the other classifications were in accord with what the -- were commensurate with the responsibilities and duties of the people at the office.

So, I've tried to briefly -- before addressing where you fit in, I've tried and wanted to briefly go through what we do and to some degree how we're rated and I've touched not a lot on the PAP, but we are rated based our refusals, docket management, organizational effectiveness and practice and procedure as well as production.

I've gone through what the NAPA report has mentioned. I've tried to make -- I've been very brief, but gone through some of the things that we have to look at when we look at a trademark application and I've tried to tie all of that in to the production standard that we're under.

Where do you fit in? Well, clearly, both on things I've seen in writing, the testimony that INTA and other organizations have submitted on Capitol Hill, and based on the past meetings that I've been attending here in the last year or two, you have a very simple mandate.

You want cases handled as quickly as possible without compromising quality; fairly simple. Indeed, the office, as I'm sure Bob will be talking about later today, is under a Congressional mandate to have cases acted upon within certain time frames which unfortunately, are not close to being met.

One way, and it's not the only way, but one way to reduce pendency is to have the office's most experienced attorneys handle more of your files which would, of course, mean more GS-13s if not all GS-13s becoming GS-14s. Other benefits that would accrue to the people at this table and your clients would be reduced attrition, and I'm sure when Bob again talks about the statistics over the last six months of this fiscal year, people are leaving.

Three people have either announced that they're leaving, one of whom has left in the last couple of weeks, and the concern obviously is that the salaries -- one of the concerns is the salaries at the office are not keeping track of what, of course, have been the increases in the salaries in the Washington, D.C., New York, and other areas.

In addition to reducing attrition, actually, it has another benefit because if people on the outside know that people on the inside are being paid more money at the GS-14 level, conceivably that will attract more experienced practitioners on the outside to come to work to the Patent and Trademark Office.

Conceivably, the more experienced attorneys you have, the less of a need there is to hire a number of the new attorneys that will be coming on board that Chris had made reference to, and conceivably, as the Commissioner had noted, we'll be moving into new space over the next couple of years.

Perhaps the more experienced attorneys that stay, the less need because they'll be producing more, the less need you'll have to pay for office space. Remember, a GS-14 attorney is required to produce at the 1.3 rate which is compared to a GS-11 attorney which is at the 1.0 rate.

A GS-13 attorney is required to produce 30 percent more applications than a GS-11 attorney and is required to produce 8 percent more trademark applications than a GS-13 attorney.

I think other benefits would be by hiring a large number of attorneys, or in hiring a large number of attorneys, you have to be concerned about training. You have to be concerned about consistency of office actions. Obviously, the more experienced attorneys that say -- and I think this goes directly to your concern, Gary -- the more experienced attorneys you have to train the new people that are going to be coming on board in the next year or two.

Obviously, there is an additional benefit that the more experienced attorneys you have, the better quality and consistency of examination you'll have.

To anticipate some questions that the committee may have, how can we be sure that quality will not be compromised by having more files going out the door quickly:? First off, you'll have a better chance of having more experienced attorneys evaluate the files that you submit to the office. Our performance appraisal plan also calls for quality review. Three of our files are looked at. Random files are looked at every month.

Additionally, as we all know, published marks in the O.G. are reviewed. Trademark quality control, Chuck Conger's outfit, monitors examination quality, and as I think will be discussed after I move off, the recent survey results will also show frankly that the people here, and at least the people who have submitted the survey, are happy with examination quality.

What about cost? First off, the office does have another announcement out to hire more 14s. There were 19 that were hired in June. The office has a rolling admission announcement out and it's unclear how many they will be hiring between now and when the next announcement closes in December, but from a cost perspective, what you're talking about is the incremental cost of those GS-14s who would become GS-14s through other than a competitive process.

Also, as the survey results show, your main goal, I think, is to get the unexamined applications out the door, and according to the recent survey, which I believe will be touched upon, you were at least satisfied with the process time standards.

One of the most, or the most improved standard, compared to a 1996 survey, the most recent survey done before the '98 survey was the cost of trademark applications where your satisfaction level went up from 45 to 56 percent and I'm sure that's because there hasn't been an increase since December of 1993.

Finally, I think you'll get a return on your fees through higher retention, better quality, better training, increase of morale, and a potential reduction in new hires and the need for additional space; all factors which you probably can't put a tangible dollar to, but I think do have a dollar value to you and to your customer.

With that, again, I thank you for the opportunity to speak and I'll just leave open the floor to any questions people have.

MS. UPTON-DOUGLASS: I just had a question about how you envision this working, doing away with the competitive selection process. Would it then just be after you're a 13 for a year, or after you've handled a certain number of applications? Or, what would be the triggering event to be considered for this GS-14?

MR. FRIEDMAN: It's a good question. Clearly, as you probably know, before you become a 12 and before you become a 13, there's a poll of cases and if you have a poll of 10, you can't receive more than one statutory refusal that you missed, or three or more practice and procedure errors.

We've always taken the position, and we haven't gotten this far with the office that it's probably only fair that there be some type of similar, if not more stringent criteria so that maybe the way it would work is after you've been in grade for a year at a 13 level, there would be a poll. Maybe it's similar to the poll that takes place as a 13. Maybe the requirements are a little more stringent. We're obviously open to discussing them.

So, you and the office, and Bob, and Todd, and others feel comfortable that before somebody's becoming a 14, they've passed some type of criteria. So, it wouldn't be, you know, from our perspective, as much as we'd love it, we wouldn't envision a year going by and then you running to your manager and saying could you please process my 52 so that I can have my additional paycheck -- additional money in my paycheck.

MR. KRUGMAN: Mark?

MR. FELDMAN: I know that you've been pushing for this for a while and I'm just curious if someone could speak for the office as to why they've not implemented this until now.

MR. FRIEDMAN: Oh, I'd be happy to speak for the office, but --

(Laughter.)

MS. MARSH: I think we need to wait until Mr. Anderson is here. He'll be back after lunch.

MR. KRUGMAN: Okay. John?

MR. RYNKIEWICZ: Howard makes the case based on his facts, but I think it should be pointed out too just from practical standpoint, the patent side of the office for years has had a working grade 15, I believe, and inroads have been made to remove and I don't necessarily like this phrase, but the stepchild of the Agency, I think a lot of improvement over the years and I think this is one issue that's been looming for a long time.

You can argue well, you have to have a technical background, but on the Trademark side, you have to have a legal background. So, I don't know what one trumps the other, if at all, but I think for parity sake, it doesn't make sense that there should be a discrepancy of two working grades.

So, for that matter alone, without looking into the facts that Howard was presenting, I just think that that's an inequity that exists on the Trademark side within the common agency.

MR. SIDOTI: Yes, and if you could speak, I used to work at the Trademark Office in a galaxy a long time ago and I can tell you that there is a large group of examining attorneys who are senior examining attorneys who have not wanted to place themselves in the competition of the typical GS-14 appointments who are experienced examining attorneys who regularly mentor people and who do an incredible amount of work.

It seems to me that these kinds of people who are really in the trenches producing and helping the pendency who are mentoring people maybe informally or formally, should be rewarded so they stay with the office.

This is not just, it seems to me, a case of increasing grades for the sake of it, it's bringing the Trademark Office and the experts at the Trademark Office in parity with the outside. It's trying to keep people, and I agree, it shouldn't be totally automatic. It should be very stringent. It should be just the best cream of the crop, but it should be something that should be seriously considered.

I know examining attorneys now who I speak to who have been there for many, many years who have chosen just not to be subjected to the political scrutiny that often goes on with competitive appointments. But these people are doing an incredible amount of work and I think that that kind of work should be rewarded so we keep them and so that we create a work atmosphere at the Trademark Office where we have excellent people who will stay.

So, having worked here, having been on the outside, I think it's a no-brainer. I think it's something that we should support wholeheartedly.

MR. KRUGMAN: Jim?

MR. JOHNSON: This is Jim Johnson. I concur wholeheartedly with Chris Sidoti's comments. I think it was difficult working in the office knowing that on the patent side that the pay equity was so -- the disparity was so great and I think that we should have a process in which the best of the best do get promoted to 14. I just don't see any reason assuming that we can afford to do so that we don't do so.

MR. KRUGMAN: Howard, just out of curiosity, if the training requirements for the 14s have sort of blurred, vis-à-vis some of the 13s. Some of the 13s do training and some of the 14s don't. The competitive openings for 14s now, what's the stated reason for them being eligible to get a 14, other than just getting more money? Is there at least stated reasons that there would be training responsibilities?

MR. FRIEDMAN: Well, I have the criteria so probably the best way to respond is to read what the criteria is from the most recent vacancy announcement, or at least put it in capsule form.

One is -- there are three criteria. One is expert knowledge of trademark law, procedures and work processes, as well as market place issues related to the prosecution of trademark applications.

Two is the ability to examine a large number of applications at an exemplary rate of production and consistent high quality.

Three is the ability to communicate effectively with internal and external customers to provide accurate information about the application process, and to investigate problems and take appropriate action.

There is no mention of training in that particular vacancy announcement. There was in the announcement that issued in February, the prior announcement to this one.

MR. KRUGMAN: John?

MR. JENNISON: Howard, of the GS-13s you have now, do you still have the bonuses that are available if they go above their performance in amount of applications they examine?

MR. FRIEDMAN: Right.

MR. JENNISON: Is that still in place?

MR. FRIEDMAN: Yes.

MR. JENNISON: So, if you went to the 14 by right or by noncompetitive means, the office wouldn't have to mess with the bonus situation for all the 13s. There would be an ongoing 14 level throughout the year instead of having the large increase of production that's done at the end of the fiscal year or perhaps in March, is that correct? It would be more of an even production for the office throughout the year?

MR. FRIEDMAN: Well, I'd like to say yes, but I don't know if that would occur that way. I mean, I think if there are incentives to -- you know, if the office and therefore, its customers are looking for more even production instead of maybe the dips and flows that occur during the year, you know, maybe a way to tackle that is to have a similar bonus structure, but pay them out on, for example, a quarterly basis.

I can't really say that just because there would be more 14s than 13s that that would necessarily result in a more even flow of production, other than the fact that if you're a 14 and you're maintaining at least a fully successful rate and at least putting out more files as a 14, and maybe this is where you were going, then the files you were putting out as a 13, and you have that many more 14s, then obviously, the cumulative number of files that are going to be disposed of are going to be more on a daily, weekly, and monthly basis, let alone a yearly basis than they would be.

But the simple fact that there may be more 14s than 13s I don't think would necessarily correlate to having files being sent out on a more even basis.

As one other point, just to follow-up on a couple of things that I think John as well as Chris said, obviously, this committee needs to focus as they have on the bottom lines and that is getting files out as quickly as possible at a reasonable cost. I would hope that the committee wouldn't lose sight of the fact that on a number of major areas that are important to this committee, including expansion into additional space, including a PTO corporate -- including a corporatization bill, the reprogramming and other legislation that has been on Capitol Hill.

I think it is important to remind the committee that into NTEU 245 as well as NTEU has worked closely with INTA to support a corporatization bill, has worked closely with the office to follow-up with what Todd and Bob said to support a move to a new facility as opposed to, example, one of the other unions in the PTO which is literally spending hundreds if not thousands of hours in collective bargaining over issues that we could have been spending in collective bargaining as opposed to examining applications which is really what you want us to do.

So, there have been a number of areas where I would want the committee to be aware of for those who aren't of the way partnership has worked and has worked well between our union and Bob and Bruce, and in the future, Todd.

MR. KRUGMAN: Thanks Howard. Susan?

MS. UPTON-DOUGLASS: I was just going to say that when we discussed this last at the NTEU/SPTO subcommittee meeting, there was a very strong level of support for your proposal and I think we just look at the 19 people who left and the 49 people who came on and we say you know, this -- and the productivity comparisons and we say we'd rather keep the people who are doing a good job.

MR. KRUGMAN: Yes, I haven't heard anything in a negative way to your proposal. Anybody that wants to say anything, we're going to pose the question to Bob Anderson because no one has sort of taken the other view. We'll pose that to him later, but it sounds like a consensus of the committee that this is something that we'd like to see for the reasons you've stated.

Is there anybody of the observers that would like to comment about this?

MR. WILLIAMS: I would.

MR. KRUGMAN: Go. This is Ron Williams.

MR. WILLIAMS: My name is Ron Williams and I'm a senior Trademark administrator. I'm not speaking for Bob Anderson, but I don't think -- I think it's safe to say that the office is not opposed to the GS-14 as a grade. It's just a matter of trying to work out the mechanics of how we're going to get there.

As for the mentoring, the training aspect of it, the 14s, when it was originally, I think, created, they were going to do mentoring and because we've been hiring so many people at such a fast rate that we've run out of GS-14s that we feel confident to have training and we don't think it's in the office's best interest to have anyone training who we don't feel is qualified and ready to do that.

So, we've taken it out of the GS-14 announcement simply because we're bringing in -- we're going to hire 150 people within a 12-month period and we just don't have enough GS-14s to train them the way that we've been doing it.

MR. KRUGMAN: Ron, what's the working grade of the managing attorneys? 15?

MR. WILLIAMS: Yes. We can talk about that too.

(Laughter.)

REPORT ON CUSTOMER SURVEY

MS. MARSH: The next topic on the agenda is quality of work products from the Trademark Office and we had a customer survey and we wanted to give you the results of that survey.

This is Mr. Mullens. Do I have that correct? Greg Mullens. He's going to give you a briefing on the findings.

MR. MULLENS: Actually, I'm just going to introduce Brian Usilaner from Westat, which is the contracting company that conducted our customer survey this year. For some of you, you might remember, this is the third time we've done it. We did it in '95, '96, and '98, and I think some of the data this time is going to be very interesting to look at.

So, I'll turn the meeting over to Brian to guide you through the briefing.

MR. USILANER: Good morning everyone. We conducted the customer survey. We do a lot of customer surveys, both in the private and public sectors and we conducted this survey for the Patent and Trademark Office. Obviously, there's a lot of detail, a lot of analysis that went behind the data.

What I would like to do this morning is just give you an overview and highlight of some of the results and if you have any questions, or let's keep this as informal as possible, if you don't mind. So, interrupt me as I go along, if you have any questions or clarifications. You have all of the slides that I'm going to use in the booklet. I'm not going to use all of them, but you have all of them in the booklet.

Okay, first of all, the survey was conducted, it was a mail-out I guess of about 1,000 was the sample taken, and the survey was conducted between June and July of this year. There were very few changes that we made on the survey this year. We're going to revisit that next year, but for this year, we made minor changes to the survey so we could keep the continuity of the survey instrument.

We added some questions about problem resolution. We added some questions about value as opposed to just cost and a few questions about service quality. One thing I want to point out to you, you'll see that when the data is broken out as I go through is there is a cadre of questions on the survey that deal with performance against standards, standards that the Trademark Office had set and the respondent is asked to assess performance against that standard.

The scale on those questions had no neutral point. Either two points of dissatisfaction and three points of satisfaction.

Then there was a cadre of questions dealing with the examination process itself. That did have a neutral point so there are two points of dissatisfaction, two points of satisfaction. The only reason I'm pointing it out to you is you obviously can't combine and compare those two sets of scales.

Greg, next slide please. This was a mail-out survey followed up by a post card and a second mailing and for mailing surveys, this was a high response rate. We usually get about 40 or some percent. This was 52 percent response rate and as I said, that's excellent for this type of survey.

We asked at the beginning of the survey questions about demographics so that we can get a profile of the respondents. As you can see from this chart, the majority of the respondents were from law firms -- can everyone see this? You have it in your book -- 78 percent. It was exactly the same as the last survey in '96 and there were some small, minor changes in between.

Large businesses dropped a little bit and I think small businesses went up a little bit. But those are small changes. The majority of the respondents are from law firms. In addition, most of them had applied for a trademark within the last 12 months, so it's fresh on their mind and that's what they're referencing.

In addition, we asked questions about -- and this is important to keep in mind -- frequency of contact and whether you're a continuous customer or not. Obviously, from law firm's perspective, there is a lot of interaction throughout the year between the "customer" and Trademark employees.

The reason I'm pointing that out, that has a lot of ramifications when you asked the respondent to assess service quality. The whole concept of the service quality area is called moments of truth. Every time you have an interaction, obviously, you're making an impression, either positive or negative on your customer. So, with not having a one focal point, for example, some companies have just a customer service center, and it's only the center that interacts with the customer.

All the other employees are "behind the curtain." They don't do any interaction. That's much more limited in terms of the contact and the frequency of contact. This has a lot of contact and that's important and these people are continuous customers that deal with you over time.

We broke the data out a few ways here, just for summary purposes here. We just took first an overview of the survey and said of all the questions on the survey, what questions have the most positive satisfaction response rate? As you can see on this chart, those questions in terms of the process itself, the most positive questions deal with the application submission process.

I know you don't have a formal submission form, but obviously, these are law firms that do it over and over again and obviously, they're very comfortable with the submission process. I guess I'm talking to the choir when I say they. It could be you that very well might have filled out the survey.

In terms of questions pertaining to performance against standards, there's some interesting points on this slide. Courtesy is extremely high and that's important. In fact, this is what I said -- as I said, I do a lot of surveys both in the private and public sectors so I have a lot of benchmark data.

This is extremely high for this type of organization where you have that number of people dealing with the "customer." That's a very high rate and as I said, with frequency of contact and the number of people, you wouldn't expect courtesy to be that high.

In addition, clear written communications which is a quality indicator for the examining attorney is high as well. That's at 81 percent and something that's very important to any customer is the whole phone call cycle, the whole phone call process. Returning phone calls promptly was very high as well.

In terms of the questions that the respondents were least satisfied with, the lowest level of satisfaction, in terms of the process, they have to do with handling of delays, handling of mistakes, and you'll hear a term I'll be using frequently this morning, "the whole problem resolution process," how the office recovers when there is a problem, whether it be a mistake or a delay of some type, and these are very, very low levels of satisfaction.

In terms of the least satisfied in terms of those questions pertaining to performance against standard, there are two that stand out here. That's filing receipts within 14 days and not surprising, because of that, first communication within 3 months, and then the whole process of meeting that 13-month goal is low as well. So, you can see there is a significant timeliness issue, especially in the up-front part.

The second cut of the data that we looked at was -- this was just, as I said, a global look at the most positive and the least positive. The second cut was simply to compare the questions in terms of percent satisfied from '96 to '98, and look at the areas that had the major improvements, and then look at the areas that had the major declines.

In terms of improvements, not surprising, the cost -- their satisfaction since I guess cost has not been raised, the respondents were happy about that and therefore happy about the cost.

I said that we know this from us being customers in other aspects of the service industry. The whole phone call operation is important, directed when you call promptly to the proper office or person was also a high level of improvement over '96. It went up 10 percent.

Other areas, mailing the certificate of registration within seven days, clear written communication, which I said is an indicator of examiner attorney quality was high as well and some other areas were also in the 6 percent, 5 percent which are statistically significant.

Just from a rough rule of thumb, you're looking at the lowest level that you would be satisfied with in terms of percent satisfaction is about 60 percent. That's the lower threshold in terms of benchmarking with other organizations of this type. Obviously, you would like to get in the 70s and 80s, especially those questions that have the three levels of satisfaction. So, obviously, anything below 60 percent is a significant problem area.

In terms of the major declines -- and I want to point something out in terms of the construct of the survey instrument -- one of the changes we did make was in the last survey, they asked -- there were three questions about problems: handling of problems, handling of mistakes, and courtesy in handling your problem.

There was not a sort question, meaning everybody responded those questions, supposedly, whether they had a problem or not. This year, we had a sort question. So, you were first asked if you had a problem and if you did, you answered these questions pertaining to the problem resolution process. If you didn't, you skip these questions.

So, again, not surprising from the data we already saw about the lower levels of satisfaction, you get the whole problem resolution process that we asked last time, including courtesy dealing with the problem went down. So, handling of delays and handling of mistakes, a significant drop even from '96 and some of it can obviously be explained away because you had some people that didn't have problems responding.

But nevertheless, if you look at the level of satisfaction, that's quite unacceptable.

MS. DARE: Can I ask a question? About the courtesy point, I noticed on your overview what respondents were most satisfied with. It says 81 percent or 85 percent felt that they were treated with courtesy each time there was a contact, but then clearly, when there was a problem, that's not -- you know, you got a very different high dissatisfaction.

MR. USILANER: Not a high. It's still 66 percent, but obviously, these people that have problems, a little more upset, and a little more negative of the courtesy. Still, that overall question pertaining to all of the interaction whether you had a problem or not is quite acceptable at 85 percent. It's just that this has dropped a little bit and one of the reasons why it dropped in comparison was, as I said, there were some people that didn't have problems that responded to it last time.

Obviously, this is something to look at and we'll get back to that point when I talk about my recommendations because it has to do, as you're pointing out, is that interaction and the "problem resolution process."

We asked a question that's a good anchor question to do analysis on; at the end of the survey all in all how satisfied are you with the trademark process? As you can see from the data, comparing it to 1996, there wasn't any change to speak of. Now, there are a few things to point out on this chart.

First of all, as I said, 60 percent is acceptable. It's just above 60 percent. The second point, though, is that your people that are dissatisfied is low. The rule of thumb there is about 25 percent. These are just rules of thumb from, as I said, from benchmark data that I've dealt with; 25 percent.

So, you obviously, in order to improve that level of satisfaction, you're really focusing on the people that are in the neutral category, which is a legitimate response. There are people that see some things that are good, they see some things that are poor overall, they're in the middle.

So, it's a lot easier to move those people to satisfy than the people that are on the negative side. Now, you've got to remember again when you look at this data is that we're talking about a "monopoly" here. You don't get much high levels of dissatisfaction in the private sector because the customer has the choice of going elsewhere.

So, you have an automatic filter of those people that are dissatisfied. They'll do business with other people. Here, obviously, you don't have that case. Your customers, whether they're satisfied or dissatisfied have to stay around. So, that's the good news on this chart. We'd like to see more movement and we have a theory of why there are some large percents in the neutral category.

I told you that that question is good for analysis. There is an analysis that's done called "key driver analysis," and all that means is statistically taking a look at all the questions and then statistically determining which questions have the greatest impact on overall satisfaction; meaning if you focused on these questions and made an improvement on these questions, you'd get the greatest bang for your buck in terms of improvements in overall satisfaction.

You don't have to ask questions anymore that we eliminated in terms of importance because by the way the respondent is responding to the questions, they are telling you which questions are more important than others in terms of those questions' relationship to the overall satisfaction question.

So, as I said, this helps for any organization to focus on those vital few issues that are important to the customer because they have the greatest impact on overall satisfaction, and we have them in two parts here: those questions pertaining to performance against standards, and as you can see here, courtesy is important, not surprising that clear written communication, which is a quality measure is important.

The whole phone call operation is important, directing calls, and then the timeliness of the whole cycle, meeting that 13-month goal is important as well as the filing receipts, meeting the 14-days in filing receipts.

On the other side, in terms of the process, if you'll look here, you'll see some questions pertaining to "service quality," flexibility, quality of the feedback provided, committed to providing the best possible service. This morning, we don't have the time to get into a lot of the detail, but those are being driven by the negative reaction about problem resolution, as we'll see.

It's about -- I think it's about 58 percent, if I remember, of the respondents claimed they had a problem. So, they answered -- 58 percent of the respondents claimed they had a problem of some type or another, and that's driving some of those, the flexibility committed to service down.

In addition, the length of the application product process, and the issuance of the product in a timely manner, which is the end of the process, is also important, which had lower levels of satisfaction. So, you can rightly see from this the areas that need to be concentrated on to improve overall satisfaction.

I put an example here, just to show you the impact here. So, a key driver was meeting that 14-day of filing receipts. So, we did a cross-tabulation here. We took a look at those people that were satisfied in terms of the performance in meeting that 14-day target and those people that were satisfied, their overall level of satisfaction was 82 percent.

Those people that were dissatisfied, which were the majority, in terms of meeting that 14-day goal, their overall level of satisfaction was only 50 percent, and you can see the same thing about the view about commitment to service as well. Register ability of Trademark within 13 months, so it's the same dynamic gap between those that are dissatisfied and satisfied with these key drivers in terms of timeliness.

There were a high level -- again, from past experience -- a high level of write-ins. I think something like 65 percent of the respondents wrote in one or more comments. That is high. So, obviously, the respondents want to be heard, number one; and number two, have something to say; and number three, want to make sure that message is being heard in terms of improvements that they would like to see.

So, we did an analysis of the open-ended question and you have a lot of detail in your booklet here for each one of the questions, what pleased you the most, what displeased you, what changes you would like to make, what new products and services, and so on, and you have the detail in terms of broad areas in front of you, in terms of we categorized, did a content analysis of each of the write-ins, and we provided Bob with copies of all the write-ins, cleaned up for language to protect the guilty or innocent, or what have you.

Let me give you an overview summary of what we gleaned from analyzing these large number of write-ins. First of all, on the positive side, they believe that most examining attorneys are committed, responsive, helpful, and courteous.

The second bullet, there were a lot of write-ins, and this is my language, when the examining attorney was what I call proactive; a very important point -- proactive, not waiting for the "customer." I keep on saying "customer," but there were some write-ins, darn it, I'm not a customer. I have to do business here.

Anyway, the customer, instead of initiating the call, got the call from the examining attorney dealing with things such as expediting the process, solving minor problems, suggesting ways to simplify the process, and shortening the time cycle, et cetera; a lot of examples of that type.

Most comments or I think over half -- in fact, I'm positive over half the comments involve timeliness issues of one type or another, a lot of complaints about the time it takes, as we've already seen, to get filing receipts. The perception of a long time of getting the application assigned to the examining attorney, first action, getting certificates of registrations, a lot of comments about timeliness throughout the process.

Now, that's a perception obviously, because as we know -- because most of the law firms do a lot of business here. They're not reluctant to pick up the phone to find out if the application has been assigned or not.

Another important point is when things go smoothly, take a look at the people that had no problems. Their overall level of satisfaction, we didn't show this, was something like 90 percent. Those that answered that question did not have a problem. Their level of satisfaction was 90 percent.

When there is a bump in the road, the perception is it's hard to get back on track. It's hard, it's difficult to fix because any fix takes time, and the time further delays the process. It's not simply a quick fix and so you have a lot of comments of that type. Lost files, lost drawings, any errors on the filing receipts, any of those type of errors, the perception is it's an error. It could be a minor error. Whatever the error is, it's hard to get the error fixed. It's not simply picking up the phone and correcting over the phone. That's the perception.

The mail process was used. These were the terms that you all use. Mail process is viewed as causing many errors. I already said correction requests delay the process and there were positive comments about the status line.

Now, let's take a look at overall conclusions in terms of the strengths. Overall courtesy it is a very high level. We talked about examination quality in terms of the response. The indicator of service quality is high. The application submission process is high, and there are improvements that are being made in the whole phone call process, especially returning calls promptly and promptly directing the calls to the proper person or office.

I mention here, though, that there are several key aspects of customer service that are acceptable levels and are showing a positive trend; returning the calls within one day, the status information, accurate responses to questions, and expert advice about the process.

On the negative side, in terms of areas for improvement, the entire problem resolution process got extremely low marks on all the questions. As I already mentioned to you -- I didn't mention to you, I'm sorry, that those people that had a problem, and then asking the question if the problem was fixed okay, their level of satisfaction went up, I think close to 90 as well.

So recovery is important. The perception of recovery, if it's done well, can have a significant impact on overall satisfaction. Then, the problems that we talked about in terms of timeliness, all these areas represent and remain a serious problem, and some of them are important, the overall process time and some of the standards, the filing receipts and so on are important because they're key drivers to overall satisfaction.

Okay, I already mentioned timeliness is a key driver, and then the flexibility in addressing needs, assistance at a time convenient to you -- we did some analysis of that. Those are lower levels in terms of service quality and what's happening is those people that have problems have a negative view of this type of thing; flexibility, the whole fix.

So, it's having a spill-over for those 58 percent. Of the people that had a problem, it's dragging down several of the questions about service quality; not surprising, but it's dragging it down.

I mentioned most of the areas -- problems or delays because of timeliness issues. We did another analysis to show the significant impact when you handle delays correctly on overall satisfaction as well.

Then the final chart is some of our recommendations, what I call the vital few. Filing receipts is a key driver, based on the write-ins and based on the responses to the questions on the survey, both errors and in terms of meeting that 14-day goal, there's a high level of dissatisfaction.

Because of the high number of incidents identified, especially in the write-ins that give you a lot of richness to the questions on the survey, a lot of things that are lost, missing papers, lost files, fees, specimens, drawings, and so on, that's usually an indicator that there are opportunities for internal process improvements, obviously. Now, this has ramifications because it further delays the process. We've already seen that timeliness is a key driver as well.

Finally, whether there is a formal process or not, the way problems are handled needs to be improved and there are a lot of good data and information, both in the public sector and the private sectors, because organizations are starting to realize the importance of the whole problem resolution, the problem recovery process.

So, there are significant opportunities for improvement of how to handle them and I think some of it, as we had a discussion with the managers and employees, there is a lot has to do with the term I use, "managing expectations." When you have goals of this type that can't be met, you're setting up a false level of expectation for the customer.

The more realistic that you give the customer expectations of what they can expect in terms of both the timeliness and in terms of the service, usually, it has a significant impact on the ratings of that service. So, if you go into a restaurant and are told that it's an hour wait, what the restaurant has done is managed the expectation. So, restaurants plan for that and know that they can beat it and you're delighted when you only had to wait 45 or 50 minutes.

There are many examples in the service sector of managing expectations. If I think that as soon as I get the filing receipt that my application is going to be assigned, then I'm going to have a negative view if I find out that it's not going to be assigned.

We can go into a lot of this -- we had a lot of discussion about that, and I said priority should be given to handling delays, especially in the problem resolution process because of the importance of timeliness.

Now, this gives you an overview, and obviously, the discussion is going on now of what to do with this data information and what improvement actions can and should be taken. With that overview, I'll be glad to try to respond to any questions. Yes, sir?

MR. KRUGMAN: John?

MR. RYNKIEWICZ: John Rynkiewicz. On slide TE30, on the open-ended comments, you mention on the last bullet timeliness and examining attorney competency. Throughout this whole study, quality is highly rated and it's listed as a strength. Is that just in that pocket of the open-ended --

MR. USILANER: Yes, if you turn to 31, of those that responded to Question 21 -- and we lumped these. There were various aspects of staff competence. We didn't break them down between examining attorney and clerical. Some were hard to break down that way. I guess you could. There was only 26 percent of what they disliked.

There were comments, obviously, not surprising that there's a variation in the "quality level" of examining attorneys. Some -- you know, some respondents praised and some criticized, but on the write-ins, those were the two areas most identified. They still were not drawing down the overall question about examining quality.

MS. UPTON-DOUGLASS: Now, I was one of the people who was given a survey and I have to say that I had a lot of problems doing it because first of all, we file -- or I personally file, I would say, thousands of applications a year and when you're dealing with that kind of volume, I mean, you're not going to condemn the entire office.

I mean, there's a patch of things that aren't right and I think we know them. We talk about them at these meetings and at our association meetings, but it was very difficult to answer the questions the way that they were posed. For example, it would have been helpful to say overall, this quality of examination in terms of statutory objections, you know, were high or low, or whatever, but it would have been better to say maybe 50 percent are good quality, or 25 percent are of high quality, or 75 percent are of high quality.

But to have these survey questions, I found that I couldn't answer them because some experiences were good and some were not. So, I would pay particular attention to the write-in comments and I spent a lot of time, for one, with the write-in comments because you couldn't fairly answer the way your questions were phrased.

MR. USILANER: Right. Greg, do you want to respond to that?

MR. MULLENS: Go ahead.

MR. USILANER: Because a decision was made and that's why Greg is author this year, that this was a survey that was designed originally by the Census Bureau and some of the questions, the wording of the questions were not appropriate, et cetera. We set up an 800 number for people to call us whether they wanted clarification.

We got a lot of calls and a lot of those calls pertained to the survey itself. We catalogued those, we got a lot of comments, and we're going to make recommendations to PTO about improvements in the whole survey design next year. Obviously, you want to hold on to certain questions so that you get a level of -- a trending level. You don't want to change all of them, but some.

It was obvious that the respondent had a difficult time; difficult, as you can see, based on I read every one of the write-ins, as I said before, about "staff competence," well, there was no break-out in terms of the questions on the survey between the technical support people and the examining attorney people, as an example.

As you point out, you have a lot of interaction in terms of throughout the year, so when you're asking the questions, are you summing all that up, are you responding to the latest, et cetera?

MS. UPTON-DOUGLASS: Yes, and I think that explains the comment that John Rynkiewicz raised as well, which is to say -- I mean, there are a lot of problems with quality and I wouldn't say -- I don't think people can go away from this survey and say quality is 82 percent, quality at the Trademark Office on substantive issues is stellar, but some of the people are consistently very good.

MR. USILANER: Right.

MS. UPTON-DOUGLASS: And some need help, and you know, this kind of survey, really it's very hard to get at this kind of data and that's inherent in any kind of survey.

MR. USILANER: I can't make a commitment. All we can do is recommend. That's why Greg --

MR. MULLENS: I think next year when we look at the survey, we are going to get into some redesign this time for some of the questions.

MR. USILANER: Because the 800 number is really helpful to us because people were frustrated in terms of responding to some of the questions and we wrote down each of these so we have some data this time. We're not just flying blind in terms of changing the design of some of the questions. Your point is well taken.

MS. DARE: You know, trying to draw on some of Susan's comments and just some real recommendations, I think especially for practitioners, usually, in law firms who are doing more than 100 applications in a year, I would really want several different metrics of you know, are they satisfied with 75 percent and dissatisfied with 25? I'd be very interested to see them break down by percentages.

MR. USILANER: Say this again, percentages?

MS. DARE: For example, Susan was saying that maybe 10 percent of her applications -- I'm making up that number -- are very good and she's extremely satisfied.

MR. USILANER: Oh, I see.

MS. DARE: And with 75, she's very middle of the road, and then with another 15 percent at the bottom, she thinks those are just terrible; there are mistakes, there are gross errors, or whatever. To have an initial metric like that from people who are doing 100 or more, or 50 or more applications a year, I think you'd get some very valuable trending data.

I'd be interested not just in a practitioner's satisfaction at those different levels, but also some kind of trending by examiner if the practitioner had enough experience to see that. You know, I feel that I'm extremely satisfied with 15 percent of the examiners that I dealt with and that they're very consistent and very good.

Then, there's a middle cohort and I feel somewhat differently about them, and then there's a bottom cohort where I get either very patchy results or I'm consistently dissatisfied with those. So, I think those are some metrics from people who are doing large volumes and that's invaluable quality data.

MR. USILANER: Right, yes, because there are really two types, two major types of customer survey instruments that are used. One is called, for lack of a better term, an overall survey. Say you had a lot of interactions. Step back now and try to answer these overall.

The other type of survey that we're seeing more and more of is what I call a transaction survey. I just took my care in for service. Now, that last transaction, that last server fresh in my mind, you get a mini-survey or a mini phone call survey of some type asking about that transaction. You call the phone company to come out for repair, what have you, you get a mini-survey about that transaction.

So, in the design, we have to be careful here is that we want to get an overall reaction, your -- when we take into consideration, that's a good idea, as well as some type of transaction should be thought of. There are two separate issues, especially in light of many of you having more than one application.

MR. KRUGMAN: Anything else?

MR. SIDOTI: I'm thinking it might be worthwhile when -- Chris Sidoti, ABA. It might be worthwhile if randomly, when somebody files an application, they're given back with their filing receipt sort of -- you know like when you stay at a hotel, how did you like your stay kind of thing -- just randomly given out and of course, there are vagaries, if they get a refusal and all that and that has to be taken into account.

But it might be a good way to kind of monitor how the process is going across the board so that when it's complete, either there's a final refusal and you can weigh that in or there's a registration issued. Then, that can be submitted and that data might be very worthwhile to track to see how on a given kind of situation, very objectively, how the customer views it.

MR. USILANER: That's the transaction I was talking about, right. So, that's something to consider, obviously, as another type of survey, as you point out, on a sampling basis, those that have gone through that have had their application approved, or what have you, registered, get a mini-survey -- not as long as this one, just a handful of questions.

MR. KRUGMAN: Are you talking about like an ongoing basis?

MR. SIDOTI: For a period of time, right. You know, just sort of take a post-hole for like maybe a month period of everything that's filed and then out of that grouping, select a universe objectively and just see what the -- you know, it may take a year to get these results, but I think it might be very worthwhile and it might be more meaningful data.

MR. RYNKIEWICZ: John Rynkiewicz. A few years ago, weren't there some kind of -- at the end of the form paragraph, there was a send some comments? Was that to your group, Chuck.

MR. CONDRO: That was to us. Chuck Condro, Trademark Quality Review. There was a form paragraph at the end of each office action soliciting comments and we got some comments for a few months and then they basically died away and we didn't get anything. It was good for a couple of months and then it just faded.

Then, every once in a while, a straggler letter of complaint would come in and it would have nothing to do with us. We'd have to send it to somebody else to straighten out whatever the problem was, and what became of it. So, from that standpoint, it only lasted for about a couple of months -- two or three months in which there were just people that would just come and give an overview of what they saw and after that, there just were no more responses.

So, they cut out -- I think the operation cut out the form paragraph at the end of the letter.

MR. SACOFF: Bob Sacoff, for IIPA. I think the survey is a very worthwhile and interesting piece of work. I think it has generated a lot of very useful data. Sort of from an overall standpoint, I just wanted to make the observation that in my view, one of the things that you've mentioned is exactly 100 percent on point; namely, the problem resolution process is an area of difficulty.

It's an area of difficulty in any organization no matter what you do, but I think it's extremely important for the committee and for the administration to recognize that as an area that is generating a disproportionately large amount of angst among the clients, customers, forced users, whatever you want to call them and that perhaps a focused task force approach-type effort towards addressing those types of issues would be very productive in terms of paying back and in terms of a much higher level of efficiency in user satisfaction.

MR. USILANER: Yes, because you're paying the price two or three ways. One, as you saw here, when you have to "fix" a problem or respond about a delay, it's taking away from the productivity, especially, of the examining attorney. To "fix" things is rework, which also has an impact on the efficiency of the whole operation, and you saw, as I said, in the analysis that we did, for those people that did have a problem and that were satisfied with the way it was handled, their overall level of satisfaction shot right up.

I think it was equal to, if I remember, or a little higher than those people that didn't have a problem.

MR. SACOFF: I'd even like to add my personal observations. The times when I have had personally the highest degree of frustration with the PTO process is when there's a problem that, you know, in the ideal world would seem like a relatively fixable, easy to fix problem, but you try time and time again, it's when you try to get a filing receipt corrected and you mail it in and it comes back wrong the second time, and you mail it in a third time, and it comes back wrong the third time.

Or, when you've got a problem with a filer, finding a filer, fixing something in a file, and you get bounced from person to person and nobody knows and nobody can find -- you know, it brings back all the worst Kafkaesque nightmares of a bureaucracy. So, you know, to return to a more rational tone --

MR. USILANER: And that's nailing down some of those service quality questions of those 58 percent, in terms of flexibility, meeting my needs, generally committed to service and so on. When we analyze that, those people that are dissatisfied with the way a problem is handled had a very low level of satisfaction with those types of service quality issues.

You can tell from the write-ins that you have more than just a few vignettes of the type that you're talking about when things, or my words, off track, the difficulty in getting it back in track.

Okay, thank you very much for your time and attention.

MR. KRUGMAN: It's about five until twelve, so, Sharon.

MS. MARSH: Do we want to hear Chuck's report before lunch?

MR. KRUGMAN: Absolutely. Chuck, can we hear your report before lunch?

OFFICE OF TRADEMARK QUALITY REVIEW REPORT

MR. CONDRO: I'll try to make it brief and concise. I'm don't want to put a wet blanket on this rosy summary here so I'll try to present the state of quality as we see it now and hope that it's not too inconsistent with what you just heard.

Let me give you a quick historical background. Trademark Quality Review has been in existence since December of '88 and we report to the Deputy Commissioner and the reason for that is because the Department believes that there's an inherent contradiction between quality and quantity and felt that there should be an independent office that reports to the Deputy Commissioner rather than to the Assistant Commissioner for Trademarks, and the same situation exists on the patent side. The Patent Quality Review also reports to the Commissioner's Office.

The primary objective of the office is to provide a mechanism to alert the Trademark examining operation to recurring problems in order to improve public confidence in the examination process and the validity of issued registrations; specific objectives, detecting trends away from proper examination practice and procedure so that corrective action can be taken, provide feedback to management in the examining core for both educational and corrective action.

We compile, analyze and disseminate information regarding the current state of quality and we provide statistical summaries of the results of the quality review process to management. Particular attention is paid to what we commonly refer to as clear error and examination, and that's errors that effect registrability. So, it's an interchangeable term. You'll hear me say errors that effect registrability or clear error; those are interchangeable.

We look at an application in four specific areas; the application of substantive statutory criteria for registrability; in other words, errors of substance. We do a sub-sample search for confusing or similar marks. We're the only organization within Trademarks that not only reviews an application, but also searches. We duplicate -- well, we don't duplicate. We search an application as though taking into consideration we're not using examiner search strategy. We search afresh.

We review each search strategy to make sure that the search strategy is correct and then we review it to make sure that the examiner has adhered to approved examination practice and procedure.

Now, in these four areas, what we do is we identify and then pinpoint the most common place of recurring errors. Now, when I mean pinpoint, I mean by law office. We do not and have resisted, and I will continue to resist any attempt to try to keep track of which examiners are making which mistakes because that's going to -- you know, what we try to do is we try to pinpoint the error.

We try to find out number one, what errors are occurring most often and in what law office they're occurring. The file selection, it's a 4 percent, computer-generated random sample of examined applications in all stages of pendency, including abandoned and registered applications.

Now, there was some discussion a few years ago of why look at abandoned and registered applications? You can't really do much about those. But the statisticians believe that in order to have a statistically valid sample, you also had to include in your sample applications that had abandoned and registered. Also, the Department Inspector General felt very strongly that abandoned and registered applications should also be looked at.

A follow-up review is conducted to make sure that whatever the Trademark examining operation agreed to correct is corrected. Now, in our first few years, we didn't do that. The Inspector General again came in and indicated to us that how do you know that these errors are being corrected? They've said they're going to correct a particular file, how do you know that? I said we don't, and they said well, we want you to pull that file after they've said they're going to correct it to make sure that the file has been corrected.

Let me give you some current data as far as the current state of quality and I'll try to give you these few percentages and try to match them up with applications because I don't think the percentages I give you or the error rates in the three or four categories are going to be that helpful unless I give you also how that translates into applications.

The error rate for 1998, in our opinion, was 3.8 percent which was a slight drop from the fiscal '97 figure of 4.2 percent. Now, that translates into about over 7,000 applications in which there was an error that effected or could effect registrability. Now, the thing that you have to be concerned about about that error rate is okay, so, fiscal '98 appears overall that the operation did a better job in fiscal '98 than it did in '97.

However, in the last six months, the error rate is 4.3 percent, which means in the last six months, the error rate has exceeded the error rate of fiscal '97. So, it's a warning sign that in the substantive statutory criteria area, the error rate is beginning to rise; not dramatically, but it's beginning to rise.

Missed references -- for 1998, the missed reference rate was 1.8 percent, which translates to about 3,500 applications that we believe the examiner missed a reference which is a significant drop from fiscal '97, which was probably one of the worst years since we -- I think the second worst year since we've been in operation. In fiscal '97, they had almost a 3 percent error rate in missed references.

The rate of error in this category, missed references, has remained pretty steady since mid-year. It hasn't risen, it hasn't gone down. It's maintained almost close to 2 percent throughout the last six months.

Search strategies, historically, that's been the best quality of examination measure. The TMEO has consistently been below 2 percent in the way they frame their search strategies to look for missed references. This year, the error rate was 1.2 percent, which means that in 2,100 applications that we looked at, we felt that the search strategy was deficient, and whenever the search strategy is deficient, then we -- in those particular cases, we research the mark because the deficient search strategy could have resulted in a missed reference.

However, even in that area, which has been historically the best area, the last two months -- last two or three months, the error rate is close to 2 percent, so in the search strategy area, the error rate is beginning to climb.

In practice and procedure, the error rate, they finished 1998 with a 5 percent error rate, which was a significant drop from fiscal '97, which was 6.3 percent and in fact, the 5 percent error rate has held pretty consistent throughout the year.

So, in the clear error rate, even though it's 3.8 percent, it's on the rise. The last six months was 4.3 percent so it's a warning that something is going on and search strategies, which have been historically -- they've been below 2 percent for 5, 6, maybe 7 years, a long time. All of a sudden, the last couple of months, which is really still too short a period of time, but in the last couple of months, the error rate and the search strategy area has risen.

Now, the follow-up review that we do, in 1995, they only corrected 86 percent of what they said they were going to correct, but as each year has gone on, they've gotten much better at that. In 1995, it was 86 percent. In 1996, they corrected 89 percent; 1997, they corrected 92 percent; and in 1998, they corrected 94 percent of those applications that they said they were going to correct, they corrected and we pull -- like I said, we re-pull the application and we check to make sure that the correction has been made.

Some historical perspective on the numbers, the fiscal year '98 was only the second year since we've been in operation that the rate of clear error, which is the most important category really because it includes the substance -- the substantive mistakes -- fell below 4 percent, even though, like I said, it's been up the last six months.

The only other year that it fell below 4 percent was 1996 when the operation finished at a 3.5 percent error rate. That comes to search strategies fiscal year '98 was only the third year since we've been in operation that the rate of misreference fell below 2 percent. The other two years were 1995 and 1996 when the error rate, number of missed references were 1.8 percent and 1.6 percent respectively.

The operation has maintained a rate of deficient search strategies below 2 percent since 1994 and the error rate in the area of practice and procedure. This year's 5 percent rate is the lowest error rate since we've been monitoring practice and procedure.

I guess if I would just conclude by saying that the state of quality is mixed. Overall, it may be better than last year, but there are some warning signs out there and it could be due strictly to the fact you've got a lot of new people. The last five or six months, there seems to be a rise in the number of substantive mistakes and it seems to be a rise in the number of strategies that are deficient.

MR. KRUGMAN: Chuck, when you're reviewing these applications, do you count a clear error? Do you look at other statutory grounds like --

MR. CONDRO: Everything. 2D, 2E.

MR. KRUGMAN: What about an error of commission? Would you count a descriptiveness refusal an examiner made that you thought was not well taken as an error?

MR. CONDRO: Okay, yes. Here's how we handled those situations where an examiner has a 2E-1 refusal or a 2D refusal that we kind of don't agree with. We give them a little bit more latitude, frankly, when they've made a 2D-1 refusal, then they withdraw it versus let's say they didn't make it at all and we felt it was 2E-1. Now, if we think it's really wrong-headed, then it goes down. Then, we'll send over a finding, yes.

But that's not really where the -- the only area where we see -- the two areas that we see where they make refusals -- I mean, they've made 2D refusals that I wouldn't make and they've made 2E-1 refusals that I wouldn't make, but that's not as frequent as the one area that we see a lot of is in the service mark area with specimens.

What they'll do is let's say it's an arbitrary. I don't want set forth a mark, but let's say you have an arbitrary word and then you have two or three more words that are descriptive, or generic, what have you, and they'll ask for a disclaimer of the descriptive term, which describes the service, and the specimens as far as the format is fine.

They'll come back and they'll ask for specimens because the specimens don't set forth the nature of the service. Yet, they've just asked for a disclaimer of the descriptive term so they're forcing the applicant to send in specimens, which is a good chance he or she doesn't have.

This happens with a fair amount of frequency where in the Trademark area, it's not as big a problem. In the service market area, we think they're too adversarial, that they ask for specimens and service mark situations when they don't need to.

MR. KRUGMAN: Does anybody have questions?

MR. FELDMAN: At what stage in the process are you doing this, because -- is this where the situation is often after publication?

MR. CONDRO: It's everything.

MR. FELDMAN: And I get the call from the examiner very sheepishly that I apologize I have to call you, but there's this word in the description of goods that really isn't right and --

MR. CONDRO: Okay, we look at the application in all stages of pendency. It could be at the first action, second action, final, publication. This computer spits out these serial numbers and those are the only ones we're permitted to look at. We don't look at any other case other than that, and it can be in all stages of prosecution, including abandons and registered.

So, I don't know if I've answered your question, but it's -- there's no part of prosecution that's not subject to a review. It really depends on whether the computer spits out the number. If the computer gives us the number, which we get every two weeks, we're going to try to find the files, which is not easy. It's very difficult to find these files.

MR. FELDMAN: But aren't you also creating situations where I've survived an opposition period and then because of a formality, such as a description of goods, I have to get published again?

MR. CONDRO: Well, it's possible that a file could be two, three, and four years old. That's rare, I mean, to find a substantive mistake. We might find a deficient search strategy, but it's very rare to find a substantive mistake after a file has been through a whole long period of time.

But in theory, yes. In theory, a file could come along that you've been working on for several years. It's had extensions of time and so forth. We get it and all of a sudden, we go this thing is descriptive. Yes, in theory, that can happen. It doesn't happen that often, but it can happen in theory, yes, and you're right. Then, it's embarrassing to everybody.

But the office also has -- well, go ahead. I don't know what else to say to you, except that in theory, that can happen. It has happened in the past, but that's not normal because it seems that most of the files that we get that the computer spits out are cases that have had first action, and second actions and that are published.

I would say a very small sample that comes out are cases that have been around for a long time.

MS. UPTON-DOUGLASS: Just a real quick question. What would be the reason -- I think the numbers are very good, but what would be the reason for not correcting something that was found to be clear error? Would it just be an oversight or would it be a disagreement with the finding?

MR. CONDRO: No. It could be a lot of reasons. Maybe the manager didn't communicate with the examiner. I mean, I don't know. I know that it was a problem when we first started. People didn't like it. I mean, nobody likes to have their cases reviewed once and then they have to come back and have somebody come back and say well, you didn't correct it. So, the job has certain parts of it that are not -- people don't like it, but I don't think there's anything sinister about it.

I think it's just that people in the beginning were just having a tougher time adjusting to it, but like I said, in over the last year or two, they've done a much, much better job of once they say they're going to fix it, it gets fixed.

MR. JENNISON: Chuck, over the years, I've heard of requests for a review of perhaps examiner attorneys and managing attorneys' decisions on certain applications to avoid ex-parte appeals proceedings. To me, it seems like your organization would be a good place to have such a review to avoid going into the ex-parte appeal.

Also, your organization might be a good place for the letter of protest procedure because you're absolute -- you've kind of doing the same thing that the letter of protest is doing, but you're taking it from third parties to say perhaps this is a clear area or mistake, and you seem to be in the trenches doing this thing all of the time.

MR. CONDRO: Well, I don't know about that. All I know is that if we took on any additional role, you'd have to have a lot more staff. Right now, we've got -- it wouldn't even be close because the Department mandates that we look at 4 percent; that's it. If the IG finds out you're looking at less than 4 percent, they're in here and they're giving the office problems.

MR. JENNISON: How many do you have?

MR. CONDRO: Three people.

MR. JENNISON: Counting you.

MR. CONDRO: No. There are three people that review applications. If the office was to take on a significant different role, it would require significant additional staff and I'm not sure even then whether the Department would want an organization that is reviewing work to also be doing -- I mean, I'm not saying this correctly, but reviewing somebody's work should be then be doing it also.

There might be a conflict there. I'm not sure because if you're looking at protests, you're making a judgment. You're sending out something to say -- to an outsider saying yes, we're going to grant your protest; no, we're not going to grant your protest.

In other words, we don't deal with the public and to a certain extent, if we were to handle protest letters, we would be dealing with the public. I'm not saying I'm against it. I'm just saying I don't know how the Department would look at that. We would then all of a sudden be expanding our role from an internal organization which looks at work strictly internally to be starting to tell the public granting protests, not granting protests.

I'm not sure. In fact, if I know the IG like I know them, they would probably object, but I can't say for sure. I don't know.

MR. KRUGMAN: Bob?

MR. SACOFF: Bob Sacoff, for IIPA. Just from an institutional standpoint, I agree with Mr. Condro's reservation. It seems to me that it makes his unit more objective and more somehow credible that it's not actually involved in -- I mean, in the ideal world, yes, they'd find the problems and correct them, but I think from an institutional credibility standpoint, it probably is preferable to separate the two functions.

MR. KRUGMAN: Anybody else?

MR. SIDOTI: I'm not sure I agree. I think with the problems of the letter of protest that I've seen, I wonder if it isn't worth exploring that an independent, non-partisan -- you know, there tends to be, and I'm a great proponent of the positives of the Trademark Office, but sometimes, when there are problems, as you say, it's really tough to correct those problems and there is sometimes on rare occasion the circling of the wagons kind of mentality that occurs, and I wonder if it doesn't beg for more of an independent review of letters of protest of an organization that's just out for quality.

So, again, I don't know if there's a ready solution on it. I think it might be worth exploring though.

MR. CONDRO: Well, the only -- there's probably a middle ground here and that is that the organization could review the decision. I'm not thrilled about that. I'm just saying it could review the decision within the operation.

I think part of the problem is going to be dealing with the public. I know how they feel downtown and I know they're not going to like the internal organization dealing with the public. I don't think they would have any objection if it was within the organization itself.

MR. SIDOTI: I'm not advocating the letter of protest procedure get any more bogged down and complicated. It's just I do wonder whether with the appropriate staffing and the appropriate procedure changes whether it might not be worthwhile to reconsider the whole way it's done. Just a thought.

MR. KRUGMAN: Sharon, are you going to feed us?

(Whereupon, at 12:15 p.m., the meeting in the above-entitled matter was recessed, to reconvene this same date at 1:15 p.m.)

A F T E R N O O N S E S S I O N

(1:25 p.m.)

MR. KRUGMAN: Okay, there's a few folks that are probably still making some calls, but it's 25 after so I think we should sort of plunge into the afternoon session and Bob Anderson is back, as you can see, sitting to my right.

A couple of things from the morning session that I would like to have Bob spend a few minutes discussing is number one, with respect to the proposal by the NTEU representative regarding the examiner's grade level essentially being -- the working grade being raised to 14 on a non-competitive basis. I want Bob to at least give his perspective from the PTO and then after that, it seemed to me that with respect to the quality survey that we looked at and discussed, the obvious question is that they've got this survey now.

They've got these results. What's the office planning on doing about it in terms of implementing some of those recommendations? So, I think Bob would be the appropriate person to give his comments about that.

So, I guess first, let's just if you have any remarks about the union proposal about the non-competitive GS-14.

MR. ANDERSON: I don't know how much background you got on the GS-14. It came about through a study that was done in the Agency by an outfit called NAPA. It's National Association of Public Administrators. They did an objective study covering not only the attorney grade in Trademarks, but several other positions in the PTO.

The outcome of the study regarding attorneys in Trademarks was they indicated that they believed the work being done by our attorneys, or some of the work being done by our attorneys was appropriate to support at grade 14.

Probably, the only point of difference between the Agency and NTEU 245 at this point is how that should be implemented. We have, in fact, brought several new 14s into the organization since the end of the study, but it's been done on a competitive basis. GS-13s apply and they are selected.

We currently have an open announcement that will stay open through December 31 to select additional GS-14s. I understand that Howard mentioned a working grade. I won't into the nuances of federal labor law, but the biggest -- if there is a point of contention between management and the union, it's how 14s would come into the workplace.

One of the things that we believe is that perhaps not every GS-13 is qualified to be a 14. And I think, in essence, that's what we want to deal with. How we deal with it is an open question. As I understood it, Howard indicated that there's been discussions before on topics of this nature and that would probably be a successful way of handling this particular situation.

I think one point of strongest contention between 245 and management goes to the performance appraisal plan. I understand this morning Howard pointed out that even though in the OPM guidelines for GS-14s verses 13s, verses 12s, 11s, and so forth, for attorneys in the federal sector, the biggest difference between position grades is a level of responsibility that an attorney has in an organization.

GS-14s are, generally speaking, held to be very independent and have a very high level of responsibility for their work, whereas a GS-11, which is our starting grade, only does work with a lot of review. As Howard, I think correctly pointed out, the current performance appraisal plan, the differentiation, is largely on the amount of work that an attorney does in the organization.

For several reasons and, in fact, one which will be addressed when we get to the quality part of this thing, I believe, and in general management believes, that the performance appraisal plan for attorneys needs to be changed to properly reflect the level of responsibility that attorneys should have in the organization as their grade increases; i.e., increase the amount of responsibility they have for high quality product, for outcome to their work, so on and so forth. Whereas, a GS-11 attorney would have a lower level of responsibility for that final product currently because it's under review by a senior attorney in the organization.

When I use senior I'm not using -- we have a job title called senior attorney. When I'm using it here I just mean someone with more experience who has attained a different position in the organization.

I think that the grade 14 should be tied to some change in level of responsibility for outcomes -- i.e. work products -- that go through the Patent and Trademark Office. And, in particular, the meeting I went to downtown this morning was to address an INTA concern regarding the quality of work that is being put out by the office.

Now, the study that was done indicates that a large segment of our customer population is very happy with our quality. The ratings were in the 80 percent range for quality of examiner actions. Eighty percent, according to the person doing the study, starts to approach world class levels. On the other hand, there is another 20 percent there that weren't too happy with our work, but I will talk about that a little bit more later.

In any case, I don't think there is any big disagreement between 245 and management about grades for attorneys. The disagreement comes more in how we handle -- how we have the performance appraisal plan and other things reflect the level of responsibility for the higher paid senior attorney in the organization verses an attorney who has just come into the office off the street and is new in the office.

Bottom line is I understand there was no major objection in the meeting to us doing fairly large scale promotions and that will probably happen at some point in the future after we can reconcile some of these other smaller problems.

Any questions on that one?

(No response.)

MR. ANDERSON: Okay, the Westat Quality Survey. I handed out an executive summary trademark quality which was given to Morley -- I believe his name is Weingard -- down at NPR this morning. This covers the basics of what you were briefed out this morning on the Westat study. At the sake of repeating a little bit, there were 14 items that were of major interest to customers of this organization and of the 14 items most strongly related to overall satisfaction, eight related to timeliness.

Received satisfaction ratings of less than 60 percent suggesting that if the organization focuses efforts on timeliness of processing, customer satisfaction would improve. It also points out that problem resolution and timeliness are big problems for us and one of the things I know you have heard this morning was is many customers have problems with individual files at a rate over 50 percent and once a file falls into a problem area we have a hard time extracting that from the problem.

Also that, if we do that well 92 percent of the customers who have problems and have their problems solved with a high level of efficiency are very happy about it and, in fact, it helps improve their view of the office in terms of the quality of our work. On the other hand, most customers didn't fall into that category. That was a relatively small percentage of people.

After I got the results of this, one of the things I've done is I now have someone that reports to me who is taking a look at problem files. If the files hits my desk, we are doing what is called a root cause analysis for that particular file. We are also keeping a database on the results. My goal is to start to pinpoint why files are having problems in the organization.

What she is attempting to do when she does this research is literally track every step of the file through the process, record what happened and see if we can't start identifying the root cause of the problem and then address that problem and get rid of it. I believe that by looking at a relatively small number of files, we can probably solve significant problems across the board and the studies -- now, this has only been going on for about three weeks but what we have seen so far is there is an element of truth to that.

Files that have problems tend to have the same problems which cause them to fall into this kind of never never land where it's hard to get them back out again. Now, the problem that is being addressed there is lost file, lost paper, lost specimens, lost check -- where you have, you yourself or your representative comes to the office, you are trying to find a file record and, lo and behold, we can't find it.

That is not all the problems that everybody has with what we are doing but it apparently is a significant problem for many of our customers. We are going to work on solving that problem. Other things going on, we are improving our automated systems. By the end of November if everything goes right, every incoming application will be scanned as an image, all of the papers in the file, and stored on a server.

If that application gets lost, we will be able to pull down the images of the pages and recreate the file. The other thing it will do is, eventually, these electronic records will be available to Public Search Room users, the certification branch and so forth which means that to do certain things, people will no longer have to pull the paper file wrapper out of examination.

One of the things that this person doing the work for me has already found, files often times get sidetracked because somebody wants to look at a file. The file then gets moved out of the process and doesn't get back into the process efficiently. We hope to solve some of that by making records available electronically, literally anywhere in the agency.

It will also help us now when we lose a file permanently, as some of you may know, we have to call you up and get the record often times. In the future, we shouldn't have to do that so often. Now, unfortunately, this will start a day forward and we already have some 360,000 file wrappers under examination in the organization and, of course, the opportunity for any one of those 360,000 files to get lost is fairly significant.

Other parts of the quality study, even though the examiners got fairly high ratings on quality, we will be addressing quality in the organization. Many of you, I know, have examination problems. What one result of the NPR meeting this morning -- we are going to look at incorporating quality standards into our strategic business plan and in the other parts of the organizational structure, including performance appraisal plans for managers, in particular.

We ill be looking at things like the results from the Office of Trademark Quality Review to see if we can address some of the problems that are pointed up through Chuck Condro review of applications in the office. We will also be working with INTA and I think we have a commitment from them to start addressing what is quality that you want to actually measure.

I mean, one of the problems we always have in the office is there are two sides to each quality issue depending on who you are representing. In particular, in likelihood of confusion, if you are representing the applicant, the applicant is very happy when we don't cite a mark. On the other hand, if you are representing the registrant and we don't cite the mark, you are not very happy with us because you believe it should be cited and everybody knows an ex-parte proceeding, particularly if it doesn't get past the examiner, is much cheaper than filing an inter-parties proceeding at the Trademark Trial and Appeal Board.

What we need to do is to pin down that dichotomy between who is representing whom and get to the underlying issue of what we should be doing and what we shouldn't be doing in ex-parte examination. While I was here this morning I heard a couple of things broached on the topic of letters of protest and at lunch I was in a conversation about the use of Internet resources for examination and one of the things that was broached was the potential of the office in the future perhaps looking at common law refusals on likelihood of confusion because the Internet makes a lot more information available to us.

Some of you may be aware that our examiners are now using the Internet fairly extensively for evidence in applications they are handling. I think as we get more sophisticated in using electronic technology, we have the potential of doing a lot more than we do today, which was one of the issues with the letter of protest.

You are going to see different kinds of things being cited that you would never have seen five years ago simply because we have access to relatively cheap and relatively efficient resources.

Again, I know Howard mentioned the short amount of time we give examining attorneys for examination. On the other hand, as we improve the efficiency of resources, examiners can gain access to much more information when making a likelihood of confusion or a refusal.

Setting a balance between ex-parte examination and what best suits the needs of the registration system I think is a tough issue for us and I think the only way we can get to that is to work with the private sector to get this defined. Hopefully, we have a commitment to do that.

I guess I would be willing to take questions now on the quality study customer survey, in particular. I'm sure there must be some. Yes.

MS. DARE: This isn't so much a question as a comment. One of the things that was very clear that was a problem, and a problem where an implemented solution would create a great increase in customer satisfaction, was the file that has a problem that suddenly seems to be cursed and never kind of gets on the right track again and you try two or three times to make a contact to solve that problem and you just can't do it.

It seems to me there may be kind of three different solutions, but they are all the same type and it's having someone within the agency who is really responsible who, once the file gets de-tracked, puts it back on track and one person becomes the point of contact instead of the number of people who touch a file, in the ordinary process of things. It makes sense to me, simply because of the way I run my practice, that it would be an attorney and that either the individual attorney who was the examining attorney or an attorney who is the designated problem resolving attorney in the law office in question would do that.

Then the third alternative -- because, obviously, you do want your attorneys practicing law as much time as they can and not doing administrative functions -- is that you would designate a problem resolution specialist or ombudsman or goodwill ambassador who could handle these things and at least give meaningful contact to the applicant that the problem was being resolved, that only one phone call had to be made, that a specific set of follow-up actions were recommended.

It seems like we could streamline that process and have a single point of contact and some comfort levels that, once the problem had been identified, it could then be solved instead of -- that it would create and resonate more problems. I think that would help everybody out.

MR. ANDERSON: I think that is probably where we are headed with the person I was just talking about. I am a little hesitant to name them as an ombudsman person yet because I don't have enough structure for it.

The thing I have found a little frustrating -- thus far, I've given her 10 files. The first one was a telephone call to me from an attorney who was extremely frustrated with us. We'd pulled the file from the Official Gazette last November, November of '97, on an examination question. The file, literally, disappeared until just a couple of weeks ago.

I put this person finding out what would go on and, lo and behold, within a period of about three hours the file turned up and was immediately put back into the publication process. And I had her go check, and the file was literally sitting on one person's desk for a period of almost seven months.

I have no idea why that happened, but it suggests to me that we need a process for when a file gets pulled, it will have some special status in our TRAM system or on the cover of the file to make sure that the file gets back where it's supposed to be.

I mean, this somewhat goes to a topic that I think is on the agenda a little later about having centralized file checkout. One of the reasons we are proposing that is to have better control over file wrappers in this organization.

Right now, virtually, well, not virtually -- anyone in this room who wants access to a file -- all they need to do is know the serial number and the location and they can go to that place in this building and take that file wrapper. If it's in a law office or with the pub and issue section you may be required to give your name and sign it out, but there is no requirement that you return it.

We ask you to return it. Sometimes the file gets back, sometimes the file doesn't. I mean, it's just like everything else, there are people who are very conscientious about doing it, you know, checking it, bringing it back, but there are other people who will drop it anyplace and it simply does not get back to where it's supposed to be. And, lo and behold, those oftentimes end up being the files that somebody else is looking for because there is a sense of commonality here if one person is looking for a file oftentimes more than one person is looking for it for, oftentimes, the same reason.

We are looking at putting more controls on files. Now, you know, the back side of that is it changes the relationship between many of our customers and the organization, and some of those customers are not happy about that particular proposal. It will be discussed a little later today.

That same rule, by the way, will also apply to internal government employees. The only place that a government employee would be allowed to pull a file from would be their home office. If they need a file from an office that in not their home, so to speak, they are going to have to go through centralized procedures to get that file wrapper because government employees are no more responsible many times than someone who comes from outside the building to pick up a file. But, you know, that's just control of file wrappers and control of papers.

One of the reasons papers get lost, files move very rapidly through the building or the paper arrives at the place where a TRAM system says that the file is supposed to be, the file is not there. Guess what happens to the paper? It gets put in a stack awaiting the return of the file. The employee gets caught up in doing other things and never quite gets back to that stack of papers that came in when the file simply was not in the office where it was supposed to be.

I think by instituting some controls, having some sign-in and sign-out procedures, holding people responsible for their behavior, we can maybe improve it some.

MR. KEIRS: I'm Chris Keirs of the Houston Bar. I wonder if you could comment on the decision to use an electronic imaging system for back-up as opposed to an entire electronic work flow system.

MR. ANDERSON: It will be an electronic work flow system. The first step is to capture the information. We have been using this system since early this summer. The first step was to scan files using OCR technology to put information into our TRAM system. Now, it's reported, again, in this summary, but one of the big complaints we have is the quality, technical quality, of data.

What we have found with scanning, when we were key entering data, we had error -- key entry caused about 74 percent of our total errors. With scanning, now the data capture process had dropped to 26 percent of our errors that we find in materials in our databases.

We are going for payoff in order. The problem with electronic file management for us right now is we are having a hard time identifying a vendor and we are only using COF software, commercial-off-the-shelf software, that has a file management system sophisticated enough to handle the examination process. We are working with the private sector to identify vendors that have the software that will support it.

We are currently planning to implement that in Trademarks in the year 2002. The first step will be a new TRAM system called TRAM Plus Plus that will give us a lot more ability to track files inside our system. The first elements of TRAM Plus Plus start coming up next summer.

The file management system that you have just talked about is scheduled to come out now in 2002. At that point, there will be no paper file wrappers under examination in Trademarks. All examination will be done using an electronic record, but the electronic images will cover everything that you would normally find in a file today.

Anything else? Yes.

MS. UPTON-DOUGLAS: Just because you weren't here for the discussion this morning, I just wanted to mention a topic that we spent some time discussing which was the -- just to briefly mention that we had issues with the methodology of the survey and that it really didn't measure a lot of important things, and that if you handled thousands of applications in a year it was very difficult to condemn the whole Office because you had maybe 10 percent or 15 percent of files that ran amuck. And so the survey doesn't really measure, I think, what you think it might measure.

MR. ANDERSON: I'm not arguing that. All of those numbers are necessarily -- reflect what you're interested in. The survey -- this is the third time the survey has been given and some of the questions -- I mean, I find the same amount of ambiguity in the question about quality of examination. In all honesty, I have no idea what that question means.

MS. MARSH: I was one of the people who answered the questions and I didn't know how to answer them. I spent a lot of time on written comments because the questions were not really suitable.

MR. ANDERSON: Now, this morning, on the visit to NPR we will be working with the bar to come up with questions that perhaps more directly answer issues of importance to our customers, such as what is quality. I agree, I don't think the question in the survey really addresses that issue. So quality is taken care of.

MS. UPTON-DOUGLAS: No, we are going to work on it, right?

MR. ANDERSON: Yes. You all may have noticed that you do not have a packet of charts this time. I heard at least one thank you up here.

What I have attempted to do here is to give you information that I oftentimes get questions about and I'm also pushing this information out a little more than in the past and I'm also keeping it in text form which makes it easy to put up on the Internet.

Pendency -- I've tried to pick up major indicators that I have at least, had questions from the bar on various occasions: When are you going to mail my postcard telling me you received my application? When will the application drawing be in the Public Search Room? When will it be in the automated system? When do I get my filing receipt? First action on the merits, approved for publication for opposition, published for opposition, when do you issue the NOA? When do you mail the NOAs? When will the mark register and when will the registration be mailed? And abandonment, which nobody asks about, but it is one of our customer service goals, so I included it also.

At the end of fiscal year 1997, or '98, I'm sorry -- September 30th -- we were not doing very well on many of these goals. Postcards were being mailed in about six to seven days. Drawings were going to the Public Search Room in 28 days. That went up eventually to around 40 days. Data was in the automated system in 33 to 35 days, that's about 40 days now.

Filing receipts were being mailed in 37 days. We are still pretty much on with that. First action on the merits dropped to 7.2 months. Now, you'll notice the other thing, there's a footnote on that. The range for first action on merits between the nine law offices is 4.8 months to 9.8 months.

Six offices are above average, three are below and then a couple of our new offices are currently included with existing offices for pendency purposes. Those of you who file a lot of applications in international class nine are probably well aware that the highest pendency is in those classes with international class seven and, I believe it's 12, close behind. The lowest pendency --

MS. UPTON-DOUGLAS: Are those averages for the law offices?

MR. ANDERSON: Those are average for the law office.

MS. UPTON-DOUGLAS: I was going to say, they are longer than those numbers, the oldest ones.

MR. ANDERSON: Well, as you know, an average -- I believe somebody said it well the other day, if you try to walk through a river that has an average depth of five feet, you are likely to drown. Averages, you know, are a measure that -- offices with the lowest pendency right now is law office 101 that handles foods and beverages. Office with the highest pendency are international class nine.

Now, I can tell you that in a category of applications, we call it a status 638, an application picked up and assigned to an examiner. In international class nine, there is at least one application in that category that is 54 months old. It is an exception, not the rule.

I took the average and I had a list created. That list contained every application in that status that was more than two months older than the average. There were 632 files on the list. I have, in essence, asked the managers in the organization to clean that list up and I am sure that as we sit here talking some of them are out there trying to find out where those old files are so they can get them off that list.

Some of the dependency is being driven by some very old files in the organization and, in fact, the not yet defined ombudsman person, nine of the files that she is looking for were files on that list that were more than 40 months old from nine different classes.

So some of you maybe sitting in this room, filed an application a long, long time ago that does not have a first action on it yet but we are trying to find it and we will be making an intense effort to weed those files out of the system.

What we are finding, by the way, is many of them were held to be informal and sent back to the applicant. In at least three instances, those files were then returned to the office as formal applications and have registered in the meantime. It's just we never got them out of TRAM as a live active application. So in some cases this is not a real problem; it's an administrative electronic management problem. But we are going to clean that garbage up.

One of the things on your approved for publication for opposition, we don't really measure that in an automated system anywhere, so that is an estimate on the list.

The other things are measured on a monthly basis through our automated systems and I have provided the range on each one of them. So the range on approved for publication for opposition are -- I'm sorry, published for opposition -- is 11.6 to 16.5 months.

When you look at the range you probably get a better feel for your interactions with the office than you do by just by looking at an average.

Going on to unexamined new applications. 112,257. That was up by about 13,000 from the end of last fiscal year, and that is file wrappers not classes. However, at the end of the fiscal year that number fell by almost 7,000. So it had been running in the 119,000 range prior to September.

Total pending applications in the office, 360,674. And, again, that is file wrappers, not classes. Examiners, by the way, examine classes not cases. The total number of pending classes, which is what examiners examine, is 432,752. Pending use applications 134,000. Pending ITU pre-notice of allowance 155,000. That reflects current filing patterns. Over 60 percent of our filings are filed under intent to use now.

ITU applications post-notice of allowance 70,000, with 59,000 awaiting a statement of use so they are under an extension of one type of another.

Total first actions last year, that's first and second examination first actions, 238,191. The reason I had you do first and second exam first actions is because I discovered an error on one of the reports that I thought was only reporting first actions during first exam. It turns out that it was counting all first actions, including those on second exam, which is why we continue to be able to build a backlog even though first action counts appear to be higher than the number of filings we were getting each year.

Now, we are in the process of having our automation people correct that problem so first action counts during first exam will drop somewhat.

Total disposals, and this is a correct number, published or abandoned, 183,186. 145,000 were approved for publication for opposition. That's a new record, by the way.

The number of examining attorneys -- and I was asked to provide this number with more than six months of experience -- as of the end of September 233. With less than six months of experience 53. And last year we had 39 examining attorneys left examination either for promotions internally, which is where we lost most of our people, but they also went to jobs outside the office.

We will continue to have attritions due to internal promotions as we expand, which is -- attached to this sheet, by the way, if you want to see a comparison of what we look like from 1992 forward, it's on this back sheet. The only thing of note is the applications filed for fiscal year 1998 only goes through the end of August. We should receive around 230,000 to 235,000 applications but we continue to increase on filings. All of the other numbers on this list are current through the end of September. At the end of September we had 281 examining attorneys and five senior attorneys -- senior attorneys are part of the management structure -- for a total of 286 attorneys.

By the end of January 1999 we plan on being at 375 attorneys, including seniors. We will be hiring approximately 100 additional attorneys between the end of September and the end of January. We have approximately 30 more coming on, I believe it's November 6th -- 9th.

We are now hiring on a kind of a continuing basis. There is a hiring committee of three people who go through the resumes in order received, interview the people and if they are well qualified, they are offered a job. We may be stepping up our recruiting efforts to try to broaden out the pool some but, fortunately for us, one commodity that is readily available to us at this point in time is attorneys.

If we advertise, we would probably have more resumes than we know what to do with. All of these resumes are literally coming over the transom or under the door. People have heard that we're hiring and they submit their resume to us. We normally have a stock of about 300 resumes on hand.

A large number of our people have experience outside the office before they come here, some in intellectual property, others in other segments of the bar. Our work force, therefore, is getting to be a little more mature than it has been in the past and you must be admitted to the bar at this point to get a job in the organization. The only exception is if you have interned here and you have not been admitted to the bar, we will offer you a job pending taking the bar.

In any case, we plan on being at 375 attorneys at the end of January and we plan on maintaining the work force for attorneys at 375 from that point forward unless we start hiring more people, which we may have to do to handle backlogs or filing increases if they go above norm. Space, as you know --

MR. FELDMAN: Before we get onto the space, where is all the training going to come from for all these new attorneys?

MR. ANDERSON: Okay, the training. We have one program called "Total." The Total program consists of two segments, one is a classroom segment, the other is on-the-job supervised training. The classroom segment is five weeks of concentrated classroom work. The new attorney starts in the organization, they will be sent to this program for five weeks.

We changed the program some. We used to look at almost everything in trademarks. Now it's focused on what the average examiner is likely to encounter during examination. So, likelihood of confusion, Section 2E and stay away from some of the more esoteric topics that we used to cover.

We also test during the course of this five weeks of training. We don't fail people out because they don't do well on the test, but what we do do with the results if a person is having some problems going through the training, we use the results to monitor the person's advancement in the office, to take a look at where they may be having problems. It gives us an indicator, you know, if they had trouble understanding Section 2E-1, that we ought to focus more of the on-the-job training on that particular aspect of the examination.

The on-the-job training portion, normally an attorney will have a virtual one-on-one relationship with the trainer for the next six months or for their first six months in the office, including the five weeks of the training course. During that period of time almost all of the work completed by the attorney will be reviewed by an experienced attorney in the office.

After six months a large number of these folks get what we call, "partial sig authority" and the review drops off slightly, it's not quite as intense as it is during the first six months.

And then as the attorney advances through the system, the amount of reviews starts dropping off gradually. They get probationary sign authority then, finally, when they become GS-13's they get what we call, "full sig authority." So through GS-11, where most of these folks get hired, and GS-12, they have some type of relationship with an experienced attorney that reviews work and provides, in essence, consulting on difficult cases and so forth.

GS-13 full sig authority, the attorney has independent authority to make all decisions. Now, six months prior to that, they have probationary full sig and their cases are no longer reviewed but a segment of those cases will be reviewed for them to get full sign authority. Full sign authority is not automatic.

We have some people who have been through it several times before they get approved for a full sig authority and get that next promotion.

At the GS-13 level, the only review that is done on work is that under the performance appraisal plan and, of course, things like request for jurisdiction, cases that Chuck Condro reviews, and trademark quality review and so forth.

We are having, in all honesty -- okay, at September 30th 1997 we had 215 attorneys. Thirty-nine of those folks disappeared last year. So out of the core of experienced people in September 1997, we dropped down to 100 -- what would that be -- 176. One hundred seventy-six experienced attorneys are now training 101 brand new attorneys. By January 1999, 176 attorneys, minus any attritions in the meantime, will be training 200 attorneys.

At the end of January 1999 we will have almost 200 attorneys that have 14 months or less experience in the Trademark Office. That may create some problems. I mean, the only thing I can assure you is we are trying to keep the training under control. I think we have a solid classroom program and we are trying to keep experienced attorneys matched with inexperienced attorneys.

Any other questions on this one? Yes.

MR. BERESFORD: Just a comment, really, I guess, and a question. I was pleased to see in your distilled chart here, Bob, that you did include data and goals and actuals for getting the drawings to the Public Search Room and into the automated system.

At such point as you swing into accepting electronic applications in full swing, I trust that will probably help on those figures.

MR. ANDERSON: If we start to get the bulk of our filings electronically, absolutely. The best estimate is if we get about 60 percent of our filings electronically, that will allow us to substantially improve front-end processing.

You know, with 800, it's almost -- I don't want to call it a gimmick because the word "gimmick" has a certain cache to it, but what we're doing with the electronic application is testing the future. With the pilot, we wanted to see how well it was accepted. With the electronic application, we wanted to give people an opportunity to use it to see what we can do to improve it.

We have actually been a little bit surprised at how well it has been accepted so far. We have actually received quite a few accolades on the quality of that particular product. We are pleased with it. It seems to be working well. I should also note that there is another product that runs concurrently with that product called Print Ease, where instead of sending it electronically to the office, you fill it out on the Internet, print it off and then send a paper application to the office. We are getting applications under Print Ease also, although we have no idea how many.

MR. SACOFF: Where is that available?

MR. ANDERSON: The same sight.

MR. SACOFF: The same sight?

MR. ANDERSON: If you go to the electronic filing sight, it's on the right hand side. The left hand side is electronic filing. The right hand side of that page is Print Ease filing. That application, if you use it, looks quite a bit different because it's SGML tagged. But again, my view is that that's the future of filing in this office. We are not going to use forms with cute little boxes and stuff on them in the future. We are going to use SGML tagging because that is what we are using to feed data into our systems.

MR. JENNISON: While you are on the resources file, what is the total number of employees for, at this point, FY '98? At the end of FY '98, you said you had examiners --

MR. ANDERSON: At the end of fiscal year 1997, as I said, we had 215 examiners, we had 456 total employees in trademarks and 60, I believe it was 62 contractors.

MR. JENNISON: Was that FY '97?

MR. ANDERSON: FY '97. At the end of fiscal year 1998, we had 286 examiners, a total of, I believe it was 582 or -3 government employees and 82 contractors.

MR. JENNISON: And FY '99, your estimate for that?

MR. ANDERSON: At the end of fiscal year 1999, we are currently estimating 830 government employees and probably around 80 contractors.

MR. JENNISON: That would be 375 examiners that you have?

MR. ANDERSON: 375 examiners.

MR. JENNISON: Let me go back. You said FY '97 the total was 456?

MR. ANDERSON: I believe it was 456.

MR. JENNISON: I have here something at the end of fiscal year '96 you had 522 and then 58 --

MR. ANDERSON: Yes, it dropped. Well, 552 probably included contractors.

MR. JENNISON: No, there's 58 contractors -- 522 employees including managers and supervisors, and 58 contractors.

MR. ANDERSON: Okay, well, we were lower at the end of last year than we were at the end of 1996. We did not have hiring authority for -- I mean, what is going on here is for a period of years, we did not have hiring authority from the government. Government levels of people are governed by a concept called, "FTE," full time equivalent. If you don't get authority to hire, you cannot hire.

MR. JENNISON: I was just trying to get some numbers, thanks.

MR. ANDERSON: Yes, those are off the top of my head. I mean, I can give you the exact numbers. As I recall, that is the way it worked. Anything else on people?

Now, I should mention a large amount of our hiring, by the way, will be in technical support areas. We are currently trying to recruit approximately 60 legal document review clerks. They are essentially file clerks. We are in the process of hiring 22 additional legal instruments examiners in the law offices and we will be adding more people there for legal instruments examiners. We are not just increasing the number of attorneys. We are increasing staff across the board.

MR. JENNISON: Do you see it growing up higher after FY 99 or are you going to hit a ceiling and --

MR. ANDERSON: Right now, we have requested FTE increases and current budgets, '99 and the year 2000 which is still -- you know, we don't get our budgets for 2000 until toward the end of 1999. The '99 budget was just completed by Congress in that very large bill that was under discussion toward the end of, or mid-October.

The year 2000 budget, we would have another increase in staff -- 2001, 2002 and so forth. When we move into the new facility that Mr. Dickinson referred to this morning, Trademark should have over 1,000 employees. That is assuming that filing levels continue to increase at the rate we have been experiencing. We will continue to hire people to handle the applications coming in the front door.

MR. JENNISON: In that 1,000, would that include contractors?

MR. ANDERSON: No, that is government employees.

MR. JENNISON: What is your estimate when you move in, the number of contractors for trademark operations?

MR. ANDERSON: I can't really answer that question directly. It depends on how quickly and how efficiently we bring automation into our systems. I mean, one of the things that is going on, when we get electronic file management, we no longer have files in a building. Therefore, we will no longer have docket clerks.

A lot of the contracted work is related to moving files around and some government employee workers related to moving files around. Those jobs disappear, but in the meantime, new jobs are coming into the system. I mean, what automation is doing is replacing low-skilled paper movers with high-skilled people who can deal with technology and that is going to continue.

MS. UPTON-DOUGLAS: Since you are mentioning 2000, I had seen on some prior reports that you had given that you expected compliance with Y2K problems to be completed by October of '99. Are you still on schedule for that?

MR. ANDERSON: Trademark systems are Y2K -- okay, we believe all the software programming has been completed for Y2K compliance. Here is our problem right now. The software, by federal mandate, all has to be tested. We are using a computer called an A16 provided by Unisys Corporation that used COBALT programming.

Cobalt has not been popular in the software industry for quite some time and we are having problems finding anyone with the expertise to test our Y2K coding structure in the cobalt programs we have. We are publishing four-digit year dates and so forth. Everything appears to be working, but until this software is tested for compliance, we won't know for sure. The agency is looking around for someone to test our code right now. All of the coding work is done, however. Where we haven't changed the code, we have purchased new systems that are certified Y2K compliant.

Let's see, I think I was headed towards space.

(Laughter.)

MR. ANDERSON: I was asked a question at lunch. There was a concern, I guess, at the last public advisory meeting that some of our examiners are going to be located quite some distance from this building. In the meantime, what happened was the Environmental Protection Agency, which had the North Tower building, discovered that we were going to move Trademarks to a building that the EPA wanted. They cut a deal with us we couldn't refuse.

They gave us 55,000 square feet of space in the North Tower building for approximately 45,000 square feet of space in the buildings that were roughly a mile up the road. As a consequence, all of the operations for Trademarks will be consolidated in the North and South Tower. In terms of making that space available for operations, the 5th floor, which you were on today for lunch, we just moved onto it over the weekend as you can tell with all the boxes and stuff over there.

We have one more complete floor in that building to occupy. It should be finished in December, if on schedule. In this building, the 4th floor is currently being renovated for the office of Trademark Services. Post Registration ITU will move to the 4th floor and the Trademark Assistance Center will also be on the 4th floor. The director of Trademark Services is also moving from the 10th floor to the 4th floor.

The 10th floor will have the Trademark Law Library, which is currently on the 9th floor. The Law Library space will be given to the Trademark Trial and Appeal Board for expansion there. David Sams is quite short of space. In total, however, we are adding 55,000 square feet to our inventory and that will give us enough space to accommodate current expansion.

After 1999, we really don't have enough space available to expand more, but as you probably know, we have this somewhat unique program called, "Trademark Work at Home." If you have reviewed the 1999 strategic business plan for the agency, we have indicated in there that up to 25 percent of our examining attorneys may be working at home at the end of 1999.

Trademark Work at Home gives us an ability to continue expansion of the examining core without adding additional space to our inventory. The way it would be handled is examiners would hotel in and out of space. In other words, when you need to come to the office, you would reserve an office for your use when you come in, and when you leave in the evenings, somebody else would be using that office the next day probably.

The current Work at Home Program is three days at home, two days in the office. Work at Home is slated to expand to 10 percent more of the work force in subsequent years after the year 1999, assuming of course, that we find the pilot to be successful and the costs are not out of line with reality.

Let's see, I think that is about it on what I was supposed to report out about. Any questions on anything?

MS. UPTON-DOUGLAS: Just briefly, your experience with the Work at Home experiment that you've been doing: lost files, continuity, productivity, how are you finding it going?

MR. ANDERSON: Productivity appears to be up. The total number of -- okay, what we have is a blind test here. There are 18 examiners in the office who no one knows who they are, except the people running the project that have about the same level of experience and so forth as the 18 Work at Home people in the pilot. So, we compare those two groups of people and then we also compare people against their previous records just to be sure that there is not something else going on.

What we have found with the 18 people working at home is the number of hours they devote to examination is up. Total productivity is up for that group. The group that is in the office, the number of hours is about static and the productivity is about static compared to prior years. So, the group in the office this year shows lower productivity in number of hours committed to examination than the people who are working at home.

The only caveat I would put on that, there is a phenomena in experimental science where sometimes when you have a spotlight on you, you do better because the spotlight is on you. If we turn this into a regular program, we would hope to get the same results and, actually, in private industry and in other contexts where this has been used, productivity tends to stay higher in work at home programs because you tend to have happier employees. I mean, it gives them a little bit more flexibility in their lives.

So, it looks like the program is a go but I don't want to commit to it yet because we haven't done the final study which will happen starting next February. Yes, John.

MR. RYNKIEWICZ: John Rynkiewicz. Bob, going back to the space issue, with the planned PTO campus, and I think the size was defined a few years back, I think Trademarks is getting its final ability to hire and get over the FTE limits and expand, and I think the numbers that we're seeing and your space needs have increased significantly.

Is that being factored in as -- what was it 2005 or so? Is that new campus going to be able to house --

MR. ANDERSON: The new campus -- there is an expansion provision in the contract so the campus will be delivered at a certain size to handle a certain number of people. I believe the number is 7,108 for the total agency. Then, if I recall correctly, there is something like 400,000 square feet of expansion space available in that project that has not been committed at all yet.

So, the answer to your question is yes, there is expansion available. I believe that's what your question was.

MR. RYNKIEWICZ: I think, theoretically, but is it likely that there could be problems going into -- space problems going into the new complex?

MR. ANDERSON: I'm on the Space Steering Committee, okay, so there are certain things I can't talk about because it's procurement sensitive, but from anything I know about this project, it is highly unlikely there are going to be any problems going into the space. There has been a lot of effort focused on right-sizing the space for the agency when we move into it.

Now, I know there's all kinds of rhetoric occurring in public about the space is too small, I can't handle all the people, et cetera, et cetera, but there is nothing to my knowledge to support that. I mean, there are a lot of political axes being ground in this situation and I'm not aware of any problems.

Anything else? As you heard Todd say this morning, the Year 2000 Campus is still on. The selection for the final site should be made shortly. At that time, I think a lot more information will be released by the office. Once it is out of the procurement sensitive environment that it is in now, a lot more information will be available.

OFFICE OF LEGISLATION AND INTERNATIONAL AFFAIRS

MR. KRUGMAN: Thanks, Bob. I want Lynne Beresford to come up. Lynne comes from the Office of Legislation and International Affairs and she's going to give us an update on international legislative activities.

MS. BERESFORD: Thank you very much, Gary. I'm Lynne Beresford and I just want to give a very brief report on what Congress has done in the area of trademarks in its closing minutes of the session.

First of all, I'm going to talk about the trademark matters that were in the Omnibus Bill and the first of those is an amendment to Title 36 to give protection to the terms, Paraolympic, Paraolympiad, PanAmerican and America Espirito Sport Fraternite.

This is olympic-type protection, it is an amendment to that, to the section of Title 36, that protects olympic. That's not the surprising news about this amendment. The surprising news is that the protection was grandfathered back to September 21, 1950. So, now, we tried very hard while this -- and I have to give INTA full credit, they tried very hard while this legislation was in process to alert Senator Stevens' staff to the fact that even if they did -- if the Olympic Committee did want to protect such terms as, panamerican and, paraolympic that they should not grandfather them back to 1950.

We were, none of us, successful in that particular mission. Since the passage and signature of the bill which happened on October 21st Senator Stevens' staff has realized that this probably wasn't a good idea and they are talking about a legislative fix for this. Now, I don't know when that legislative fix will take place, but I'm just alerting, if any of you have interest in any of these marks, that is, indeed, one of the things that happened at the last minute of this Congress.

In addition, in Section 210 of the Omnibus Bill, there was a provision added by Senator Bingaman's staff on the official insignia of federally and state recognized Indian tribes. This language in the appropriations bill states that the Patent and Trademark Office will expend no appropriated funds to examine or process any application that contains the official insignia of a federally or a state recognized Indian tribe for one year.

It's a one-year prohibition on spending any funds on these matters. There are so many problems with this particular piece of legislation that it's almost hard to know where to begin. First of all, it's in an appropriations bill, so people who file trademark applications don't know anything about it so it's like a secret standard.

Secondly, there isn't any list of official insignia of federally and state recognized Indian tribes. It just doesn't exist. We've been looking hard to find one but it doesn't exist. So, we are faced with a very difficult situation here.

We have had some preliminary discussions on this matter and I think at this point, what we are going to do is not implement this particular restriction until an individual applicant or registrant petitions, asking for relief under this particular piece of legislation. So, we'll wait for -- preliminarily, this is our thinking. We will wait until someone brings this legislation to our attention and then we'll deal with the cases on an individual basis.

Again, this was a problem that we saw coming and worked very hard to eliminate and were, in fact, told by Senator Bingaman's staff that this language would not be in the appropriations bill but it was in the bill. So, we're waiting to see if this will be legislatively fixed in the early months of the next Congress.

In addition, while I'm on this subject of Indians, in the Trademark Law Treaty Legislation there is also a provision about Indians. The Trademark Law Treaty, by the way, was signed by President Clinton on October 30th, so the legislation implementing the Trademark Law Treaty has, in fact, become law.

We have one year to implement that legislation and/or we have three months after we file our instruments of accession with WIPO, our accession to TLT, so we have some control over when this happens, but the outside date is a year, so, October 30th.

In the Trademark Law Treaty legislation, in Section 302, there is a requirement that the Commissioner of Patents and Trademarks study the issues surrounding the protection of the official insignia of federally and state recognized Native American tribes.

That includes such things as what would the impact on Native American tribes, trademark owners, the Patent and Trademark Office, or any other interested party be if there was a change in law or policy prohibiting federal registration of trademarks identical to the official insignia of Native American tribes.

It asks that we find a means for establishing and maintaining a listing of official insignia of federally or state recognized Native American tribes. Again, a definition of official insignia, look into the administrative feasibility including the cost of coming up with such a list and giving additional protection for these official insignia, et cetera. We have a time schedule here. We must put out a Federal Register notice asking for comment and advice within 60 days. I'm working on that Federal Register notice and I'm sure that it will be out.

It will ask for public comment on these issues. Also, we're told in this piece of legislation that we must hold public hearings with the Native American tribes to address their concerns on this matter, so sometime down the road, we will be holding those public hearings. Then, within a year we have to prepare a report and submit the report to the committee, to the congressional committee.

So, that's part of -- all of this, I have to say, stemming from one particular trademark application, an application that had a stylized Zia sun symbol in it and the Zia Indians, having discussions with Senator Bingaman about how unhappy they were that we were getting ready to publish this application with the stylized Zia sun symbol in it, so the result of this is that we are in this -- we have all this activity around federally and state -- the official insignia federally and state recognized Indian tribes.

Any questions about these first two topics? I'm sorry I didn't stop after Olympics. All right, on to the Cubans. In Section 211 of the Omnibus Bill, there is very disturbing language that essentially says that if you have a trademark that was originally owned by a Cuban national and that trademark came to you because the mark was confiscated by the Cuban government without just compensation that you no longer have the right to maintain that -- if it's on the register, you can't maintain the registration; it's an application -- you can't process it or pay any fees for it; and if it's a common law right, you can't defend that common law right; and if you have any rights under the treaties, you can't claim those treaty rights.

So, essentially, for a very small number of trademarks, this particular legislation ends any ability to maintain or protect that trademark. This particular piece of legislation, again, I have to give INTA and AIPLA high marks for working to, first of all, try to get rid of this legislation, but second of all, to change the way it was written because as it was originally written, the legislation required that examining attorneys make a determination as to whether the mark was one which had been confiscated without just compensation.

This was hardly the kind of thing that we wanted to move into the examination system so at least as far as examination, this whole issue has been taken out of the legislation. It could still come before the Trademark Trial and Appeal Board but, at this point, that legislation stands and there are, as far as I know, no plans for the repeal of that legislation.

It raises very serious questions concerning our obligations under the InterAmerican Convention, of which both Cuba and the U.S. are members, which essentially says that we are going to allow each other to file and maintain trademark applications and registrations. It also calls into question some of our obligations under the TRIPS Agreement and the Paris Convention as to national treatment and other things of that nature.

We've already seen an article in U.S. Trade two days after this legislation passed in which the European Commission said that they were already planning their case at the WTO to take us there for dispute settlement because, in fact, the mark, the individual trademark that caused this particular controversy --

PARTICIPANT: (Inaudible.)

MS. BERESFORD: No, it's Havana Club Rum -- is partially owned by a French corporation. It's owned by a French and a Cuban corporation. So, as long as this legislation stands, they will not be able to maintain that trademark registration, make the payments, or defend that registration. So, this is another end of year bonus, I guess, from Congress. I think that's all the bad news from Congress. Now for the good news from Congress. They did pass the Trademark Law Treaty Implementation Act.

We're very happy about that and I know that the legal staff here in the South Tower buildings is working hard to get regulations and other things in place to implement the Trademark Law Treaty. In addition, in the Trademark Law Treaty Act, there is an amendment to Section 14 which essentially will allow the owner of the certification mark to engage in the advertising of the goods that are certified, not the sale of the goods, but merely the advertising.

This has been a matter of concern for the Idaho Potato Commission and the Florida orange juice people who have had suits filed against them because they have been advertising Florida oranges and Idaho potatoes.

So, I think that's a quick run-through of the devastation wrought by this last session of Congress on trademark matters and should give you some understanding of why we're suddenly very interested in official insignia of federally and state registered Indian tribes. Any questions?

MS. UPTON-DOUGLAS: I just wanted to comment that we know it's been a very, very busy year for you and that we really appreciate all of your efforts in trying to keep the trademark laws in line with reality in the interest of trademark owners.

MS. BERESFORD: Thank you. Thank you very much.

MR. KRUGMAN: Thanks, Lynne. The next topic is Trademark Law Treaty. In your packet you received a summary of key provisions and then a second related packet relating to issues for discussion in today's meeting. Sharon, did you want to --

MS. MARSH: Yes, do you want to take a break or --

MR. KRUGMAN: Do you want to take a five-minute stretch break?

MS. MARSH: Okay, we've got about an hour left.

MR. KRUGMAN: All right, that's a good idea. Everybody, if we could get back just on the early side of three, about five of.

(Recess.)

MR. KRUGMAN: The next topic is the TLT, but before we do that, just to back up for a second, during the break, Bob Anderson and I -- I had mentioned to him because he had left before we finished our discussion of the letter of protest issue, and I had summed up to him -- he had heard at lunch anyway, that it was pretty much unanimous -- it was unanimous that no one was in favor of abolishing that procedure.

We were more in favor of somehow improving it and formalizing it and speeding up a decision. Bob had asked me if the issue had come up as to whether people would be opposed to a fee for the letter of protest and I got the sense from the discussion that this would not be a problem, but it was not specifically brought up.

So, I just thought maybe we could take a minute, if anybody had any views on it. Would anybody be opposed to a fee structure being initiated in connection with a letter of protest, assuming that this would improve the service relating to it, in terms of timeliness and so on?

MS. UPTON-DOUGLAS: Well, I have a comment. A lot of times the purpose of the letter of protest -- I mean, the timing of it can vary, but often they are filed after the first examination. Many times it's filed to bring a dead hit or a serious error or omission to the attention of the Trademark Office and to the extent that people aren't, "doing their job," I don't know why we should have to pay a fee to say you've overlooked something you should have done if you were doing your job correctly.

That's not every reason why a letter of protest is filed, but it's often a reason and in that case a fee would be inappropriate.

MR. KRUGMAN: Okay.

MS. DARE: One of the thoughts that I had when we talked about the procedures and codifying it, is it seems one very clear, distinct situation is when you are informing the examiner of a pending litigation. Again, I'm not sure a fee, and certainly not a large fee, would be appropriate for that, but there maybe other types of letters of protest where more evidence is being filed or it's not the sort of thing that the examiner should have found in a routine search. Maybe a fee would be appropriate in some circumstances, but certainly not all of them.

MR. KLEIN: I would propose that we revisit the question of a fee after there are formal regulations published to see whether that increases the volume of letters of protest, which it may well. Then, if we see that it's causing significant additional cost and time to the office, we could revisit that. But right now, if it's $25,000 a year, I would think that's something that the office should be able to absorb, particularly building on Susan's comments as to the reason why most of them are filed.

MR. JENNISON: If the office is doing it on a cost basis, marginal cost looks like for the 600 -- maybe my math is wrong, I didn't go to math school, but for the 600 per year at 25,000 is that $21.00 a piece for the filing fee? Would that cover it? Is that the type of fee we're talking about?

MR. ANDERSON: The Agency is moving towards a concept called "cost-based accounting." One of the proposals will be on the table at some point in the future is taking a look at our fees in terms of the cost of doing an activity. Now, the impact of that may be that the filing fee could be substantially higher, where a fee for filing a statement of use might be lower but we are looking at changing the nature of the fee structure. But you're right, $21.00 a piece or 20 bucks a piece would probably be the cost.

MS. UPTON-DOUGLAS: Wouldn't it just cost more to process that and keep the checks straight, and worry about the accounts, and then the refunds and the misplaced checks? I mean, it sounds like a lot of trouble.

MR. ANDERSON: Well, once we convince everyone to file with credit cards and electronically, it will cost almost nothing.

MR. SACOFF: If I could respond to that question and, perhaps, go a little bit beyond it as well. I'm recalling a previous public advisory committee meeting. I don't remember when it was, it was within the last couple of years, wherein we were talking about other possible approaches to fee-based expedited service issues and things like that.

My recollection is that there was a generally favorable response to the proposition that it would be useful for the office to make available, perhaps at a fee, perhaps even in some circumstances at a substantial fee, if substantially out of the ordinary service is being requested for expedited processing of certain things, like when you needed a registration, an application to be examined in an expedited fashion because of litigation or something like that, or expedited issuance of a certificate or something like that.

I think it's debatable but a good case could be made, I think, for a service like that to be available in response to the applicant who needs it upon payment of an appropriate fee to cover the additional cost burdens placed upon the office, as calculated on our cost accounting approach.

Personally, I think that's a very interesting and fruitful approach to consider and for us to talk about and certainly, in this case, if you're talking about recovering the actual administrative cost burden and it turns out to be relatively small, or reasonable, as we've talked about here. I doubt that you would encounter substantial resistance from the private sector.

MR. KRUGMAN: Okay, I'm going to turn it over to Nancy Omelko from the Commissioner's Office and Sharon Marsh from the Commissioner's Office who are going to lead the discussion on the TLT stuff.

TRADEMARK LAW TREATY

MS. MARSH: You all got a package of materials before the meeting about TLT. We are going to start with filing date requirements. Under the treaty, we must make some changes in what are currently our filing date requirements. Under the treaty, we can no longer require a separate drawing page. Under the treaty, we must accept a colored drawing.

Under the treaty, we can no longer require a certified copy of the foreign registration as a filing date requirement. We can no longer require a claim of priority as a filing date requirement. Those are requirements of the treaty and things that we must change. In addition, the office is looking, in general, at the filing date requirements with an eye towards minimizing the filing date requirements.

When someone files an application with the office and we have to return it because they didn't meet one of our requirements, it makes the applicant angry and frustrated. You know, they get the whole package back in the mail and have to resubmit it. It usually means more work for our office. We have to send it back and then answer their phone calls when they call to question why we sent it back and then when they resubmit it, we have to reprocess it.

More importantly, I think one of the purposes of the trademark operation is to maintain a database of marks that are in use in commerce or that are intended to be used in commerce and when we are keeping people out of the system because they didn't meet certain technical requirements, it does not further that goal.

The first issue in the materials you have is what information should be a mandatory filing requirement related to the basis of the application. Under the treaty, we can basically require four pieces of information. We can require a declaration of use in commerce. We can require a declaration of bona fide intention to use a mark in commerce.

We can require specimens of use and we can require dates of use. We can no longer ask the applicant to specify whether their basis is 1B, 44E or 44D. We can no longer require that they submit a certified copy of the foreign registration or submit a claim of priority with the initial application. Given those constraints, what we wanted to hear from the committee was as trademark attorneys, we need to know what is important to you when the application is filed in terms of basis?

What information do you absolutely have to have to have proper notice and make decisions about marks? Obviously, at a minimum you need to know what the mark is and what the goods and services are, but in terms of basis, we'd be interested in hearing thoughts from the committee about do you need dates of use? Do you need specimens? Do you need a declaration of use or intent to use or are those elements that could be asked for during examination? Does anybody have any thoughts today?

MR. FELDMAN: I would say there is very little I need to know, assuming that this information is going to be submitted within six months or before publication or, as it is now, sometime prior to registration. I could live with knowing the minimum information if the goal was to make it easy. I tend to think that in reality we are going to find less difference after the fact than we do before.

I think as attorneys for our clients, we are going to want to have less separate pieces of paper to file and I'm assuming that there are going to be fees associated every time you have a separate piece of paper. As far as having the option of putting it all in up front or doing it later, I don't care if other people do it later.

MS. MARSH: At least currently there is an initial application fee but no fees for amending the application. Bob?

MR. SACOFF: When you put the question the way you put it, what would a trademark lawyer need to know about an application when it's filing, the way I think of answering that question is not about an application I'm filing but an application that I'm looking at that I'm trying to evaluate on behalf of my client to make some sort of assessment of whether it's going to wind up as a registration or whatever.

I tend to agree with Mark Feldman that you don't really need to know too much other than the fact that it is, in fact, pending, when it was filed, what it's for and who it's by. As a practical matter, I guess I'd like to know is it use-based or is it otherwise based because, frankly, as the old cliché goes, "there is many a slip twixt cup and lip" and there is a big difference in projecting this out between a mark that is already in use and a mark that is not already in use.

The mark that is not already in use may never go into use but a mark that is in use -- there is more substance to it. From the standpoint of the person filing that application, I certainly don't think it's very burdensome to place the burden of stating the basis for the application on the applicant. I mean, this is not rocket science to figure out whether the mark is in use or not in use.

If it's not in use you have to state that you have the bona fide intent, and if it's a foreign applicant you can state whether you have got the mark registered in your country of origin. So, I guess my answer to your question is I don't really see any burdensome impact of requiring the applicant to state the basis or the multiple basis. It's not difficult to figure that out.

MS. MARSH: Susan.

MS. UPTON-DOUGLAS: The INTA subcommittee studied this in advance of this meeting and the consensus was that we wanted to keep the requirements as minimal as possible, although with the understanding that you really have to be able to process some basic information. I think certainly what Bob was saying, if it's used space you want to know the date because if you don't have priority it changes things a lot.

I think that one of the things that we were hoping the new rules would implement would be able to supplement the application with a signed declaration after it was filed to just get on file even if the basis was intent to use and supplement that filing, if you don't, afterwards, during the prosecution.

MR. KRUGMAN: And that that information would become available to the public pretty quickly after it was submitted in terms of being available on a search report and things like that.

MS. MARSH: Right, if the information has to be required though, you know, a first office action will go out and they have up to six months. It could delay, depending on what our pendency is, it could delay six months and up.

MR. KLEIN: I would certainly agree that for a use-based application I don't need the specimen to be there to get a filing date because you've got a drawing and that's the way it is now if it's an ITU application anyway. I want to commend you for including in the draft regulations the elimination of the signature requirement to get a filing date.

That's something that a lot of us have pushed for a long, long time and there were always a lot of reasons why it couldn't be done so it's great to see that that's the direction we are headed. I did have a question in connection with that proposal and we're saying that an attorney might even be able to sign an application if they are comfortable, if the applicant and the attorney are comfortable that the attorney has first-hand knowledge of the facts. What about the power of attorney paragraph? You are saying that that can be filed without signature by the applicant?

MS. MARSH: No, I don't think we were saying that, but if an applicant is going to file power of attorney, we need a signature. Boy, I don't know that we have thought about that.

MR. KLEIN: You were saying that the verification can be signed by the applicant's attorney.

MS. MARSH: Yes.

MR. KLEIN: But if you have to get that -- with that, if you have to get a signed power of attorney first or even subsequently, maybe, then it does interact.

MS. OMELKO: We are proposing that you possibly don't need a signature at all at the filing of the application. What you need to come back with later during examination might be a signed power of attorney.

MR. KLEIN: If the attorney is the one who signs, then he will still also need a signed power of attorney from the applicant. Is that what you are saying?

MS. MARSH: Yes, I think right now at least. We weren't contemplating changing the power of attorney practice. If I could just clarify, we are talking about two different things. One is, currently, the application must be signed when filed; that is a filing date requirement. We are proposing to eliminate that so that you wouldn't have to have any signature when you file the application.

Then, when you get to the point of getting a signature, we are proposing that it could be the attorney if the attorney had first-hand knowledge of the facts that they are attesting to in the application. So, if the attorney is going to sign the application, they wouldn't have to do it at the filing date, but after the requirement by the examining attorney, the attorney would submit a signed application and a power of attorney, both, at that time, I guess.

MR. KLEIN: In which case I might as well have my client sign the verification as well.

MS. MARSH: Okay, I see your point.

MR. KLEIN: It will be interesting to see -- if the attorney signs the application initially, will you then come back and, under the assumption that the attorney does have first-hand knowledge and can sign the verification, will you then come back and say okay, now we need a power of attorney signed by the applicant?

MS. OMELKO: Well, Section 45 talks about the applicant including a legal representative so it's possible that we don't need any of that clarification, that we would permit an attorney to file an application and it possibly could go unquestioned. That is all going to be flushed out at some point. This is part of the process right now to see which direction you want to go, which direction we can go.

MS. MARSH: Actually, even under our current practice, if we receive an application that is filed by an attorney, we assume that that is the applicant's attorney and we don't request any other documentation.

MS. OMELKO: In other words, if an application is filed with just a cover letter, no power, we assume that that attorney who filed that application, whose name is on the cover letter, is the one we are going to correspond with and the one who gets to send in all the information that we need.

MS. MARSH: Yes, so in answer to your question maybe -- I mean, this is an issue we obviously haven't discussed in detail and we need to spend more time on that. I think if we get an application signed by an attorney that we could assume that that is the applicant's attorney.

MS. UPTON-DOUGLAS: Are you talking about the verification of the declaration or --

MS. MARSH: Yes.

MS. UPTON-DOUGLAS: So, an attorney who is not an officer, who may not be the assistant secretary or secretary but is an in-house attorney and could have personal knowledge could sign simply because he or she has personal knowledge and you won't need to submit a follow-up verification.

MS. MARSH: Right.

MR. KLEIN: But even an outside attorney can sign the verification.

MS. UPTON-DOUGLAS: Then how would you get personal knowledge?

MR. KLEIN: So, maybe you do.

MS. MARSH: You could, yes.

MR. KLEIN: That's what they are proposing.

MR. KRUGMAN: But then they are warning about that they might not be able to represent them later on, which presents a whole other set of problems. Bob.

MR. SACOFF: Originally, when I made my comment, I thought we were just going to talk about these one by one, but now we are talking about the whole thing. There are about three, I think, really important issues here. As I understand it, you are not proposing to eliminate completely the requirement of having a signed verification of all the pertinent allegations at some part in the process.

I think it's an important part of the process to retain that and as we discussed in the context of the 1989 revisions, it's real important to have some individual go on the line as standing behind, under oath, the veracity of these allegations about use or intent or whatever. Having said that, I personally think it is conducive to efficiency and modern realities to forego that requirement.

That that document be signed and submitted in order to obtain a filing date. I think that is a constructive move and I think it brings us into line with the practice of most countries around the world. Not necessarily the litmus test but I think it's in line with commercial realities. As far as the corporate officer's signatory requirement -- I guess I have two comments.

Number one, I'm in favor of expanding and putting more flexibility into the traditionally sort of draconian requirement of it being a corporate officer because in my experience what happens with some frequency in corporate America is that big companies are designating some man or some woman, often in the legal department, who is not a corporate officer, but they figure this is the person that is really in charge of all these trademarks and patents and so forth and we want this person to sign these documents.

Sometimes they have a corporate resolution. Well, because that person is not an officer often, you've got a real conflict here with the current practice requiring a corporate officer and the commercial reality that they want to do it this way. So, I think it should be expanded. As far as attorneys signing, I suppose that is fine.

Speaking as a private practitioner in the private law firm sector, I can't imagine, even if I had personal knowledge -- I suppose if I went out to a retail store and I saw my client's product on the shelf I know from personal knowledge that it's out there. Even assuming I got over the hurdle of knowing exactly when the first date of first use is and verifying the invoice that they have sent me for my -- all which raises questions that probably we could all be deposed about for a couple hours in the case.

I think it puts the private lawyer in a really tough position to allow the private -- almost even allow the private lawyer to be in a position of signing the verified application for his client because what happens is the clients start looking at this, oh, yes, the lawyers can sign this. Well, we want you to sign this. We sent you all the documents, you know.

Well, it puts you in a bad position because you don't want to put yourself in a potential conflict situation and if we are waiving the signed document requirement in order to get the filing date, which is when there is no time and you want to get something done fast, what is the problem in allowing it to be done in due course after the fact and have it signed by the client, whatever designated signatory?

MS. MARSH: Right, but you are also talking about expanding current practice. It sounds like you would be content if someone who, under our current practice, would have color of authority like the in-house counsel, that you would allow that person to be the final signatory.

MR. SACOFF: Yes, I think I would be more comfortable expanding the scope of who can sign as long as it's a person regularly employed by the applicant, assuming it's a corporation. I'm speaking mostly in the context of a big company.

MS. MARSH: Okay, John.

MR. JENNISON: I'm a little confused about something and I hope you can clear this up. Every application will either have declaration of use in interstate commerce, or intention to use the mark in interstate commerce --

MS. MARSH: We can require --

MR. JENNISON: It would have to have one or the other, not just plain in commerce, is that correct?

MS. MARSH: Well, we can require under the treaty either or both of those things, a declaration of use or intent to use. Also, we are required to accept applications that assert both 1A and 1B so they might have both.

MR. JENNISON: Right, but I'm going for that term, "interstate commerce" so it's -- that is a requirement?

PARTICIPANT: No, it can be foreign commerce.

MR. JENNISON: But you cannot -- I thought there was a problem with the priority, claiming the priority. You don't have to claim the priority?

MS. MARSH: Right, that under the treaty any applicant under Section 1B, 44D or 44E, we can require them to give us a declaration of bona fide intention to use the mark in commerce. What we cannot do is require them to specify whether they are seeking registration under 1B, 44D or 44E. So, even if we require the maximum that we can require under the treaty, you will know the use applications because they will file a declaration of use and we could require dates of use and specimens.

But when someone files and application asserting a bona fide intention to use the mark in commerce, you may not know initially whether it's 1B, 44D or 44E. Now, as a practical matter, the 44D applicants still have to make their 44D claim within six months, within the priority period. So, most of them will, most likely, assert it in the initial application anyway.

MR. JENNISON: Okay, my follow-up question is what kind of burden does this put on the office in supplementing this information at a later date? What would the impact be on the pendency?

MS. MARSH: Yes, that's a good point that if we reduce the minimum filing requirements it has the potential to increase pendency because anyone who doesn't send us information in the initial application will get an office action making the requirement. It is something to think about. We don't know. If we reduce these minimum filing requirements, I don't know how much it would change.

Most people who are trademark attorneys and do a lot of business with our office would probably continue to give us all the information up front. We hope that there would only be a small segment of applicants who miss critical information that has to be required later, but we don't know what would happen for sure.

MS. OMELKO: And if you look at our job as getting as many applicants on the register, this attempt to keep them in the process would probably lead towards that result more than sending it back because they don't have minimum requirements. Again, the balance between the work for us at any one point against the applicant having to re-enter, but then, also the overall process of how long it takes for us to send them back and have them start over again. So, I think in the long run it probably helps both sides if we reduce the minimum requirements.

MR. JENNISON: So, I could conceivable see getting non-final actions on some sensitive rejections but then files on the first office action for the information that is not there.

MS. MARSH: Well, you will get a first action that has the substantive refusals and the informalities requiring those things and if you don't comply, you'll get a final. Now, the way it has a possibility, I think, to extend examination is if we don't require specimens of use for 1A applicants as a minimum filing requirement, then the examining attorney gets the case, there are no specimens.

Their first action is just requiring new substitute specimen, or specimens of use, and then as six months goes by the applicants and specimens -- and it's not until that point that the examining attorney has to make a decision about the use-based refusals, you know, is this ornamental use or is this a non-distinctive configuration? Then they wouldn't be making the substantive refusal until six months into --

MR. JENNISON: Yes, it would be one extra action.

MS. UPTON-DOUGLAS: Would you require a verification that the specimens were in use as of the filing dates, so then you will have to get another piece of paper signed and go back to your client again and get the officer or suitable person to sign another piece of paper?

MS. MARSH: Yes.

MR. KLEIN: I don't see that as a problem because basically the applicant made his bed in that case. It's a delay that the applicant caused so he's going to suffer through it. It's just like a delay in filing a statement of use.

MS. MARSH: Yes, it's the applicant's choice.

MR. KRUGMAN: Well, I think on, at least on the first thing, the basis for filing -- I would like to see it to the minimal amount that would be necessary, but I think I would like to see dates of use in a use-based application, at least personally. I think that is important to see early. It does impact on availability opinions and deciding on how to proceed further. I don't know if anybody agrees.

MS. MARSH: Well, that seems like a pretty consistent theme, dates of use, for --

MR. KRUGMAN: I could live without the other stuff, though, as far as the filing date requirement.

MR. KLEIN: Are we allowed to require dates of use under the treaty for a filing date?

MS. MARSH: Yes, yes, absolutely.

MR. KRUGMAN: Lynne?

MS. BERESFORD: Lynne Beresford -- just a contrary opinion. I think you have to look at this as most people are going to file complete applications. We are only talking about, usually, the people that have screwed up and left something out, and I think that will continue because most of you and most attorneys are going to want to file complete applications.

But what you're talking about when you make a requirement that someone doesn't meet is that the application gets kicked out of the system, which causes work for the office and the applicant. So, when you talk about dates of use, about needing them to make decisions, what you're saying is if somebody doesn't put the dates of use in, you're not going to know about that application for an even longer period of time because it's going back. It's going to go back to the applicant and in six months or so they are going to refile it.

This is the trade-off, I think, here and I think the office started out with kind of looking and saying how can we get as much information out and available to the public as to what is being filed and what people are asking for, and the way to do that is to have the requirements as low as possible.

On the other side of the equation, of course, is that the information is there but you need a quick decision about availability or something of that -- and that's more important to you than having the information there in the first place, then that's where the balance is.

But I really urge you to keep in mind that we are not talking, I suspect -- I would bet the ranch that we are not talking about everybody is going to stop filing this information so that they can file it later on. We are only talking about a few people that don't file complete applications which is what we are looking at now and it's actually -- I guess we return at least 1,000 applications a month as incomplete. At least that was the statistics a couple of years ago. It's probably up at this point, and for a variety of reasons.

Some of them -- all kinds of reasons, no filing date, no statement of use, no statement of bona fide intention to use -- you know, any number of reasons. But those 1,000 applications are applications you don't know about and maybe some won't come back but when they do come back, you're further down the road. They may have longer use at that point. Your client may have adopted a mark, not knowing about that earlier application because we kicked it out of the system.

MS. UPTON-DOUGLAS: But Lynne, do those files hit the database and the thing that the search firms pick up before they get returned? Because I think when I see search reports I see things that say incomplete application --

MS. BERESFORD: Right.

MS. UPTON-DOUGLAS: -- or misassigned serial number and, to the extent that they were the database, I look at that information and I would investigate anyway.

MS. BERESFORD: A few, but most of them actually don't. I would suspect that -- looking at how the mail room at least used to operate -- I haven't been around it in the last couple of years, but most of those go directly back and are in the search system, so that's -- and you can ask Bob or -- that's correct, we're a search and services person -- I think that's really the essential trade-off here that you are making and that's really the bottom line choice. How much information do you want and do you want it as soon as possible or would you rather have more information and not have it for a while and that is, I think, is the bottom line.

MS. OMELKO: And to go along those lines too, dates of use is subject to proof and it's possible that someone is filing an application that they have used for 20 years and filed it as an intent to use application, even now. So we don't know anything for sure based on the information in the database at this point.

MS. MARSH: Okay, in the interest of time we are going to keep moving. If you all have further thoughts about any of the issues in this paper or if you want to talk to people in your organization, we would welcome further comments because we have to start making decisions pretty quickly and get a rules package prepared and out for comment pretty quickly. I think we should give you a cut-off point of, say, December 15th. If you have further comments, you can send them to Sharon Marsh or Nancy Omelko, Office of the Assistant Commissioner, 2900 Jefferson Davis.

MR. KRUGMAN: Yes, I think this is a good thing for everybody to take back to their organizations to the extent we could do it in the deadline you have just given us.

MS. MARSH: Okay.

MR. KRUGMAN: And have comments from the organizations because this is pretty critical.

MS. MARSH: The issues under examination I think are less controversial and I don't think we should dwell on them right now. If we are going to accept marks with colored drawings, the office has to make a decision about whether to register marks in color. We are thinking that we will do that. We are also considering eliminating the current color lining system and, for applicants who choose a black and white drawing but want to claim color, to permit them just to describe in words where the color is and what the color is.

We are still considering dropping the specimens of use requirement from three to one. I think we have talked about that before.

Under TLT, applications may be based on both Section 1A and Section 1B; currently, that is prohibited. Because of the additional work involved for the office in processing those kinds of applications, we are proposing an administrative fee, an extra fee, if you're going to file an application based on both 1A and 1B, and also changing the basis.

You know, under current practice, you can change your basis during examination from 1B to 44 or back the other way. The question comes up when you have applications that can be filed based on 1A or 1B, are we going to let people file an application under 1A and then switch it back to 1B if the office rejects the specimens? We are proposing that we not allow applicants to do that because it will lengthen the examination period a great deal, potentially. So think about that one.

One of the best changes under the Trademark Law Treaty has to do with petitions and I will let Nancy mention that one.

MS. OMELKO: Currently now, in order to revive an application that has gone abandoned for failure to respond in a timely manner, you have to file a petition with the Assistant Commissioner's Office and the standard that we use is unavoidable delay. I would think about 50 percent of the petitions are granted.

Under TLT, we will be lowering that standard to unintentional delay and that will mean that almost anything will get you back into the system as long as you file the petition timely; that is, within two months, and it's unintentional and we are thinking that something like extending time to file a response would not be unintentional.

In other words, if you had a six-month deadline and you decided not to respond to something because you didn't have time at that point, that might not be unintentional. That's about the only example we could come up that wouldn't work and that's subject to argument back and forth, as well, so that's where that stands.

MS. MARSH: The last big area for change is post-registration. Hope, do you think you could summarize the changes we are proposing? I just -- because we are running out of time and we need -- David Sams needs to give his report also.

MS. SLONIM: My name is Hope Slonim and TLT makes pretty substantial changes to the post-registration division. Particularly, it extracts from Section 9 renewal applications, the declaration of use and evidence of use. It adds an additional Section 8 affidavit, not just at the fifth and sixth year, it maintains that, but adds them at each 10-year increment so along with Section 9 applications, it adds grace periods of six months to the filing of a Section 8 and a Section 9 application and it adds surcharges for filing applications in the grace period as well as correcting deficiency.

There is a deficiency period also that is added which will probably be six months after the statutory time period and then surcharges, when a deficiency is corrected. As we approach each of the issues that TLT presented, one of the first issues was what will be a complete filing for a Section 8 or a Section 9? The goal was to keep registrations alive and active and going and we don't want to kick people out of the system because they didn't include a proper signature, for example, on their Section 8 or Section 9.

So, the question was what would constitute a minimum filing for Section 8 and Section 9 so that we could then go ahead and process the renewal application or the affidavit. On page 8 of the handout we have identified four areas that we think that we really need as a minimum in order to process papers as they come in to know that they are a Section 8 or a Section 9 and then to proceed and those will be the correspondent's address, the registration number or the trademark, a fee for at least one class of goods or services and some identification of the paper so that we know what to do with it, we know what the applicant or the registrant is seeking.

As to the amount for deficiencies, surcharges, we would propose that there just be one fee so that if there are several deficiencies in a Section 8 or 9 we would not charge per deficiency but, rather, just one fee that would cut across the board. We thought that the type of commerce need not be a requirement for Section 8 affidavit. It would not need to be in a Section 9 anyway, since use would not be part of Section 9 but in a Section 8 we felt that that could be eliminated since, at least in the initial application stage, you do have to show use in commerce and supporting specimens.

The problem with that is for Section 44 applicants, they never have to show use or alleged use until their affidavit stage, so to eliminate it from that point may be problematic.

The filing fees that we are proposing at this point, we really would encourage people to file combined Section 8 and 9 affidavits and the office will create a combined Section 8 and 9 form and if that is used then the total filing fee for the Section 8 and 9, again at the 10-year increments, would be the same as it would be now, $300 for filing a renewal application.

However, if registrants divide it and file two documents instead then we would charge $400. We propose that the grace period surcharge be $200 per class which would be the same as the filing fee and that the deficiency surcharge would be $100 per class which would be one-half the filing fee.

If you have both a grace -- I think our goal, in general, is, though we know that those fees might be high, that we wish to encourage people to file timely and to file accurately. The big concern is that now that a grace period is available, as well as a deficiency period is available, that people will wait and do things at the last minute and so that a registration may show as active when, in fact, it really is not active and so that the accuracy of the register may be in question.

MR. KRUGMAN: Sharon, given the hour, maybe the best thing with this topic is we take it back to our groups to study it and we come back with some comments because I do want to get two last topics in: David's TTAB and first, this public access to pending application files. So, can we move to that?

MS. MARSH: That's a good idea.

MR. KRUGMAN: Obviously, there is a lot of discussion about a lot of these things but I don't think we really have the time now. So, thank you very much, Hope and Nancy.

Public access to pending application files is an issue that is of particular concern to some of the searchers and to all of us, really, and you have a one page sheet that was in the packet that's captioned, "Trademark Operations Central File Checkout Procedures," and did you want to say anything about this, Bob?

PUBLIC ACCESS TO PENDING APPLICATION FILES

MR. ANDERSON: I alluded to this briefly earlier. This is, in essence, a proposal to try to get better control over file wrappers inside the building. I know it already has a lot of not so great PR because of some problems that have come up the street with probably a more draconian system than this.

The general goal here is to have centralized checkout of files through our current Trademark Assistant Center. This would come into being in January, or so, of 1999. We would give 24-hour service turnaround on a routine checkout. We would have some provision for expedited service. There would not be a fee for accessing the files. You would just file a request for a file and it would be picked up by a government employee, brought to the Trademark Assistance Center. We would not, however, allow any original file wrapper to leave the Trademark Assistance Center for any purpose.

It would be fee card photocopiers in this assistance center and there would also be a reading room in the assistance center that would be available to members of the public to review files. That pretty much sums it up. We don't have a formal proposal on the table yet, but it will more or less follow those guidelines.

We would require files to be turned back in at the tax center. Someone who manages to slip out of the place with a file they had signed out for would not be allowed to get files until such time as the file was returned to the Trademark Assistance Center.

MR. JENNISON: Bob, this is something that the searchers are very concerned about. There is a question whether the office knows what the demand is for the application and registration files that are under action right now and if the PTO knows that they can meet that demand on an ongoing basis and keep up with the demand.

MR. ANDERSON: I want to mention one thing. We would not be handling registered files out of the warehouse.

MR. JENNISON: No, this is the ones that would be up in the air, post registration.

MR. ANDERSON: Yes, only files in the post registration section --

MR. JENNISON: As far as the 24-hour period, presently, I think the outside attorneys are used to same-day access to the public documents and the 24 hour period seems to be rather draconian. So, if you can make both of --

MR. ANDERSON: We would allow for expedited service, but the reason this is on the table as a proposal is for comment. None of this stuff has been put in to stone yet, so, if this is a comment that 24 hours is too long, we will take that into consideration.

MR. JENNISON: Well, I guess the first question is do you know what the demand of application files is?

MR. ANDERSON: Since we have never done this, no.

MR. JENNISON: Will you try to figure out what that is before you start going -- for instance, if there are 100 files per law office per week and there are 12 law offices, is that correct?

MR. ANDERSON: 15.

MR. JENNISON: 15? So, if there is 1,500 file requests in a week, how many people are you going to need to staff and meet those demands for those files? That is sort of what happened on the patent side where they had no idea what the demand was or how long it would take to respond to those demands and that is what kind of threw a -- just made the whole system break down. No one had thought out or planned in advance. Normally I'm accustomed to you planning and knowing your numbers in advance.

MR. ANDERSON: That is why we are engaged in this discussion with members of the public. I think one difference between what we are doing here and what patents did is no one -- I don't believe they talked to their customers before they implemented the system. We are attempting to have a dialogue with all of you before we implement the system to find out what your requirements are.

Now, I can't answer the question about how many files get pulled because we have no control over it. We don't really know. I mean, that's the honest answer to that question. I do know how many files are in a law status. I do know how many files get pulled and disappear, roughly. You know, for instance, I -- in a law status right now we have almost 2,500 files that have been declared officially lost.

Most likely, those files were pulled by someone, whether it was a government employee or a member of the public, and simply did not get back to where they were supposed to be. What I want to do is to make the access to files system work better for everybody and we are willing to engage in a dialog with our customers to find out what will work for you, but what I do know is I can't leave the thing work the way it does now because it doesn't work. I mean, we have no process or system now. So, are you willing to talk to us?

MR. JENNISON: Yes. I think the best thing, instead of bogging down the committee today, maybe to have a working group on this with some of the searchers. I'm sure everybody belonging to our organization will want to put in some time and walk through what you are proposing and see how that works. Maybe find out what the demand is and look at some of the things we would like to have as well as, like, color copiers and things like that for access to the specimens and see how well it works and we all want tighter controls on the files.

We don't want lost files and certainly not blamed on people who want access to them because lots of times they want to have access again and it is an internal and external problem. A lot of the problems are PTO employees, as well, and there are some problems with it as there is no right off time for your docket clerks who pull the files and those people should be treated fairly too for the time that they expend pulling those files. So, there's a lot of issues and we'd be happy to engage in that and work out a solution so we don't bog down this afternoon's committee meeting.

MR. ANDERSON: Yes, the thing you just mentioned is one of the reasons we are looking at a dedicated staff to handle files because we recognize that it does cause a lot of interruptions in day to day work and we believe this would solve some of that problem. To have a dedicated staff that pulls files, that basically handles files that are being pulled for some purpose other than routine examination.

MR. JENNISON: So, you will get with Daphne and do some sort of a work up on that.

MR. ANDERSON: Yes. Sure.

MR. KRUGMAN: David, you have been very patient. Sorry for this late hour.

TRADEMARK TRIAL AND APPEAL BOARD

MR. SAMS: That's fine. I haven't a whole lot to say. I just want to make myself available for five minutes, it would appear, of questions. To let you know what kind of year the TTAB has just concluded, we had about a 5 percent increase in ex-parte appeals for this year and a similar increase in cancellations. Oppositions this year were really, actually, down 15 percent but there is a pretty easy explanation for that as you saw in the statistics that Bob brought to your attention earlier.

The number of files published -- cases published for opposition went down last year from 134,000 to 107,000 so, naturally, the number of oppositions filed follows that directly. So, the point I'm making there is this is not a trend. In fact, the trend is otherwise, given the number of examining attorneys that are being added to the mix and given the fact that the back log of unexamined applications is likely to reach the publication for opposition stage sooner rather than later, we see this as kind of an upward trend.

In the attempt to build up our staff to anticipate the filings, we have added over this fiscal year three new judges as, I think, most of you know. Beth Chapman, Helen Wendel and David Bucher, as was mentioned earlier, just joined us fairly recently as an Administrative Trademark Judge at the board. We have put them all to work now full time and we are hoping for a reduction in the time it's taking us to issue final decisions which now stands at about nine months.

Some of them are longer, a few are shorter than that period, but there has been some movement in the correct direction over the last month or so since our new people have started producing. We also have three new interlocutory attorneys on staff: Julie Quinn, Sheryl Butler and Al Zervas, who are in basically a in training mode now working with some senior interlocutory attorneys.

We have now expanded that staff to 12 people which has raised a new issue for us for the first time in our history, I think, one that has been with the examining operation for a good length of time and that is consistency of action. So, when you get to a certain size you get concerns about all people issuing the same sorts of decisions and determinations.

We started working a working group with all the interlocutory attorneys who raise issues of concern to them and to the public that had been -- litigants that have been raised in conversations with me or with other judges or with the interlocutory staff. Those are put onto an agenda and we talk about issues to make certain that we have some consistency of action and I think that's working very effectively.

As most of you know our new TTAB rules went into effect on October 9th. For those of you who don't know, I suspect everybody here does, the final version of the rules package was a somewhat modified version of the rules that were in the notice of proposed rule making. We, in essence, eliminated the extraordinary circumstances requirement for getting extensions of time for both the discovery and trial periods.

There were other - also eliminated the limitations that we were going to impose on various discovery devices. Those are the major changes from the rules as originally proposed. I have been asked to give a couple of comments on our new pilot project on disposing of TTAB issues, motions and other things by telephone conferencing, a pilot project which started a couple of months ago.

It's still not widely known, I don't think, among litigants that it exists. That is, I suspect, because not everybody reads the OG where we announced it. Second, we put out notices with every new instituted case which is subject to that new pilot. A notice to the effect that they will be part of that pilot. However, motions aren't being filed in the recently instituted cases yet.

As we send out revised trial orders or updated papers in existing proceedings, we're sending out notices to that effect but the preliminary results, even though they have been rather small in number -- the cases involved that have been small in number have been very encouraging. We have found, in fact, that even the prospect of having a telephone conference on a motion has caused parties to go back to get together and settle the issue, which is something we were hoping would happen and it has, at least, preliminary seems to be the case.

So, we still have great hopes for that and if it works out as we hope it will, it won't be very much longer, I think, within the next six months we will be expanding it to the entire working group of interlocutory attorneys.

I have also been asked about the status of the standardized protective order that we have been talking about for some time. Where that stands is this; a person on our staff who has been sort of lead person for us is Jerry Rogers, Interlocutory Attorney.

Jerry has been working specifically with an INTA subcommittee who is dealing with this issue and in the person of Keith Shark and the last we had put together was a submission for Keith to take back to the committee which included the suggestions put to us for a protective order, suggestions that came in as part of our rules comments from the AIPLA plus some additional talking points that the interlocutory staff developed and wanted the comments of INTA and others.

We have, frankly, felt this process is going a little too slowly and so we are going to be taking some action on our own. I understand there is a meeting, first of all, in Florida -- mid-year INTA meeting which this topic may be discussed but whether it is or it is not, we are probably going to be going forward on our own with a proposed order, standardized protective order, that we are going to put out for comment.

Right now, we are thinking of putting in the OG comment which will include both the sort of standard prototype that we have from the AIPLA plus the additional comments that we have put together to get a broader range of comments to see where we stand and try to get it in effect as soon as we can because we think it really will help.

Finally, over the years it seems the cry, the human cry, is getting louder and louder for us to mark more decisions as citeable precedent. I think we are all in agreement now that we don't make enough cases citeable precedent and we have taken some action at the board to -- in the way that we make the determination about citeable precedent to increase the number that actually gets so marked.

We are looking at sort of a certification process and every final decision so that the issue of whether it should be published gets looked at squarely, which sometimes doesn't happen now. So, as a result, in the last three weeks we've marked some eight to ten cases for citeable precedent which is far more than we used to be doing so I think we're responding to that request from David Kera and others who share his view that we mark more of these cases as citeable precedents. That's it. If you have questions, we'll be glad to take them.

MS. UPTON-DOUGLAS: I just wanted to mention that I know Keith had planned to get you comments from the INTA group before the mid-year meeting so I would think it was going to be this week.

MR. SAMS: We haven't gotten them as of this morning. Thank you.

MR. KRUGMAN: Does anybody have any comments or questions? If I could beg your indulgence for about two more minutes. Bob Anderson just wanted to refer to the last topic on the agenda -- thanks, David -- relating to the Internet Federal Register notice of October 26 on proposed Internet usage policy.

FEDERAL REGISTER NOTICE ON PROPOSED

INTERNET USAGE POLICY

MR. ANDERSON: This particular notice is in your package. I would appreciate it if you would look at it and if you have any comments on it, get it back to the person listed here. What this does it open the potential of engaging in electronic communications with the examiner for everything pertaining to the prosecution of an application. that's all office actions and all other work.

The way it's set up is the applicant would request that Internet communication be used, or Internet e-mail. If you have comments on this policy or the other part of the policy which goes to the use of Internet evidence and so forth, please get it back to the agency.

MR. KRUGMAN: I'd like to thank everybody for -- oh, I'm sorry, John.

MR. RYNKIEWICZ: I think we skipped the fourth item on the agenda.

MR. KRUGMAN: Oh, yes, we did skip that. Yes, you're right.

DESCRIPTION OF GOODS AND SERVICES

IN TRADEMARK APPLICATIONS

MS. MARSH: There are a number of marks that often examiners mistakenly include in descriptions of goods. The office has a prohibition against using any registered mark in a description of goods and to avoid issuing registrations that have registered marks in the ID, we want to issue a list of registered marks to examining attorneys.

These are the marks that we see in IDs from time to time and there have been concerns raised on the part of the public that this is inappropriate, that this could be used by a third party as evidence that a particular mark is generic and we just wanted some comments from this group on whether you would oppose or, you know, think there are reasons why we should not issue this list to examining attorneys. John.

MR. RYNKIEWICZ: John Rynkiewicz. I would oppose going to the 100 list. I think it's prejudicial to many of the trademark owners that are not listed there and I think INTA has worked towards that goal and come up with the 4,000 list. We are talking about Internet access and other electronic versions; 4,000 should not be too detailed of a list to have maybe some type of a spell check type device, or whatever, but looking at this list of 100, I think it's predominately consumer retail focused and, again, I think the goal is not just to avoid use of registered trademarks of the more common misused ones but any registered trademark. So, to that end, a broader list of more marks would help achieve that goal.

MS. MARSH: So, you think the INTA list is acceptable, but that this one is too restrictive?

MR. RYNKIEWICZ: Well, because INTA list is available I think saying you're going to go to 100 is just not fair to the other 3,900 that are listed in there.

MS. MARSH: I think, as a practical matter, we thought that examining attorneys could refer to and use a list of 100 very quickly and these are the 100 that are most commonly misused in the office, whereas a list of 4,000 becomes more cumbersome. If anyone has any further thoughts on this please call Jessie Marshall at 308-9000 and let her know your thoughts on the issue. Thanks.

MR. RYNKIEWICZ: Okay, I just have one -- I'm sorry for holding everybody up but there's one issue, Bob, on the PTO budget that was recently passed. From my understanding there was about a diversion of approximately $71 million. Can you comment whether that was partly trademarks?

MR. ANDERSON: It's a recision out of the total PTO budget. Reading of the legislation indicates that it effects patent and trademark office fees and I cannot answer your question at this point. The issue is under review as to whether or not trademark fees will be affected by the recision.

I would remind you, however, that under Gramm-Rudman-Hollings, trademark fees were taken for other purposes despite the fact that there is offense so it could well happen again.

MR. KRUGMAN: Anybody else, comments or questions? The meeting is adjourned. Thank you for your attention and interest.

(Whereupon, at 4:05 p.m., the meeting in the above-entitled matter was adjourned.)