Detailed Information on the
U.S. Patent and Trademark Office - Patents Assessment

The USPTO will undertake an evaluation of the underlying assumptions used to establish examiner production goals.

Review the current patent fee structure to determine if improvements can be made that will continue to encourage innovation as well as enable the USPTO to provide high quality and timely examination of patent applications while recovering costs in aggregate.

The USPTO will undertake an examination of the impact of the patent system.

Measure: Percentage of applications received that are filed electronically

Explanation:Identifies USPTO's support of and applicants' willingness to operating in an e-government environment and will identify the percent of basic applications filed electronically.

Measure: Allowance Compliance Rate

Explanation:The allowance compliance rate measures a sample of USPTO examination decisions to determine the percentage of decisions that were made correctly. A higher percentage shows that USPTO examiners are making correct determinations about whether to grant a patent. By ensuring that correct decisions are made, USPTO will improve the quality of granted patents and trademarks.

Measure: Average first action pendency

Explanation:First action pendency is the average time, in months, from the filing date of the application to the mailing of the first office action.

Measure: Average Total Pendency

Explanation:Total Pendency is the average time, in months, for a complete review of a patent application, from the filing date to issue or abandonment of the application. Furutre year targets in parenthesis do not assume enactment of legislation that would require better quality information in patent applications.

Measure: Relative Cost of Production

Explanation:This measure tracks the amount of resources used on the entire patent examination process, divided by production units, a measure of examiner productivity. Using less resources, while maintaining quality, would demonstrate more efficient patent processing.

Measure: In-process compliance rate

Explanation:This measure gives the percentage of utility, plant, reissue and design (URPD) applications' non-final and final actions reviewed in which no examination deficiency was found.

Is the program purpose clear?

Explanation: The United States Patent and Trademark Office's (USPTO) Patent organization administers U.S. patent law by examining inventors' applications to determine whether the claimed invention is new, useful, and non-obvious to someone knowledgeable in that subject matter. In addition to providing examination services, the patent process includes publishing pending applications, issuing patents to successful applicants, and disseminating issued patents to the public. The Patents program accounts for 86% of total USPTO costs.

Evidence: ?? U.S. Code Title 35. Sec 2: Powers and Duties ?? USPTO Performance and Accountability Report: Fiscal Year 2007, page 12 http://www.uspto.gov/web/offices/com/annual/2007/index.html ?? USPTO's Mission Statement - USPTO website http://www.uspto.gov ?? USPTO Strategic Framework - USPTO Strategic Plan 2007-2012. http://www.uspto.gov/web/offices/com/strat2007/stratplan2007-2012.pdf ?? Catalog of Federal Domestic Assistance - search of "Patents" ?? Patents Organization - USPTO website http://www.uspto.gov/web/offices/pac/index.html

Does the program address a specific and existing problem, interest, or need?

Explanation: The granting of a patent by the USPTO's Patent organization establishes the right to exclude others from making any use of the patented invention in return for a full and complete disclosure of the invention to society. By granting protections in exchange for inventors' disclosing their IP, the Patent organization supports the Constitution's mandate to "promote the progress of science and the useful arts."

Evidence: ?? Article 1, Section 8 of the U.S. Constitution. ?? U.S. Code Title 35. ?? USPTO's Mission Statement - USPTO website http://www.uspto.gov ?? GAO-07-74: Strategy for Targeting Organized Piracy (STOP) Requires Changes for Long-Term Success Background (pg6) http://www.gao.gov/new.items/d0774.pdf ?? The Institute of Electrical and Electronics Engineers - United States of America (IEEE-USA): Statement for the Record on the "U.S. Patent and Trademark Office: Fee Schedule Adjustment and Agency Reform" Prepared for U.S. House of Representatives Judiciary Subcommittee on Courts and Intellectual Property. "Intellectual property is a significant and growing component of our national economy. The Information Technology (IT) sector accounts for an estimated 8.2 percent of our gross domestic product and accounts for one-quarter of the economic growth in the American economy. This is just one of many sectors which rely heavily on patent protection and with which many IEEE-USA members are involved." ?? USPTO Performance and Accountability Report: Fiscal Year 2007, Workload Tables, pages 108-137 http://www.uspto.gov/web/offices/com/annual/2007/index.html

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: USPTO is the only governmental agency or entity in the United States that administers patent laws and grants patents.

Evidence: ?? This sole authority derives from Article 1 Sec. 8 par. h. of the U.S. Constitution and is codified in Title 35 U.S.C. "Patents". ?? Catalog of Federal Domestic Assistance (CDFA) - search of "Patents" The CFDA maintained by the General Services Administration identifies the USPTO as the only entity that grants patents. Other agencies reporting patent-related assistance are limited to only the licensing of patents granted by the USPTO.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: The costs of administering the program are supported entirely by user fees of those wishing to protect their invention. At the end of FY07, there were approximately 1.8 million patents in force in the U.S., the largest amount ever, and 25% more than just five years prior. Quality of examiner work products improved from 2005 to 2007 and higher electronic filings have also begun to be realized. The percent of applications filed electronically rose from less than 2% in FY04 to nearly 50% in FY07, contributing to the highest number of applications ever received in a given fiscal year. Today, while nearly 50% of patent applications are received electronically, 99% of all patent applications are managed electronically. While continued research into more ways to improve USPTO's processes would be helpful, there is no compelling evidence that another mechanism for administering and granting patents would be more effective at determining which inventions are worthy of patent protections.

Evidence: ?? USPTO Strategic Plan 2007-2012: The Intellectual Property Process (figure, pg 10) Strategic Planning Process (pgs 30-31) http://www.uspto.gov/web/offices/com/strat2007/ stratplan2007-2012.pdf ?? USPTO Performance and Accountability Report: Fiscal Year 2007, Strategic Goal 1, pages 16-19; Workload Tables, pages 108-137 http://www.uspto.gov/web/offices/com/annual/2007/index.html ?? American Intellectual Property Law Association (AIPLA) - letter to PPAC on potential changes to USPTO operations and procedures (1/29/07). ?? Patent Public Advisory Committee (PPAC) Annual Report - 11/30/2007, Conclusions, pages 16-17 http://www.uspto.gov/web/offices/com/advisory/reports/ ppac_2007annualrpt.pdf ?? International Intellectual Property Institute: The United States and Global Intellectual Property System: Leadership and Responsibilities

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: The intended beneficiaries of intellectual property protections provided by patents are applicants, who pay fees for the patent program's products and services that convey special benefits to those entitled under the law. Beneficiaries realize the benefits from the Patents organization through faster application processing times and better quality examinations, shown through reviews that evaluate whether granted patents meet statutory requirements for issue. By using fee collections on initiatives to improve processing times and quality, the USPTO attempts to target benefits to applicants as a whole. However, the current fee structure for patent examinations does not align with costs for all applicants. This may promote behavior, such as excessive continuation filings or filings of applications that lack sufficient information, detrimental to patent wait times and quality examinations. USPTO has attempted to fix these incentives by issuing regulations streamlining filing procedures and supporting legislation to implement Applicant Quality Submissions, which help improve the quality of information in applications.

Evidence: ?? USPTO Performance and Accountability Report: Fiscal Year 2007 Message from Under Secretary of Commerce for Intellectual Property and Director of the USPTO, pages 3-6 Mission, page 10 http://www.uspto.gov/web/offices/com/annual/2007/index.html ?? USPTO Strategic Plan 2007-2012: Who We Are, page 5 Implementing the Electronic Filing System - Web, page 7 Optimizing the Patent Process, page 7 http://www.uspto.gov/web/offices/com/strat2007/ stratplan2007-2012.pdf ?? USPTO Press Release: USPTO's EFS-Web Electronic Patent Filing System Celebrates Successful First Year (#07-14) http://www.uspto.gov/web/offices/com/speeches/07-14.htm ?? USPTO Press Release: USPTO Grants First Patent Under New Accelerated Review Option (#07-13) http://www.uspto.gov/web/offices/com/speeches/07-13.htm

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: The Patent program has the long term goal of Optimizing Patent Quality and Timeliness. To support this goal, the patent program has performance measures supporting the areas of 1) Quality (long term), 2) and Pendency (long term). The Patent organization measures quality by tracking how well a statistically valid sample of all examinations conform to the underlying patent statues. A higher percentage on the compliance rate measure means that the examination and the resulting decision were consistent with the statutory requirements for issuing a patent. The pendency measures track how many months elapse between a patent filing and the first decision by the office and final patentability decision the application.

Evidence: ?? USPTO Performance and Accountability Report: Fiscal Year 2007, Strategic Goal 1, pages 16-19 http://www.uspto.gov/web/offices/com/annual/2007/index.html ?? USPTO Strategic Plan 2007-2012: Patents Performance Measures (pg 17) http://www.uspto.gov/web/offices/com/strat2007/stratplan2007-2012.pdf ?? USPTO Press Release: Fiscal Year 2006: A Record-Breaking Year for the USPTO (#06-73) http://www.uspto.gov/web/offices/com/speeches/06-73.htm ?? USPTO Press Release: USPTO 2007 Fiscal Year-End Results Demonstrate Trend of Improved Patent and Trademark Quality (#07-46) http://www.uspto.gov/web/offices/com/speeches/07-46.htm

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: The program's long-term target on its compliance measure is 96.5 percent. Targets above 96.5 percent may be difficult to sustain, given the inherent errors that accompany statistical sampling. However, USPTO should continue to monitor actual data and adjust target accordingly. The Patent organization's targets for average total pendency show improvement in 2011 assuming passage of provisions in the Patent Reform Act that require higher quality information in patent applications. Targets for pendency are projected to be relatively steady, if the legislative provisions are not enacted. Given that USPTO is experiencing an increasing workload and maintaining pendency requires increases in production, these targets are ambitious. However, USPT should continue to work develop ways to improve patent application wait times.

Evidence: ?? USPTO Performance and Accountability Report: Fiscal Year 2007 Strategic Goal 1, pages 16-19 http://www.uspto.gov/web/offices/com/annual/2007/index.html ?? FY2009 Budget Request http://www.uspto.gov/web/offices/ac/comp/budg/fy09pbr.pdf ?? Trilateral Statistical Report - 2006 Edition http://www.trilateral.net/tsr/tsr_2006/4_tril_off_pat_act_2006.pdf ?? Patent Procedures and Statistics: An Overview, Eurostat, December 7, 2006 The Cost Factor in Patent Systems (pages 4-5) http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-NS-06-019/EN/KS-NS-06-019-EN.PDF ?? Patent Statistics, Eurostat, February 21, 2008 http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-08-017/EN/KS-SF-08-017-EN.PDF ?? Comparison of Fees Charged by CIPO for Trademark and Patent Activities in Comparison to Other Jurisdictions, Top Box Consulting Group, June 2002 Total Fees Paid Over the Patent Life Cycle (page 3) http://strategis.ic.gc.ca/sc_mrksv/cipo/fees/doceng.pdf

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: Patents has annual measures that tie directly to all of the long-term goals cited in 2.1. The measures are centered on the strategic goal of optimizing patent quality and timeliness. Patents annual measures include an Allowance and In-Process Compliance Rate, which measure the how well examination decisions conform to statutory requirements, and pendency measures that track the time elapsed from filing until a first action and the final decision by the office. Patents also measures efficiency by measuring percentage of applications filed and managed electronically and the amount of resources used per patent. Increasing the number of applications filed and managed electronically streamlines the examination process.

Evidence: ?? USPTO Performance and Accountability Report: Fiscal Year 2007 Strategic Goal 1, pages 16-19 http://www.uspto.gov/web/offices/com/annual/2007/index.html ?? FY2009 Budget Request http://www.uspto.gov/web/offices/ac/comp/budg/fy09pbr.pdf

Does the program have baselines and ambitious targets for its annual measures?

Explanation: As with the program's long-term targets, the annual targets for quality and pendency are ambitious, given the expected increases in patent filings. Also, the Patent organization's cost-efficiency measure envisions improvements in 2012. This is ambitious, given the increased hiring of new examiners, who tend to be less efficient than more experienced examiners.

Evidence: ?? USPTO Performance and Accountability Report: Fiscal Year 2007 Strategic Goal 1, pages 16-19 http://www.uspto.gov/web/offices/com/annual/2007/index.html ?? FY2009 Budget Request http://www.uspto.gov/web/offices/ac/comp/budg/fy09pbr.pdf

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: Competitively sourced functions related to the processing of patent applications contain performance clauses and incentives to ensure the contractors meet specific time frames for processing. To reduce workloads and duplication of efforts, Patents has undertaken pilot projects with other IP offices (EPO, JPO, etc.) to assess the benefits of mutual exploitation of patent search and examination results. All work-product generated in these projects are subject to the same quality review standards as the USPTO-generated work-product. Incorporating timeliness and quality standards into all work agreements ensures the Patents strategic goal of optimizing patent quality and timeliness remains a priority and focus.

Evidence: ?? USPTO Strategic Plan 2007-2012: Working with other U.S. Government Agencies (pg 8) Working with individuals and businesses (pg 8) Working with Other Governments (pg 9) http://www.uspto.gov/web/offices/com/strat2007/ stratplan2007-2012.pdf ?? USPTO Press Release: USPTO and the European Patent Office to Launch Electronic Priority Document Exchange (#06-68) http://www.uspto.gov/web/offices/com/speeches/06-68.htm ?? USPTO Press Release: USPTO and the Danish Patent and Trademark Office Announce Cooperative Effort on Reclassification of Patent Search Documents (#06-55) http://www.uspto.gov/web/offices/com/speeches/06-55.htm ?? USPTO Press Release: US And Japan To Pilot Patent Prosecution Highway (#06-35) http://www.uspto.gov/web/offices/com/speeches/06-35.htm

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: The Patent organization undertakes internal evaluations of patentability decisions to ensure that they conform to statutory requirements. Also, at the beginning of FY06, Patents awarded a contract to Westat, Inc, to provide quarterly assessments of work-product quality and aid Patents in identifying actions that can lead to a more efficient prosecution of patents. These evaluations are, and will continue to be, conducted each quarter by administering a brief survey to a randomly-selected panel of roughly 2500 patent filers who identify themselves as frequent filers. The National Academy of Public Administration (NAPA) in 2005 issued an assessment of the agency's organizational and human capital structures, the timeliness and quality challenges in processing patent applications, and whether the agency staff has the appropriate skills. In September 2007 the Government Accountability Office (GAO) issued a report highlighting that hiring alone cannot reduce pendency and acknowledged the negative impact attrition has on the agency's mission. Patents will expand the use of external evaluations in upcoming years. Through Patent Public Advisory Committee (PPAC) and an external consulting firm, Patents will receive analysis and recommendations on all aspects of the patent examination system. The study is expected to be completed in early 2008 and will provide a more comprehensive look at Patents' ability to achieve results with the current examination system.

Evidence: ?? USPTO Strategic Plan 2007-2012: Evaluations (pg 30) http://www.uspto.gov/web/offices/com/strat2007/ stratplan2007-2012.pdf ?? USPTO Performance and Accountability Report: Fiscal Year 2007 Performance Audits and Evaluations (pages 39-41) http://www.uspto.gov/web/offices/com/annual/2007/index.html ?? National Academy of Public Administration, U.S. Patent and Trademark Office: Transforming to Meet the Challenges of the 21st Century, page xx http://www.napawash.org/Pubs/PTO8-25-05.pdf ?? GAO-07-1102, Hiring Efforts Are Not Sufficient to Reduce the Patent Application Backlog, September 2007 http://www.gao.gov/new.items/d071102.pdf

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: The USPTO performance budget operationalizes the Strategic Plan and provides a direct linkage between USPTO's budget request and the results the public can expect. The performance budget defines the performance goals and measures used to manage progress toward strategic objectives. An activity-based-costing methodology is used to identify various factors that drive program costs by strategic goal as well as by primary business line (Patents) to depict a transparent relationship of costs by strategic goal to outcome measures. The USPTO's budget is framed by the FY 2007-2012 Strategic Plan which outlines Patents' goals. The FY 2009 budget request, Goal 1: Optimize Patent Quality and Timeliness - $1,783,730,000, allowance compliance rate 96%, in process examination compliance rate 93%, average first action pendency 27.5 months, average total pendency 37.9 months.

Evidence: ?? The annual Performance and Accountability Report provides a public accounting of our annual performance results. Although the relationship between resources and results can be complex, the USPTO has been successful in demonstrating how a performance budget by goal can align with and to principle financial statements (i.e., consolidated statement of net cost). http://www.uspto.gov/web/offices/com/annual/2007/index.html ?? FY2009 Budget Request, pages 1, 11, 19-22 http://www.uspto.gov/web/offices/ac/comp/budg/fy09pbr.pdf

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: In 2002 USPTO developed and released its 21st Century Strategic Plan. In 2006, the plan was updated to assess and adjust its direction in response to a changing environment. The new strategic plan envisions several changes to improve strategic planning. These include an executive level Strategic Planning Group to monitor and administer planning deficiencies, new rules to limit patent application claims and continuations of prior applications, an Applicant Quality Submissions initiative to elicit better information from applicants, work sharing with other major IP offices, and initiatives to increase telework employee productivity. However, even with these initiatives, the Patents unit envisions worsening performance on its pendency measures over the long-term.

Evidence: ?? USPTO Performance and Accountability Report: Fiscal Year 2007 Strategic Goal 1, pages 16-19 http://www.uspto.gov/web/offices/com/annual/2007/index.html ?? FY2009 Budget Request http://www.uspto.gov/web/offices/ac/comp/budg/fy09pbr.pdf ?? USPTO Strategic Plan 2007-2012: List of Initiatives (pg 32) http://www.uspto.gov/web/offices/com/strat2007/ stratplan2007-2012.pdf ?? Strategic Plan Frequently Asked Questions http://ptoweb.uspto.gov/ptointranet/stratplan/sp_q_and_a.doc

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: Patents maintains automated information systems (AIS) to collect and monitor data on productivity, pendency, quality, administrative, and financial performance for use by managers and examiners to track and analyze daily, weekly, monthly, and quarterly performance against baseline and annual targets. The AIS contain numerous reports for instantaneous access to real-time data as well as archived snapshots. Comprehensive monthly reports on critical budget staffing and performance data are distributed to all Patents managers. On a quarterly basis, organization assessments are conducted and senior Patents management discuss performance measures and progress with the USPTO Management Council, which consists of USPTO Executives representing all business units. Patents shares data with its international counterparts, including measures of quality, performance, and cost. Periodic trilateral and bilateral meetings of senior managers, as well as ad-hoc meetings between functional area experts, are incorporated to facilitate the sharing of information.

Evidence: ?? Monthly Spending and Performance Reports (internal document) ?? Patent Application Location and Monitoring (PALM) reports (internal document) ?? Quarterly Organizational Assessments (internal document) ?? Quality Review System (QRS) reports (internal document) ?? USPTO Process Production Report - Patents (internal document)

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: Productivity and performance measurements are built into the performance appraisal plans of all patents managers. Agency performance goals are incorporated in Senior Executive performance plans. All managers are provided with production efficiency, production output, timeliness, and quality targets each FY. For higher-tier managers, their productivity and performance targets are based on cumulative expectations for all groups/units they oversee. In the event performance metrics are available only at certain levels, organizations below those levels share the same target as the group as a whole. The Commissioner of Patents has an established annual performance agreement with the Secretary of Commerce that outlines measurable goals and objectives for the organization. Externally, several outsourcing projects have timeliness and/or quality contractual requirements. And for USPTO employees, several programs, such as the Patent Hoteling Program, require performance metrics (e.g. productivity, competency) be met as a stipulation for participation. Also, the patents unit includes performance objectives and measures in its memorandums of understanding to help ensure that program partners are held accountable.

Evidence: ?? Patent Manager Performance Appraisal Plan ?? USPTO Performance and Accountability Report: Fiscal Year 2006 Patent Commissioner's Performance for FY06, page 23 http://www.uspto.gov/web/offices/com/annual/2006/index.html ?? Outsourcing of Patent Cooperation Treaty (PCT) Search Services (contract DOC52PAPT0601014) Section E: Inspection and Acceptance (pg 23) ?? PG PUB Classification (DOC52PAPT0501020) contract performance requirements Attachment A (pgs 1-3)

Are funds (Federal and partners') obligated in a timely manner, spent for the intended purpose and accurately reported?

Explanation: USPTO administers reimbursable agreements in accordance with OMB Memorandum M-07-03, titled "Business Rules for Intergovernmental Transactions". USPTO develops operating plans for each organization based on appropriated funding levels and USPTO goals and priorities with routine monitoring of spending against established program plans. USPTO uses the MOMENTUM System, which provides the means to monitor and control all accounting related to the execution of Program Offices' budgets, including establishing spending limits, exercising funds control, and accounting for revenue and reimbursements. The system tracks plan versus actual amounts by month, quarter and year, and records payable amounts resulting from liquidated obligations and schedules payments according to the Prompt Payment Act. Monthly budget execution reports produced by the Office of Corporate Planning are shared with managers and staff.

Evidence: ?? Monthly budget execution reports produced by the Office of Corporate Planning (internal documents) ?? USPTO Performance and Accountability Report: Fiscal Year 2007, Patent costs, page 56 http://www.uspto.gov/web/offices/com/annual/2007/index.html

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: USPTO has a cost efficiency measure to monitor the relative cost of production. USPTO has taken steps to improve efficency, such as competitively sourcing non-inherently governmental functions (e.g. mail, payroll, clerical support, IT development and maintenance) and increased use of telework. While efficency, as measured through their cost efficency measure, has deteriorated, this is mainly do to increased hiring of inexperienced employees, who tend to be less productive than older patent examiners.

Evidence: ?? USPTO Strategic Plan 2007-2012: Leading with Patents (pages 6-7) http://www.uspto.gov/web/offices/com/strat2007/ stratplan2007-2012.pdf ?? USPTO Performance and Accountability Report: Fiscal Year 2007 Strategic Goal 1 (pages 16-19) The Nature of Training Provided to USPTO Examiners (pages 104-106) http://www.uspto.gov/web/offices/com/annual/2007/index.html

Does the program collaborate and coordinate effectively with related programs?

Explanation: Though USPTO is the only Federal entity that addresses patent law and policy, Patents regularly collaborates with its international IP counterparts to share systems, exchange information, and identify best practices. To reduce workloads and duplication of efforts, Patents has undertaken pilot projects with other IP offices (EPO, JPO, etc.) to assess the benefits of mutual exploitation of patent search and examination results. The Strategic Plan, and all proposed rules packages, are open to public comment to ensure all interested parties have the opportunity to indicate weaknesses or opportunities for improvement. Such proposals are then modified to take viable suggestions into account. Patents also coordinates specific user needs as necessary, such as ensuring proper handling of patent applications related to national security with agencies such as the Department of Defense. Patents works with the Patent Depository Libraries (PTDL) program to ensure general public information relative to patent research is available to the public at large. PTDL staff are periodically queried to identify and implement program improvements.

Evidence: ?? USPTO Press Release: USPTO and the European Patent Office to Launch Electronic Priority Document Exchange (#06-68) http://www.uspto.gov/web/offices/com/speeches/06-68.htm ?? USPTO Press Release: USPTO and the Danish Patent and Trademark Office Announce Cooperative Effort on Reclassification of Patent Search Documents (#06-55) http://www.uspto.gov/web/offices/com/speeches/06-55.htm ?? USPTO Press Release: US And Japan To Pilot Patent Prosecution Highway (#06-35) http://www.uspto.gov/web/offices/com/speeches/06-35.htm ?? GAO Report 05-788T: Intellectual Property: US Efforts Have Contributed to Strengthened Laws Overseas, But Significant Enforcement Challenges Remain http://www.gao.gov/new.items/d05788t.pdf ?? National Intellectual Property Law Enforcement Coordination Council (NIPLECC) http://www.uspto.gov/web/offices/dcom/olia/globalip/niplecc.htm ?? USPTO Strategic Plan 2007-2012: Improve Intellectual Property Protection and Enforcement Domestically and Abroad (pg 22) http://www.uspto.gov/web/offices/com/strat2007/ stratplan2007-2012.pdf ?? USPTO Performance and Accountability Report: Fiscal Year 2007 Working to Unify International IP Practice: Multilateral and Bilateral Efforts (page 25) http://www.uspto.gov/web/offices/com/annual/2007/index.html

Does the program use strong financial management practices?

Explanation: FY07 marked the 15th consecutive year of an unqualified audit opinion and the 11th year without material internal control weaknesses supporting the financial management practices. The USPTO has continued compliance with all federal accounting principles and standards and has encountered no instances of material weaknesses in internal controls or non-compliance with financial related laws and regulations. The USPTO complied substantially with the FFMIA for FY07. The USPTO has a certified and accredited, fully integrated financial management system and uses a data warehouse to accommodate both financial and operational data. The data warehouse is used by managers for analyzing financial results and performance and by supervisory patent examiners for managing patent processing timeframes. The USPTO also operates a mature Activity-Based-Cost (ABC) system that captures costs of core mission activities and both direct and indirect costs for the entire Office. Managers use data from the ABC system to analyze the cost of operations when making decisions regarding improving processes, setting fees, or developing budget requirements. Procedures are in place to ensure that payments are made properly for the intended purpose to minimize erroneous payments. During FY07, the USPTO had minimal erroneous payments of only 0.04 percent of total disbursements, a net decline of .02 percent over the previous year. The agency has implemented and is carrying out an administrative order setting forth the policy and management's roles and responsibilities for establishing, assessing, and monitoring internal control according to applicable laws and regulations. The key elements of the program include periodic internal control reviews, ongoing monitoring and certification of internal controls, and follow-up on corrective action plans. In order to provide the separate assessment of internal controls over financial reporting required by OMB Circular A-123, specific monitoring, test work, and documentation are carried out. Now that a baseline assessment has been established, the key financial reporting control processes are tested on a rotating schedule, once every three years. Other internal control reviews may be conducted for selected business processes each year.

Evidence: ?? USPTO Performance and Accountability Report: Fiscal Year 2007 Independent Auditors' Report (pages 96-100) Management Assurances and Compliance with Laws and Regulations (pages 45-49) http://www.uspto.gov/web/offices/com/annual/2007/index.html ?? AAO 216-02, Management's Responsibility for Internal Controls

Has the program taken meaningful steps to address its management deficiencies?

Explanation: The USPTO Strategic Plan 2007-2012 takes a proactive approach to strengthening Patents program management by setting a path for achieving desired goals and objectives. This includes training and compensation initiatives to improve performance and ensure management officials and staff have the skills, capabilities, and incentives needed to carry out the plan. A quarterly report to agency management contains up to date information on new reports and recommendations, closed reports and recommendations, material weaknesses, actions due and the status of corrective actions, and ongoing examinations. Patents has implemented a comprehensive outreach support program. Through PPAC and an external consulting firm, Patents will receive analysis and recommendations on all aspects of the patent examination system. The study is expected to be completed in 2008. Patents leadership holds periodic Management Meetings where all Patents managers are briefed on current initiatives, performance results, and policy/rules changes. Patents managers also have the opportunity to participate in a Q/A session with senior executives to address other topics of interest. At the April 2007 Patents Managers Meeting, managers were provided with a Supervisor's Communication Guide to serve as a resource for discussing the 2007-2012 Strategic Plan with their staff.

Evidence: ?? USPTO Strategic Plan 2007-2012: Implementing the Electronic Filing System-Web (pg 7) Optimizing the Patent Process (pg 7) List of Initiatives (pg 32) http://www.uspto.gov/web/offices/com/strat2007/ stratplan2007-2012.pdf ?? Quarterly Management's Internal Control Report

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: At the end of FY07, had realized two years of improvement in its allowance compliance mesure. However, Patent's pendency measures have been deteriorating for several years because of increased growth of patent applications. Some of these increases will be mitigated by pending rules to limit the number of claims and continuations of existing applications. Also, improvements to management processes contained in the Patent Reform Act pending in Congress will also help improve processing times. However, increasing application volumes have been known for some time and the patent organization has not realized enough progress toward adequate processing time goals.

Evidence: ?? USPTO Strategic Plan 2007-2012: Leading with Patents (pages 6-7) http://www.uspto.gov/web/offices/com/strat2007/ stratplan2007-2012.pdf ?? USPTO Performance and Accountability Report: Fiscal Year 2007 Strategic Goal 1 (pages 16-19) http://www.uspto.gov/web/offices/com/annual/2007/index.html ?? Patent Public Advisory Committee Annual Report, November 30, 2007 http://www.uspto.gov/web/offices/com/advisory/reports/ ppac_2007annualrpt.pdf

Does the program (including program partners) achieve its annual performance goals?

Explanation: As with the long-term measures, the Patent program has achieved improvements in the quality of its examinations and has seen increases in electronic filing. Also, the unit has met most of its annual targets for its processing time measures and has taken some steps to minimize increases in processing times from increased filings. However, the unit missed its first action pendency target for 2007 and some targets have been revised downward from previous years, thus organization meets its goals to a large extent.

Evidence: ?? USPTO Performance and Accountability Report: Fiscal Year 2007 Strategic Goal 1 (pages 16-19) http://www.uspto.gov/web/offices/com/annual/2007/index.html ?? Office of Patent Quality Assurance - "Corps Rolling Average Compliance Rates by Quarter" (internal document) ?? USPTO Press Release: USPTO 2007 Fiscal Year-End Results Demonstrate Trend of Improved Patent and Trademark Quality (#07-46) http://www.uspto.gov/web/offices/com/speeches/07-46.htm

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The Patents organization out-performed cost-effectiveness targets from FY05 to FY07. However, targets were worse than previous year actuals. Also, the measures have been generally worsening in recent years. This could arise from increased hiring that has led to a large number of new employees, who tend to be less productive than more experienced employees. However, the program has seen some production improvements in certain areas. In the Patents Hoteling Program (800+ examiners) that encourages teleworking, employees have shown a 10% increase in production over pre-program levels. Also, the increase in electronically filing has allowed the program to save money through the retirement of legacy systems.

Evidence: ?? USPTO Performance and Accountability Report: Fiscal Year 2007 Strategic Goal 1 (pages 16-19) http://www.uspto.gov/web/offices/com/annual/2007/index.html ?? USPTO Strategic Plan 2007-2012: Leading with Patents (pages 6-7) http://www.uspto.gov/web/offices/com/strat2007/ stratplan2007-2012.pdf ?? Patents Hoteling Program Highlights - FY07 ?? Electronic Filing System-Web (EFS-Web) Highlights - FY07 ?? Patent Prosecution Highway to Be Extended to Cover International Applications, ag-IP-news Agency, March 13, 2008 http://www.ag-ip-news.com/GetArticle.asp?Art_ID=5598&lang=en

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: There are no other similar Federal programs. USPTO compares favorably with the other two major international intellectual property offices (EPO and JPO). USPTO has the lowest pendency and lowest cost to the applicant for obtaining and maintaining a patent.

Evidence: ?? Trilateral Statistical Report - 2006 Edition http://www.trilateral.net/tsr/tsr_2006/4_tril_off_pat_act_2006.pdf ?? Patent Procedures and Statistics: An Overview, Eurostat, December 7, 2006 The Cost Factor in Patent Systems (pages 4-5) http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-NS-06-019/EN/KS-NS-06-019-EN.PDF ?? Patent Statistics, Eurostat, February 21, 2008 http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-SF-08-017/EN/KS-SF-08-017-EN.PDF ?? Comparison of Fees Charged by CIPO for Trademark and Patent Activities in Comparison to Other Jurisdictions, Top Box Consulting Group, June 2002 Total Fees Paid Over the Patent Life Cycle (page 3) http://strategis.ic.gc.ca/sc_mrksv/cipo/fees/doceng.pdf

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: Quarterly customer satisfaction survey conducted by Westat, Inc. indicate that only about one-third of customers believe they are receiving a excellant or good examination. However, a NAPA study generally approved of the program's quality initiatives. Patents will expand the use of external evaluations in upcoming years. Through PPAC and an external consulting firm, patents will receive analysis and recommendations on all aspects of the patent examination system. The study is expected to be completed in early 2008 and will provide a more comprehensive look at Patents' ability to achieve results with the current examination system.

Evidence: ?? Patent Public Advisory Committee Annual Report, November 30, 2007 http://www.uspto.gov/web/offices/com/advisory/reports/ ppac_2007annualrpt.pdf ?? Office of Patent Quality Assurance - "Corps Rolling Average Compliance Rates by Quarter" ?? Office of Patent Quality Assurance - "Quality Since 1982 in Brief" ?? Customer Panel Quality Survey - Wave 4 Report ?? USPTO Strategic Plan 2007-2012 http://www.uspto.gov/web/offices/com/strat2007/stratplan2007-2012.pdf ?? National Academy of Public Administration, U.S. Patent and Trademark Office: Transforming to Meet the Challenges of the 21st Century, pages 70, 50-53, http://www.napawash.org/Pubs/PTO8-25-05.pdf