Strategic Objective 2.2
Protect intellectual property and improve the patent and trademark system
This objective is important to the nation as it serves to ensure that the intellectual property (IP) system contributes to a strong global economy, encourages investment in innovation, and fosters entrepreneurial spirit. Achievement of this objective will protect individual rights and innovation in a timely, efficient manner. A discussion of each performance goal within this objective will further describe the outcomes of the objective. The Department promotes the IP system through the protection of inventions or creations via patent, trademark, trade secret, or copyright laws. U.S. innovators and industry have flourished under this multifaceted system of protection as new products are invented and employment opportunities are created for millions of Americans. The strength and vitality of the U.S. economy depends directly on effective mechanisms that protect new ideas and investments in innovation and creativity. The primary services provided by the Department within this objective are examination of patent and trademark applications and dissemination of patent and trademark information. Through issuing patents, the Department encourages technological advancement by providing incentives to invent, invest in, and disclose new technology. Through registering trademarks, the Department assists businesses in protecting their investments, promoting quality goods and services, and safeguarding consumers against confusion and deception in the marketplace by providing notice of marks in use. By disseminating both patent and trademark information, the Department promotes a global understanding of IP protection and facilitates developing and sharing new technologies worldwide.
Performance Goal: Improve the quality of patent products and services and optimize patent processing time (USPTO)
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| Rating | Results |
|---|---|
| On Target | 4 |
| Slightly Below Target | 0 |
| Below Target | 1 |
| See Appendix A: Performance and Resource Tables for individual reported results. | |
The core process under this goal is the examination of an inventor’s application for a patent by comparing the claimed subject matter of the application to the existing body of technological information to determine whether the claimed invention is new, useful, and non-obvious to someone knowledgeable in that subject matter. A quality review of the examination process includes reviewing a random sample of both in-process and allowed applications for errors.
Quality is the most important component of The 21st Century Strategic Plan. USPTO has in place several quality initiatives called for by the Strategic Plan, including an enhanced Quality Assurance Program for end product reviews, in-process reviews, and enhanced “second pair of eyes” reviews. The feedback from these reviews is used to identify and develop training modules and other quality enhancements. Additionally, to ensure that the primary patent examiners maintain the knowledge, skills, and abilities (KSA) necessary to perform a high quality examination, USPTO implemented a re-certification program, with primary examiners re-certified once every three years. A certification program was also implemented for junior examiners to ensure they have the required KSAs prior to promotion to the level where they are given legal and negotiation authority.
 New USPTO examiners attend class during the Patent Examiner Initial Training program. |
The Office did not meet its FY 2005 patent allowance error rate target of 4.0. The percent of allowed applications with a material defect was 4.6 percent for the fiscal year. An allowance error is defined as at least one claim within the randomly selected allowed application under quality review that would be held invalid in a court of law, if the application were to issue as a patent without the required correction. The allowance error rate is measured by the ratio of the number of applications containing an allowance error to the total number of allowed applications reviewed.
The patent in-process review program is employed to assess examination quality prior to final examiner determination. An in-process compliance rate is measured by the ratio of Office actions that do not include a deficiency that has a significant impact on the ability of the applicant to advance the prosecution on the merits of the application to the total number of Office actions reviewed. FY 2004 was the baseline year, with an in-process compliance rate of 82 percent as of June 30. The Office met its FY 2005 target of 84 percent with a patent in-process compliance rate of 86.2 percent.
Under The 21st Century Strategic Plan, USPTO has a goal to reduce patent application pendency and substantially cut the size of the work backlog. The two primary measures of patent application processing time are: (1) first action pendency, which measures the average time in months from filing until an examiner’s initial determination is made of the patentability of an invention; and (2) total pendency, which measures the average time in months from filing until the application issues as a patent or the application is abandoned by the applicant. The Office continues to strive to meet its goals through hiring sufficient numbers of new patent examiners, exploring work sharing with other patent offices, competitive sourcing of PCT (Patent Cooperation Treaty) application searches, and the implementation of variable, incentive-driven fees.
The Office met its target of 21.3 months for first action pendency and met its target of 31.0 months for total pendency.
Patent efficiency measures the degree to which the program can operate within planned costs relative to patent examiner outputs. The Office met its 2005 efficiency target of $4,122. The measure is calculated by dividing total annual USPTO expenses associated with the examination and processing of patents, including associated overhead and support expenses, by annual production units. For the current and budget years, targets are estimated using the budgetary request in place of actual expenses, and all projected production units. It should be noted that out year calculations are subject to change, depending upon the level of funding actually authorized and spent.
| Rating | Results |
|---|---|
| On Target | 4 |
| Slightly Below Target | 0 |
| Below Target | 1 |
| See Appendix A: Performance and Resource Tables for individual reported results. | |
The core process under this goal is the examination of applications for trademark registration. As part of that examination, trademark examining attorneys make determinations of registrability under the provisions of the Trademark Act of 1946, as amended, including searching the electronic databases for any pending or registered marks that are confusingly similar to the mark in a subject application, preparing letters informing applicants of the attorney’s findings, approving applications to be published for opposition, and examining Statements of Use in applications filed under the Intent to Use provisions of the Trademark Act.
Identification of the criterion for assessing the quality of an office action is a crucial aspect of the USPTO priority for improving the quality of examination. Trademark quality is determined through an evaluation of current, in-process first and final examiner search results and actions to create a more comprehensive, meaningful, and rigorous review of what constitutes quality of examination. This review includes a review and an analysis of over 350 items to determine “excellent”, “satisfactory”, and “deficient” work with regard to the overall writing and evidence in the Office actions and the decision-making of every aspect of the application examination. The review also includes an analysis of all aspects of the examining attorneys’ handling of every substantive and procedural issue. Quality has been measured using the more rigorous criteria for the past two years. The results show that quality of the examiner’s first action on an application is improving. Quality as measured for final Office actions, which includes a complete review of the quality of all the actions throughout the course of examination, has not met the target goal.
The first action deficiency target of 8.3 percent was revised to 7.5 percent based on the FY 2004 performance results that exceeded the target originally set for FY 2005. Trademark first action deficiency error rate results for FY 2005 were 4.7 percent, or 2.8 percent below the revised 7.5 percent deficiency target. The final action deficiency error rate was 5.9 percent, or .9 percent above the 5.0 percent target.
The in-process review evaluation has been structured to provide feedback on performance and is the basis for developing training materials to ensure that examiners are well qualified to perform their jobs at the highest level. As part of this effort, the Office released three new e-learning training modules covering issues related to §2(d) of the Trademark Act. Examiners were required to take the self-paced tutorial as part of USPTO’s commitment to improve the quality of examination.
Trademark first action pendency target is 6.4 months from date of filing to the date that the examiner’s first office action is processed. First action pendency is based on the average time from filing to first action as reported for the month of September. First action pendency results for FY 2004 were 6.6 months. The Office met its FY 2005 target by achieving a first action pendency of 6.3 months.
Trademark disposal pendency target for this fiscal year is 17.5 months excluding suspended and inter partes cases, and 20.3 months including all cases, based on the average number of days from date of filing to notice of abandonment, notice of allowance, or registration for applications based on use. Disposal pendency results for FY 2005 were 17.2 months and 19.6 months, respectively. The Office met its FY 2005 target.
The trademark efficiency measure is calculated by dividing total USPTO expenses associated with the examination and processing of trademarks (including related overhead and support expenses) by office disposals or outputs. The measure is a relative rather than absolute indicator of the efficiency of trademark processes. It provides a means for assessing actual expenses against plan and changes in costs relative to performance results over time to determine if improvements in operating efficiencies are achieved. The FY 2005 target of $701 is based on planned budget obligations whereas the final results are based on actual expenses, which include non-budget costs.1
The Office met its trademark efficiency target. Total costs averaged $170,900,919 based on office disposals of 252,275 for a unit cost of $677.
| Rating | Results |
|---|---|
| On Target | 3 |
| Slightly Below Target | 0 |
| Below Target | 2 |
| See Appendix A: Performance and Resource Tables for individual reported results. | |
Under The 21st Century Strategic Plan, USPTO continues to work with its IP partners to improve the efficiency of its processing systems. The number of applications and communications received and processed electronically has continued to increase and has resulted in more coordinated and streamlined work processes. The transition to greater reliance on electronic systems will position USPTO for the globalization that characterizes the 21st century economy and will increase the efficiency of operations.
USPTO continues to make progress in the transition of its patent and trademark operations; applicants are able to electronically file for patents and trademark registration and can review the current status of those applications as needed. USPTO has replaced paper files with electronic copies of patent and trademark applications. Examiners and the public may now access the same version of the file contents electronically.
Anyone with Internet access anywhere in the world can use USPTO’s Web site (www.uspto.gov) to track the status of a public patent application as it moves from pre-grant publication to final disposition, allowing review of the documents in the official application file, including all decisions made by patent examiners. This system, known as Public PAIR (Patent Application and Information Retrieval), offers the public an advanced electronic portal for PDF viewing, downloading, and printing an array of information and documents for patent applications not covered by confidentiality laws. Public PAIR also offers a quick-click feature for ordering certified copies of patent applications and application files.
The Trademark Document Retrieval (TDR) System allows for online public access to the official trademark application file, including all decisions made by trademark examining attorneys and their reasons for making them. This system allows access to the full file contents of all pending and some registered files in an electronic PDF format, including downloading and printing of an array of information and documents. Public access improves USPTO’s ability to provide timely and useful information to business owners as they develop their marks and prepare to file trademark applications.
Significant progress has been made in transitioning both patent and trademark operations to an e-government environment. USPTO met its target for managing 99 percent of trademark and 90 percent of patent applications electronically by having all applications available in an electronic format. As USPTO continues to make progress in this transition, Americans may more easily gain access to information as well as apply for patents and trademark registration and obtain information about the status of their applications online. All federally registered and pending trademarks are available to the public on USPTO’s Web site where status information is also available. The trademark data includes nearly two million pending and registered trademarks dating back to 1885 and represents more than 100 years of marketing creativity.
USPTO has established three fee levels for filing an application for registration of a trademark consistent with the objectives of The 21st Century Strategic Plan to create financial and market-based incentives and encourage greater participation in the trademark system. Trademark owners now have alternatives that allow them to select the option that best meets their needs with higher fees for filing on paper and lower fees for filing electronically. The lowest fee requires electronic filing of a complete application that permits USPTO to reduce time required to determine registrability.
USPTO revised its target goal for electronic filing to 70 percent of trademark applications filed based on 2004 results and still exceeded the revised target with 88 percent of applications received electronically. USPTO has continued to enhance its trademark electronic filing system by expanding the number and type of transactions that can be completed online and by offering reduced fees to encourage electronic communications. Twenty-six electronic forms are now available through the award winning Trademark Electronic Application System (TEAS). Just as electronic filing has become the preferred way to initially transact business with USPTO, options for reduced fees, system enhancements, and the availability of forms that permit more transactions have encouraged greater use and acceptance among trademark customers to the point where electronic filing is now the preferred method for communicating on trademark matters.
In FY 2005, the Office received 2.2 percent of patent applications electronically and managed 96.7 percent electronically. During FY 2005, the Office continued its efforts to increase the number of electronically filed applications and held several e-filing customer outreach forums to hear applicants’ concerns and to promote the benefits of filing applications electronically. Acting on their suggestions, USPTO will deploy a user-friendly PDF-format system early in FY 2006.
In the past year, USPTO increased the number of notices by 10 that are sent electronically through “Tpostal”, the Agency’s electronic bulk mailing system for trademark related notices. Thirteen types of notices are sent electronically through the U.S. Postal Service’s Web-based NetPost Mailing Online system to print, stamp, and mail post card notices to trademark filers within 24 hours of receipt by the U.S. Postal Service. Using postcards rather than letters not only saves time but also reduces labor, materials, and postage costs, resulting in considerable savings.
USPTO will continue to eliminate paper documents from the examining process. Delivery of Web-based text and image search systems will encourage more applicants to do business electronically. Significant progress has been made in improving e-government operations, as the Office now exclusively uses trademark data submitted or captured electronically to support examination, publish documents, and print registrations.
Completing implementation of The 21st Century Strategic Plan will continue at USPTO. In order to more effectively serve an increasingly larger, global client base, USPTO relies on electronic communications to improve the availability of patent and trademark information. E-government initiatives allow customers to conduct an electronic search to determine the status of pending and registered trademarks and view public patent applications; conduct a preliminary search prior to filing an application; access general information, examination manuals, treaties, laws and regulations; obtain weekly information on marks published, registered, and renewed, and patents issued and patent applications published; and file patent and trademark applications. Internet access increases the opportunity for filing for patent protection and for federal registration.
While The 21st Century Strategic Plan’s long-term patent pendency goal remains 18 months, this goal will not be achieved in the near future because of the higher priority placed on quality and patent e-government initiatives. However, USPTO plans to produce, on average, a first office action for first-filed U.S. non-provisional applications at the time of 18-month publication with a patent search report for other patent applications that will be issued in the same time frame.
USPTO has implemented legislation to change its current fee schedule, and will provide the means to streamline the patent system. The Agency plans to control patent pendency and reduce the time to first office action by hiring additional patent examiners to address the growing backlog of pending applications, exploring work sharing with other patent offices, and competitive sourcing of PCT application searches.
USPTO will continue efforts to enhance quality in FY 2006 by certifying patent examiners before the delegation of legal competency, recertification of primary examiners once every three years, and reviewing of work product throughout prosecution to ensure compliance with examination practice and procedures standards. Hiring people who make the best patent examiners, certifying their knowledge and competencies throughout their careers, and focusing on quality throughout the patent examination process will ensure continued quality. By bolstering confidence in the quality of U.S. patents, USPTO will enhance the reliability in the quality of products and services resulting in improved efficiencies and better services for applicants. Additionally, an online pre-employment screening tool will identify potential patent examiner candidates who possess the competencies that are best suited for effective patent examination. These quality initiatives will improve patent and trademark quality by providing review of work product, feedback to examiners on areas for improvement, targeted training, and safeguards to ensure competencies.
USPTO must address the continuing challenges of rising workloads and the shift of applications from traditional arts to more complex technologies.
The demand for higher quality products and services has grown as technology has become increasingly complex. Demands for products and services have created substantial workload challenges in the processing of patents at USPTO. Congress, the owners of IP, the patent bar, and the public-at-large have all told the Department that it must address these challenges aggressively and promptly.
Implementation of USPTO’s 21st Century Strategic Plan initiatives will address these challenges and transform USPTO into a quality-driven, highly-productive, and cost-efficient organization that promotes expansion of business opportunities, stimulates R&D, and expands U.S. businesses globally.
1 Note that after the FY 2005 target was set there was a change in how the overhead costs were allocated for the Office. This change in methodology resulted in a greater amount of overhead attributed to the trademark operations. (back)
= Met (100%)