Management Challenges

The USPTO is responsible for supporting the national economy through IP protection. The domestic and global economies are driven in part by new technologies supported by incentives provided by IP laws. The USPTO is one of the principle IP offices in the world, and all the major offices, particularly the USPTO, the Japan Patent Office (JPO), and the European Patent Office (EPO), have experienced rapid increases in the number of patent applications filed and the resulting increase in workload.

Volatility and Economic Uncertainty in the Demand for Products and Services

Over the past decade, the USPTO has faced increasing workload demands, particularly in the filing of patent and trademark applications. However, the volatility of these application filings has been evident particularly in the last year. During the 1990s, patent application filings grew at an average annual rate of 8 percent per year. In fiscal years (FY) 2000 and 2001, the growth rate increased to 12 percent per year, where it is projected to stay through FY 2002 and then level off at 10 percent annual growth through FY 2007. Taken as a whole, these double-digit workload increases are formidable. However, the growth has been particularly explosive in the electrical technologies, which experienced a 19 percent growth over the past two years.

The annual growth rate of applications for registration of a trademark during the 1990s averaged 14 percent. In FY 1999 and FY 2000, fueled by the increase in business related to the Internet, which paralleled the growth of the economy, trademark application filings grew by 27 percent each year. Although application filings decreased in FY 2001 by 21 percent, consistent with a declining economy, the number of applications filed was the second highest level ever recorded. For FY 2002, the USPTO projects no additional growth in filings due to the current economic slowdown. Thereafter, based on projections and statements from the administration, the economy is expected to improve and for trademark applications to return to a growth position.

Increasing Workload of Complex Technologies

In recent years the greatest growth in filings is in the more complex areas of electrical/computer engineering and biotechnology/ bioinformatics technologies. To better manage this changing workload, the USPTO is focusing more heavily on automated search tools and other labor-saving techniques, as well as reviewing its fee structure for fee changes that may result in improvements to facilitate internal application processing efficiencies.

Recent Legislative Mandates

The American Inventors Protection Act of 1999 (AIPA) made significant changes to the structure and management of the USPTO and the patent system. Transition to the new structure and management practices took place in the early part of FY 2000 and continued into FY 2001. The new structure positions the USPTO to function with a more business-like approach.

Changes to the patent system have included patent term adjustments for failure to process patent applications within specific timeframes, pre-grant publication of most patent applications 18 months after filing, and expanded the reexamination process. Implementation of these provisions is still under way. Some of these new mandates created significant financial requirements for the USPTO. Until sufficient historical patterns can be observed, detailed implications for forecasting workload, fee collections, and impact on operations remain unclear.

Space Consolidation

The USPTO plans to consolidate its current operations in Alexandria, Virginia, about three miles from our current site. This space consolidation is a critical step in making the USPTO the best IP office in the world. On June 1, 2000, the General Services Administration (GSA), as agent for the USPTO, executed a 20-year lease for a two-million-square-foot facility to consolidate the USPTO’s operations now dispersed among 18 separate Crystal City buildings within a one-mile area, covered by 33 separate GSA leases. Relocation to Alexandria will be phased to coincide with delivery of five interconnected buildings. Occupancy is expected to begin in late FY 2003 and be completed by mid-FY 2005.

Consolidation is critical to the agency's transition to e-Government. The USPTO now has the opportunity to tailor the design of a comprehensive state-of-the-art communication backbone for the facility and to provide for current communication technology such as video-conferencing. Additionally, in conjunction with the move and as part of the transformation to a fully electronic workplace, the agency plans to eliminate paper files in both employee and public search areas to the maximum extent possible.

The USPTO will face numerous logistical and operational challenges in executing this consolidating move. Dual operations, including dual computer facilities, will be required during the phasing of the relocation because the space will be delivered over a protracted period. Supporting employees and customers at geographically separate locations will require careful planning. However, the long-term benefit will be a world-class facility with operational efficiencies and improved allocation of workspace to accommodate the USPTO’s growing and changing workplace.