PATENTS

FY 2001 was another successful year for the patent business. The first full year under AIPA has seen significant progress in implementing the major pieces of this legislation. In May 2001, the patent business published the first U.S. patent applications under the new statute, commonly called pre-grant publications. By the end of FY 2001, a total of 25,376 patent applications had been published. The publication of these application documents is an historic event for the United States patent system. This information will expand the public knowledge of the latest technology. Additionally, the patent business has started measuring patent term adjustments for patents granted that exceed the specific timeframes defined in the AIPA. Further, it received the first request under the new inter partes reexamination rules. The business line also achieved or made significant progress toward achieving the performance goals and initiatives identified in the beginning of the fiscal year. It made notable gains in quality and timeliness, as well as employee and customer satisfaction. The patent business also is making tremendous strides and continues to build on its successes in e-Government.

The patent business continues to receive a record number of applications. It received 326,081 utility, plant and reissue (UPR) applications in FY 2001. Increases in the number of applications in communications, information processing, and biotechnology led to the 11.2 percent growth over last year. The patent business also issued a record 170,643 UPR patents, a three percent increase over FY 2000. For FY 2002, UPR applications are expected to increase another 12 percent, with the high technology areas leading this growth once again.

Filings under the Patent Cooperation Treaty (PCT) continued to increase, as shown in the table below. PCT usage reflects the transition to a global economy because it implements the concept of a single international patent application which has legal effect in the member countries.

An important step toward operating in an electronic environment occurred when the Office of Personnel Management approved the pay raise portion of the "Agreement on Initiatives for a New Millennium" on May 31, 2001. This historic agreement is the result of a cooperative effort by the Patent Office Professional Association (POPA) and USPTO management, and represents a milestone in the progress and commitment toward improving the agency for both customers and employees. The "Millennium" agreement addresses a number of long-standing issues and will help the organization reach its goals. The agreement includes a special pay rate to address recruitment and retention issues for patent examining professionals, moving to an electronic search environment by the phased elimination of paper search files, improving automation tools, establishing a patent examiner work-at-home pilot, and adding a customer service element to employee performance plans. Taken as a whole, these initiatives will have a positive impact on quality, customer service, and timeliness, and provide the patent business with the flexibility necessary to recruit highly-skilled professionals and retain experienced employees who will help the agency move toward electronic-based processing.

D

Goal: Enhance the quality of our products and services

Customers are concerned with the quality of the products and services they receive in exchange for the fees they pay. The patent business has made great strides in meeting expectations for high quality products and services.

Results: Quality of Patents

Measure: Improve quality of patents by 55 percent through reducing the error rate from 6.6 percent to 3 percent by FY 2006.

DATA VALIDATION AND VERIFICATION

• Data source: Office of Patent Quality Review Report.
• Frequency: Daily input, monthly reporting.
• Data storage: Automated systems, reports.
• Verification: Manual reports and analysis.
• Data Limitations: None.

The patent business finished FY 2001 with a 5.4 percent error rate, a great improvement from last year's 6.6 percent. Over the past 18 years, this error rate has varied from 3.7 percent to 7.6 percent. The goal is to reduce the error rate to a level of 3 percent by FY 2004.

Another key quality measure is the percent of allowed applications where a significant question relating to quality of the examination process was raised. This year, the patent business improved from 7.7 percent to 5.1 percent, beating its target of 7 percent. Based on the input from our PPAC, the business is developing a quality index that will incorporate a number of metrics to achieve a better-balanced measure of quality.

Programs to ensure the quality of patent business services and products include partnerships, focus sessions, and round-tables with customers. For example, the business established a customer partnership-working group in the business methods technology area. An inaugural business methods partnership meeting was held at the USPTO on March 1, 2001, with approximately 60 representatives from the business and legal communities, trade associations, and academia.

The in-process review program continues to help identify areas that need quality improvement within the technology centers (TC), and design training programs to enhance the quality of our products. Leadership continues to meet regularly with front-line supervisors and quality specialists to share knowledge; stress the importance of quality, training and employee development; identify systemic issues; and explore best practices. Other initiatives include focus sessions with customers on key aspects of patent examination. "Road shows," utilized in the biotechnology area, have brought training on the latest procedural issues to many of patent business customers. Patent examiners continue to attend technology fairs where industry highlights the latest in technology and processes. Further, patentability reviews have been expanded to review the correctness of each allowed application in the emerging technology areas where the prior art is not well established.

Implementing the AIPA has presented numerous challenges, as well as opportunities to improve quality in the USPTO. In FY 2001, the patent business provided the public with text searchable access to the published application database through the USPTO Web site. A Patent Business Goal and AIPA Rulemaking and Patent Examination Guidelines – first supplement was developed for distribution to internal and external customers, and training materials for examiners were created on inter partes reexamination. In August 2001, a new edition of the Manual of Patent Examining Procedure (MPEP) was completed, which incorporates the changes necessitated by the AIPA and a number of final rule packages that became effective since the last revision of the MPEP in February 2000. The electronic version of the new edition of the MPEP in PDF was posted on the USPTO Web site in September 2001.

Results: Customer Satisfaction

Measure: Increase overall customer satisfaction from 64 percent to 80 percent by FY 2006.

DATA VALIDATION AND VERIFICATION

• Data source: Customer surveys.
• Frequency: Surveys are conducted and results are reported annually.
• Data storage: Paper files and contractor electronic files.
• Verification: Independent contractor develops data instrument, conducts survey and compiles results.
• Data Limitations: None.

Customer satisfaction with the patent business service is high, given the nature of the business. Customers are most satisfied that employees treat them with courtesy each time they contact the agency, that assistance is available at a time convenient to them, application instructions are clear, the telephone is used to resolve examination issues, the outcome met their objectives, and final decisions are fair. Yet there continues to be opportunities for improvement. Areas for improvement include the time required to correct problems, consistency of examinations, accuracy in correcting problems, and the time required for responding to status letters.

The patent business expanded the number of customer service centers throughout the organization to answer customer questions and resolve problems correctly and in a timely manner. The business piloted an automated complaint management system to analyze the root-cause of problems and improve processes. The USPTO provided desktop facsimile service to all TCs so that customers can send their documents directly to the individual responsible for getting their issues resolved. The patent business also has expanded the number of customers having direct access to their application information through the online PAIR system, allowing them to check on the status of their patent applications at any time. In FY 2002, the patent business will begin implementing systems and solutions to respond to status letter inquiries based on feedback from the PPAC and customers.

Goal: Minimize patent application processing time

The patent system has been the foundation of America’s great innovative success. The system carefully balances the exclusivity incentive it offers against disclosure, and openness of the invention that accrues to society as a whole by the use of the invention once the term of patent protection has ended. It is critical for the USPTO to maximize the term of patent protection for the inventor, as well as avoid extension of patent term beyond that necessary.

The AIPA legislation provides a guarantee that ensures diligent applicants maximize their patent terms. Failure of the patent business to take the actions listed below will result in the patent term being extended one day for each day of delay.

During FY 2001, 414 new patent examiners were hired and trained to help reduce processing time and address the growing workload. To provide timely information on progress, the patent business developed new management and balanced score-card reports to track critical performance targets. It balanced workloads and shifted resources to address critical shortages in various TCs. The business formed a new Technology Center 2100 to help with rapid growth in the business method area, and transferred approximately 30 experienced examiners from outside the electrical areas into the new TC 2100 to help with the workload and training of newer examiners.

Results: First Action Pendency

Measure: Reduce average first action pendency to 12 months by FY 2006.

DATA VALIDATION AND VERIFICATION

• Data source: Patent Application Location and Monitoring (PALM) system.
• Frequency: Daily input, monthly reporting.
• Data storage: PALM, automated systems, reports.
• Verification: Accuracy of supporting data is controlled through internal program edits in the PALM system. Final test for reasonableness is performed internally by patent examiners and supervisory and program management.
• Data Limitations: None.

With a net increase in staffing (414 hired, 263 lost: net gain of 151 examiners), and an 11 percent increase in filings, the patent business has increased the number of first actions by 4,349 (241,770 up from 237,421) and increased the number of balanced disposals by 5,149 (239,493 up from 234,344).

Results : Total Pendency

Measure: Reduce average total pendency to 26 months by FY 2006

DATA VALIDATION AND VERIFICATION

• Data source: PALM system.
• Frequency: Daily input, monthly reporting.
• Data storage: PALM, automated systems, reports.
• Verification: Accuracy of supporting data is controlled through internal program edits in the PALM system. Final test for reasonableness is performed internally by patent examiners and supervisory and program management.
• Data Limitations: None.

A performance incentive program to increase the productivity of current resources was implemented. The technology center group directors’ performance plan and awards program now includes incentives to meet set production and pendency targets. A new performance plan and awards program for supervisory patent examiners was implemented at mid-year FY 2001, and also includes incentives to meet set production and pendency targets.

Employee Satisfaction Initiative. Employee ownership and accountability for providing high quality customer service characterizes the patent business environment. The patent business views employees as its most valuable resource, and understands the importance of updating and expanding employee skills, knowledge, and abilities. By providing opportunities for employees to expand their professional competencies and experience personal growth and development in their careers, the USPTO is developing a diverse and expert staff genuinely interested in, and capable of, supporting and helping customers get patents. As employee satisfaction increases, the USPTO expects customer satisfaction and business performance to increase as well.

The patent business developed a new program for automation training for examiners and supervisors. The program was developed based on extensive feedback from examiners and includes the following key concepts: a bank of training hours, core curriculum, self-registration, non-traditional training hours, and online course catalog. This new automation-training program empowers employees to design their own automation training curriculum based on their level of expertise and their work schedule. This program has received tremendous positive feedback from employees. This past year, considerable time, energy, and resources were devoted to developing a knowledge, skills, and abilities (KSAs) developmental guide for technical support employees. As a partnership effort between the National Treasury Employees Union - Local 243 and the USPTO, this project will identify the KSAs needed as the patent business transitions to an e-Government environment.

The annual patent employee satisfaction survey showed a marked improvement this fiscal year. The percent of employees in the patent business area who are satisfied with their job reached 65, a 10 percent increase over FY 2000 results. The patent business continues to make great progress in key measures that drive employee satisfaction, most notably the percent of patent employees who feel proud to work for the USPTO, who are proud of the work that they do, and who are satisfied with communication across the office.

These innovative initiatives have helped the patent business achieve many of the FY 2001 goals. In FY 2002, the patent business will continue to work with employees, managers and the PPAC to explore other opportunities to increase the quality of patent business products and improve the overall level of customer satisfaction.

Patent Performance

The American Inventors Protection Act, Title VI, Subtitle G, the Patent and Trademark Office Efficiency Act, established the USPTO as a Performance Based Organization (PBO) on March 29, 2000. The legislation allows appointment of a Commissioner for Patents as the Chief Operating Officer for Patents, and a Commissioner for Trademarks as the Chief Operating Officer for Trademarks. It also requires that an annual performance agreement be established between the Commissioners and the Secretary of Commerce. The agreement outlines measurable organizational goals and objectives for the PBO. The Commissioners may be rewarded a bonus, based upon an evaluation of their performance as defined in the agreement, of up to 50 percent of their base salary.

The patent business goals formed the foundation for the annual performance agreement between the Commissioner for Patents and the Secretary of Commerce, as required by the AIPA. The performance agreement outlined measurable organizational goals and objectives for the patent business based on the above goals and performance measures. At the time of publication, the Commissioner for Patents performance bonus had not been determined.