|Performance and Accountability Report Fiscal Year 2007
Message from the Director
MESSAGE FROM THE UNDER SECRETARY OF COMMERCE
World IP Leaders Meet — USPTO Director Jon Dudas hosts the leaders of the world’s five largest intellectual property offices at a meeting to discuss shared issues and ways the offices can work together.
The United States Patent and Trademark Office continued leading the world in intellectual property (IP) protection and policy in fiscal year (FY) 2007. Beyond achieving another record-breaking year in performance, we took steps to transform for the future today. In other words, we are building a foundation for gains that will be fully realized in the years ahead.
The USPTO granted patents and registered trademarks that will affect countless lives in the future. We once again improved the quality and efficiency of our patent and trademark processes. Quality is our primary focus, and our quality results have been phenomenal. To keep the momentum, we started down a path to future quality improvements by encouraging greater collaboration with our constituents.
In FY 2007, we reached out to encourage individual inventors and small and medium businesses to innovate and protect their IP. We also worked to foster innovation among America’s next generation. We began a three-year partnership with the Ad Council to reach young people through a national ad campaign called, “Inspiring Invention.” Our radio and TV commercials are now playing throughout the country with the message, “Anything’s possible. Keep thinking.”
The USPTO continued to move forward on improving IP rights and enforcement here and around the world. For example, we hosted a “heads of office meeting” with the leaders of the world’s five largest IP offices — China, Europe, Japan, Korea, and the United States — to discuss how we can better work together. With the growth of China and Korea’s offices over the past few years, the top five IP offices now handle more than three-fourths of the world’s patent applications. So, these IP leaders recognize that close cooperation among our offices is essential to ensuring high quality and maximizing efficiencies.
To define exactly how the USPTO will remain the world’s leader in IP, we rolled out our 2007-2012 Strategic Plan, with these major goals:
GOAL 1: Optimize patent quality and timeliness
GOAL 2: Optimize trademark quality and timeliness
GOAL 3: Improve IP protection and enforcement domestically and abroad
And Management Goal: Achieve organizational excellence
I am pleased to present the FY 2007 USPTO Performance and Accountability Report, which demonstrates that we are achieving the goals of our Strategic Plan – the basis for achieving even greater results in the future.
Our Patent organization improved on a record-breaking FY 2006 performance, examining more applications at a high level of quality.
Last year, Patents achieved its highest examination compliance rate in a quarter of a century, at 96.5 percent. This year, Patents matched that with 96.5 percent compliance again.
We recognize that this accomplishment is the result of several quality initiatives put into place four years ago. For example, we added a new quality review mid-way through the patent examination process. This gives patent examiners the chance to realize possible errors and learn from them before they make a final decision. This in-process review has reduced errors at a growing rate since it was implemented in 2005.
Beyond achieving higher compliance and in-process review rates, our patent examiners’ decisions are also increasingly being affirmed by our Board of Patent Appeals and Interferences. This is the first time in recent history that the Board approved outright the majority of decisions.
We have revamped our patent examiner hiring process, developed a new, more intensive patent training academy, and started testing and certifying patent examiners at critical times throughout their careers.
This year, Patents hired and trained another 1,215 new patent examiners. We increased the number of patent examiners who can work from home to more than 1,000, and gave them better electronic tools. Both programs helped us retain more examiners. We also deepened partnerships with industry to keep our patent examiners’ knowledge on the cutting edge.
Patents moved closer to an end-to-end electronic system. E-filings have grown dramatically. Our e-filings were only 2.2 percent of total filings in FY 2005. E-filings reached 14.2 percent in FY 2006, and they jumped to 49.3 percent in FY 2007. In the final month of the year, this had risen to 68 percent. The USPTO also celebrated the one-millionth e-submission on our Patents Electronic Filing System-Web this year. We are exploring other ways to achieve greater e-filings.
Common Goal — USPTO Director Jon Dudas speaks to employees at the 11th annual USPTO Community Day. The theme was “Many Skills – One Remarkable Community,” celebrating the diversity of our work force.
Last year, Patents launched an Accelerated Examination program offering patent protection in less than a year. In exchange, applicants provide concise information upfront and have a limited number of claims. In the first year, we dramatically reduced the time for patent examination. One patent examination went from filing to issuing in less than four months. Comments from our users indicate that Accelerated Examination is not only faster, but higher quality because of the close interaction between the USPTO and the applicant. We believe this is a significant lesson for the Agency and applicants.
To promote still greater collaboration, we participated in a peer-to-patent pilot that asked members of the public to review volunteered applications and submit prior art and comments. And our Patent Public Advisory Committee is reaching out to applicants to ask them what other types of examination options would be helpful.
Our Trademark organization continued to demonstrate excellence today and outstanding planning for tomorrow. For the second year in a row, Trademarks met or exceeded all of its performance goals.
First-action pendency of trademark applications — the length of time between receipt of a trademark application and when our office makes a preliminary decision — was reduced to the lowest level in six years, ending the year at 2.9 months. Average total pendency of applications showed significant improvement, with trademark registration occurring within 15.1 months of filing.
Quality of searching and examination of trademarks continued to improve — with quality rates exceeding 97 percent. These advances were made through greater use of online tools, e-filing, workflow design, and training.
Trademarks continues to gain recognition for a leading telework program. We celebrated the 10th anniversary of this program in June. Eighty-five percent of eligible trademark examining attorneys now work from home nearly full time. We are confident that this program helps us attract and retain the best and brightest work force, who continue to improve trademark quality.
Trademarks is in the final stages of a long-term project to become fully electronic. To this end, we have undertaken an assessment that includes documenting the entire Trademark process workflow. We will use this assessment to complete our design requirements and implement an electronic workflow and file management system. Again, we are achieving today, while transforming for tomorrow.
During FY 2007, the USPTO continued to improve IP rights and enforcement in the United States and around the world.
As part of President Bush’s Strategy Targeting Organized Piracy (STOP!) initiative, we worked with other U.S. Government agencies to fight piracy and counterfeiting. For example, the USPTO managed the STOP! hotline that helps businesses leverage U.S. Government resources to protect their IP. We responded to 1,730 hotline calls this year.
We advocated for American businesses and led IP training for foreign officials through our IP experts stationed in American embassies in Brazil, China, Egypt, India, Russia, and Thailand.
Once again, the USPTO offered a public awareness campaign to educate small businesses and individual inventors about protecting their IP, providing more than 1,300 participants with important information in seminars throughout the country. We partnered with the U.S. Chamber of Commerce on many of these seminars, which provided even greater outreach.
In addition to hosting the meeting with the heads of the world’s five largest IP offices, we made strides in implementing our USPTO-State IP Office of the People’s Republic of China work plan of strategic cooperation. And we signed memos of understanding with IP offices in Australia, Ethiopia, India, and the Philippines to cooperate on many issues.
We made great progress within the Trademark Trilateral on identifying classifications for goods and services. We expect this to further reduce our trademark pendency, because applications, especially those filed from abroad, will be more focused.
Patent modernization legislation has been the subject of several committee hearings and much debate in Congress this year. The proposed legislation is intended to improve patent quality, reduce patent litigation costs, and further the international harmonization of patent laws. The USPTO supports these goals, and we are working closely with Congress to develop laws that are effective, fair, and balanced for all stakeholders.
Our Office of General Counsel also played a significant role in improving the quality and timeliness of domestic patent examination this year. In the Supreme Court Case, KSR International Co. v. Teleflex, we worked closely with the U.S. Solicitor General to formulate the Government's amicus brief. In this landmark decision, the Supreme Court largely adopted our position to give our patent examiners greater flexibility in determining whether a claimed invention is “obvious.”
Also this year, we completed our Global Intellectual Property Academy, a 20,000-square-foot training facility. It has allowed us to expand our IP training for foreign judges, enforcement officials, and administrators. In FY 2007, our academy trained more than 700 foreign officials on how to strengthen their IP rights and enforcement.
And finally, the USPTO made gains in achieving organizational excellence and set the course for future improvement.
Our business units are working more closely across organizational lines as true partners. For example, our Office of Chief Administrative Officer led us in developing a Strategic Human Capital Plan to address the challenges identified in our overall Strategic Plan. Our Human Capital Plan is helping us identify, develop, and implement activities that make the USPTO an “employer of choice with a culture of high performance.”
In many ways, we are already a leading government agency in offering programs to attract and retain highly qualified employees. We continue to expand our workplace flexibilities and telework programs, which improve employee retention. This year, we offered recruitment bonuses to attract top-notch scientists and engineers. For the second year, we hosted a management conference off-site with more than 700 of our front-line supervisors to give them valuable training and time to share ideas with each other.
Our Office of Chief Financial Officer (OCFO) worked with our Office of Chief Information Officer (OCIO) to help us become more effective stewards of our financial resources using new e-tools. These groups enhanced our systems to create an enterprise-wide approach to financial management. Specifically, the OCFO focused on improving processes for collecting financial data, so that USPTO managers have the right information to make sound decisions quickly.
Inspiring Invention — An innovative ad campaign to encourage young people to invent is launched at the National Press Club by U.S. Secretary of Commerce Carlos Gutierrez; Under Secretary of Commerce for Intellectual Property and USPTO Director Jon Dudas; National Inventors Hall of Fame inductee Dr. James West; and Ad Council Vice President Kathy Crosby. The three-year ad campaign features creative TV and radio spots, along with an engaging Web site, inventnow.org.
Beyond helping the Patent and Trademark organizations achieve record e-filings, our OCIO also improved our information technology (IT) enterprise architecture to help us deliver higher quality products. Moving forward, we will continue to improve the security, availability, and quality of our IT systems, while reducing their complexity and cost.
We are confident that the USPTO’s financial and performance data are complete, reliable, accurate, and consistent as we improve our ability to measure progress toward our performance goals. For the 15th consecutive year, we earned an unqualified audit opinion on our annual financial statements. For FY 2007 financial reporting, the independent auditors did not identify any material weaknesses, significant deficiencies, or instances of non-compliance with laws and regulations.
However, we are reporting one non-financial material weakness in IT security. The OCIO is working diligently with the Office of the Inspector General and the Department of Commerce to improve our overall IT security program and certification packages to remove our material weakness for IT security.
During FY 2007, the USPTO lived up to our mission of fostering innovation and competitiveness. Our vision of leading the world in IP protection and policy means continually improving our own operations and transforming for the future today.
Jon W. Dudas
Under Secretary of Commerce for Intellectual Property and
Director of the United States Patent and Trademark Office
November 6, 2007
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