Strategic Goal 1: Optimize Patent Quality and Timeliness

Awarding Excellence — The USPTO grants full signatory authority to 286 patent examiners at a Full Signatory Award Ceremony. Prior to this grant of authority to sign a notice of allowability or a final rejection, a rigorous review of the examiners’ work was conducted over an 18-month period. Present at the ceremony to recognize and congratulate the new primary examiners were Deputy Under Secretary Margaret J.A. Peterlin, Under Secretary Jon Dudas, Commissioner for Patents John Doll, Deputy Commissioner for Patent Operations Peggy Focarino, Assistant Deputy Commissioners for Patent Operations, the examiners’ group directors, and supervisory patent examiners.

High quality and timely examination of patent applications advances science and technology and creates the certainty innovators need in capital-driven markets. The Patent organization is working closely with the public and its stakeholders to find the best ways to ensure that the U.S. patent system continues to promote innovation and U.S. competitiveness in the global economy. Proposed solutions will not be limited by existing laws, rules, processes or procedures. The following are the priorities for achieving this goal and our accomplishments in FY 2008.

Providing High Quality

The Patent organization met or exceeded all of its goals for the year, examining more applications than ever before while maintaining a high level of quality. Hiring and training of large numbers of new examiners continued (1,211 this year) enabling the Patent organization to address growing patent pendency, with the result of 25.6 months from filing to first action and 32.2 months until issue or abandonment. In order to educate this number of new hires over a sustained period of time, it was necessary to expand the USPTO campus training space. The Patent Training Academy opened a new facility in March 2008 to better train our newly hired examiners. Additionally, the position of Chief Scientist was announced, whereby university professors or experienced scientists will be utilized in Academy classes to provide a greater focus on technical training for new examiners. Case Review — Patent Commissioner John Doll and Patent Deputy Commissioner Peggy Focarino confer with a Technology Fair participant. Displays, demonstrations, and hand-out materials are available to participants. Advancing Productivity — Technology Center Director Wendy Garber, Deputy Commissioner for Patent Operations Peggy Focarino, Patent Office Professional Association (POPA) Director Robert Budens, and POPA Treasurer Randy Myers mark the signing of an agreement to begin a six-month First Action Interview Pilot initiative. This pilot was created to provide an opportunity for the examiner and the applicant to discuss the invention, claims, and relevant references prior to the first action on the merits. The USPTO continues to work with the world’s major intellectual property offices to study, review and implement work-sharing efforts that promote examination efficiencies in each participating office by leveraging the work done in one office when an application is filed in a second office. For example, the USPTO and the Japan Patent Office (JPO) developed a work-sharing cooperation framework known as the Patent Prosecution Highway (PPH), which is resulting in a quick turnaround time for a first office action, shorter overall pendency, and improved quality. In addition, PPH pilot programs were established with the following IP offices: IP Australia (IPAU), Canadian IP Office (CIPO), Korean IP Office (KIPO), and the United Kingdom Intellectual Property Office (UK-IPO). Similarly, the Trilateral Strategic Working Group, which includes the European Patent Office (EPO) as well as the USPTO and the JPO, is implementing related initiatives. In one pilot, when applications are filed in more than one office, the “office of first filing” gives the application precedence in prosecution so that the “office of second filing” can exploit those work results on the corresponding application. A search-sharing pilot has also been initiated, which will leverage the searching expertise of each of the Trilateral Offices by eliminating certain timing issues while providing both applicants and the offices with the benefits of the search results. Through these and other efforts, the Patent organization reached an allowance compliance rate of 96.3 percent and an in-process compliance rate of 92.5 percent.

Patent Pendency Performance — The two primary measures of Patent organization processing are average first action pendency (the time from filing to first action) and average total pendency (the time from filing until the application is issued as a patent or abandoned by the applicant). D D Patent Quality Performance — The Patent organization continues to improve the quality of its products and services using in-depth reviews of work in progress and enhanced end-process reviews. D D

Recognizing Achievement — Some of the 286 patent examiners recognized at a Full Signatory Award Ceremony.

Improving E-Systems

E-Filing of Patent Applications — Electronic filings increased from 49.5 percent in FY 2007 to 72.1 percent in FY 2008. D

The Patent organization continued to transition to an end-to-end, text-based patent prosecution system, and increased the number of examiners able to work from home, while providing them with better electronic tools to perform their work. Electronic filings exceeded this year’s goal, reaching 72.1 percent of total filings. The USPTO continues to explore options that will move toward complete electronic filings.

The Agency also continued the development of a text based Patent File Wrapper (PFW) system, with a goal of replacing the current image-based system. PFW will transform the manual, image-based USPTO system into an environment where the majority of applications are managed and prosecuted electronically. PFW will integrate the applicant with the Patent process, provide workflow and intelligent text processing, and facilitate the work-at-home program. This year implementation of the Transfer Inquiry (TI) portion of PFW was started. The new TI portion of PFW automatically routes transfer inquiry requests to the appropriate art unit. The new interface also allows examiners to access patent application images with improved tables of contents, examiner dockets, and image thumbnails.

In support of both teleworking and the examination process, the Agency implemented the eRed Folder (eRF) automated tool. This tool improves document file management and permits the electronic submission of office actions for review and credit. Finally, the number of eligible positions teleworking increased to 87 percent for FY 2008.

Exploring Range of Options to Meet Challenges

Advancing Technology — Toyota Motor Corporation’s Fuel Cell Hybrid Vehicle on display during Technology Centers 3600 and 3700 annual Technology Fair. The fair is an opportunity for patent examiners to see the actual “production to market” device resulting from a patent they have issued and to learn about changes in the field of technology in which they work.

While continued hiring of patent examiners is key to managing increasing workloads, hiring alone is not the answer to the growth of filings and complexity in the patent system. In fact, the Agency is exploring a range of innovative concepts to meet these challenges.

The USPTO expects to increase productivity in the Patent organization by offering examiners more opportunities to determine when and how they do their work, and achieve higher bonuses. This year the Agency extended the voluntary Flat Goal Pilot program for patent examiners that moves production away from an hourly-based system. Under the pilot, examiners may earn larger, quarterly bonuses for every application examined above a particular target goal. Early indications are that participants prefer the per-application bonus compared to the present productivity award structure and enjoy the flexibility of choosing when and how to do their work. The USPTO will evaluate the results of the pilot and incorporate that information into future planning. Similarly, the Agency implemented a voluntary program providing laptops for experienced patent examiners which offers flexibility regarding when and where overtime work is performed. The vast majority of participants report improved production and job satisfaction.

Another pilot concept is the First-Action Interview program, an initiative in which the applicant is entitled to a first-action interview, upon request, prior to the first office action on the merits. Interviews conducted early in an application’s prosecution allow for a speedy resolution of any unresolved issues. These, coupled with reduced applicant periods for response under the pilot, are expected to reduce total pendency for the applications examined under this initiative.

Other initiatives under way include the IP Experienced Hire pilot and the Peer Review pilot. In addition to at least one year of direct and current prosecution experience, candidates must have successfully completed a four-year course of study or specific course requirements in a science or engineering field. It is expected that the IP Experienced Hire pilot will greatly shorten the formal training period and performance adjustment phase for these new examiners. The USPTO has just extended the Peer Review pilot to include business methods in addition to the original computer-related applications.

Patent Efficiency — The following metric measures the relative cost-effectiveness of the entire patent examination process over time, or the efficiency with which the organization applies its resources to production. D

There were notable regulatory and legislative developments this year. In April, a United States district court issued a permanent injunction enjoining the USPTO from implementing the changes in the Claims and Continuations Final Rule that was published last year. Therefore, the changes to the rules of practice in the Claims and Continuations Final Rule did not go into effect, and USPTO employees continue to process and examine patent applications as before, until further notice. In Congress, patent modernization legislation (H.R. 1908) passed the House of Representatives last fall. A companion bill in the Senate (S. 1145) was passed out of committee but did not reach the Senate floor. The USPTO held two Senate briefings, participated in over 60 meetings with Senate offices and provided technical assistance and expertise to many Judiciary Committee requests. It is anticipated that the patent legislation will be a major bill of the 111th Congress.

Through the Patent Public Advisory Committee (PPAC), the USPTO is reaching out to the user community to determine the types of examination options that should be provided as alternatives to the current system. This is resulting in an open dialogue with patent stakeholders and the public as to what the USPTO needs to do to best protect and encourage innovation in America.

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