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Collage showing images with one-word descriptors from the U S P T O Fiscal Year 2008 Performance and Accountability Report cover that reinforces the reportís tagline of Transforming for the Future Today.
Performance and Accountability Report Fiscal Year 2008
Management's Discussion and Analysis

Table of Contents | Management | Financial | Auditor | IG | Other

Strategic Goal 3: Improve Intellectual Property Protection and Enforcement Domestically and Abroad

The USPTO is an integral component of President Bush’s strategy to encourage innovation and strengthen the nation’s ability to compete in the global economy. To this end, the USPTO advocates U.S. Government IP policy, works to develop unified standards for international IP, provides policy guidance on domestic IP issues, and fosters innovation.

Protecting IP and Curbing IP Theft

During FY 2008, the USPTO continued to improve the enforcement of IP rights in the United States and around the world. USPTO actions included taking the lead on several initiatives to strengthen IP protection and enforcement and to continue advocating improved IP protection and enforcement for American businesses.

As part of the Administration’s Strategy Targeting Organized Piracy! (STOP!) initiative, the USPTO advanced work with other U.S. Government agencies to fight piracy and counterfeiting. As part of STOP!, the USPTO continued managing a hotline that helps small and medium-sized businesses leverage U.S. Government resources to protect their IP. The USPTO responded to 1,289 STOP! hotline calls in FY 2008.

The USPTO worked with the Office of the United States Trade Representative (USTR) on the IP chapter for several free trade agreements (FTAs) during FY 2008, most notably the IP chapter of the U.S.-Malaysia FTA negotiations, Peru and Costa Rica’s implementation of the U.S.-Central America FTA, and implementation of the U.S.-Chile FTA. The USPTO also contributed to the development of the United States’ World Trade Organization (WTO) dispute settlement case against China relating to intellectual property rights (IPR) enforcement deficiencies. The USPTO is participating in the negotiations to establish an Anti-Counterfeiting Trade Agreement, which will create high standards of enforcement against piracy and counterfeiting through cooperation, best practices, and a strong legal framework amongst partners to the Agreement. The USPTO’s IP experts posted at American embassies in key locations around the world continued to address country-specific and regional issues involving IP protection and enforcement.

Image of World map showing the eight foreign postings of intellectual property experts: Brazil, Beijing China, Guangzhou China, Egypt, Geneva, India, Russia, and Thailand.

Working to Unify International IP Practice

Multilateral Efforts

The USPTO hosted the second Heads of Offices Meeting for the world’s five largest patent offices. The meeting enabled the USPTO, the EPO, the JPO, the KIPO, and the State Intellectual Property Office (SIPO) of the People’s Republic of China to build from last year’s historic meeting in Hawaii and discuss further cooperation initiatives to meet the growing patent application filing demands and improvements in patent quality.

The weeklong talks focused on sharing experiences, analyzing ongoing cooperative initiatives, and exploring information technology (IT) issues and future work-sharing initiatives to meet the growing demands placed on the patent system. The meeting opened up dialogue that resulted in a successful framework for moving forward on these cooperative initiatives.

The USPTO made strides in establishing work-sharing arrangements between the Offices. The USPTO and the JPO implemented the PPH on a full-time basis leveraging fast-track patent examination procedures available in both Offices to allow applicants in both countries to obtain corresponding patents faster and more efficiently. The USPTO also began a comparable pilot with the EPO. PPH pilots were also implemented this year with the CIPO, the KIPO, and IP Australia, and continued with the UK Intellectual Property Office (UK-IPO). The PPH work-sharing program is an important step toward reducing duplication of searching as it permits each Office to benefit from work previously done by the other Office, resulting in reductions in examination workload and improved patent quality.

Other work-sharing initiatives were also implemented this year within the framework of the USPTO-JPO-EPO Trilateral cooperation include a “New Route” pilot with the JPO, and a “Triway” pilot with other Trilateral Offices.

At the USPTO hosted 25th Annual Trilateral Conference, the Trilateral Offices agreed on a common application format in consultation with users. The format allows an applicant desiring to file an application in each Office to prepare a single application in the common application format, which will be accepted by each office, thereby providing significant savings to applicants in the filing and processing of patent applications.

The USPTO, as a member of the World Intellectual Property Organization (WIPO) Madrid Working Group, worked to build consensus for reforms to the Madrid System for the International Registration of Marks. The USPTO goal for the Madrid System is to increase membership as well as to increase simplicity, transparency, and flexibility of the system for the benefit of users. In May 2008, the Madrid Working Group agreed to move towards harmonization of services provided by national offices, which will benefit all users by promptly informing them of the status of designations in other countries. These reforms will make it easier to move forward with harmonization and simplification efforts in the future. Moreover, the USPTO has actively worked with other delegations at WIPO to gain support for discussions about the legal development of the Madrid System with an eye towards addressing significant obstacles blocking wider adherence to the system.

Photo showing The U.S., Japan, and Europe furthering their coordination, cooperation and harmonization efforts at the 25th Annual Trilateral Conference. USPTO Director Jon Dudas, JPO Commissioner Masahiro Koezuka, and EPO President Alison Brimelow addressed global workload challenges and identified mechanisms for improving quality of applications.

Harmonizing Efforts — The U.S., Japan, and Europe further their coordination, cooperation and harmonization efforts at the 25th Annual Trilateral Conference. USPTO Director Jon Dudas, JPO Commissioner Masahiro Koezuka, and EPO President Alison Brimelow address global workload challenges and identify mechanisms for improving quality of applications. More than half of the world’s patent applications are filed in the Trilateral Offices.

Finally, the USPTO achieved significant multilateral cooperation with its Trademark Trilateral partners. These are the JPO and the Office for Harmonization in the Internal Market (OHIM), which is responsible for registration of trademarks and designs for the European Union. The Trademark Trilateral continues to negotiate an ever expanding list of identifications of goods and services that can be used by trademark applicants filing trademark applications in any of the three offices and encouraging other national trademark offices to utilize that list and participate in its ongoing development.

Bilateral Efforts

The USPTO continued its effort to establish cooperative agreements with other countries for increased technical cooperation between offices. During FY 2008, the USPTO signed agreements with the Intellectual Property Offices of Brazil, Kazakhstan, and Singapore, and continued its efforts in implementing the work plan with the SIPO by conducting the second automation experts meeting.

The USPTO also signed a Statement on Enhanced Mutual Cooperation with the JPO to further promote the existing close relationship between the two offices and signed an agreement with the KIPO for comprehensive cooperation on patents to promote work sharing. Additionally, within the context of the PCT, the USPTO signed an agreement with the IP Australia to establish it as an international searching authority and preliminary examining authority under the PCT for certain international applications filed with the USPTO as Receiving Office.

Giving Domestic IP Policy Guidance

Patent modernization continued to be the subject of intense debate in Congress. The USPTO participated in numerous high-level meetings with key Members of Congress, their IP counsel, and patent stakeholders, including corporations, independent inventors, other Federal agencies, and the White House to discuss this legislation. The USPTO hosted two well-attended briefings on Capitol Hill and reached out to every Senate office to educate Senators and their staff on patent issues. 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 continues to work closely with Congress to develop laws that are effective, fair, and balanced for all stakeholders.

The USPTO also provided policy guidance on various other patent, trademark, and IP bills during the year and participated in Congressional hearings on “Telework: Breaking New Ground” and USPTO oversight.

In March 2008, the George Washington University School of Business held the 15th annual International Business Case Competition, which was focused on operations at the USPTO. This was a rare and exciting opportunity for the USPTO to garner fresh perspectives on how to address important issues.

In FY 2008, the Deputy Under Secretary for IP and Director of the USPTO participated in three listening tours to seek the perspectives of parties concerned with the protection of industrial designs. In May, the USPTO spoke with automotive designers at Ford Motor Company’s Dearborn, Michigan design center. In June, the USPTO hosted a town hall meeting with over 75 participants representing diverse interests such as automobile, insurance and consumer products companies, and independent parts manufacturers. In July, the USPTO met with West Coast stakeholders at Nike Inc. headquarters in Beaverton, Oregon, to learn about the role of design protection in their businesses, and how changes to design protection law and policy might impact their companies.

The USPTO was honored that the Secretary of Commerce, in November 2007, delegated the responsibility for administering the National Medal of Technology and Innovation to the USPTO. The Medal, which is presented each year by the President, is the nation’s highest honor for technological achievement and is awarded to innovators who have made lasting contributions to America’s competitiveness, standard of living, and quality of life through technological innovation.

As in past years, the USPTO was heavily involved in shaping IP law and policy through precedential decisions issued by the Agency’s Boards and through domestic litigation. The Trademark Trial and Appeal Board (TTAB) issued more than 50 decisions affecting Agency practice and substantive law of trademark registration. The Board of Patent Appeals and Interferences (BPAI) issued six precedential and 19 informative opinions, particularly concentrating on clarifying the application of the obviousness standard in the wake of the Supreme Court’s KSR decision to particular technologies.

Photo showing Deputy Under Secretary Margaret J.A. Peterlin hosting the second Heads of Offices Meeting at the USPTO for the world's five largest patent offices.

Improving Quality — Deputy Under Secretary Margaret J.A. Peterlin hosts the second Heads of Offices Meeting at the USPTO for the world’s five largest patent offices. The five-day meeting enabled the USPTO, the European Patent Office (EPO), the Japan Patent Office (JPO), the Korean Intellectual Property Office (KIPO), and the State Intellectual Property Office (SIPO) of the People’s Republic of China to discuss further cooperation initiatives to meet the growing patent application filing demand and improve patent quality.

In a series of important cases the USPTO urged the U.S. Court of Appeals for the Federal Circuit to clarify the standards for patent-eligibility under 35 U.S.C. § 101. This issue has become more challenging in recent years due to a growing number of patent applications claiming intangible subject matter. In In re Nuijten, the Federal Circuit affirmed the USPTO’s decision that a “signal” is not patent-eligible subject matter, agreeing that a patent-eligible “manufacture” requires a tangible article. In In re Comiskey, the Federal Circuit significantly clarified the law on the patent-eligibility of processes, following the suggestions in the Office of General Counsel’s (OGC) brief. Because of the importance of the patent-eligibility question, the Federal Circuit decided to hear en banc the appeal of the USPTO’s decision in In re Bilski. The USPTO is currently studying how to implement the recent Bilski ruling in examinations of process inventions.

The USPTO has also continued to advise the Solicitor General of the United States on intellectual property matters before the Supreme Court. For example, the USPTO assisted in preparing the Government’s amicus brief in Quanta Computer v. LG Electronic Co. Ltd., which involved the application of the “patent exhaustion doctrine” as a defense to patent infringement. The Supreme Court largely agreed with the Government’s position, finding that the exhaustion doctrine applies to patented method claims, as well as when an authorized sale of a product substantially embodies a patented invention.

On the trademark side, the USPTO, in conjunction with the Department of Justice, convinced the U.S. Court of Appeals for the Fourth Circuit to overturn the lower court’s decision in The Last Best Beef, LLC v. Dudas. The case involved the USPTO’s authority to cancel two of the plaintiff’s trademark registrations. In so doing, the USPTO successfully defended the validity of a recently enacted statute that prohibited the registration of the particular marks.

Furthering the USPTO’s leadership in IP law, OGC launched a pilot program this year with law school clinics through which law students can practice intellectual property law before the agency by prosecuting patent or trademark applications. Six law schools have been selected to participate in the pilot, and students in the program will gain practical, real-world experience while working under the strict guidance of a law school clinical faculty supervisor.

Delivering IP Education Worldwide

The USPTO Global IP Academy (GIPA) continued to deliver high-level capacity building and technical assistance training to foreign judges, prosecutors, customs officials, IP enforcement personnel, as well as officials from copyright, trademark and patent offices from around the world. In 2008, the GIPA provided training to more than 4,100 officials from 127 countries on a variety of topics, including IP protection and enforcement, and technology transfer. GIPA also delivers IP training to other stakeholders, including small business owners, U.S. Government officials, and the general public.

As part of the STOP! initiative, the USPTO continued its intensive national public awareness campaign. For the fourth year in a row, the USPTO conducted outreach events around the country for small and medium-sized businesses. The USPTO’s Office of Governmental Affairs conducted a highly anticipated event for small and medium-sized businesses designed to aid them in protecting their IP in a global marketplace, which was held in Baltimore, Maryland in June 2008. The USPTO also organized two China-specific events during FY 2008, which took place in San Jose, California and Houston, Texas. More than 220 small and medium-sized enterprises (SMEs), attorneys, and other businesses attended these conferences. Large companies presented “Lessons Learned” and “Best Practices” to small business attendees and small businesses discussed the importance of IP protection.

The USPTO expanded its relationships with federal agencies that share the goal of bringing awareness of IPR to SMEs. The USPTO signed a memorandum of understanding with the Minority Business Development Agency (MBDA) in 2008 whereby MBDA will emphasize the importance of IPR with the businesses with which it works, and the USPTO will work with MBDA to provide education and training opportunities. The MBDA also included IPR awareness as a goal in their 2009-2012 Strategic Plan. The USPTO has participated in five events hosted by the MBDA, providing awareness briefings and educational materials to nearly 800 hundred business owners, business development consultants, and leaders in the minority business community. In February, details of the initiative were rolled out in Ft. Lauderdale, Florida to MBDA’s management, and national business development staff. This was quickly followed by an invitation to participate in a White House Initiative on Asian American and Pacific Islanders conference in New York. Following this successful event, in June the Deputy Under Secretary addressed 150 MBDA business center owners and business development specialists during MBDA’s 2008 National Conference in Seattle, Washington, that included a short workshop by an OIPPE attorney-advisor. A return to New York in August, for a Business-to-Business networking conference, provided a briefing and educational materials to more than 100 business owners. In September, the nearly 700 participants in MBDA’s 26th Annual National Conference to recognize the outstanding achievements of minority business enterprises, held in Washington, D.C., were provided with information on the web-based IPR educational tool for SMEs located on www.StopFakes.gov and STOP! initiative literature.

The USPTO continued its partnership with the Ad Council to reach young people through a national ad campaign called “Inspiring Invention,” which seeks to make inventing and developing new ideas part of the lives of American children. Radio and TV commercials are now playing throughout the country with the message “Anything’s possible. Keep thinking.” In July, new television and radio commercials, as well as an updated interactive Web site for children, were launched as the newest phase of the campaign.

Photo showing USPTO representatives including Attorney-Advisor Charles Eloshway (back row, far left), Deputy Commissioner for Patent Operations Peggy Focarino (front row, second from left) and Director of the Office of Governmental Affairs Jefferson Taylor (back row, far right).

Protecting Intellectual Property — The USPTO organized a U.S. Congressional Staff Delegation visit to Copenhagen, Denmark, in August focusing on discussions relating to protecting and promoting patents, trademarks, and intellectual property rights. The trip included a visit to the Danish Patent and Trademark Office (DKPTO). USPTO representatives included Attorney-Advisor Charles Eloshway (back row, far left), Deputy Commissioner for Patent Operations Peggy Focarino (front row, second from left) and Director of the Office of Governmental Affairs Jefferson Taylor (back row, far right).

IP Protection — The measures of the USPTO’s progress in protecting and enforcing IP focus on FTA negotiations and implementation, World Trade Organization (WTO) accessions, 301 reviews, trade policy reviews, technical assistance, expansion of foreign postings, work details of USPTO employees to other U.S. Government agencies, as well as development of specific plans for strategic cooperation; for example, the work plans with China, Egypt, India, Brazil, and the Association of South East Asian Nations (ASEAN).

The significant variance in actual numbers of instances in which USPTO experts reviewed IP policies/standards compared to the target was due to the exceptionally large number of requests from the USTR to assist with trade policy reviews, activities associated with FTAs, and requests for technical assistance stemming from the successful GIPA program and an increased focus on China.

Graph summarizing the number of instances in which USPTO experts review IP policies/standards for the last four fiscal years.
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Graph summarizing the number of Memoranda of Agreement for IP joint cooperation, plans of action, mechanisms, and support programs initiated or implemented in developing countries as a result of the Office of Intellectual Property Policy and Enforcement (OIPPE) for the last four fiscal years.
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Graph summarizing improving worldwide IP expertise for U.S. government interests for the last four fiscal years.
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