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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
Message from the Director

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

Message from the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office (USPTO)

Photo showing USPTO Director Jon Dudas serving on a panel at the 41st World Intellectual Property Congress.

USPTO Director Jon Dudas serves on a panel at the 41st World Intellectual Property Congress.

Graph summarizing the percentage of goals met by fiscal year for the last fourteen fiscal years.
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Fiscal Year (FY) 2008 was a remarkable year for the United States Patent and Trademark Office (USPTO). FY 2008 demonstrated the USPTO’s commitment to sustaining high performance in a year where our patent and trademark operations rose to the highest performance levels in our history. It was also a year of growing international interests and expansion of our collaborative efforts with intellectual property (IP) offices around the globe.

The key components of the USPTO’s goals and objectives are to ensure high quality and timely examination of patent and trademark applications. These two factors are critical to the protection of America’s valuable IP resources and to our innovation and competitiveness worldwide. That is why several years ago we embarked on a steady yet arduous path of continual improvement of our operations. As part of this process, we put in place numerous initiatives to improve the quality of examinations, reassuring right-holders of the high-quality products they receive. This resulted in six years of continual improvement.

In FY 2008, we built upon our past successes, and the USPTO can be proud it met 100 percent of its goals established pursuant to the Government Performance and Results Act (GPRA) of 1993.

Highlights of USPTO accomplishments for the past year include:

  • Maintained its high level of quality, achieving patent allowance compliance rate of 96.3 percent and a trademark first action compliance rate of 95.8 percent.
  • Increased patent production by an additional 14 percent over 2007 by examining 448,003 applications – the highest number in our history. Production has increased by 38.6 percent over the past four years, compared to a 21.3 percent increase in application filings during the same period.
  • Examined the patent filings in the Accelerated Examination Program, which rose 173 percent over its introduction last year and maintained 12-month pendency – or less – for every application in the program, with an average time to final action or allowance of 186 days, or just over 6 months.
  • Trademarks saw a record number of applications filed electronically with approximately 268,000 applications comprising 390,000 classes. This represented a record rate of filing, 96.9 percent of applications were filed electronically.
  • Maintained first action trademark pendency within the 2.5 to 3.5 month range for more than 18 months, a historic first. Disposal pendency was also maintained at record low levels, ending the year with 13.9 months, the lowest in 20 years.
  • Received record numbers of patent and trademark applications filed electronically, achieving electronically filed application rates of 72.1 percent and 96.9 percent, respectively.
  • Hosted the follow-up to the Heads of Offices meeting for the five largest IP Offices (Europe, Japan, Korea, China and the United States) to discuss further cooperative initiatives to meet the growing patent application filing demands and improve patent quality.
Photo showing the USPTO Senior Management team.

Embodying Leadership — The USPTO Senior Management team includes Director of the Office of Intellectual Property Policy and Enforcement Lois Boland, Commissioner for Trademarks Lynne Beresford, Director of the Office of Congressional Affairs Jefferson Taylor, Deputy Under Secretary Margaret J. A. Peterlin, Chief Administrative Officer Steve Smith, Under Secretary Jon Dudas, Chief Financial Officer Barry Hudson, Commissioner for Patents John Doll, General Counsel Jim Toupin, Acting Chief Information Officer Wendy Garber.

Our exceptional performance reflects the hard work and dedication of the USPTO management team and most importantly, the more than 9,500 bright, quality-focused and results-driven USPTO employees. Their perseverance in sustaining high performance for the USPTO will carry the agency into the future and continue to help strengthen the IP system for years to come.

Our performance in FY 2008 is largely attributed to adhering closely to the solid foundation laid out by our comprehensive 2007-2012 Strategic Plan, which was introduced last year. The plan outlines ambitious goals in support of our fundamental mission:

  1. Optimize patent quality and timeliness;

  2. Optimize trademark quality and timeliness;

  3. Improve IP protection and enforcement domestically and abroad; and

  4. Achieve organizational excellence.

With these goals and complementary initiatives as our guide, the USPTO reached its highest level of performance and achieved record breaking results.

I. Optimizing Patent Quality and Timeliness

For the third year in a row, the Patent organization set new performance records. They exceeded all performance goals while examining more applications at a sustained high level of quality, making strides in improving electronic systems, and exploring a range of options to meet the challenges our patent system continues to face.

The Patent organization sustained its high level of quality, achieving an examination compliance rate of 96.3 percent. Building from ongoing successful multiyear quality review efforts, this accomplishment is the result of several initiatives. For instance, we established concrete work-sharing arrangements between Offices as we fully implemented the Patent Prosecution Highway (PPH) with the Japanese Patent Office (JPO). We also implemented PPH pilots with the IP Offices of Canada, Korea (KIPO), Australia, the UK, and the European Patent Office (EPO) and continue to enhance the mutual exploitation of work results throughout the world.

Also in FY 2008, the Patent organization expanded the successful Patent Training Academy enabling us to hire and train over 1,200 new patent examiners again this year. Expanding our workforce has helped us to examine more patent applications than ever before in our history. In the past three years, patent filings have increased dramatically – a full 11.1 percent. The USPTO has more than risen to the occasion, increasing production by a phenomenal 27.4 percent. Over the next few years, this positive trend will continue as the examiners hired over the past four years gain more experience and become even more productive. In addition, we achieved an average first action pendency of 25.6 months and an average total pendency of 32.2 months. Despite the growth in filings, our efforts have limited first action and average pendency growth to one percent over FY 2007.

Finally, in FY 2008, through a combination of innovative tools, including recruitment and retention incentives, workplace flexibilities such as telework, and our “best practices” Patent Training Academy,” the USPTO attracted and retained patent examiners at record levels. First-year patent-examiner attrition, less transfer and retirees, dropped below 12.9 percent, while overall patent examiner attrition fell to 7.8 percent. We will continue monitoring the effectiveness of these various tools to ensure that our retention rate continues to grow.

II. Optimizing Trademark Quality and Timeliness

The Trademark organization continues to advance the strategic goal of optimizing quality and timeliness. For the third year in a row, Trademarks has met and exceeded all of its agency performance goals.

Searching and examination continued to show quality improvement, with measures for first and final actions reporting quality rates exceeding 95 percent. Advances have been made through expanded criteria for evaluating quality as well as greater use of on-line tools and workflow to better manage and track performance. Continued acceptance and use of electronic filing has improved quality by providing more complete and accurate filings.

First action pendency has been maintained within the target of 2.5 to 3.5 months due in part to more consistent monthly production and increased use of electronic forms. In particular, electronic filing has improved the efficiency of examination most notably by lowering disposal pendency for applicants who file using Trademark Electronic Application System (TEAS) Plus.

III. Improving IP Protection and Enforcement

Encouraging greater collaboration

As our marketplace continues to expand globally, the USPTO, along with our colleagues at other international counterpart offices, is faced with growing demands to ensure protection and enforcement of IP rights. In this regard, the USPTO worked more closely in FY 2008 with our international counterpart offices than ever before.

For instance, the USPTO hosted the first follow-up Heads of Offices Meeting of the world’s five largest patent offices. Building from our historic meeting in Hawaii last year, 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 discuss further cooperation initiatives necessary to meet the growing patent application filing demands and to address improvements in patent quality. We also entered into memoranda of understanding or other bilateral agreements with the IP Offices in Korea, Japan, Australia, Philippines, Brazil and Canada.

As a member of the World Intellectual Property Organization (WIPO) Madrid Working Group, we worked to build consensus for significant and beneficial reforms to the Madrid System for the International Registration of Marks.

Collaborating on IP education worldwide

Our Global Intellectual Property Academy (GIPA) celebrated the graduation of its first group of examiners participating in our Foreign Examiner in Residence (FEIR) program. Patent examiners from Brazil, China, Egypt, India, Mexico and the Philippines were trained in U.S. current patent examination practice while working on applications filed under the Patent Cooperation Treaty. USPTO officials gained critical knowledge of their systems as well.

In FY 2008, GIPA trained more than 4,100 foreign officials on best practices for strengthening IP rights and enforcement in their nations. The USPTO continues to expand the scope of GIPA’s programs and is developing outreach and capacity-building through long distance training to give participants maximum flexibility to benefit from these programs.

Curbing IP theft

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, responding to 1,289 calls this year and helping businesses leverage U.S. Government resources in protecting their IP.

IV. Achieving Organizational Excellence

Photo showing USPTO Director Jon Dudas speaking to students at the For Inspiration and Recognition of Science and Technology (FIRST) Robotics Competition.

Inspiring Innovation — USPTO Director Jon Dudas speaks to students at the For Inspiration and Recognition of Science and Technology (FIRST) Robotics Competition, which helps students discover the rewards and excitement of science, engineering, and technology.

The USPTO’s management goal is to achieve organizational excellence, and we have made measurable progress in FY 2008 in these key areas:

Expanding Telework Programs

The USPTO continues to be recognized as the leader in Federal Government telework initiatives through its award-winning programs. In FY 2008:

  • The USPTO expanded our telework programs to include all business units and now have 54 percent of our employees eligible to participate in one of nearly 20 different telework programs across the Agency.
  • The Trademark Assistance Center (TAC) received the 2008 Telework Exchange Award for Best New Telework Initiative.
  • Eighty-six percent of eligible trademark examining attorneys now work from home nearly full time with 58 percent of all Trademark organization employees working from home at least one day per week.
  • We further extended our electronic tools and technical capabilities to patent examiners, which enabled us to increase the number of eligible examiners who can work from home to more than 4,000.

Promoting Leadership Opportunities

To develop and strengthen our leadership capabilities, we began rolling out a competency-based leadership development program framework. The basic principle behind our leadership program is leadership at all levels, and every employee will have the opportunity to design and select their own programs based on their developmental needs.

Developing Human Capital

In FY 2008, the USPTO developed integrated plans throughout the business units that identified alignments of policies and operations to produce maximum value. For instance, under the Human Capital Strategic Plan (HCSP) developed in the Trademark organization, seven teams were created to develop initiatives, programs and training in support of the plans for three “human capital” objectives, i.e., talent management, results-oriented performance culture, and leadership and knowledge management. The HCSP aligns and integrates with the 2007-2012 Strategic Plan.

Improving our IT Infrastructure

We continued to make improvements in information technology (IT) architecture to help improve the security, availability, and quality of our IT systems. Most notably, in FY 2008, the USPTO developed a five-year IT Modernization Plan that will improve and enhance our IT infrastructure, including updating our hardware and software systems, replacing our network, and standardizing our IT processes. This important, long-term modernization effort will ensure that the Agency’s mission and goals continue to be met as our reliance on technology and the size of our workforce continues to increase.

Financial Compliance

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 16th consecutive year, we earned an unqualified audit opinion on our annual financial statements. For FY 2008 financial reporting, the independent auditors did not identify any material weaknesses or instances of non-compliance with laws and regulations.

However, we continue to report one non-financial material weakness in IT security. The Office of the Chief Information Officer (OCIO) is working diligently with the Office of the Inspector General of the Department of Commerce to improve our overall IT security program and certification packages to remove our material weakness for IT security.

Sustaining our High Performance

We can all be proud of the USPTO’s achievements this year. However, meeting 100 percent of our goals is not by itself enough to ensure sustained high performance for the Agency over the long term. Of equal importance is having the discipline and strategic vision to anticipate needs and a willingness to explore alternatives to address future challenges.

I am pleased with the steps we have taken to meet the challenges facing the Agency, such as the ever-growing patent application backlog despite an increase in our examination capacity. In FY 2008, we explored ways to help reduce the patent backlog. In particular, the Patent organization extended the Flat Goal Pilot an additional year. This program provides improved flexibility regarding when examiners can do their work, provides more predictable goals, and reduces administrative burdens.

Other efforts include the Patent Examiner Laptop Program (PELP), a voluntary program which offers flexibility in regard to when and where overtime work is performed; the Accelerated Examination program, which provides patent protection to applicants in less than a year in exchange for concise information upfront and a submission with a limited number of claims; and the First-Action Interview pilot program, where an applicant is entitled to a first action interview, upon request, prior to the first Office action on the merits.

To promote still greater collaboration between the USPTO and its customers, we expanded the Peer Review Pilot that asked members of the public to review volunteered applications and submit prior art and comments. With the help of the Patent Public Advisory Committee we are continuing to reach out to the intellectual property community to seek their input on improvements to the patent system.

With the 2007-2012 Strategic Plan now fully integrated into our work across the Agency, we are constantly monitoring and reevaluating our progress of these and other initiatives to ensure the USPTO continues to reach new heights for high quality and efficiency.

It is my pleasure to present the FY 2008 USPTO Performance and Accountability Report, which builds on the strong foundation and clear vision of our strategic plan and exemplifies our employees’ drive towards excellence and to sustaining high performance at the USPTO.

Signature of Jon W. Dudas

Jon W. Dudas
Under Secretary of Commerce for Intellectual Property and
Director of the United States Patent and Trademark Office

November 7, 2008

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