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Collage showing images with one-word descriptors from the U S P T O Fiscal Year 2009 Performance and Accountability Report cover that reinforces the report’s tagline of Today’s Challenges – Tomorrow’s Solutions.
Performance and Accountability Report Fiscal Year 2009
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 plays a leadership role in promoting effective domestic and international protection and enforcement of intellectual property rights (IPR) by advocating U.S. Government IPR policy, working to develop unified standards for international IPR, providing policy guidance on domestic IPR issues, and fostering innovation. The USPTO advises the President and Federal agencies on national and international IPR policy matters and trade-related aspects of IPR, and conducts technical assistance and capacity-building programs for foreign governments seeking to develop or improve their IPR regulatory and enforcement mechanisms.

Protecting IP and Curbing IP Theft

During FY 2009, the USPTO continued to improve the enforcement of IP rights in the United States and around the world. The USPTO supported the Office of the U.S. Trade Representative (USTR), Department of State, and other U.S. Government agencies in international negotiations and consultations throughout the year. Attorneys from the USPTO assisted with the drafting, reviewing, and implementation of IP obligations in bilateral and multilateral treaties and trade agreements, such as Oman’s implementation of its Free Trade Agreement (FTA) commitments, and ongoing review of Malaysia’s IP regime. In addition, the USPTO also continued to participate in the ongoing negotiations to establish an Anti-Counterfeiting Trade Agreement, a state-of-the-art agreement to combat counterfeiting and piracy, which is intended to assist in the efforts of governments around the world to more effectively combat the proliferation of counterfeit and pirated goods.

The USPTO’s IP experts and their teams posted at American embassies in key locations around the world continued to develop long-term and direct working relationships with foreign government agencies and the private sector. They also delivered targeted capacity-building programs for foreign officials and continuously pressed for stronger legal frameworks for IPR protection, improved IPR enforcement, greater certainty for U.S. innovators and creators, and enhanced public awareness and support for IPR.

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 723 STOP! hotline calls in FY 2009.

Image of world map showing the nine foreign postings of intellectual property experts: Brazil; Beijing, China; Shanghai, China; Guangzhou, China; Cairo, Egypt; Geneva; India; Russia; and Thailand.

Working to Unify International IP Practice

Multilateral Efforts

The USPTO continued meeting with the world’s five largest patent offices, including the EPO, the JPO, the Korean Intellectual Property Office (KIPO), and the State Intellectual Property Office (SIPO) of the People’s Republic of China and within the Trilateral cooperation framework of USPTO, EPO, and JPO to advance progress on cooperative work sharing initiatives and to develop foundation tools to support work sharing. A series of meetings throughout the year resulted in an agreed implementation strategy for moving forward on developing the foundation support tools, as well as, increased emphasis on work sharing activities.

The USPTO increased the number of work sharing partnerships with other intellectual property offices. The USPTO and the Korean Intellectual Property Offices 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 implemented pilots with the IP Offices in Denmark, Germany, Singapore, and Finland bringing the USPTO’s total number of PPH work sharing programs to 10. The USPTO and the JPO worked collaboratively to bring together the IP Offices participating in the programs to work toward streamlining procedures. Two Heads of Offices meetings and one technical level meeting were conducted to advance progress in this area. The PPH framework is an important step toward the goal of maximizing reutilization of work done by other offices.

The USPTO, as a member of the World Intellectual Property Organization (WIPO), deposited its instrument of ratification of the Singapore Trademark Law Treaty with the WIPO. The Singapore Treaty updates and improves the WIPO Trademark Law Treaty (TLT) of 1994 that harmonizes formalities and simplifies procedures for registering and renewing trademarks. The Treaty modernizes some aspects of the earlier TLT and allows national Trademark offices to move to an entirely electronic system for trademark application and processing while, at the same time, preserving the rights of developing countries to maintain paper systems.

The USPTO engaged in fruitful multilateral cooperation with its Trademark Trilateral partners, namely, the JPO and the European Union’s Office for Harmonization in the Internal Market (OHIM). The Trademark Trilateral continues to negotiate an ever expanding list that identifies goods and services that can be used by trademark applicants filing trademark applications in any of the three offices. Additionally, the Trademark Trilateral partners entered into an agreement with the Canada Intellectual Property Office, allowing the latter to participate in the identification project. Finally, the partners continue to exchange information about best practices in trademark operations.

Bilateral Efforts

The USPTO established cooperative agreements with other IP offices and organizations for increased technical cooperation. Agreements were signed with the State Administration for Industry and Commerce and the National Copyright Administration of China to establish bilateral frameworks to improve effectiveness of IP systems through the exchange of information, best practices, and participating in trademark and copyright technical capacity building activities. An agreement was signed with SIPO for reviewing the possibility of establishing patent-related work sharing initiatives and to develop foundation support tools to facilitate work sharing. The USPTO and the United Nations Economic Commission for Europe (UNECE) signed an agreement to conduct joint capacity building programs and activities for government officials and rights owners in UNECE member states on protecting commercialization and for enforcement of intellectual property rights.

Additionally, the USPTO and the JPO signed an agreement to enhance the existing priority document exchange service between the two Offices. The USPTO and the KIPO continued actions to promote work sharing among the two Offices in accordance with their signed cooperative agreement.

International Policy Efforts — Measures the results of OIPPE engagement to moving toward improving IP systems worldwide. They focus on FTA negotiations and implementation, 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 Association of Southeast Asian Nations (ASEAN).

Bar chart summarizing the percentage of countries on the USTR 301 list, awaiting WTO accession, or targeted by OIPPE for improvements that have positively amended or improved their IP systems for the last five fiscal years.
D
Bar chart summarizing the number of countries that implement at least 75% of action steps which improve IP protections in the joint cooperation, action or work plans for the last five fiscal years.
D

These are new outcome-oriented performance measures that replaced previously reported measures..

Giving Domestic IP Policy Guidance

Photo showing Representative Jim Moran (Democrat-VA) speaking to the graduating class of the Patent Examiner Training Academy on January 26.

Representative Jim Moran (D-VA) spoke to the graduating class of the Patent Examiner Training Academy on January 26.

Proposed patent reform legislation continued to be an important subject of consideration in the first session of the 111th Congress. As in previous Congresses, the proposed legislation is intended to improve patent quality, reduce patent litigation costs, and further the international harmonization of patent laws. The USPTO monitored, analyzed and provided technical assistance within the Administration and to Congress on patent reform legislation and various other patent, trademark, and intellectual property-related legislation during the year. These included bills to: expand telework opportunities within the Federal government and specifically within the USPTO; establish a 10-year pilot program in select district courts to enhance judges’ expertise in patent cases; require broadcast radio stations to pay royalties to musicians for use of their works; and promote the availability of biosimilar drugs.

Consistent with the USPTO’s efforts to educate decision makers and create outreach opportunities on IP matters, the Office of Governmental Affairs (OGA) organized and participated in a congressional staff delegation to Geneva, Switzerland, in February 2009. Participants included House and Senate Judiciary Committee staff who met with IPR attachés and WIPO officials to discuss and learn about IPR, anti-counterfeiting, and anti-piracy initiatives from a European perspective. In addition, the OGA coordinated visits to congressional offices by USPTO IP attachés, stationed in critical areas throughout the world, to discuss the nature, importance, and success of the IP attaché program.

Members of Congress continue to express a strong interest in USPTO operations and employees. The OGA launched a successful new outreach program that brings members of Congress to speak at the Patent Academy graduations. Representatives Jim Moran (D-Virginia) and Darrell Issa (R-California) spoke at the Academy graduations in January and March 2009, respectively. Other speaking engagements included local Representative Jim Moran as the keynote speaker at the opening ceremonies of the USPTO Trademark Expo in May 2009. Representative Joseph Cao (R-Louisiana) and Maryland State Delegate Susan Lee spoke at the Annual Asian Pacific Heritage Celebration held at the USPTO in May 2009.

Photo showing the USPTO receiving the 2009 Tele-Vision Award from the Telework Exchange.  Accepting the award were Tracy Burns, Jennifer McDowell, Michael Lewis, James Toupin, William Covey, Rachel Irish, and Roderick McCracken.

The USPTO received the 2009 Tele-Vision Award from the Telework Exchange, a public-private partnership focused on eliminating gridlock. USPTO’s Office of General Law Telework Program was recognized in the “Best Use of Innovation and Technology to Support Telework” category. Accepting the award were Tracy Burns, Jennifer McDowell, Michael Lewis, James Toupin, William Covey, Rachel Irish, and Roderick McCracken.

Briefings were also conducted for the Chairman and Ranking Member of the House Judiciary Committee on progress relating to a USPTO-commissioned study, launched in October 2008, to review the assumptions the Agency uses to establish production goals for patent examiners. USPTO officials also provided briefings for Congressional staff on the Strategic Plan, captioned the “Information Technology Roadmap,” for the improvement of the Agency’s information systems.

The USPTO continues to heavily shape IP law and policy through domestic litigation and the decisions of its boards: the TTAB and the BPAI. The Agency’s litigation responsibilities fall primarily on the USPTO’s Office of General Counsel (OGC), which defends the decisions of the Agency’s administrative boards as well as the Agency’s rule making and policies in court. The OGC also advises the Solicitor General of the United States on IP matters before the U.S. Supreme Court. Further, the BPAI and TTAB issued in excess of 60 decisions on a wide variety of topics, affecting both Agency practice and substantive law of patent applications and trademark registration.

On the IP policy front, OGC has urged the U.S. Court of Appeals for the Federal Circuit to clarify the standards for patent-eligibility under 35 U.S.C. § 101 in a series of important cases over the past several years. One recent case, In re Bilski, considered the metes and bounds of patent-eligibility for process inventions – the number and type of which has greatly expanded with the success of the Internet. Given the magnitude of the question raised in Bilski, the Federal Circuit decided to hear the case en banc. The court’s decision specifically adopts the test for a patent-eligible “process” recommended by the USPTO: that a patent-eligible process must either be implemented by a machine or transform subject matter into a different state or thing. The U.S. Supreme Court has granted certiorari (review of a decision of a lower court) in this case – making it the first time in over 30 years that the Supreme Court has considered the issue of patent-eligibility. The USPTO will be assisting the Solicitor General in defending the Federal Circuit’s decision. The Supreme Court is expected to issue a decision sometime in 2010. The USPTO is currently in the process of drafting guidelines to implement the Bilski decision and to address any issues left open by the court.

Another landmark IP policy case was In re Kubin. The Kubin case considered whether knowledge of the structure of a protein along with general methods of cloning and sequencing DNA render obvious – and thus unpatentable – claims to a DNA-encoding the protein. The Federal Circuit acknowledged that the Supreme Court further developed the “obvious to try” standard for obviousness in KSR v. Teleflex that it previously rejected in In re Deuel. Applying that standard, the Court affirmed the USPTO’s rejection. Thus, Kubin represents an expansion of the Federal Circuit’s obviousness precedent post-KSR.

Photo showing Under Secretary Kappos meeting for the first time with officials from the Government of India.  From left: Under Secretary Kappos; Ambassador of India to the United States, H.E. Ms. Meera Shankar; and Ajay Shankar, Secretary, Department of Industrial Policy and Promotion.

Under Secretary Kappos meets for the first time with officials from the Government of India to discuss work under a Memorandum of Understanding on Bilateral Cooperation on IPR between USPTO and India’s Department of Industrial Policy and Promotion. From left: Under Secretary Kappos; Ambassador of India to the United States, H.E. Ms. Meera Shankar; and Ajay Shankar, Secretary, Department of Industrial Policy and Promotion.

On the Agency rule-making front, OGC defended the USPTO’s new regulations regarding patent claims, requests for continued examination, and continuation applications in Tafas v. Dudas. The Federal Circuit panel that originally heard the case concluded that the USPTO’s rules are within the Agency’s rule making authority. The panel also concluded that the rules regarding requests for continued examination, claims, and examination support documents are consistent with the Patent Act, but that the rule regarding continuation applications conflicts with the Patent Act. Nonetheless, the Federal Circuit recently vacated the panel’s decision and decided to hear the case en banc. A decision by the en banc court is expected in 2010.

The Agency, through its OGC, has an interest in law schools helping to support young lawyers in gaining experience in USPTO practice. Therefore, OGC launched a two-year pilot program in the fall of 2008, during which time six law school clinical programs with an Intellectual Property (IP) specialization, selected through a competitive process, are participating in the pilot. Each IP Law School Clinical program is required to meet and maintain certain requirements for USPTO certification in order for student practitioners to practice before the Office. For example, each school must have a Law School Clinic Faculty Supervisor who is authorized to practice before the Office and agrees to supervise the clinic students in their filing and prosecution of applications before the Agency.

The Law School Clinical Certification Pilot Program (Law School Pilot) launched its inaugural semester in the fall of 2008. Over the fall 2008 and spring 2009 semesters, the Law School Pilot had between 45 and 50 students practicing in the program from the six schools selected to participate in the pilot. Two schools held a summer 2009 clinic with a total of 12 students practicing over the shortened summer session. On behalf of the law school clinic’s clients, the students filed a total of 37 trademark applications and 10 patent applications. The Law School Pilot program is scheduled to continue through the spring of 2010.

DELIVERING IP EDUCATION WORLDWIDE

The USPTO Global Intellectual Property Academy (GIPA) was established in 2006 and offers capacity building programs in the United States and around the world on IPR protection, enforcement, and capitalization. Capacity building programs are offered to patent, trademark, and copyright officials, judges, prosecutors, police, customs officials, foreign policy makers, examiners, and rights owners. In delivering capacity building programs, GIPA works closely with other U.S. Government agencies, trading partners, international organizations, and rights holders. Through GIPA programs, foreign officials learn about international IP obligations and norms, and are exposed to a U.S. model of protecting and enforcing IPR and discussion of IP issues in a collaborative learning environment.

In 2009, the GIPA provided training to more than 2,226 officials from 128 countries on a variety of topics, including IP protection and enforcement, and technology transfer.

The GIPA also initiated a new pilot program exposing patent officials from other countries to the USPTO Patent Training Academy’s patent examiner training program. The six-month long International Examiners in Residence (IEIR) Program included most of the Patent Training Academy’s new examiner training curriculum. In addition, the IEIR covered other IP topics, such as copyright, trademark, and enforcement issues. In order to provide a full perspective of the U.S. IP system, the IEIR also included visits to the BPAI, the Federal District Court of the Eastern District of Virginia, the Court of Appeals for the Federal Circuit, and the Supreme Court to witness oral hearings at each of these judicial proceedings. Eight patent examiners in various technologies from the patent offices in China, Germany, Korea, and Saudi Arabia participated in the pilot program.

GIPA also conducted a two-week long advanced trademark examination program for 16 examiners from the IP Offices in Brazil and India. The program provided the senior examiners with an in-depth analysis of the U.S. approach to the examination of trademark applications. One participant remarked,

“I was impressed with the USPTO staff...They were always very attentive, friendly and willing to help. The teachers, all super-prepared, were able to transmit the entire contents of the program in a dynamic way, alternating lectures, roundtable and simulations of situations that occur daily at the PTO…The content of the course provided are already of great value here [Brazil].”

In the area of enforcement, the GIPA organized and hosted two joint Asian-Pacific Economic Cooperation (APEC) - Association of South East Asian Nations (ASEAN) - Pacific Island Forum (PIF) capacity building events, namely, the Colloquium for Public Prosecutors and the Judiciary on IPR Enforcement in Kuala Lumpur, Malaysia, and the Workshop on the Border Enforcement of Intellectual Property Rights in Honolulu, Hawaii. GIPA also conducted a successful two-week study tour program on IPR enforcement and the U.S. legal system for 23 foreign government judges and prosecutors. These are just a few examples of the wide range of GIPA programs the USPTO delivered both in the United States and overseas during the past year.

In FY 2009, the USPTO developed and produced GIPA’s new Distance Learning Modules, a new method for delivering IP education, which provide presentations addressing the basics of trademarks, geographical indications, patents, copyright, enforcement, and trade issues, as well as information on international standards and the U.S. experience. The modules will be available on-line to anyone who wishes to access them, and include a video presentation and an accompanying PowerPoint presentation on each topic. The Distance Learning Modules will also be accessible in a number of foreign languages, including Arabic, French, and Spanish.

Photo showing officials from the Russian Federal Service for Intellectual Property, Patents, and Trademarks (Rospatent) visiting the USPTO on September 30.

Officials from the Russian Federal Service for Intellectual Property, Patents, and Trademarks (Rospatent) visited the USPTO on September 30, to gather information about designing and developing a telework program for their examiners.

While every IP-based business is vulnerable to counterfeiting and piracy, small businesses can be at a particular disadvantage because they lack the resources and expertise available to larger corporations. Small businesses also often lack the familiarity with the process of protecting IP. This year, the USPTO offered free programs and materials to help subject matter experts (SMEs) improve their understanding of IPR, increase the value of IP in their businesses, and to protect against counterfeiting and piracy. For example, in conjunction with the Trademark Expo at the USPTO’s headquarters in Alexandria, Virginia, the USPTO offered SMEs very well-received seminars on “What Every Small Business Must Know About Intellectual Property (The Top 13 Mistakes that YOU May Be Making).” The USPTO also provided experts to staff trade shows, such as the International Music Products Association (NAMM) tradeshow where they discussed patent, trade secret, trademark, and copyright protection and enforcement, and provided information about U.S. Government and other resources to help U.S. right holders protect their IP.

The USPTO continued its relationships with Federal agencies that share the goal of bringing awareness of IPR to SMEs. Under a 2008 memorandum of understanding between the USPTO and the Minority Business Development Agency (MBDA), the USPTO delivered IP-related presentations for regional directors of business centers and operated an IP information booth at an MBDA trade event. The USPTO has also worked with the Department of the Interior’s Indian Arts and Crafts Board (IACB) since 2005 to help improve understanding of and appreciation for IP among Native American artists and craftspeople. In addition to providing numerous presentations for these groups, the USPTO is also working with IACB to revise its informational brochure on IP.

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