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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
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 of David J. Kappos, Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office.

Fiscal Year (FY) 2009 was a year of great economic turbulence for the United States of America as well as for the United States Patent and Trademark Office (USPTO). It was also a year of extraordinary decisions and results. It is my honor and privilege to have been sworn in as the Under Secretary of Commerce for Intellectual Property and Director of the United States Patent and Trademark Office and to lead this Agency during a time of historic transformation.

As you know, the past year was a challenging one for the USPTO. The downturn in the economy showed us that the Agency is working with an outdated financial model. Due to decreased patent filings and maintenance fee payments, the Agency found itself in a financial crisis and was forced to freeze hiring, curtail mission critical programs, and cut back in key efforts relating to the Agency’s mission.

With the help of the Department of Commerce, the Office of Management and Budget and Congress, an insurance policy was put in place that would have allowed us to borrow from Trademark funds. Due to aggressive cost-cutting across the Agency, we ended the year without having to take unwanted measures such as borrowing money from the Trademarks’ budget. However, with 2010 promising to be another financially challenging year, we are focusing on both short- and long-term solutions to put the agency back on solid financial footing. We will be working with the administration, Congress and stakeholders to identify and implement those solutions.

In 2009, the Agency began to lay the groundwork for new measures to address our biggest challenge--dramatically reducing the time it takes to process patent applications. Secretary of Commerce, Gary Locke, has directed the USPTO to reduce first action pendency to 10 months and overall pendency to 20 months. Shortening pendency time is imperative to improve predictability and clarity in the patent system.

Our technological infrastructure has been neglected, threatening the ability of the USPTO to drive future growth. We need to implement a robust information technology system capable of supporting all of the USPTO’s operations on a continual basis, and capable of facilitating full electronic patent and trademark processing.

“Today, the competition is keener; the challenge is tougher; and that is why innovation is more important than ever.”

-President Barack Obama

Although many of the financial forces are, to a large extent, beyond our control, we must nevertheless accomplish our statutory mission to foster innovation and competitiveness. But despite the Agency’s financial challenges in FY 2009, the patent examining operations increased first action productivity by 10 percent while filings were slightly reduced. This combination resulted in a small reduction in the overall backlog. Had the funding been available to continue hiring and to allow overtime for patent examiners, that reduction in the backlog could have been much larger.

The Trademark organization had challenges of a different nature. Lower application filings meant managing workflow and inventory while keeping pendency at appropriate levels consistent with stakeholder expectations. For the fourth year in a row, the Trademark organization met all of its goals, focusing on pendency, quality and e-government efforts.

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 17th consecutive year, we earned an unqualified audit opinion on our annual financial statements. For FY 2009 financial reporting, the independent auditors did not identify any material weaknesses or instances of non-compliance with laws and regulations.

The employees at the USPTO have the talent, creativity and innovative spirit to produce tangible results for the American people. I look forward to working with our employees and the stakeholders in the intellectual property community to ensure we have a USPTO and an IP system that drives innovation, creates jobs and guarantees America’s competitiveness.

Signature of David J. Kappos.

David J. Kappos
Under Secretary of Commerce for Intellectual Property and
Director of the United States Patent and Trademark Office

November 5, 2009

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