The PTO received 240,090 utility, plant and reissue (UPR) applications in FY 1998. Increases in the number of applications in communications and information processing technologies led the 9 percent growth from last year. We issued 140,574 patents, a 25 percent increase over FY 1997. Some of this increase was the result of a successful effort to reduce the backlog in the publications area.
For FY 1999, we expect UPR applications to increase another 8 percent to around 259,000, with the high technology areas leading this growth once again. We expect another large increase in the number of patents issued in FY 1999, partly as a result of a one-time process change which provides for parallel processing of allowed applications.
At the end of FY 1998, cycle time 1 averaged 16.9 months, with 32 percent of applications processed in 12 months or less. Our target processing time for FY 1998 applications was 16.7 months, with 33 percent of applications processed in 12 months or less. FY 1997 cycle time was 16.0 months.
Our customer survey showed that overall satisfaction with our performance was essentially unchanged at 52 percent, from 50 percent in 1996, but short of our FY 1998 goal of 57 percent. It showed, however, that our performance has improved in 23 of 33 operational areas. The areas of greatest improvement included application procedures, examination quality and staff courtesy.
The mission of the patent business area is to help our customers get patents; its performance goal is to grant patents to inventors for their discoveries. These were established to help us direct our efforts toward providing our customers with high-quality service, one of the PTO's two strategic goals.
To help achieve this mission and performance goal, we established the following five business goals.
Goal 1: Reduce the PTO processing time to patent original inventions to 12 months in 2003.
By 2003, we will reduce PTO processing time, or cycle time, for original UPR patents to 12 months from the time we receive an application to the time when we issue the patent or the inventor abandons the application. We committed to achieving this goal following our designation as a High-Impact Agency (HIA).
Although we are working toward processing all patents within 12 months, we expected cycle time to rise slightly in FY 1998 as a result of the increasing number of patent applications and the shortage of trained examiners. Actual cycle time increased only slightly more than anticipated.
The number of patent applications received increased 26 percent from 1993 through 1997, but the number of patent examiners increased only 17 percent over the same period. Backlogs increased, as did the complexity of patent applications. To help attack the problems of unacceptable cycle time, we hired 732 patent examiners this year. By the end of FY 1999 these new examiners will be working at full capacity and we expect to process 75 percent of inventions in 12 months or less, with an average cycle time of 10.9 months. We plan to hire at least 700 more examiners during FY 1999.
In another major step toward achieving our long-term goal, we reduced the backlog of patent applications in the pre-examination area. Filing receipts were mailed to customers and applications delivered to the examining corps in an average of 29 days, an improvement of over three and a half months from the beginning of the year.
In addition, we are improving our efficiency by making direct contact early with customers to anticipate and resolve potential problems with their applications. We also plan to improve our patents publication process to reduce the time between the allowance of an application and the granting of the patent from 4.3 months at the end of FY 1998 to one month by the end of FY 1999.
Goal 2: Establish industry sectors.
During 1998, the Patent Examining Corps realigned the 16 Examining Groups into six Technology Centers. These Technology Centers are technology-specific groups that parallel technology areas in private industry; they focus resources to meet specific customer requirements; and they allow us to take advantage of new management concepts and techniques. The Technology Center structure enables us to offer customers improved service and responsiveness. It allows us to customize resources and services, and helps us streamline processes. It also allows greater partnering with industry in developing technology-specific training, and enables us to better anticipate and respond to specific industry needs.
Goal 3: Receive applications and publish patents electronically.
The PTO will complete systems testing and begin full electronic processing of patent applications in FY 2003. This goal represents another of our HIA commitments.
In August 1998, the PTO began capturing bibliographic data from incoming patent applications by electronically scanning the documents. We also began sending an electronic acknowledgment of receipt to the applicant.
To achieve full electronic filing, the PTO must develop electronic systems to receive applications, process them, and publish issued patents. In FY 1999, working with volunteer applicants, we plan to offer Internet-based application filing. We also plan to work with vendors of intellectual property (IP) portfolio management packages to incorporate electronic filing capability into their products. We expect to begin receiving electronically filed U.S. applications by FY 2002.
In September 1999, we will establish within one of the technology centers a prototype system for processing applications filed electronically. We will build on this and other prototype systems to develop and establish a fully electronic processing system in one of the technology centers early in FY 2002. The entire patent examining corps will adopt this system during FY 2003.
To complement these systems, we also will develop a new publication system that will be deployed incrementally through FY 2003. This system will vastly improve the quality and timeliness of our patent publications, and significantly reduce our publication costs.
Electronic access for applicants
In another effort to make the patent system more open to customers, we plan to introduce the patent application information retrieval (PAIR) system in June 1999. PAIR will allow patent applicants and their designated representatives restricted Internet access to patent application information without compromising the confidentiality or security of other data. We will make PAIR available to a limited number of users during a pilot period, and extend it to other users when the necessary infrastructure is in place.
Patent application location monitoring (PALM)
PALM performs the PTO's workflow tracking and status reporting for patent applications processing, and is critical to the PTO's day-to-day operations. The current system is beset by problems, however: it is dependent on institutional knowledge to keep operating properly; it is costly and difficult to maintain; and it cannot take advantage of the advances in technology available in an open system environment.
We have begun work to replace PALM during FY 2000 with a product that will operate in an open system environment. This will make future modifications and enhancements to patent applications processing easier and cheaper. We have also begun to modify the existing PALM system to ensure that it will be Y2K-compliant. We should complete this work in March 1999.
To help improve the speed and quality of patent searches, in August 1998 we introduced browser-based software to permit examiners to search the text and images of U.S. and foreign patents. At the same time, PTO examiners were given access to the Derwent World Patents Index. We also expanded the prior-art search file to include approximately 46,000 full images from the European Patent Office and the Japanese Patent Office.
In April 1998, PTO examiners obtained access to the Elsevier Scientific Electronic Journals, a source of non-patent technical literature. We will add other electronic information sources, including IBM Technical Disclosure Bulletins and UMI ProQuest, as availability and budgets permit.
In May 1998, we began electronically capturing the U.S. patents text file back to 1960. By mid-December 1998, we had captured 99 percent of U.S. patents issued between 1960 and 1970. We will add selected art dating back to 1920 to the electronic archive, and we will ultimately extend our text archive back to 1790. This information will be available to our trilateral partners as well.
Biotechnology patent sequence submission (PatentIn)
In June 1998, we began using the Windows version of the PatentIn program. We also continued to develop a version of the PatentIn software that can be used by Internet browsers. The browser will be integrated with the PTO's electronic filing system in 1999, to provide customers with an efficient method of submitting sequence listings that meet international patent application filing standards for gene and protein sequence information.
Goal 4: Exceed our customers' quality expectations through the competencies and empowerment of our employees.
We use a variety of methods to obtain information about our customer service, including surveys, focus sessions, roundtable discussions, and town hall meetings. In FY 1998 for example, we conducted a postal survey of more than 6,000 patent customers. The survey showed that overall satisfaction with our performance was essentially unchanged. A similar survey is planned for FY 1999. We use our client feedback to determine our customers' expectations of our service and to identify areas where we must improve to meet these expectations.
We give the highest priority to customer needs, and encourage all our employees to recognize their responsibility to the customer. In FY 1998 we established an in-house program to publicly recognize good service to customers, and identified 108 employees for recognition. In FY 1999, all patent employees will receive customer service training to emphasize their responsibility to customers.
Researching customer expectations
In FY 1999, each major patent operation center will establish a customer service function or office to address customer needs and to register the compliments and complaints that will help us to refine our service. Work on the first customer service offices is already underway in the six technology centers.
Each technology center will conduct a series of focus sessions and roundtable discussions to identify weak areas in our customer service, as will other offices in the patent business area. We will use the results of these meetings to develop our customer service improvement strategy.
We are also conducting an in-house assessment of our customer service. Telecare, a telephone measurement project, will involve placing about 1,700 calls to PTO employees by the end of FY 1999 and measuring the responses to these calls. We will use the information gathered by this project to improve communication with our customers. Another project, the In-Process Review, will analyze about 2,700 office actions for compliance with the examination-related customer service standards for clear and complete office actions and thorough searches.
At least one quality assurance specialist (QAS) is employed in each technology center to assist with the In-Process Review. The Office of Patent Quality Review will perform a second review of a statistically valid sample of those actions reviewed by the QAS. The Center for Quality Services, which administers customer surveys and focus sessions, will conduct customer interviews to review those same actions. We will use the results of the review to develop training programs and any necessary procedural changes.
Reviewing working procedures
The Patent Legal Administration has proposed a number of significant changes to the PTO's regulations to improve application processing. The proposed changes affect a wide variety of PTO processes, and are designed to reduce cycle time, align fees with work performed, and help prepare for the electronic processing of applications and publishing of patents.
On March 30, 1998, we inaugurated a Patent Working Lab to test new working procedures.
The goals of the lab are to:
- improve patent application processing;
- train technical support personnel to perform higher-level functions and thereby enable the examiners to focus on legal and technical work;
- encourage teamwork and collaboration between team members;
- improve examination quality;
- improve customer and employee satisfaction.
- We will assess the results of the lab from our customers' and employees' perspectives, as well as the agency's.
After six months of operation, the participants are enthusiastic about working in the lab environment. Employee satisfaction has improved significantly since the lab opened, and examiners and support staff are finding new ways to help each other.
On October 1, the lab entered the second phase of operation. This phase will test procedural changes incorporated into the program as a result of the experience gained from the first months of lab operation.
Goal 5: Assess fees commensurate with resource use and customer efficiency.
In order to encourage innovation and to ensure low-cost access to the patent system, our patent system has a fee to file patent applications much lower than the actual cost of processing those applications. We recover our costs through fees charged to maintain issued patents. The General Accounting Office, in past consultations, has pointed out that this does not align well with the actual costs of processing a patent, which tend to be high during the examination of the application and low after the patent is issued. The PTO has a responsibility to ensure that the patents and trademarks system encourages the broadest participation, however, and the current fee structure was designed with that end in mind. We will work with Congress to establish a fee schedule, aligned with costs, that encourages maximum participation in the patents and trademarks system. This goal also represents the third of our HIA commitments within the patent business area.
We began a project last year to determine if we could realign our fee structure to better match our costs while maintaining or raising customer participation. Teams of PTO employees traveled around the country to eight different cities, meeting with a cross-section of PTO customers and soliciting their views on possible improvements to our fee structure. A summary of their input has been placed on the PTO's Internet site. We are still examining the results of those meetings, and will discuss our conclusions with our customers before recommending any changes. In addition, we are conducting an activity-based costing project to obtain accurate cost data to accompany our customers' input.
1In 1995, Congress changed the length of a patent's term from 17 years from the date the patent was issued to 20 years after the earliest effective filing date claimed by the applicant. As a result, the time the PTO spends processing an application now directly affects the length of the patent term. In response, we have changed our measure from traditional pendency to processing time, or cycle time. This allows us to measure the time we spend processing an invention, and excludes the time expended by the applicant, such as the time spent by the applicant in making a reply. Also, the pendency method tracked individual patent applications and separately tracked continuations, or second applications filed to continue the prosecution of a parent application; cycle time tracks inventions regardless of the number of applications filed on that invention.