Specifically, of the  activities planned for completion by December 2004, the agency has fully  or partially implemented all 23 of the initiatives related to its capability  theme to improve the skills of employees, enhance quality assurance, and  alter the patent process through legislative and rule changes. With  passage of the legislation in December 2004 to restructure and increase the  fees available to USPTO, the agency is re-evaluating the feasibility of many  initiatives that it had deferred or suspended. For more details on USPTO’s  progress in implementing the 38 initiatives in the Strategic Plan, see  appendix III. USPTO Has Made Less Progress Implementing Its Productivity and Agility Initiatives

As shown in table 5, USPTO has not implemented 3 of the 4 initiatives that  focus on accelerating the time to process patent applications and expand  public input and has partially implemented only 1 of the productivity  initiatives that allow the agency to increase fees and retain the funds. USPTO Has Taken Steps to Help Attract and Retain a Qualified Patent Examiner Workforce, but Long- Term Success Is Uncertain

Since 2000, USPTO has taken steps intended to help attract and retain a  qualified patent examination workforce. However, during the past 5 years, the  agency’s recruiting efforts and use of benefits have not been consistently  sustained, and officials and examiners at all levels in the agency told us that  the economy has more of an impact on USPTO’s ability to attract and retain  examiners than any actions taken by the agency. While USPTO has been able to meet its  hiring goals, attrition has recently increased. USPTO Faces Long- standing Human Capital Challenges That Could Undermine Its Recruiting and Retention Efforts

Although USPTO has taken a number of steps to attract and retain a  qualified patent examiner workforce, the agency continues to face three  human capital challenges of a long-standing nature that could also  undermine its efforts in the future if not addressed. However,  USPTO lacks a collaborative culture, has an awards system that is based on  outdated information, and requires little ongoing technical training for  patent examiners. USPTO management and examiners do not agree on the  need to address these issues. In February 2004, this issue  was presented for arbitration to determine the validity of the agreement. It is so different than when  they were examining.” Examiners in our focus groups said that the lack of  communication and involvement has created an atmosphere of distrust in  management officials by examiners and has lowered examiners’ morale. According to agency officials, the  primary method for examiners to keep current in their technical fields is by  processing patent applications. Recommendations for Executive Action

We recommend that the Secretary of Commerce direct the Under Secretary  of Commerce for Intellectual Property and Director of the U.S. Patent and  Trademark Office to take the following two actions: develop formal  strategies to (1) improve communication between management and patent  examiners and between management and union officials, and (2) foster  greater collaboration among all levels of the organization to resolve key  issues discussed in this report, such as the assumptions underlying the  quota system and the need for required technical training. Scope and Methodology

We were asked to report on various efforts being undertaken by the U.S.  Patent and Trademark Office (USPTO) about its (1) overall progress in  implementing the initiatives in the 21st Century Strategic Plan related to  the patent organization; (2) efforts to attract and retain a qualified patent  workforce; and (3) remaining challenges, if any, in attracting and retaining  a qualified patent workforce.
Why GAO Did This Study

The U.S. Patent and Trademark Office (USPTO) is responsible for issuing U.S. patents that protect new ideas and investments in innovation and creativity. Recent increases in both the complexity and volume of patent applications have increased the time it takes to process patents and have raised concerns about the validity of the patents USPTO issues. Adding to these challenges is the difficulty that USPTO has had attracting and retaining qualified staff. In this context, GAO was asked to obtain information about USPTO's patent organization. Specifically GAO reviewed (1) overall progress in implementing the initiatives in its strategic plan; (2) efforts to attract and retain a qualified patent workforce; and (3) remaining challenges, if any, in attracting and retaining a qualified patent workforce.

What GAO Found

USPTO has made more progress in implementing its strategic plan initiatives to increase the agency's capability than initiatives aimed at decreasing patent pendency. USPTO has fully or partially implemented all 23 capability initiatives that focus on improving the skills of employees, enhancing quality assurance, and altering the patent system through changes in existing laws or regulations. In contrast, the agency has partially or fully implemented only 8 of the 15 initiatives aimed at reducing pendency. Lack of funding was cited as the primary reason for not implementing these initiatives. With passage of legislation in December 2004 to increase fees available to USPTO for the next two years, the agency is re-evaluating the feasibility of implementing some of these initiatives. Since 2000, USPTO has taken steps intended to help attract and retain a qualified patent examination workforce, such as enhancing its recruiting efforts and using many of the human capital benefits available under federal personnel regulations. However, it is too soon to determine the long-term success of the agency's recruiting efforts because they have been in place only a short time and have not been consistently sustained due to budgetary constraints. Long-term uncertainty about USPTO's hiring and retention success is also due to the unknown impact of the economy. In the past, when the economy was doing well, the agency had more difficulty in recruiting and retaining the staff it needed. USPTO faces three long-standing challenges that could also undermine its efforts to retain a qualified workforce: the lack of an effective strategy to communicate and collaborate with examiners; outdated assumptions in the production quotas it uses to reward examiners; and the lack of required ongoing technical training for examiners. According to patent examiners, the lack of communication and a collaborative work environment has resulted in low morale and an atmosphere of distrust that is exacerbated by the contentious relationship between management and union officials. Also, managers and examiners have differing opinions on the need to update the monetary award system that is based on assumptions that were established in 1976. As a result, examiners told us they have to contend with a highly stressful work environment and work voluntary overtime to meet their assigned quotas. Similarly, managers and examiners disagree on the need for required ongoing technical training. Examiners said they need this training to keep current in their technical fields, while managers believe that reviewing patent applications is the best way for examiners to remain current.