USPTO’s Annual Hiring Estimates Are Determined by Funding and Institutional Capacity and Are Unlikely to Reduce the Patent Application Backlog

In each of the last 5 years, USPTO has identified its annual hiring estimates  primarily on the basis of available funding levels and its institutional  capacity to train and supervise new patent examiners, and not on the basis  of the number of patent examiners needed to reduce the existing backlog  or review new patent applications. Although this process is consistent  with workforce planning strategies established by the Office of Personnel  Management (OPM) and has enabled the agency to better match its hiring  estimates to its institutional capacity, USPTO’s ability to reduce the patent  application backlog simply through its hiring efforts is unlikely. For example, in identifying its fiscal year 2002 hiring estimate,  USPTO determined that funding availability would limit the number of  patent examiners the agency could hire, and established its estimate on  the basis of the number of patent examiners the agency had hired in the  most recent year. Although new  patent examiners can review the prior art relating to patent applications,  only supervisors can authorize a new patent examiner’s decision to  approve or reject a patent application. Attrition Has Significantly Offset Hiring over the Last 5 Years, and Agency Management and Patent Examiners Disagree about the Reasons for Attrition

Although USPTO is hiring as many new patent examiners as it has the  annual funding and institutional capacity to support, attrition has  continued to increase among patent examiners—one patent examiner has  been lost for nearly every two hired over the last 5 years. The attrition of patent examiners who were at the agency for less than 5  years is a significant loss for USPTO for a variety of reasons. First,  attrition of these staff affects USPTO’s ability to reduce the patent  application backlog because these less experienced patent examiners are  primarily responsible for making the initial decisions on patent  applications—the triggering event that removes applications from the  backlog. According to USPTO  management, personal reasons are the primary reasons that cause patent  examiners to leave the agency. Specifically, approximately 67 percent of patent examiners,  regardless of their tenure with the agency, said that the agency’s  production goals were among the primary reasons they would consider  leaving USPTO. We and others have reported in the past that the assumptions underlying  the agency’s production goals were established over 30 years ago and have  not since been adjusted to reflect changes in science and technology. The percentage of patent examiners working  while on paid leave was significantly higher for those with longer tenure at  the agency. As one respondent to our survey explained,  “Vacation time means catch up time.”  Another respondent summed up the  situation as follows: “I know that the production goals are set to keep us  motivated in order to help get over the backlog but if a majority of  examiners cannot meet those goals without relying on unpaid overtime or  annual leave then something is wrong with the system.”  According to our  survey results, 59 percent of patent examiners identified the amount of  unpaid overtime that they have to put into meeting their production goals  as a primary reason they would choose to leave USPTO, and 37 percent  identified the amount of time they must work during paid leave in order to  meet their goals as a primary reason to leave the agency. When we asked USPTO  management about the agency’s policy for unpaid overtime to meet  production goals, the Deputy Commissioner for Patent Operations told us,  “As with many professionals who occasionally remain at work longer to  make up for time during the day spent chatting or because they were less  productive than intended, examiners may stay at the office (or remote  location) longer than their scheduled tour of duty to work.”

	Retention Incentives and Flexibilities Provided over the Last 5 Years Generally Align with the Primary Reasons Patent Examiners Identified for Staying at USPTO

From 2002 to 2006, USPTO offered a number of different retention  incentives and flexibilities, as table 1 shows. More specifically:    Special pay rate. Because the agency’s production goals appear to be undermining USPTO’s  efforts to hire and retain a qualified workforce, we recommended in 2007  that the agency comprehensively evaluate the assumptions it uses to  establish patent examiner production goals and revise those assumptions  as appropriate. The Department of Commerce agreed with our findings, conclusions, and  recommendation and agreed that the agency’s hiring efforts are not  sufficient to reduce the patent application backlog. It stated that USPTO  is implementing initiatives to increase the productivity of the agency that  will result in a more efficient and focused patent examination process.
Why GAO Did This Study

The U.S. Patent and Trademark Office (USPTO) helps protect U.S. competitiveness by granting patents for new ideas and innovations. Increases in the volume and complexity of patent applications have extended the time for processing them. Concerns continue about the agency's efforts to attract and retain qualified patent examiners who can meet the demand for patents and help reduce the growing backlog of unexamined patent applications. In 2007, GAO reported on (1) USPTO's process for making its annual hiring estimates and the relationship of these estimates to the patent application backlog; (2) the extent to which patent examiner hiring has been offset by attrition, and the factors that may contribute to this attrition; and (3) the extent to which USPTO's retention efforts align with examiners' reasons for staying with the agency. GAO recommended that USPTO comprehensively evaluate the assumptions it uses to establish its production goals. USPTO agreed to implement this recommendation once it determines the effect of recent initiatives designed to increase the productivity of the agency through a more efficient and focused patent examination process. This testimony is based on GAO's 2007 report, which was based in part on a survey of 1,420 patent examiners. See, GAO, U.S. Patent and Trademark Office: Hiring Efforts Are Not Sufficient to Reduce the Patent Application Backlog, GAO-07-1102 .

What GAO Found

USPTO primarily determined its annual hiring estimates on the basis of available funding levels and institutional capacity to train and supervise new patent examiners, and not on the basis of the number of patent examiners needed to reduce the existing backlog of patent applications or review new patent applications. USPTO's process for identifying its annual hiring estimates is generally consistent with accepted workforce planning strategies. However, because this approach does not consider how many examiners are needed to reduce the existing backlog or address the inflow of new applications, it is unlikely that the agency will be able to reduce the growing backlog simply through its hiring efforts. Although USPTO is hiring as many new patent examiners as its budget and institutional capacity will support, attrition is significantly offsetting the agency's hiring efforts, and agency management and patent examiners disagree about the causes of attrition. Specifically, from 2002 through 2006, one patent examiner left USPTO for nearly every two hired--70 percent of those who left had been at the agency for less than 5 years. This represents a significant loss to the agency because new patent examiners are primarily responsible for the actions that remove applications from the backlog. According to USPTO management, patent examiners primarily leave the agency because of personal reasons, such as finding that the job is not a good fit. In contrast, 67 percent of patent examiners identified the agency's production goals among the primary reasons they would consider leaving the agency. These goals are based on the number of applications patent examiners must complete during a 2-week period. However, the assumptions underlying these goals were established over 30 years ago and have not since been adjusted to reflect changes in the complexity of patent applications. Moreover, 70 percent of patent examiners reported working unpaid overtime during the past year in order to meet their production goals. The large percentage of examiners working overtime to meet production goals and who would choose to leave the agency because of these goals may indicate that these goals do not accurately reflect the time needed to review applications and are undermining USPTO's hiring efforts. The retention incentives and flexibilities USPTO has provided over the last 5 years generally align with the primary reasons patent examiners identified for staying with the agency. Between 2002 and 2006, USPTO used a variety of retention flexibilities, such as a special pay rate, performance bonuses, and a flexible work place to encourage patent examiners to stay with the agency. According to USPTO management, their most effective retention efforts were those related to compensation and an enhanced work environment. GAO's survey of patent examiners indicates that most patent examiners generally approved of USPTO's retention efforts, and ranked the agency's salary and other pay incentives as well as the flexible work schedule among the primary reasons for staying with the agency.