Historically, the time  from the date that a patent application is filed to the date that the patent is  either granted or the application is abandoned has been called “patent  pendency.”
Because of long-standing concerns about the increasing volume and  complexity of patent applications, USPTO has been undertaking projects  to automate its patent process for about the past two decades. The agency reported  spending approximately $1 billion on this initiative from 1983 through  2002. Using the Internet, patent applicants also can review the  status of their applications online and the public can electronically access  and search existing published patents. Two of the key systems that it is relying on to further  enhance its capabilities—the electronic filing system and the Image File  Wrapper—have not yielded the processing improvements that the agency  has deemed essential to successfully operate in a fully integrated,  electronic environment. The officials explained that, to meet the accelerated date for delivering an  operational system as outlined in its strategic plan, the agency had decided  in 2002 to acquire and use a document-imaging system owned by the  European Patent Office, called ePhoenix, rather than develop the  integrated patent processing system that had been described in its  automation plans. USPTO Lacks Essential Information Technology Investment Management Processes to Support Its Patent Automation

USPTO’s ineffective planning for and management of its patent  automation projects, in large measure, can be attributed to enterprise- level, systemic weaknesses in the agency’s information technology  investment management processes. USPTO Has Taken Steps to Help Attract and Retain a Qualified Patent Examiner Workforce, but Long- Term Success Is Uncertain

Since 2000, USPTO has also taken steps intended to help attract and retain  a qualified patent examination workforce. However, during the past 5 years, its  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 their ability to attract and retain  examiners than any actions taken by the agency. USPTO has also used many of the human capital benefits available under  federal personnel regulations to attract and retain qualified patent  examiners. However, it is too soon to determine the long-term effect of the agency’s  efforts, in part because neither its recruiting efforts nor the human capital  benefits have been consistently sustained due to budgetary constraints. USPTO Has Made Greater Progress on Strategic Plan Initiatives that Enhance the Agency’s Capability Rather than Productivity and Agility

In carrying out its strategic plan to become a more productive and  responsive organization, our work found that USPTO has made greater  progress in implementing its initiatives to make the patent organization  more capable by improving the quality of examiners’ skills and work  processes than it has in implementing its productivity and agility initiatives  aimed at decreasing the length of time to process a patent application and  improving electronic processing. Nonetheless, after spending over a  billion dollars on its efforts, the agency is still not yet effectively  positioned to process patent applications in a fully automated  environment. Moreover, when and how it will actually achieve this  capability is uncertain. Although  USPTO’s director and its chief information officer have recognized the  need to improve the agency’s planning and management of its automation  initiatives, weaknesses in key information technology management  processes needed to guide the agency’s investments in patent automation,  such as incomplete capital planning and investment controls, could  preclude their ability to successfully accomplish this. Given the weaknesses in USPTO’s information technology investment  management processes, we recommended that the agency, before  proceeding with any new patent automation initiatives, (1) reassess and,  where necessary, revise its approach for implementing and achieving  effective use of information systems supporting a fully automated patent  process; (2) establish disciplined processes for planning and managing the  development of patent systems based on well-established business cases;  and (3) fully institute and enforce information technology investment  management processes and practices to ensure that its automation  initiatives support the agency’s mission and are aligned with its enterprise  architecture. Further, in light of its need for a more transparent and  collaborative work environment, we recommended that the agency  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, such as the assumptions underlying the  quota system and the need for required technical training.
Why GAO Did This Study

The United States Patent and Trademark Office (USPTO) is responsible for issuing patents that protect new ideas and investments in innovation and creativity. However, the volume and complexity of patent applications to the agency have increased significantly in recent years, lengthening the time needed to process patents and raising concerns about the validity of the patents that are issued. Annual applications have grown from about 185,000 to over 350,000 in the last 10 years and are projected to exceed 450,000 by 2009. Coupled with this growth is a backlog of about 750,000 applications. Further complicating matters, the agency has faced difficulty in attracting and retaining qualified staff to process patent applications. USPTO has long recognized the need to automate its patent processing and, over the past two decades, has been engaged in various automation projects. More recently, in its strategic plan, the agency articulated its approach for accelerating the use of automation and improving workforce quality. In two reports issued in June 2005, GAO discussed progress and problems that the agency faces as it develops its electronic patent process, its actions to attain a highly qualified patent examination workforce, and the progress of the agency's strategic plan initiatives. At Congress's request, this testimony summarizes the results of these GAO reports.

What GAO Found

As part of its strategy to achieve an electronic patent process, USPTO had planned to deliver an operational patent system by October 2004. It has delivered important capabilities, for example, allowing patent applicants to electronically file and view the status of their applications and the public to search published patents. Nonetheless, after spending over $1 billion on its efforts from 1983 through 2004, the agency has not yet developed the fully integrated, electronic patent process articulated in its automation plans, and when and how it will achieve this process is uncertain. Key systems that the agency is relying on to help reach this goal--an electronic application filing system and a document imaging system--have not provided capabilities that are essential to operating in a fully electronic environment. Contributing to this situation is the agency's ineffective planning for and management of its patent automation initiatives, due in large measure to enterprise-level, systemic weaknesses in its information technology investment management processes. Although the agency has begun instituting essential investment management mechanisms, such as its enterprise architecture framework, it has not yet finalized its capital planning and investment control process, or established necessary linkages between the process and its architecture to guide the development and implementation of its information technology. The Under Secretary of Commerce for Intellectual Property and the agency's chief information officer have acknowledged the need for improvement. USPTO has taken steps to attract and retain a highly qualified patent examination workforce by, for example, 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 efforts because they have been in place only a short time and have not been consistently sustained because of budgetary constraints. Long-term uncertainty about the agency's hiring and retention success is also due to the unknown impact of the economy. In the past, the agency had more difficulty recruiting and retaining staff when the economy was doing well. Further, USPTO faces three long-standing challenges that could undermine its efforts: the lack of an effective strategy to communicate and collaborate with examiners, outdated assumptions in production quotas that it uses to reward examiners, and the lack of required ongoing technical training for examiners. Patent examiners said the lack of a collaborative work environment has lowered morale and created an atmosphere of distrust between management and patent examiners. Overall, USPTO has made more progress in implementing its strategic plan initiatives aimed at increasing its patent processing capability through workforce and process improvements than in its initiatives to decrease patent pendency and improve electronic processing. It has fully or partially implemented all 23 capability initiatives, but only 8 of 15 initiatives to reduce patent pendency and improve electronic processing. The agency cited a lack of funding as the primary reason for not implementing all initiatives.