#### [statement of]{.smallcaps}

####  

#### [John J. Doll]{.smallcaps}

#### 

#### [Commissioner for Patents]{.smallcaps}

#### [United States Patent and Trademark Office]{.smallcaps}

#### 

#### [before the]{.smallcaps}

#### 

#### [Committee on Small Business]{.smallcaps}

#### U.S. House of Representatives

#### 

#### "The Importance of Patent Reform to Small Businesses\"

#### 

#### [March 29, 2007]{.smallcaps}

**[Introduction]{.underline}**

Chairwoman Velazquez, Ranking Member Chabot, and Members of the
Committee:

Thank you for this opportunity to appear before you to discuss the
United States Patent and Trademark Office\'s (USPTO) operations,
programs and initiatives involving small business.

Small businesses not only represent an important part of our patent and
trademark stakeholder community, they are also a strong driving force in
our nation\'s economy. Small businesses account for 99.7% of all
employer firms in America and those firms create two out of every three
new jobs and account for nearly half of America\'s overall employment.
They have played a vital role in helping our economy add millions of new
jobs and have helped reduce unemployment rates across the country.

The contribution from small and minority business and independent
inventors to America\'s innovation and technological growth cannot be
overstated.

The strength of our nation's economy continues to rest on the ingenuity
of American inventors. In this new century, securing appropriate
protection for inventions is almost as important as the invention
itself. As inventors turn their ideas and discoveries into viable,
marketable products and seek capital investment, it is critically
important that they obtain the protection they need to safeguard their
inventions. The USPTO is proud to play an important role in that
process.

**[Protecting Small Business Innovation]{.underline}**

In addition to our core functions of examination and issuance of patents
and trademarks, the USPTO is actively involved with efforts to improve
protection of the intellectual property of American inventors and
creators on both the domestic and international levels. A wide range of
USPTO\'s ongoing programs and initiatives serve to educate, assist and
guide small businesses and independent inventors in obtaining and
maintaining appropriate protection for their inventions.

**USPTO Fees and Funding**

We are thankful that Congress has ensured that our current fee schedule
remains in effect for FY 2007. Notably, that fee schedule continues the
50 percent discount for small entity filers. The Administration is
preparing for submission to Congress draft legislation that will make
permanent our current fee schedule.

We are also pleased that the FY 2008 budget request gives the USPTO full
access to the \$1.9 billion in fees we expect to collect. This is the
fourth consecutive year that the President\'s budget recommends full
access to collected fees, and we appreciate the continued Congressional
support for that funding level.

Full access to user fees allows the USPTO to continue its successful
model of disciplined focus on real measures that enhance quality and
increase production, increase hiring and training, promote electronic
filing and processing, provide telework opportunities for our employees
and improve intellectual property protection and enforcement
domestically and abroad.

Predictable funding permits us to finance the initiatives --
particularly initiatives requiring long-term planning and commitment --
necessary to providing and maintaining reliable, functioning systems.
Without Congressional support, we would not be able to function in a
business-like manner and achieve these results.

**Inventors Assistance Center**

In addition to the wealth of information, including the searchable
issued patent and published patent application databases, available on
USPTO\'s website ([www.uspto.gov](http://www.uspto.gov/)), patent
applicants can contact the USPTO\'s Inventors Assistance Center for help
on a variety of issues. Staffed by former Supervisory Patent Examiners
and experienced Primary Examiners, the Center provides patent
information and services to the public including assistance with filling
out forms and general information on relevant rules, procedures, fees
and patent examining policy. Approximately 5,000 to 6,000 calls are
received each month and approximately 2,500 packages of information are
sent each month to the public containing information about provisional
patent applications, utility and design patent applications, fee
schedules and cautionary literature about invention promotion firms.

The Center\'s staff members are available for questions and
consultations Monday through Friday, from 8:30 A.M to 5:00 P.M. EST, at
1-800-PTO-9199.

**Patent and Trademark Depository Libraries**

USPTO\'s patent and trademark depository library (PTDL) program is a
nationwide network of public, state and academic libraries authorized to
disseminate patent and trademark information and to support inventors,
intellectual property attorneys and agents, business people,
researchers, entrepreneurs, students, historians and the general public
who are not able to come to USPTO\'s offices in Alexandria, Va.

Services at the libraries are free, and include assistance in accessing
and using patent and trademark documents, training on USPTO databases,
obtaining access to the USPTO website, and hosting public seminars on
intellectual property topics for novice and experienced innovators.

The PTDL network consists of 85 libraries located in 47 states, the
District of Columbia, and Puerto Rico. Locations include the public
libraries in New York City and Cincinnati.

**On-Line Chats**

On-Line chats for independent inventors are advertised and hosted by the
USPTO. This gives the public the unique opportunity to log onto the
"chat" and ask questions that are posted in a public forum. A panel of
USPTO experts provides the answers to the questions during a one-hour
chat session. On average, 200 members of the public log on to
participate in the chats. Transcripts from the chats are published on
USPTO\'s website and converted to frequently asked questions.

**Independent Inventors Conferences**

The USPTO sponsors conferences for independent inventors and small
businesses which feature informative sessions conducted by USPTO
personnel including supervisory patent examiners. These two-day events
include sessions on how to conduct a patent search, what is and is not
patentable, how to protect your trademark, how to write a business plan,
and what to do after you receive a patent. The USPTO also invites
participation at these events by representatives of local resources such
as Small Business Development Centers, Patent and Trademark Depository
Libraries, attorneys from the Intellectual Property Law Associations and
subject matter experts in marketing.

Future conferences include those planned for New York in May and North
Carolina in September 2007.

**Electronic Filing and Processing**

The USPTO continues to promote electronic filing and processing of
patent applications as a means of reducing paper-based inefficiencies
and enabling large as well as small entities and independent inventors
to file their patent applications 24-hours a day from any location in
the world.

Our patents organization implemented the Electronic Filing System-Web
(EFS-Web), a user friendly, Internet-based patent application and
document submission program and in FY 2006 achieved a rate of 14 percent
of patent applications filed electronically.

A celebration event is being planned at the USPTO to celebrate EFS-Web
recently achieving the milestones of (1) receiving 50% of new patent
applications on a weekly basis, and (2) the Office having received over
500,000 follow-on papers through the use of EFS-Web.

We will work with our stakeholders to further promote electronic filing
and interaction with patent applicants.

We are developing the electronic Patent File Wrapper (PFW) that in
conjunction with current Patent Automated Information Systems (AIS's)
will allow for a fully automated, text-driven patent application
processing system.

Operating in today\'s wired world requires that the USPTO have full
electronic processing that is safe, secure and continually available to
employees, applicants and stakeholders.

**Innovative Processing**

The USPTO is developing and reviewing a variety of innovative patent
processing initiatives including a new offering called "Accelerated
Examination." Under this program, which began August 26, 2006, the USPTO
offers a complete examination within 12 months for applicants who need
or want quick turn around.

In exchange for this quick turn around, applicants must file a complete
application, agree to interviews and accelerated response periods, must
file and prosecute their application electronically and must provide
more information about the invention to the USPTO in the form of a prior
art examination support document. The first application completed under
this program was filed on September 29, 2006, and the patent issued on
March 13, 2007 (less than 6 months from date of filing).

The Accelerated Examination option is available to large as well as
small entities and independent inventors who determine that marketplace
factors justify focused action to gain patent protection in the shortest
possible period.

The USPTO is also planning a pilot program involving public peer review
of patent applications. Up to 250 applications, assigned to Technology
Center 2100, which examines computer related technologies, will
voluntarily be placed, by the applicants, on a non-USPTO web site for
public review by a peer group of patent users, attorneys and academics.
The pilot group of applications will include applications filed by
independent inventors and small entity filers. The public group will
determine and submit to the USPTO what they consider the best available
and relevant prior art. The pilot will test whether this peer review can
effectively identify prior art that might not otherwise be found by our
examiners during the typical examination process. We will also make an
evaluation as to whether this process results in measurable examination
timesavings and quality improvements.

### **STOP! Hotline** 

As part of the Administration\'s STOP! initiative to combat the piracy
and counterfeiting of intellectual property, USPTO manages a hotline
(1-866-999-HALT) that helps small-and medium-sized businesses leverage
the resources of the U.S. Government to protect their intellectual
property rights in the U.S. and abroad. Callers receive information from
a staff of approximately 37 intellectual property attorneys at the
USPTO, with regional expertise, on matters involving how to secure
patents, trademarks, and copyrights, and how to enforce those rights.

In FY 2006, the Hotline received 1,460 calls, an increase of more than
50 percent over FY 2005. Thus far in FY 2007, we have received more than
850 calls.

**Stopfakes.gov**

The USPTO has established a link on its website to
[*www.stopfakes.gov*](http://www.stopfakes.gov/) which provides in-depth
details of the STOP! initiative. One key feature of the website is the
country specific "Toolkits" that have been created by our embassies
overseas to assist small-and medium-sized businesses with intellectual
property rights issues in China, Korea, Mexico, Taiwan, Russia, Brazil,
and Malaysia. STOP! also seeks to increase global awareness of the risks
and consequences of intellectual property crimes through a section of
its website,
[*www.stopfakes.com/smallbusiness*](http://www.stopfakes.gov/smallbusiness),
that is specifically designed and operated by the USPTO to answer common
questions of small businesses to help them better identify and address
their intellectual property protection needs.

**Outreach to Small Business - Public Awareness Campaign**

While counterfeiting and piracy pose a serious threat to all American
businesses, small and minority businesses are particularly at risk since
they often lack the knowledge and expertise to effectively combat those
problems. Because small businesses typically do not have personnel or
maintain large operations in other countries, theft of their
intellectual property overseas can go undetected. As part of the STOP!
initiative, in April of 2005, the USPTO launched an intensive national
public awareness campaign to help educate small businesses on protecting
their intellectual property both here and abroad.

According to the U.S. Small Business Administration, America is home to
about 23 million diverse, geographically dispersed small businesses. As
a result, the most significant challenge confronted by the campaign was
developing a program that would appeal to -- and reach -- as many target
smaller businesses as possible.

The campaign consists of market research, stakeholder outreach, earned
media outreach, online outreach, and conferences. The market research we
conducted shows that the great majority of small businesses (81 percent)
are not aware that their U.S. intellectual property rights end at the
U.S. border and within U.S. Territories, such as Puerto Rico.

The conferences are designed to raise awareness of intellectual property
in general, and increase awareness among small businesses of the new
realities of counterfeiting and piracy of intellectual property. The
program explains the government's role in enforcing intellectual
property rights and also the owners' responsibilities.

The conferences consist of presentations by USPTO attorney-advisors on
patents, trademarks, copyright, the Patent Cooperation Treaty, trade
secrets, and the specific problems posed by China. We cover the basics
of intellectual property protection -- why to apply, how to apply, the
difference between types of intellectual property -- as well as how to
enforce intellectual property rights.

A handout workbook with a copy of the presentation materials is made
available to the conference attendees and the programs include question
and answer sessions. We recently added one-on-one consultations with our
attorney-advisors as a new feature of these conferences.

Since May 2005, USPTO has presented 10 of these programs throughout the
country and reached more than 2,000 small and medium-sized businesses.
Members of Congress have been very supportive of this program and have
participated as speakers at a number of the conferences.

These programs have received a very positive response from small
businesses. More than 90 percent of the attendees have rated these
programs as good or excellent and we have seen positive statements such
as "the whole program shattered the myth of lazy, apathetic federal
government workers," and "the best program I've undertaken since
beginning developing patents 15 years ago."

This year, the USPTO is partnering with the U.S. Chamber of Commerce and
other business groups to continue to hold small-business outreach
seminars to give American businesses face-to-face contact with
intellectual property experts.

# China Conferences 

The USPTO has also hosted special educational outreach conferences on
China in several U.S. cities for companies ranging from small businesses
contemplating entering the China market to large corporations with
established presence in China. Topics have included a review of recent
laws and regulations promulgated by the Chinese government that affect
protection and enforcement of intellectual property; what the United
States government is doing to improve intellectual property protection
and enforcement in China; how to best protect business assets to avoid
intellectual property problems; how to recognize product infringement;
and the practical steps to take if it occurs.

Our China events have been held in Alexandria, Baltimore, Boston,
Detroit, Atlanta, Chicago and Seattle.

The USPTO has reached out to both government and non-government
stakeholders to help publicize the conferences and the campaign. Some of
the organizations that we have worked with to promote awareness of the
conferences and the issue of intellectual property theft are: Small
Business Administration, Minority Business Development Centers, U.S.
Export Assistance Centers, U.S. Customs and Border Protection, American
Intellectual Property Law Association, Intellectual Property Owners
Association, U.S. Chamber of Commerce, National Association of
Manufacturers, Service Core Of Retired Executives, National Federation
of Independent Business, and United Inventors Association.

**[Conclusion]{.underline}**

The USPTO has implemented a wide range of initiatives and programs to
address the unique concerns and needs of independent and small entity
inventors and looks forward to working with the Committee to ensure that
ongoing and future initiatives effectively serve the interests of those
inventors.