a

GAO

United States Government Accountability Office

Report to Congressional Committees

June 2005 INTELLECTUAL 

PROPERTY

USPTO Has Made 

Progress in Hiring 

Examiners, but 

Challenges to 

Retention Remain

GAO-05-720
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-720.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Anu K. Mittal at 

(202) 512-3841 or mittala@gao.gov. 

Highlights of GAO-05-720, a report to

congressional committees 

June 2005

INTELLECTUAL PROPERTY 

USPTO Has Made Progress in Hiring 

Examiners, but Challenges to Retention 

Remain 

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. 

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 Recommends

GAO recommends that USPTO 

develop formal strategies to 

improve communication and 

collaboration between 

management, patent examiners, 

and the union to help to address 

the issues identified in this report. 

USPTO agreed with our 

recommendations. 
Page i GAO-05-720 Intellectual Property

Contents

Letter 1

Results in Brief 3

Background 6

USPTO Has Made Greater Progress on Strategic Plan Initiatives That 

Enhance the Agency’s Capability Rather Than Productivity and 

Agility 9

USPTO Has Taken Steps to Help Attract and Retain a Qualified 

Patent Examiner Workforce, but Long-Term Success Is 

Uncertain 16

USPTO Faces Long-standing Human Capital Challenges That Could 

Undermine Its Recruiting and Retention Efforts 24

Conclusions 32

Recommendations for Executive Action 32

Agency Comments and Our Evaluation 32

Appendixes

Appendix I: Scope and Methodology 34

Appendix II: Comments from the U.S. Patent and Trademark Office 36

Appendix III: Progress on Strategic Plan Initiatives 40

Appendix IV: GAO Contact and Staff Acknowledgments 50

Tables Table 1: USPTO Average Patent Pendency by Technology Center, 

2004 8

Table 2: Status of Capability Initiatives to Improve Workforce 

Skills 10

Table 3: Status of Capability Initiatives to Enhance Quality 

Assurance 11

Table 4: Status of Capability Initiatives to Change Legislation and 

Rules 12

Table 5: Status of Productivity Initiatives 13

Table 6: Status of Agility Initiatives 14

Table 7: USPTO Patent Examiner Hiring Data, Fiscal Years 2000–

2004 22

Table 8: USPTO Capability Initiatives 40

Table 9: USPTO Productivity Initiatives 45

Table 10: USPTO Agility Initiatives 47

Figures Figure 1: USPTO’s 2004 Brand Image 18
Contents

Page ii GAO-05-720 Intellectual Property

Figure 2: USPTO’s 2002 Brand Image 19

Figure 3: Examiner Attrition as Percentage of Staff 23

Abbreviations

EPO European Patent Office

OIG Office of Inspector General

OMB Office of Management and Budget

OPM Office of Personnel Management

OPQA Office of Patent Quality Assurance

PCT Patent Cooperation Treaty

POPA Patent Office Professional Association

USPTO U.S. Patent and Trademark Office

This is a work of the U.S. government and is not subject to copyright protection in the 

United States. It may be reproduced and distributed in its entirety without further 

permission from GAO. However, because this work may contain copyrighted images or 

other material, permission from the copyright holder may be necessary if you wish to 

reproduce this material separately.
Page 1 GAO-05-720 Intellectual Property

United States Government Accountability Office

Washington, D.C. 20548

A

June 17, 2005 Letr

The Honorable F. James Sensenbrenner Jr.

Chairman

Committee on the Judiciary

House of Representatives

The Honorable Frank R. Wolf

Chairman 

Subcommittee on Science, the Departments 

of State, Justice, and Commerce, and 

Related Agencies

Committee on Appropriations

House of Representatives

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.1

 However, recent increases in both the complexity and volume of 

patent applications have lengthened the time it takes USPTO to process 

patents (“pendency”) and have raised concerns among intellectual property 

organizations, patent holders, and others about the quality of the patents 

that are issued. Over the last 10 years, the number of patent applications 

filed annually with USPTO has increased 91 percent from about 185,000 in 

1994 to over 350,000 in 2004. USPTO’s resources have not kept pace with 

the rising number and complexity of patent applications it must review. 

Moreover, at times, USPTO officials acknowledge they have had difficulty 

competing with the private sector to attract and retain staff with the high 

degree of scientific, technical, and legal knowledge required to be patent 

examiners. To help the agency address these challenges, Congress passed a 

law requiring USPTO to improve patent quality, implement electronic 

government,2

 and reduce pendency.3

1

USPTO, an agency within the Department of Commerce, consists of two organizations, one 

for patents and one for trademarks. This report focuses on the patent organization, which 

accounts for about 76 percent of the agency’s resources.

2

Electronic government refers to an increased reliance on information technology to 

conduct government operations and accomplish agency missions.

3

Patent and Trademark Office Authorization Act of 2002, Pub. L. No. 107-273, § 13104, 116 

Stat. 1899, 1900, required USPTO to develop a 5-year strategic plan for meeting these three 

requirements.
Page 2 GAO-05-720 Intellectual Property

In response to the law, USPTO in June 2002 embarked on an aggressive 5-

year modernization plan outlined in its 21st Century Strategic Plan 

(Strategic Plan), which was updated to include stakeholder input and 

rereleased in February 2003.4

 USPTO’s Strategic Plan includes 38 initiatives 

related to the patent organization that focus on three crosscutting strategic 

themes: capability, productivity, and agility. The capability theme includes 

efforts to enhance patent quality through workforce and process 

improvements; the productivity theme includes efforts to decrease 

pendency of patent applications; and the agility theme includes initiatives 

to electronically process patent applications. To fully fund the initiatives in 

its Strategic Plan, the agency requested authority from Congress to 

increase the user fees it collects from applicants and to spend all of these 

fees on patent processing.5

 Legislation to increase the fees was enacted in 

December 2004; 6 however, the changes will be effective only in fiscal years 

2005 and 2006. Although USPTO’s Strategic Plan includes some initiatives 

to improve the skills of its examination workforce, the agency’s more 

detailed summary of its actions to attract and retain a qualified workforce 

is contained in the Strategic Workforce Restructuring Plan (Workforce 

Plan), which the agency developed in 2001. 

In the context of the various efforts being undertaken by USPTO, you 

requested that we obtain information 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. 

To determine USPTO’s progress toward implementing the Strategic Plan 

initiatives for the patent organization, we reviewed the initiatives contained 

in the plan, as well as agency documents regarding USPTO’s progress in 

implementing each initiative. We also interviewed key USPTO officials and 

4

USPTO also prepared the Strategic Plan as part of the requirements of the Government 

Performance and Results Act.

5

USPTO is funded by fees collected from the public for specific activities related to 

processing applications. The spending of those fees is subject to provisions in annual 

appropriations acts.

6

Consolidated Appropriations Act, 2005, § 801, Pub. L. No. 108-447, 118 Stat. 2809, 2924 (Dec. 

8, 2004). 
Page 3 GAO-05-720 Intellectual Property

union officials about the plan’s implementation.7 We focused our review on 

tasks that were to have been completed by December 2004. To determine 

what actions USPTO has taken to attract and retain a qualified patent 

workforce and what challenges, if any, the agency faces in this area, we 

reviewed USPTO’s Workforce Plan and other policies and practices related 

to human capital. We interviewed USPTO management and union officials, 

as well as officials from the Department of Commerce, its Office of 

Inspector General (OIG), and the Office of Personnel Management (OPM) 

about human capital initiatives undertaken by USPTO. We also reviewed 

results from USPTO and OPM employee surveys and compared human 

capital policies and practices with those recommended by GAO, OPM, and 

others. In addition, we attended a USPTO career fair for patent examiners 

to observe agency recruiting efforts and conducted focus groups with 

patent examiners and supervisory patent examiners to obtain their views 

on various issues related to USPTO’s ability to attract and retain a qualified 

patent examination workforce. Our review focused exclusively on the 

activities of the patent organization and not those of the trademark 

organization. We are issuing a separate report addressing the agency’s 

strategy for automating its patent process.8

 Appendix I contains a detailed 

discussion of the scope and methodology for our review. We conducted our 

review from June 2004 through April 2005 in accordance with generally 

accepted government auditing standards.

Results in Brief USPTO has made greater progress in implementing its Strategic Plan’s 

initiatives to improve the patent organization’s capability than it has in 

implementing initiatives to improve its productivity and agility. Specifically, 

of the actions planned to have been implemented by December 2004, 

USPTO has fully or partially implemented all 23 of the initiatives related to 

its capability theme, which focuses on improving the skills of employees, 

enhancing quality assurance, and altering the patent system through 

changes in existing laws or regulations. For example, USPTO established 

programs to periodically test the skills of patent examiners, and revised 

and expanded reviews to ensure the quality of examiners’ work. In 

7

Patent examiners are represented by, but not required to join, the Patent Office 

Professional Association (POPA), an independent union of professional employees formed 

in 1964.

8

GAO, Intellectual Property: Key Processes for Managing Patent Automation Strategy 

Need Strengthening, GAO-05-336 (Washington, D.C.: June 17, 2005).
Page 4 GAO-05-720 Intellectual Property

contrast, the agency has partially implemented only 1 of the 4 initiatives 

related to the productivity theme to help reduce pendency, and has fully 

implemented only 1 and partially implemented 6 of the 11 initiatives related 

to the agility theme to help improve electronic processing of patent 

applications. Agency officials primarily cited the need for additional 

funding as the reason for not implementing these initiatives. With passage 

of the legislation in December 2004 to increase fees available to USPTO, 

the agency is re-evaluating the feasibility of implementing those initiatives 

that it had previously deferred or suspended.

Since 2000, USPTO has taken steps intended to help attract and retain a 

qualified patent examination workforce. Specifically, the agency enhanced 

its recruiting efforts by, among other things, identifying the knowledge, 

skills, and abilities that patent examiners need to effectively fulfill their 

responsibilities and establishing a permanent recruiting team composed of 

senior and line managers. In addition, USPTO has used many of the human 

capital benefits available under federal personnel regulations to attract and 

retain qualified examiners, including the two benefits most frequently cited 

as important by examiners: flexible working schedules and competitive 

salaries. However, it is too soon to determine the long-term success of the 

agency’s efforts, in part because neither recruiting efforts nor availability of 

benefits have been consistently sustained during the limited time they have 

been in effect. In 2002, for example, USPTO suspended reimbursements to 

examiners for law school tuition, in part because of funding limitations, 

although the agency resumed reimbursement in 2004 when funding from 

the fee legislation became available. Examiners in our focus groups 

expressed dissatisfaction with the inconsistent availability of these 

benefits, in some cases saying that suspension of benefits provides them 

with an incentive to leave the agency. Another reason adding to the 

uncertainty of USPTO’s recruiting efforts is the impact of the economy, 

which, according to agency officials and examiners, has a greater effect on 

recruitment and retention than any actions the agency may take. Both 

agency officials and examiners told us that when the economy picks up, 

more examiners tend to leave USPTO and fewer qualified candidates are 

attracted to the agency. On the other hand, when there is a downturn in the 

economy, USPTO’s ability to attract and retain qualified examiners 

increases because of perceived job security and competitive pay. This 

correspondence between the economy and USPTO’s hiring and retention 

success is part of the reason why USPTO has been able to meet its hiring 

goals for the last several years, but recently has experienced a rise in 

attrition rates. 
Page 5 GAO-05-720 Intellectual Property

While USPTO has undertaken a number of important and necessary actions 

to attract and retain qualified patent examiners, the agency continues to 

face three long-standing human capital challenges that could also 

undermine its recent efforts if not addressed. 

• First, the agency lacks effective mechanisms for helping managers to 

communicate and collaborate with examiners. Organizations with 

effective human capital models have strategies to communicate with 

employees and involve them in decision making; however, USPTO 

officials acknowledged that they do not have a formal communication 

strategy or actively seek input from examiners on management 

decisions. Most of USPTO’s communication mechanisms emphasize 

communication between managers and not between managers and 

examiners. Patent examiners and supervisory patent examiners in our 

focus groups frequently said that communication with management was 

poor or nonexistent, and they reported little involvement in providing 

input to key agency decisions. Prior employee surveys and participants 

in our focus groups indicated that the lack of communication and 

involvement has created an atmosphere of distrust of USPTO 

management and lowered examiner morale, which is further 

exacerbated by the contentious relationship between USPTO 

management and the examiners’ union. 

• Second, human capital models suggest that agencies should periodically 

assess their monetary awards systems to ensure that they help attract 

and retain qualified staff. Patent examiners’ awards are based largely on 

the number of applications they process, but the assumptions 

underlying their application processing quotas have not been updated 

since 1976. USPTO management and examiners have differing opinions 

on whether these assumptions need to be updated. For example, 

according to examiners, the assumptions do not reflect the impact of the 

increased use of electronic tools that has reduced the time required to 

find relevant patent literature but at the same time has increased the 

amount of literature that must be reviewed. As a result, many of the 

examiners and supervisory patent examiners in our focus groups and 

respondents to previous agency surveys reported that examiners do not 

have enough time to conduct high-quality reviews of patent applications. 

According to agency surveys, these inadequate time frames create a 

stressful work environment and is cited in the agency’s exit surveys as a 

primary reason examiners leave the agency.
Page 6 GAO-05-720 Intellectual Property

• Finally, counter to current workforce models, USPTO does not require 

ongoing technical education for patent examiners, which could 

negatively affect the quality of its patent examination workforce. 

According to agency officials, examiners automatically maintain 

currency with their technical fields by just doing their job of examining 

applications, which they believe contains the most cutting-edge 

information. However, patent examiners and supervisory patent 

examiners disagreed and said that the literature they review in 

applications is outdated, particularly in rapidly evolving technologies. 

USPTO offers some voluntary in-house training, but the agency could 

provide no data on the extent to which examiners have taken advantage 

of such training. Moreover, patent examiners told us that they are 

reluctant to attend such training, given the time demands involved. In 

contrast, USPTO’s policy requires examiners to attend extensive 

training provided by the agency on legal issues on which examiners are 

periodically tested.

Although USPTO has taken a number of steps to enhance its recruiting 

efforts and better target a qualified pool of candidates, in light of its longstanding human capital challenges, we are recommending that it develop 

formal strategies to improve communication and collaboration across all 

levels of the organization, which will also help resolve differences of 

opinion between management and examiners on such issues as the 

assumptions underlying the quota system and requirements for technical 

training. In its written comments on a draft of our report (reprinted in 

appendix II), USPTO agreed with our findings, conclusions, and 

recommendations. In addition, the agency provided technical comments 

that we have incorporated as appropriate.

Background USPTO administers U.S. patent and trademark law to encourage innovation 

and advance science and technology in two ways. First, USPTO grants to 

inventors exclusive rights to their inventions for a limited period of time, 

usually 20 years. During this time, the inventor can exclude others from 

making, using, selling or importing the invention. Second, the agency 

preserves and disseminates patent information, for example on issued 

patents and most patent applications. Such information allows other 

inventors to improve upon the invention in the original application and 

apply for their own patent.

To obtain a patent, inventors—or more usually their attorneys or agents—

submit to USPTO an application that fully discloses and clearly describes 
Page 7 GAO-05-720 Intellectual Property

one or more distinct innovative features of the proposed invention (called 

claims) and pays a filing fee to begin the examination process. USPTO 

evaluates the application for completeness, classifies it by the type of 

patent and the technology involved,9

 and assigns it for review to one of its 

operational units, called technology centers, that specialize in specific 

areas of science and engineering.10 Supervisors in each technology center 

then assign the application to a patent examiner for further review. For 

each claim in the application, the examiner searches and analyzes relevant 

United States and international patents, journals, and other literature to 

determine whether the proposed invention merits a patent—that is, 

whether the invention is a new and useful process, machine, manufacture, 

or composition of matter, or any new and useful improvement to one that 

already exists. The examiner may contact the applicant on one or more 

occasions to resolve questions and obtain additional information to 

determine the proposed invention’s potential patentability. If the examiner 

determines that the proposed invention merits a patent, the applicant is 

informed, and, upon payment of a fee, USPTO issues a patent. The 

applicant may abandon the application at any time during the examination 

process. If the application is denied a patent, the applicant may appeal the 

decision within an established time. Each examiner typically reviews 

applications in the order in which they are received by USPTO. 

The time from the date an application is filed until a patent is granted, 

denied, or the application is abandoned is called “overall pendency.” Over 

the past decade, overall pendency has increased on average from 20 to 

almost 28 months. However, pendency varies by technology center, ranging 

from 24 months for applications in such fields as transportation, 

agriculture, electronic commerce, mechanical engineering, and 

manufacturing to 41 months for applications in the fields of computer 

9

Patents typically fall into one of three categories: (1) utility—for useful inventions, such as 

processes, machines, articles of manufacture, or composition of matter; (2) design—for 

changes in configuration, shape, or surface ornamentation that do not involve changes in 

function; or (3) plant—for asexually reproducible plants. A fourth category, “reissue 

patents,” refers to patents USPTO grants as replacements for any patent that was in some 

way defective; these patents constituted less than one-half of 1 percent of patents issued in 

fiscal year 2003.

10USPTO’s eight technology centers are: (1) Biotechnology and Organic Chemistry; (2) 

Chemical and Materials Engineering; (3) Computer Architecture, Software, and Information 

Security; (4) Communications; (5) Semiconductors, Electrical and Optical Systems and 

Components; (6) Transportation, Electronic Commerce, Construction, Agriculture, National 

Security and License and Review; (7) Mechanical Engineering, Manufacturing, and 

Products; and (8) Designs for Articles of Manufacture. 
Page 8 GAO-05-720 Intellectual Property

architecture, software and information security (see table 1). In addition to 

overall pendency, USPTO monitors the time from when an application is 

filed until the examiner makes an initial assessment of the proposed 

invention’s patentability and informs the applicant, called first action 

pendency. First action pendency also has generally increased in the past 

decade from 8 to over 20 months. In 2004, first action pendency ranged 

from an average of 14 months for applications in such fields as 

semiconductors and optical systems to 33 months for computer 

architecture and software applications. Such measures of pendency help 

USPTO assess its effectiveness in reviewing patent applications. 

Table 1: USPTO Average Patent Pendency by Technology Center, 2004

Source: USPTO.

Months

Technology center Overall pendency First action pendency

Biotechnology and Organic Chemistry 29.9 19.2

Chemical and Materials Engineering 27.6 17.9

Communications 40.5 31.4

Computer Architecture, Software and 

Information Security 41.1 33.3

Mechanical Engineering, Manufacturing, 

Products and Design 24.1 15.2

Semiconductor, Electrical, Optical Systems 

and Components 23.9 14.0

Transportation, Construction, Agriculture, 

and Electronic Commerce 24.1 15.6

Average 27.6 20.2
Page 9 GAO-05-720 Intellectual Property

USPTO Has Made 

Greater Progress on 

Strategic Plan 

Initiatives That 

Enhance the Agency’s 

Capability Rather Than 

Productivity and 

Agility 

USPTO has made greater progress in implementing its Strategic Plan 

initiatives to make the patent organization more capable than it has been in 

implementing its productivity and agility initiatives. 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. In contrast, 

USPTO has partially implemented only 1 of the 4 initiatives related to the 

productivity theme to restructure fees and expand examination options for 

patent applicants and has fully or partially implemented 7 of the 11 

initiatives related to the agility theme to increase electronic processing of 

patent applications and reduce examiners’ responsibilities for literature 

searches. In explaining why some initiatives have not been implemented, 

agency officials primarily cited the need for additional funding. 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 

Substantial Progress on Its 

Capability Initiatives

To improve the quality of its reviews of patent applications through 

workforce and process improvements, USPTO developed 23 capability 

initiatives: 9 to improve the skills of its workforce, 5 to enhance its quality 

assurance program, and 9 to improve processes through legislative and rule 

changes.

Workforce Skills Improvements As shown in table 2, USPTO has implemented 5 and partially implemented 

4 of the 9 workforce skills initiatives. 
Page 10 GAO-05-720 Intellectual Property

Table 2: Status of Capability Initiatives to Improve Workforce Skills

Source: GAO analysis of USPTO data.

Although the agency has not estimated how much funding would be needed 

to implement the final 4 initiatives, their full implementation was hindered, 

in part by funding constraints, agency officials said. The current status of 

these partially completed initiatives is as follows:

• To improve the selection and training of managers, USPTO has added 

proficiency in supervisory skills to the requirements for a supervisory 

examiner and in 2004 required applicants for such positions to pass an 

examination, but the agency has not fully developed the supervisory 

curriculum or trained supervisors.

• To help ensure that new examiners have the requisite skills prior to 

promotion, USPTO has identified the knowledge, skills, and abilities 

needed for patent examiners and established training units in work 

groups for new examiners, but has not developed a structured process 

for subsequent promotions.

• To implement a pre-employment test to assess English language 

communication skills of new patent examiners, USPTO has, among 

Initiatives Implemented

Partially 

implemented Not implemented

Increase the pool of qualified management candidates by 

adding awards to total compensation X

Explore alternate organizational structures for the workplace X

Develop interim pre-employment measures to assess English 

language skills X

Recertify the skills of examiners with authority to issue patents 

(primary examiners) through examinations and expanded work 

product reviews X

Certify that examiners possess the requisite knowledge, skills, 

and abilities prior to promotion to a position with authority to 

negotiate on behalf of USPTO X

Improve the selection and training of supervisory patent 

examiners X

Use examinations and other means to ensure that new patent 

examiners possess the requisite skills prior to promotion X

Implement a pre-employment test to assess English language 

skills X

Create an Enterprise Training Division X
Page 11 GAO-05-720 Intellectual Property

other things, revised its vacancy announcements to include English 

language proficiency as a required skill but has not developed an 

automated pre-employment test of such skills.

• USPTO has developed an action plan to establish an Enterprise Training 

Division, which was to have been in place in 2003, to consolidate 

responsibility for conducting legally required and other agencywide 

training, developing training policy, and monitoring funds spent on 

training.

Quality Assurance 

Enhancements

As shown in table 3, USPTO has implemented 3 and partially implemented 

2 of the 5 capability initiatives to enhance its quality assurance program. 

Table 3: Status of Capability Initiatives to Enhance Quality Assurance

Source: GAO analysis of USPTO data.

The status of the initiatives USPTO has partially implemented is as follows:

• The agency has begun to develop a plan and criteria to review the 

quality of searches and anticipates incorporating such reviews in the 

quality assurance program during fiscal year 2006. 

• To enhance the reviewable record for patent applications, USPTO has 

developed guidance and amended forms to allow both examiners and 

applicants to provide additional information on the content of 

interviews and reason for decisions and strongly recommends, rather 

than requires, applicants and examiners to do so. 

Initiatives Implemented

Partially 

implemented Not implemented

Expand current quality assurance program to include works in progress 

(in-process reviews) X

Establish “second pair of eyes” reviews in each technology center X

Survey customer regarding transactions with USPTO on specific 

applications to supplement comprehensive customer surveys X

Evaluate the quality of examiners’ literature searches X

Enhance the reviewable record for each patent application with additional 

information from the applicant and examiner X
Page 12 GAO-05-720 Intellectual Property

Process Improvements Related 

to Legislative and Rule Changes

As shown in table 4, of the 9 capability initiatives to streamline patent 

processing through legislative and rule changes, USPTO has implemented 1 

and partially implemented 8. 

Table 4: Status of Capability Initiatives to Change Legislation and Rules

Source: GAO analysis of USPTO data.

Although full implementation of these initiatives is largely dependent on 

actions by Congress, the status of the 8 partially implemented initiatives is 

as follows:

• To certify the legal knowledge of newly registering and practicing patent 

attorneys and agents and to monitor their practice, the agency offers 

registration examinations electronically year-round and issued 

proposed rules to harmonize ethics and disciplinary actions with the 

requirements in place in most states, but has not yet developed a formal 

program of continuing legal education requirements to periodically 

recertify the skills of practicing attorneys and agents. 

• To evaluate whether to adopt a unity standard to harmonize U.S. 

examination practices with international standards and allow U.S. 

applicants to obtain a single patent on related claims that must currently 

Initiatives Implemented

Partially 

implemented Not implemented

Delete the requirement for physical surrender of the original patent 

papers X

Certify the legal knowledge of patent attorneys and agents who wish 

to practice before USPTO and periodically recertify the skills of 

practicing attorneys and agents X

Evaluate whether to adopt a unity of invention standard X

Simplify adjustments to the patent term X

Permit individuals who have been assigned patent rights to sign an 

oath declaring that the inventor is the original and first inventor X

Permit individuals who have been assigned patent rights to broaden 

the claims in an application X

Correct an inconsistency regarding unintentionally delayed 

submission of certain claims X

Eliminate certain exemptions from the requirement to publish most 

patent applications within 18 months of when they were first filed X

Amend current legislation regarding certain limitations on an 

inventors’ right to obtain a patent X
Page 13 GAO-05-720 Intellectual Property

be pursued in separate patent applications in the United States, USPTO 

began a study of the changes needed to adopt a unity standard and 

sought public comment but has not completed its analysis, reached a 

decision, or drafted and introduced implementing legislation.

• For the other 6 partially implemented initiatives, USPTO is drafting 

proposed legislation or obtaining administrative clearance to introduce 

it.

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. 

Following passage of legislation in 2004, USPTO has issued rules to 

increase fees generally and restructure fees to include separate 

components for different stages of processing both domestic and 

international patent applications, and for filing the application, searching 

the literature, and examining the claims. The separate components could, 

under certain circumstances, be refunded to the applicant. USPTO has not 

issued rules governing the refund of domestic fees. The revised fees are 

effective for 2005 and 2006. 

Table 5: Status of Productivity Initiatives

Source: GAO analysis of USPTO data.

Similarly, as shown in table 6, USPTO has not implemented 4 of the 11 

initiatives related to agility, has only implemented 1 and partially 

implemented 6. These 11 initiatives are designed to further the agency’s 

goal to create a more flexible organization and include efforts to increase 

electronic processing of patent applications, reduce examiners’ 

Initiatives Implemented

Partially 

implemented Not implemented

Restructure fees and provide for refunds X

Offer patent applicants a choice of up to five examination options, based 

in part on the ability to rely on searches conducted by others X

Offer patent applicants the option of an accelerated examination X

Revise postgrant review procedures to allow greater public input X
Page 14 GAO-05-720 Intellectual Property

responsibilities for literature searches, and participate in worldwide efforts 

to streamline processes and strengthen intellectual property protection. 

Table 6: Status of Agility Initiatives

Source: GAO analysis of USPTO data.

The status of the 6 partially implemented agility initiatives to increase 

electronic processing and harmonize U.S. and international practices is as 

follows: 

• Although USPTO has largely accomplished the actions related to 

implementing image-based electronic processing of patent applications, 

it has not achieved the full extent of electronic sharing of patent 

documents with the European Patent Office the initiative had 

anticipated and the two offices continue to finalize security and 

protocols between their servers.

• USPTO has amended rules to generally allow electronic filing of 

postgrant review documents and trained additional judges in 

streamlined procedures, but it has not defined records management 

schedules for electronic documents or implemented full electronic 

processing capabilities to support these reviews, such as text searching 

and the ability to receive, file, store, and view multimedia files.

Initiatives Implemented

Partially 

implemented Not implemented

Establish an information security program X

Transition to electronic patent processing X

Transition to electronic processing for postgrant reviews X

Ensure availability of critical data in the event of a catastrophic systems 

failure X

Promote international harmonization and pursue goals to strengthen 

international intellectual property rights of U.S. inventors X

Pursue international agreements to share patent search results X

Accelerate Patent Cooperation Treaty reforms X

Rely on other sources to classify patent documents X

Rely on other sources to support domestic and international literature 

searches X

Rely on other sources to transition to a new global patent classification 

system X

Develop stringent conflict of interest clauses for search firms X
Page 15 GAO-05-720 Intellectual Property

• To ensure the availability of critical data in the event of a catastrophic 

failure, USPTO has certified and accredited its classified system and its 

mission-critical and business-essential systems, uses scanning tools to 

identify security weaknesses, and uses intrusion detection systems, but 

has not acquired the hardware, software, staff, and facilities for a 

backup data center.

• To promote harmonization of patent processing among international 

intellectual property offices and pursue goals to strengthen 

international intellectual property rights of U.S. inventors, USPTO 

participated in substantive patent treaty discussions that addressed 

such topics as the first-to-file (European) versus the first-to-invent 

(U.S.) standards, access to genetic resources, and definitions for such 

terms as prior art and novelty.

• To pursue multi- and bilateral agreements with other intellectual 

property offices, USPTO completed pilot programs to compare search 

results with the Japan and European Patent Offices and with patent 

offices in Australia and the United Kingdom.

• Regarding the acceleration of Patent Cooperation Treaty reforms, 

USPTO indicated that many significant reform procedures have been 

adopted in the last several years.

Although USPTO has not determined how much funding would be needed, 

officials said that the lack of adequate funding largely limited its ability to 

complete planned actions on productivity and agility initiatives that had not 

been fully implemented. With passage of the fee-restructuring legislation in 

December 2004, USPTO plans to commence work on these suspended 

initiatives. For example, it has assigned new teams to evaluate the 

feasibility of using contractors and international intellectual property 

offices to conduct literature searches. For greater detail on USPTO’s 

progress in implementing the 38 initiatives in the Strategic Plan, see 

appendix III.
Page 16 GAO-05-720 Intellectual Property

USPTO Has Taken 

Steps to Help Attract 

and Retain a Qualified 

Patent Examiner 

Workforce, but LongTerm Success Is 

Uncertain

Since 2000, USPTO has taken steps intended to help attract and retain a 

qualified patent examination workforce. The agency has enhanced its 

recruiting efforts and has used many human capital flexibilities to attract 

and retain qualified patent examiners. 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. Consequently, how the 

agency’s actions will affect its long-term ability to maintain a highly 

qualified workforce is unclear. While USPTO has been able to meet its 

hiring goals, attrition has recently increased. 

USPTO Has Enhanced 

Recruiting Efforts to Attract 

Qualified Examiners

USPTO’s recent recruiting efforts have incorporated several measures 

identified by GAO and others as necessary to attract a qualified 

workforce.11 First, in 2003, to help select qualified applicants, USPTO 

identified the knowledge, skills, and abilities that examiners need to 

effectively fulfill their responsibilities. As part of this study, USPTO 

conducted focus group meetings with, and surveys of, experienced 

examiners to identify and validate key skills.12 In doing so, the agency was 

responding to a recommendation from the Department of Commerce’s OIG 

to better target candidates likely to stay at USPTO.13 

Second, in 2004, the agency’s permanent recruiting team, composed of 

senior and line managers,14 participated in various recruiting events, 

including visits to the 10 schools that the agency targeted based on the 

diversity of their student population and the strength of their engineering 

11See GAO, Human Capital: A Self-Assessment Checklist for Agency Leaders, GAO/OCG00-14G, version 1 (Washington, D.C.: September 2000); and Office of Personnel 

Management, Human Capital Assessment Accountability Framework (Washington, D.C., 

Sept. 20, 2000). 

12USPTO, KSA Work Team: Knowledge, Skills and Abilities Project (Alexandria, Va., August 

2003).

13Department of Commerce, Office of Inspector General, U.S. Patent and Trademark 

Office: Patent Examiner Hiring Process Should be Improved, Final Inspection Report No. 

BTD-14432-2-0001 (Washington, D.C., March 2002).

14USPTO’s permanent recruiting team was established in 2002. However, the agency 

suspended recruiting efforts in 2002 and 2003 in the face of budgetary uncertainty.
Page 17 GAO-05-720 Intellectual Property

and science programs.15 The team also visited 22 additional schools, 

participated in two job fairs, and attended three conferences sponsored by 

professional societies. To assist the recruiting team, USPTO hired a 

consultant to develop a new brand image for the agency, shown in figure 1 

below.16 As part of this effort, USPTO and the consultant surveyed USPTO 

managers and supervisors and conducted focus groups with a range of 

ethnically diverse audiences, from college seniors to experienced 

professionals, to identify the characteristics of examiners and how the 

target market perceives the agency, as well as to get a sense of their work 

habits, values, and perceptions of work at USPTO. According to USPTO, 

the agency’s new brand focuses on the vital role intellectual property plays 

in the U.S. economy and the career momentum of patent examiners. 

Agency officials said that USPTO uses its employment brand image at every 

opportunity, from Internet banner ads to print advertisements. They believe 

that this has enhanced public awareness of the agency and has helped 

distinguish USPTO from other employers. 

15The 10 target schools selected are Florida International University, North Carolina 

Agricultural and Technical State University, North Carolina State University, University of 

Florida, University of Maryland, University of Pennsylvania, University of Puerto RicoMayaguez, University of Virginia, University of Wisconsin-Madison, and Virginia Polytechnic 

and State University.

16TMP Worldwide Advertising and Communications, USPTO Task 1: Research and 

Evaluation (Alexandria, Va., Mar. 10, 2004).
Page 18 GAO-05-720 Intellectual Property

Figure 1: USPTO’s 2004 Brand Image

 

Source: USPTO.
Page 19 GAO-05-720 Intellectual Property

Figure 2: USPTO’s 2002 Brand Image

Finally, for 2005, USPTO developed a formal recruiting plan that, among 

other things, identified hiring goals for each technology center and 

described USPTO’s efforts to establish ongoing partnerships with the 10 

target schools. In addition, USPTO trained its recruiters in effective 

interviewing techniques to help them better describe the production 

system and incorporated references to the production-oriented work 

environment in its recruitment literature. During a USPTO career fair in 

February 2005, we observed that potential candidates were provided with a 

range of information about the work environment at the agency, received 

handouts, and heard a formal presentation about the agency and the role 

and responsibilities of a patent examiner. The presentation also included 

overviews of the basics of intellectual property, the patent examination 

Source: USPTO.
Page 20 GAO-05-720 Intellectual Property

process, USPTO’s production model, the skill set needed for a successful 

patent examiner, and the benefits the agency offers. 

USPTO Has Used Many 

Federal Human Capital 

Benefits to Attract and 

Retain Examiners

USPTO has used many of the human capital benefits available under 

federal personnel regulations to attract and retain qualified patent 

examiners. Among other benefits, USPTO has offered

• recruitment bonuses ranging from $600 to over $10,000;

• a special pay rate for patent examiners that is 10 percent above federal 

salaries for comparable jobs;

• noncompetitive promotion to the full performance level;

• flexible spending accounts that allow examiners to set aside funds for 

expenses related to health care and care for dependents;

• reimbursement for law school tuition;

• a transit subsidy program that was recognized in 2003 and 2004 as one of 

the best in the greater Washington, D.C., area;

• flexible working schedules, including the ability to schedule hours off 

during midday;

• work at home opportunities for certain supervisory and senior 

examiners;

• no-cost health screenings at an on-site health unit staffed with a 

registered nurse and part-time physician; 

• casual dress policy; and 

• on-site child care and fitness centers at USPTO’s new facility.

According to many of the supervisors and examiners in our focus groups, 

these benefits were a key reason they were attracted to USPTO and are a 

reason they continue to stay. The benefits most frequently cited as 

important by examiners were the flexible working schedules and 

competitive salaries. Many supervisors and examiners said that the ability 

to set their own hours allowed them to better coordinate their work 
Page 21 GAO-05-720 Intellectual Property

schedules with their personal commitments, such as a child’s school or day 

care schedule. Concerning salaries, examiners also cited the special pay 

rate offered by USPTO as increasing the agency’s competitiveness with the 

private sector. Although entry-level pay for examiners may not be as high 

as in the private sector, examiners who have been with the agency for 

about 5 to 7 years can earn up to $100,000 annually,17 and new examiners 

can increase their pay relatively rapidly, in part because of the 

noncompetitive promotion potential available at the agency. However, 

some examiners commented that the benefit of the special pay rate is 

eroding over time because examiners do not receive annual locality pay 

adjustments to compensate for the high cost of living in the Washington, 

D.C., area. According to USPTO management, in 2002 the agency sought 

such an adjustment, but OPM denied the request because of a lack of 

justification. In addition to basic salary, examiners may also earn various 

cash awards based on production or other types of meritorious 

performance. 

Lack of Consistent 

Recruiting Efforts and 

Benefits, along with 

Changes in the Economy, 

Could Affect USPTO’s 

Efforts

The long-term effect of USPTO’s recruiting efforts and use of benefits is 

difficult to predict for a variety of reasons. First, many of USPTO’s efforts 

have been in place for a relatively short duration and have not been 

consistently maintained. For example, as shown in table 7, USPTO 

suspended recruitment and hiring in fiscal year 2000, which agency 

officials said resulted in its inability to meet its hiring goals for the year. 

Except for 2002, in those years where USPTO used its recruiting strategy 

consistently, such as 2001, 2003, and 2004, it not only met its hiring goals, 

but exceeded them. 

17Career opportunities for patent examiners continue through the senior executive level. 

Historically, senior executives at USPTO have come from the ranks of examiners. 
Page 22 GAO-05-720 Intellectual Property

Table 7: USPTO Patent Examiner Hiring Data, Fiscal Years 2000–2004

Source: USPTO.

The second reason that creates uncertainty about USPTO’s success in 

retaining examiners is that USPTO has occasionally suspended some 

important employee benefits. For example, funding constraints led USPTO 

to discontinue reimbursing examiners for their law school tuition in 2002 

and 2003, although the agency resumed reimbursement in 2004, when 

funding became available. Examiners who participated in our focus groups 

expressed dissatisfaction with the inconsistent availability of the benefits. 

Regarding law school tuition reimbursement, one examiner said, “I started 

when they started the [law school program] and then they cut it off and I 

had to pay [tuition] myself, which creates a large incentive to leave the 

office now that I have . . . student loans to pay off.” Other examiners 

expressed similar views. More recently in March 2005, USPTO proposed to 

eliminate or modify other benefits such as examiners’ ability to earn credit 

hours and alter examiners’ ability to set their own work schedules. For 

example, unlike current practice, examiners would no longer be able to 

schedule hours off during midday without a written request approved in 

advance. These benefits were cited by examiners in our focus groups as 

key reasons for working at USPTO, and eliminating such benefits may 

impact future retention. 

The third and possibly the most important factor that adds to the 

uncertainty surrounding the success of USPTO’s recruitment efforts is the 

unknown potential impact of the economy. According to USPTO officials 

and examiners, because USPTO competes directly with the private sector 

for qualified individuals, changes in the economy have a greater impact on 

USPTO’s ability to attract and retain examiners than any actions taken by 

the agency. They told us that when the economy picks up, more examiners 

tend to leave USPTO and fewer qualified candidates accept employment 

offers. Conversely, they said that when there is a downturn in the economy, 

employment opportunities at USPTO become more attractive. When 

discussing reasons for joining USPTO, many examiners in our focus groups 

Fiscal year Examiner hiring goal Examiner hires

2000 475 375

2001 360 414

2002 788 769

2003 300 308

2004 250 443
Page 23 GAO-05-720 Intellectual Property

cited job security and lack of other employment opportunities, making 

comments such as “I had been laid off from my prior job, and this was the 

only job offer I got at the time”; “I looked towards the government because 

I wanted job security”; and “. . . part of the reason I came to the office is 

that when I first came out of college, the job market was not great.” 

The relationship between the economy and USPTO’s ability to attract and 

retain examiners is reflected in its attrition rates over time. As shown in 

figure 3, attrition among patent examiners declined from a high of almost 

14 percent in 2000 to just over 6 percent in 2003. This decline coincided 

with a recession in 2001, a general slowdown of the economy, and 

subsequent collapse of the “high tech bubble”—which caused many 

Internet-based businesses to close, leaving computer scientists and 

engineers out of work. The decline in attrition was preceded by a more 

robust economy during a time when the high-tech industry was building up. 

At that time, attrition at USPTO was steadily rising.

Figure 3: Examiner Attrition as Percentage of Staff

Fiscal year

Percentage of examiner attrition staff

Source: GAO.

0

2

4

6

8

10

12

14

16

18

20

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Page 24 GAO-05-720 Intellectual Property

Since 2004, attrition has risen again to almost 9 percent, fueled in part by an 

increase in the number of examiners who retired. By the end of fiscal year 

2010, about 12 percent of examiners will be eligible to retire.18 Another 

trend that could affect USPTO’s efforts to maintain a highly qualified patent 

examination workforce is the high level of attrition among younger, less 

experienced examiners. While attrition among examiners who have been at 

USPTO for 3 or fewer years has declined each year since 2000, attrition 

among these examiners continues to account for over half of all examiners 

who leave the agency. Attrition of examiners with 3 or fewer years of 

experience is a particularly significant loss for USPTO because the agency 

invests considerable time and money helping new examiners become 

proficient during the first few years. Managers and examiners told us that 

examiners usually become fully proficient in conducting patent application 

reviews in about 4 to 6 years. Managers we spoke with said the agency 

needs continuous recruiting efforts to offset these trends and continue to 

attract the best candidates. They said they hope to have constant 

recruitment efforts and year-round hiring in the upcoming years. 

USPTO Faces Longstanding 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. Current workforce 

models developed by GAO and others to help federal agencies attract and 

retain a qualified workforce suggest, among other things, that agencies 

establish an agencywide communication strategy, including opportunities 

for feedback from employees; involving management, employees, and 

other stakeholders in making key decisions; have appropriately designed 

compensation and awards systems; and develop strategies to address 

current and future competencies and skills needed by staff. 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. 

18Governmentwide, about 40 percent of employees will be eligible to retire by that time. 
Page 25 GAO-05-720 Intellectual Property

USPTO Has Not Established 

Effective Mechanisms for 

Managers to Communicate 

and Collaborate with 

Examiners 

Organizations with effective human capital models have strategies to 

communicate with employees at all levels of the organization, as well as 

involve them in key decision-making processes. However, lack of good 

communication and collaboration has been a long-standing problem at 

USPTO. For example, focus groups with examiners conducted by USPTO 

in 2000 identified a need for improved communication across all levels of 

the agency to assist in its efforts to retain examiners.19 Accordingly, one of 

the goals listed in the Commissioner of Patent’s 2003 performance 

appraisal plan was to establish an effective communication strategy. 

However, when we asked for the agency’s communication strategy, USPTO 

management officials acknowledged the agency does not have a formal 

strategy. Instead, USPTO officials provided us with a list of activities 

undertaken by the agency to improve communication. However, most of 

these activities focused on improving communication among managers but 

not between managers and other levels of the organization, such as 

between managers and patent examiners. The efforts to communicate with 

examiners were largely confined to presenting information to examiners 

and generally were not interactive, according to examiners. 

Patent examiners and supervisory patent examiners that participated in 

our focus groups frequently said that communication with USPTO 

management was poor and that managers provided them with inadequate 

or no information. They also said management is out of touch with 

examiners and their concerns and that communication with managers 

tends to be one way and hierarchical, with little opportunity for feedback. 

Management officials told us that informal feedback can always be 

provided by anyone in the organization—for example, through an e-mail to 

anyone in management. However, some patent examiners believe they will 

be penalized for offering any type of criticism of management actions or 

decisions and therefore do not provide this kind of feedback. 

The lack of communication between management and examiners is 

exacerbated by the contentious working relationship between USPTO 

management and union officials and the complexity of the rules about what 

level of communication can occur between managers and examiners 

without involving the union. Union officials stated that a more 

collaborative spirit existed between USPTO and the examiners’ union from 

19U.S. Patent and Trademark Office, Retention Focus Sessions with Examiners and 

Primary Examiners, Center for Quality Service (Alexandria, Va., February 2000).
Page 26 GAO-05-720 Intellectual Property

the late 1990s to about 2001. During this period, both parties actively 

worked to improve their relationship. For example, in 2001, USPTO 

management and the union quickly reached an agreement that led to 

increased pay for examiners and paved the way for electronic processing of 

patent applications by having examiners rely more heavily on electronic 

searches of relevant patent literature. According to union officials, this 

agreement was negotiated in about 1-1/2 weeks, improved the morale of 

patent examiners, and made them feel valued and appreciated. Since that 

time however, both USPTO management and union officials agree that 

their working relationship has not been as productive. Both say that 

despite several attempts, neither USPTO managers nor union officials have 

improved this relationship and that issues raised by either side are 

routinely presented for arbitration before the Federal Labor Relations 

Authority20 because the two sides cannot agree. USPTO and union officials 

are currently disputing the validity of their 1986 collective bargaining 

agreement, which USPTO deems defunct. 21 In February 2004, this issue 

was presented for arbitration to determine the validity of the agreement. 

According to union officials, the arbitrator agreed with their position that 

the agreement was still valid and ordered a 1-year hiatus on negotiations on 

a new agreement. USPTO contends that the arbitrator said the two had 

“tacit agreements” but did not define the term. In March 2005, without 

continuing any debate regarding the validity of the 1986 agreement, USPTO 

issued a proposed new collective bargaining agreement with the union. The 

union denounced this proposal, reporting in its newsletter to examiners 

that “USPTO declares war on employee professionalism and patent system 

integrity.” 

Some USPTO managers alluded to this contentious relationship as one of 

the reasons why they have limited communication with patent examiners, 

who are represented by the union even if they decide not to join. 

Specifically, they believe they cannot solicit the input of employees directly 

without engaging the union. Another official, however, told us that nothing 

prevents the agency from having “town hall” type meetings to discuss 

20The Federal Labor Relations Authority was established by the Civil Service Reform Act of 

1978. It is charged with providing leadership in establishing policies and guidance relating to 

federal sector labor-management relations and with administering and resolving disputes 

under Title VII of the Civil Service Reform Act of 1978.

21A collective bargaining agreement is an official contract between USPTO and the union 

that sets forth the mutual understanding between the agency and union officials relative to 

personnel policies and practices and matters affecting the working conditions of patent 

examiners.
Page 27 GAO-05-720 Intellectual Property

potential changes, as long as the agency does not promise examiners a 

benefit that impacts their working conditions. Union officials agreed that 

USPTO can invite comments from examiners on a plan or proposal; 

however, if the proposal concerns a negotiating issue, the agency must 

consult the examiners’ union, which is their exclusive representative with 

regard to working conditions. For example, union officials said that agency 

management can involve examiners on discussions of substantive issues 

related to patent law and practice, such as how to implement electronic 

filing, but must consult the union to obtain examiners’ views on issues such 

as the development of the Strategic Plan which contains initiatives that 

would entail, for example, additional reviews of examiners work and other 

changes to working conditions. 

Given the lack of effective communication mechanisms between 

management and patent examiners and the poor relationship between 

management and the union, patent examiners report little involvement in 

providing input to key decision-making processes. For example, some of 

the examiners in our focus groups stated that although they had heard of 

the agency’s Strategic Plan, they were not involved in developing it and had 

no idea what it entailed or how it was to be implemented. USPTO 

management officials we spoke to acknowledged that employees had no 

role in developing the Strategic Plan even though USPTO identifies its 

employees as a key stakeholder in the plan. This lack of employee 

involvement is not a new problem for the agency. For example, a study 

about the agency’s performance measurement and rewards system 

conducted in 1995 by a private consultant stated that the agency must 

strive to include employees at all levels of the organization in the decisionmaking process to both introduce a variety of perspectives and experiences 

and to generate the critical support of employees to any new system 

developed.22 Additionally, responses to employee surveys conducted in 

1998 and 2001 by USPTO and others indicate that employees believed that 

they did not play a meaningful role in decision making.23 Specifically, a 

quarter of the examiners surveyed in 1998 expressed satisfaction with their 

22Booz-Allen & Hamilton Inc., PTO Goal Study—Task One: An Assessment of the Current 

Performance Measurements and Rewards System (May 1995).

23Sirota Consulting, Patents: USPTO Survey Results (Alexandria, Va., November 2000);

USPTO, Office of Quality Management and Training, Center for Quality Services, Patents: 

2001 Employee Survey, Summary of Findings (Alexandria, Va., September 2001); and 

Center for Quality Services, 2002 Federal Human Capital Survey, Overview of USPTO 

Results (Washington, D.C., April 2003).
Page 28 GAO-05-720 Intellectual Property

level of involvement in decisions that affect their work. In 2001, less than 

half of examiners who responded to the survey said they believe USPTO 

management trusts and respects them or values their opinions. Agencyspecific data from the 2004 federal human capital survey conducted by the 

Office of Personnel Management have not been released.

Managers told us that examiners do not need to be involved in decision 

making because all of the agency’s senior managers—from the 

Commissioner down—“came up through the ranks.” Moreover, they said 

the basic role of the agency has not changed in 200 years. As a result, senior 

managers believe they bring the staff perspective to all planning and 

decision-making activities. However, examiners in our focus groups believe 

that senior managers are out of touch with the role of examiners, making 

comments such as “I think it would help if upper management who haven’t 

examined in decades could try to do some of it now—it’s so drastically 

different than when they were doing it—and realize how difficult it is, and 

then maybe they might get a clue. I really don’t think that they realize how 

much work it takes to examine an application. 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. 

Examiners’ Monetary 

Awards Are Based on 

Outdated Assumptions 

about the Time It Takes to 

Process a Patent 

Application

According to human capital models, an agency’s compensation and 

rewards system should help it attract, motivate, retain, and reward the 

people it needs to achieve its goals. To ensure that their systems meet these 

criteria, agencies should periodically assess how they compensate staff and 

consider changes, as appropriate. Patent examiners’ monetary awards are 

based largely on the number of patent applications they process, but the 

assumptions underlying their annual application-processing quotas (called 

production quotas) have not been updated since 1976. Depending on the 

type of patent and the skill level of the examiner, each examiner is 

expected to process an average of 87 applications per year at a rate of 19 

hours per application. Examiners who consistently do not meet their 

quotas may be dismissed. Patent examiners may earn cash awards based 
Page 29 GAO-05-720 Intellectual Property

on the extent to which they exceed their production quotas.24 Although 

examiners in our focus groups generally support production quotas as a 

way to guide their work and provide an objective basis for cash awards, 

they said that the time estimates involved are no longer accurate. 

Examiners in our focus groups told us that, in the last several decades, the 

tasks for processing applications have greatly increased while the time 

allowed has not. For example, examiners said the number of claims per 

application have increased, which in turn increases the amount of relevant 

literature they must review and analyze for each application. Also, while 

the greater use of electronic search tools has improved their access to 

relevant patent literature, the use of such tools has also increased the 

amount of literature they must review. In addition, the complexity of 

applications in some fields has increased significantly, requiring more time 

for a quality review. Neither USPTO nor the examiners union has collected 

information on the effects that such changes as improvements in electronic 

search capabilities have had on the time required to review patent 

applications.

Moreover, many examiners in our focus groups said that the time 

limitations of the current production quotas are inconsistent with 

producing high-quality work and do not adequately reflect the actual tasks 

and time required to examine applications. For example, examiners have 

responsibilities included in their job expectations, such as responding to 

calls from applicants and the public and providing more documentation for 

their decisions, which are not accounted for in the production model. 

Examiners expressed concern that although the agency’s emphasis on 

quality has increased under the Strategic Plan, examiners have not been 

allowed more time to fulfill these increased responsibilities for quality, and 

there are no negative consequences for examiners who produce low-quality 

work. Examiners told us that voluntarily working overtime to meet quotas 

is common at USPTO, and they find it demoralizing not to have enough 

time to do a good quality job. In commenting on a draft of this report, 

USPTO stated that quality is a critical element of an examiner’s 

performance standards and if an examiner does not maintain quality, their 

24Individual goals are adjusted based on the technology in the application and the skill level 

of the examiner. For example, a junior patent examiner has more time to process an 

application than a senior examiner. Similarly, examiners who process applications for 

biotechnology inventions have more time than examiners who process applications for 

some manufactured items.
Page 30 GAO-05-720 Intellectual Property

rating would reflect this deficiency. Consequences would depend on the 

level of deficiency. 

Employee surveys conducted since 1998 suggest that these concerns are 

not new to the agency. Specifically, a quarter of the examiners who 

responded to the agency’s employee surveys during the period 1998 to 2001 

said that the amount of time available for their work was sufficient to 

produce high-quality products and services. The 1995 study conducted by a 

private consultant also noted that USPTO is production driven and that the 

agency’s emphasis on production placed considerable stress on examiners. 

Although less than 25 percent of patent examiners who left USPTO in 2002 

and 2004 actually completed an exit survey, about half who did cited 

dissatisfaction with the nature of the job, the production system, and the 

workload as factors that had the most impact on their decision to leave the 

agency. 

In contrast, USPTO managers had a different perspective on the production 

model and its impact on examiners. They stated that the time estimates 

used in establishing production quotas do not need to be adjusted because 

the efficiencies gained through actions such as the greater use of 

technology have offset the demands resulting from changes such as greater 

complexity of the applications and increases in the number of claims. 

Moreover, they said that for an individual examiner, reviews of applications 

that take more time than the estimated average are generally offset by 

other reviews that take less time. 

USPTO Does Not Require 

Ongoing Technical 

Education for Patent 

Examiners

Current workforce models suggest that professional organizations such as 

USPTO make appropriate investments in education, training, and other 

developmental opportunities to help build the competencies of its 

employees. Reviewing patent applications involves knowledge and 

understanding of highly technical subjects, but USPTO does not require 

ongoing training on these subjects. Instead, USPTO only requires newly 

hired examiners to take extensive training on how to be a patent examiner 

during the first year, and all other required training is focused on legal 

training. For example, newly hired examiners are required, within their 

first 10 months at the agency, to take about 200 hours of training on such 

topics as procedures for examining patent applications, electronic tools 

used in the examination process, and patent law and evidence. In addition, 

almost all patent examiners are required to take a range of ongoing training 

on legal matters, including patent law. As a result of the implementation of 

some Strategic Plan initiatives, additional mandatory training to help 
Page 31 GAO-05-720 Intellectual Property

examiners prepare for tests to certify their legal competency and ensure 

their eligibility for promotion from a GS-12 level to a GS-13 is also required. 

In addition, patent examiners who have the authority to issue patents 

(generally GS-14s or above) must pass tests on the content of legal training 

every 3 years. In contrast, patent examiners are not required to undertake 

any ongoing training to maintain expertise in their area of technology, even 

though the agency acknowledges that such training is important, especially 

for electrical and electronic engineers. Specifically, in its 2001 justification 

for examiners’ special pay rates, the agency stated, “Engineers who fail to 

keep up with the rapid changes in technology, regardless of degree, risk 

technological obsolescence.” 

USPTO does offer some voluntary in-house training, such as technology 

fairs and industry days at which scientists and others are invited to lecture 

to help keep patent examiners current on the technical aspects of their 

work. Because this training is not required by USPTO, patent examiners 

told us they are reluctant to attend such training given the time demands 

involved. USPTO also offers a voluntary external training program for 

examiners to update their technical skills. Under this program, examiners 

may take technical courses related to their area of expertise at an 

accredited college or university. USPTO will pay up to $5,000 per fiscal year 

for each participant and up to $150 per course for required materials, such 

as books and lab fees. In addition, agency managers told us the agency will 

pay registration fees for a small number of examiners to attend 

conferences, although sometimes it will not pay travel expenses. While 

USPTO officials told us they knew of examiners who had taken advantage 

of these opportunities, the agency could provide no data on the extent to 

which examiners had taken advantage of these voluntary training 

opportunities. Some examiners in our focus groups said that they did 

participate in these training opportunities, but others said they did not 

because of the monetary costs or personal time involved. 

USPTO believes that a requirement for ongoing technical training is not 

necessary for patent examiners because the nature of the job keeps them 

up-to-date with the latest technology. According to agency officials, the 

primary method for examiners to keep current in their technical fields is by 

processing patent applications. However, patent examiners and 

supervisors in our focus groups said that often the literature cited in the 

application they review for patents, particularly in rapidly developing 

technologies, is outdated, can be too narrowly focused, and does not 

provide them the big picture of the field. For example, in certain fields, 

such as computer software and biotechnology, some examiners told us that 
Page 32 GAO-05-720 Intellectual Property

the information cited in the application may be several years old even 

though it may have been current at the time the application was submitted. 

Conclusions To improve its ability to attract and retain the highly educated and qualified 

patent examiners it needs, USPTO has taken a number of steps recognized 

by experts as characteristic of highly effective organizations. However, the 

lack of an effective communication strategy and a collaborative 

environment that is inclusive of all layers within the organization could 

undermine some of USPTO’s efforts. Specifically, the lack of 

communication and collaborative culture has resulted in a general distrust 

of management by examiners and has caused a significant divide between 

management and examiners on important issues such as the 

appropriateness of the current production model and the need for technical 

training. We believe that unless USPTO begins the process of developing an 

open, transparent, and collaborative work environment, its efforts to hire 

and retain examiners may be negatively impacted in the long run. 

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.

Agency Comments and 

Our Evaluation

In written comments on a draft of our report, the Under Secretary of 

Commerce for Intellectual Property and Director of USPTO agreed with 

our findings, conclusions, and recommendations. The agency’s comments 

suggest that USPTO will develop a communication plan and labor 

management strategy and educate and inform employees about progress 

on initiatives, successes, and lessons learned. In addition, USPTO indicated 

that it would develop a more formalized technical program for patent 

examiners to ensure that their skills are fresh and ready to address state-ofthe-art technology. USPTO also provided technical comments that we have 

incorporated, as appropriate. USPTO’s comments are included in appendix 

II.
Page 33 GAO-05-720 Intellectual Property

We are sending copies of this report to interested congressional 

committees; the Secretary of Commerce; the Under Secretary for 

Intellectual Property and Commissioner of the U.S. Patent and Trademark 

Office; and other interested parties. We will also make copies available to 

others upon request. In addition, the report will be available at no charge 

on the GAO Web site at http://www.gao.gov.

If you or your staff have any questions about this report, please contact me 

at (202) 512-3841 or mittala@gao.gov. Contact points for our Offices of 

Congressional Relations and Public Affairs may be found on the last page 

of this report. GAO staff who made contributions to this report are listed in 

appendix IV.

Anu K. Mittal

Director, Natural Resources 

and Environment
Page 34 GAO-05-720 Intellectual Property

Appendix I

Scope and Methodology ApApenednxidexiIs

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. 

To determine USPTO’s progress toward implementing the Strategic Plan 

initiatives for the patent organization, we reviewed the initiatives contained 

in the plan, as well as agency documents regarding USPTO’s progress in 

implementing each initiative. We also interviewed key USPTO officials and 

union officials about the plan’s implementation. 

To determine what actions USPTO has taken to attract and retain a 

qualified patent workforce and what challenges, if any, the agency faces in 

this area, we reviewed USPTO’s Workforce Plan and other policies and 

practices related to human capital. We interviewed USPTO management, 

union officials, and relevant interest groups, as well as officials from the 

Department of Commerce, its Office of Inspector General (OIG), and the 

Office of Personnel Management (OPM) about human capital initiatives 

undertaken by USPTO. We reviewed evaluations of USPTO human capital 

management efforts by OIG and by a private consultant. We reviewed 

USPTO employee surveys, USPTO documents on hiring and retention, and 

OPM reports on USPTO. We also reviewed results from USPTO and OPM 

employee surveys and compared human capital policies and practices with 

best practices recommended by GAO and OPM. In addition, we attended a 

USPTO career fair for patent examiners. 

To obtain the perspective of patent examiners and supervisory patent 

examiners on issues related to USPTO’s ability to attract and retain a 

qualified patent examination workforce, we conducted 11 focus groups. 

Participants were randomly selected from all patent examiners and 

supervisory patent examiners who had been at USPTO at least 9 months. A 

total of 91 examiners and supervisory examiners attended the focus 

groups. The number of participants in the groups ranged from 6 to 11; 

participants in 8 of the groups were patent examiners while the other 3 

groups encompassed supervisory patent examiners. Participants were 

selected from both USPTO locations (Alexandria and Crystal City, 

Virginia). We developed questions for the focus groups based on literature 

reviews and by speaking with USPTO management, union officials, and 

interest groups. In addition, we developed a short questionnaire that asked 

for individual views of issues similar to those being discussed in the 
Appendix I

Scope and Methodology

Page 35 GAO-05-720 Intellectual Property

groups. Following each discussion question, participants filled out the 

corresponding questions in their questionnaires. Trained facilitators 

conducted the focus groups and transcripts were professionally prepared. 

Prior to using the transcripts, we checked each for accuracy and found that 

they were sufficiently accurate for the purposes of this study. 

We conducted a content analysis in order to produce a summary of the 

respondents’ comments made during the focus groups. The classification 

plan was developed by two GAO analysts who independently reviewed the 

transcripts and proposed classification categories for each question. The 

classification categories were finalized through discussion with a third 

analyst. One analyst then coded all comments made during each discussion 

question into the categories. The accuracy of the coding was checked by 

another analyst, who independently coded a random sample of transcript 

pages for each question. The accuracy of the content coding was 

sufficiently high for the purposes of this report. Finally, the number of 

comments in each category and subcategory was tallied, and the resulting 

summary of the comments was verified by a second analyst. A quantitative 

analysis was conducted on the data from the questionnaires.

Our review focused exclusively on the activities of the patent organization 

and not those of the trademark organization. We conducted our review 

from June 2004 through May 2005 in accordance with generally accepted 

government auditing standards.
Page 36 GAO-05-720 Intellectual Property

Appendix II

Comments from the U.S. Patent and 

Trademark Office ApendxiI
Appendix II

Comments from the U.S. Patent and 

Trademark Office

Page 37 GAO-05-720 Intellectual Property
Appendix II

Comments from the U.S. Patent and 

Trademark Office

Page 38 GAO-05-720 Intellectual Property
Appendix II

Comments from the U.S. Patent and 

Trademark Office

Page 39 GAO-05-720 Intellectual Property
Page 40 GAO-05-720 Intellectual Property

Appendix III

Progress on Strategic Plan Initiatives ApendxiI

USPTO issued its 21st Century Strategic Plan in June 2002, then updated 

and rereleased it in February 2003. The Strategic Plan responds to the 

Government Performance and Results Act and direction from Congress. 

The plan is centered on three themes—capability, productivity, and agility. 

Strategic Theme: 

Capability

To become a more capable organization that enhances quality through 

workforce and process improvements, USPTO developed initiatives to 

improve the skills of its workforce (transformation), enhance its quality 

assurance program (quality), and improve processes through rule changes 

or proposed legislative changes (legislative/rules changes). 

Table 8: USPTO Capability Initiatives

Capability initiatives

Status of actions 

planned through 

December 2004 Implementation details

Transformation

Increase the pool of competent, qualified candidates 

for management positions, and reward current 

managers by offering awards of up to 10 percent of 

base salary as part of the compensation package.

Implemented Actions implemented: USPTO developed award criteria 

and sought input from the supervisory examiners’ 

professional association and USPTO senior managers. 

The program was approved in 2003, and performance 

appraisal plans for supervisory examiners were revised 

for 2004. As of November 2004, awards had been paid to 

all qualifying managers.

Transform the workplace by exploring alternative 

organizational concepts and structures.

Implemented Actions implemented: Conducted preliminary 

consultations and research with the National Academy of 

Public Administration in 2002.

Develop interim pre-employment measures to assess 

English language oral and written communication 

skills for new patent examiners.

Implemented Actions implemented: Developed procedures for 

supervisory patent examiners and hiring officials to use in 

assessing communication skills, and trained individuals in 

their use.
Appendix III

Progress on Strategic Plan Initiatives

Page 41 GAO-05-720 Intellectual Property

Recertify the skills of examiners with the authority to 

issue patents (primary examiners) through 

examinations and expanded reviews of work 

products.

Implemented Actions implemented: Developed an examination to 

recertify primary examiners every 3 years. As of 

December 2004, approximately one-third of primary 

examiners had successfully completed the examination. 

An additional one-third will be tested in 2005 and 2006. 

Thereafter, primary examiners will be retested once every 

3 years. Increase the number of primary examiners’ work 

products that are reviewed in annual quality reviews to 

more than four. Require primary examiners to pass 

examinations on the content of periodic training on 

changes in patent law, practice, or procedures.

Certify the knowledge, skills, and abilities of 

examiners before they are promoted to a position with 

the authority to negotiate with applicants (partial 

signatory authority or GS-13 level).

Implemented Actions implemented: In 2003, USPTO developed a legal 

competency examination to certify the skills of patent 

examiners prior to promotion to GS-13. From March 

through December 2004, 152 examiners had 

successfully completed the examination and been 

promoted. Another 85 had taken the examination to help 

them prepare for future promotion. The requirement to 

pass the examination became effective March 1, 2004.

Use examinations and other means to ensure that 

new patent examiners possess the requisite 

knowledge, skills, and abilities prior to initial 

promotion decisions.

Partial Actions implemented: In 2003, USPTO identified the 

knowledge, skills, and abilities needed for patent 

examiners, established training units in work groups for 

new examiners (Training Art Units), and developed 

recruitment materials to better educate candidates on the 

nature of the work.

Actions not implemented: USPTO has not sought OPM 

approval to extend the probationary period for patent 

examiners to two years, developed a structured process 

for promotions after the first 6 or 12 months, or developed 

a pre-employment test to identify candidates with 

characteristics of successful examiners.

Implement a pre-employment test to assess English 

language oral and written communication skills for 

new patent examiners.

Partial Actions implemented: Vacancy announcements include 

English language proficiency as a requirement; the 

automated application system was modified to include a 

writing sample, and in-person interviews are used to 

assess oral communication skills. To the extent possible, 

check references regarding communication skills. 

USPTO assessed the communication skills of all patent 

examiners hired from 2002 to 2004.

Actions not implemented: The design and 

implementation of an automated pre-employment test 

was deferred due to a lack of funding, according to 

USPTO officials.

(Continued From Previous Page)

Capability initiatives

Status of actions 

planned through 

December 2004 Implementation details
Appendix III

Progress on Strategic Plan Initiatives

Page 42 GAO-05-720 Intellectual Property

Improve the selection and training of supervisory 

patent examiners.

Partial Actions implemented: In November 2003, USPTO added 

proficiency in supervisory skills to the requirements for 

selection as a supervisory patent examiner. In 2004, 

applicants for supervisory positions were required to pass 

a certification examination. Some training modules, such 

as coaching and feedback, have been developed and 

offered.

Actions not implemented: Although a full complement of 

training was to be in place by September 2004, some 

courses are being considered or under development, 

including various management development courses. 

Create an Enterprise Training Division in the Office of 

Human Resources to centralize responsibility for 

legally required hard and soft skills, leadership, and 

other agencywide training as well as coordinating 

agencywide training policy and tracking funds spent 

on training.

Partial Actions implemented: USPTO developed a draft action 

plan to create an Enterprise Training Division in 

November 2004 and began work to select a USPTO-wide 

learning management system, implement an e-learning 

pilot, and establish a development center. 

Actions not implemented: This initiative was to have been 

completed in 2003 but has not been implemented.

Quality

Expand the current internal quality review program to 

include works in progress.

Implemented Actions implemented: By October 2004 the Office of 

Patent Quality Assurance (OPQA) had expanded its 

quality reviews to include reviews of works in process. 

The results of these reviews will be reported in the 

agency’s fiscal year 2005 accountability report.

Establish in each technology center some level of 

“second pair of eyes” reviews of work products.

Implemented Actions implemented: By October 2004, managers for 

each technology center have designed and implemented 

quality assurance reviews that include some level of 

second pair of eyes review. In addition, results from 

OPQA reviews identify work units with high error rates for 

more intensive second pair of eyes reviews. Quality 

reviewers in each technology center also annually review 

work products for examiners as part of performance 

appraisals.

Augment periodic comprehensive customer surveys 

with surveys on specific applications (transactional 

surveys). 

Implemented Actions implemented: Adjust the timing of comprehensive 

surveys to every other year and conduct transactional 

surveys in the off years. The first transactional survey 

was conducted in 2003. Although USPTO has conducted 

surveys under generic approval from the Office of 

Management and Budget (OMB) since 1995, beginning 

in 2004, each survey must be reviewed and approved 

separately by OMB, a process that can take about 6 

months. As a result, USPTO did not conduct a 

comprehensive survey in 2004.

(Continued From Previous Page)

Capability initiatives

Status of actions 

planned through 

December 2004 Implementation details
Appendix III

Progress on Strategic Plan Initiatives

Page 43 GAO-05-720 Intellectual Property

Evaluate the quality of searches conducted by patent 

examiners.

Partial Actions implemented: OPQA is developing a plan and a 

set of criteria.

Actions not implemented: OPQA reviews, both in process 

and end of examination (allowance) reviews, do not 

include an examination of the adequacy and 

comprehensiveness of the examiner’s search. USPTO 

officials will pilot their plan and commence such reviews 

in fiscal year 2006.

Enhance the quality of the reviewable record of the 

examination process.

Partial Actions implemented: Revised the interview summary 

form to provide a means for applicants and examiners to 

provide additional information on the content of interview. 

Revised the Manual of Patent Examining Procedures to 

reflect the change, and informally trained examiners. 

Examiners and applicants are strongly encouraged, but 

not required, to elaborate on decisions or the content of 

interviews.

Actions not implemented: Examiners and applicants are 

not currently required to provide additional information 

regarding the content of interviews or elaborate on the 

reasons for decisions.

Legislative and rule changes

Delete the requirement for physical surrender of the 

original patent when USPTO reissues a patent that 

was defective.

Implemented Actions implemented: Implemented through rules 

changes that became effective in September 2004.

Certify the legal knowledge of patent attorneys and 

agents registering to practice before USPTO, and 

periodically recertify the legal knowledge of registered 

attorneys and agents and harmonize ethics standards 

with those used by states.

Partial Actions implemented: In 2004, USPTO selected a 

contractor and began offering registration examinations 

electronically year–round. In December 2003, USPTO 

issued proposed rules to harmonize ethics and 

disciplinary actions with the requirements in place in most 

states, and obtained OMB approval for the ethics and 

disciplinary changes. USPTO will adjust questions on the 

registration examination as needed to reflect changes in 

patent law and practice. 

Actions not implemented: USPTO did not acquire the 

hardware and software to accept electronic registration 

forms due to funding limitations, according to USPTO 

officials. As of December 2004, USPTO had not 

implemented a continuing legal education program and 

recertification examination that was to have been in 

place.

(Continued From Previous Page)

Capability initiatives

Status of actions 

planned through 

December 2004 Implementation details
Appendix III

Progress on Strategic Plan Initiatives

Page 44 GAO-05-720 Intellectual Property

Evaluate whether to adopt a unity standard to 

harmonize U.S. examination practices with 

international standards and allow U.S. applicants to 

obtain a single patent on related claims that must 

currently be pursued in separate patent applications 

in the United States.

Partial Actions implemented: In 2003, USPTO began a study of 

the changes needed to adopt a unity standard and 

sought public comment. Based on the comments 

received, USPTO consulted with stakeholders on other 

options. In 2004 the agency conducted a business impact 

analysis of four options that is currently under review.

Actions not implemented: USPTO has not completed its 

analysis, reached a decision, or drafted and introduced 

implementing legislation.

Simplify adjustments to the length of time during 

which inventors can exclude others from making, 

using, or selling an invention, called the patent term.

Partial Actions implemented: USPTO is drafting proposed 

legislation and obtaining administrative clearance to 

introduce the draft legislation.

Actions not implemented: Further action depends upon 

passage of the legislation, which is anticipated by 2008.

Amend current legislation to permit individuals who 

have been assigned the rights to a patent, called the 

assignee, to sign an oath stating that the inventor is 

the original and first inventor of the invention 

described in the patent application.

Partial Actions implemented: USPTO is drafting proposed 

legislation and obtaining administrative clearance to 

introduce the draft legislation. 

Actions not implemented: Further action depends upon 

passage of the legislation, which is anticipated by 2008.

Permit assignees to seek to broaden the claims in an 

application without the signature of the inventor.

Partial Actions implemented: The change requires legislation to 

amend current law and subsequent rule making by 

USPTO. USPTO is drafting legislation. 

Actions not implemented: Further action depends upon 

passage of the legislation, which is anticipated by 2008. 

May be merged with the initiative above.

Correct an inconsistency regarding the treatment of 

unintentionally delayed submission of claims related 

to a previously filed provisional patent application.

Partial Actions implemented: The change requires legislation to 

amend current law and subsequent rule making by 

USPTO. USPTO is drafting legislation. 

Actions not implemented: Further action depends upon 

passage of the legislation, which is anticipated by 2008.

Eliminate provisions that allow inventors to request 

publications of redacted versions of their applications 

and that require USPTO to publish applications for 

plant patents, which are typically granted in less time 

than the 18-month requirement to publish 

applications.

Partial Actions implemented: USPTO is drafting proposed 

legislation and obtaining administrative clearance to 

introduce the draft legislation. 

Actions not implemented: Further action depends upon 

passage of the legislation, which is anticipated by 2008.

(Continued From Previous Page)

Capability initiatives

Status of actions 

planned through 

December 2004 Implementation details
Appendix III

Progress on Strategic Plan Initiatives

Page 45 GAO-05-720 Intellectual Property

Source: GAO analysis of USPTO data.

Strategic Theme: 

Productivity

The agency’s productivity initiatives are designed to accelerate the time to 

process patent applications by offering a range of examination options to 

applicants, reducing the responsibilities examiners have for searches of 

literature related to applications (pendency and accelerated examination), 

and creating financial incentives for applicants as well as an improved 

postgrant review process (shared responsibility).

Table 9: USPTO Productivity Initiatives

Amend current legislation regarding certain 

limitations on an inventor’s right to obtain a patent. 

Currently, inventors are barred from obtaining a 

patent on one or more claims that have already been 

patented by another or published in domestic or 

foreign applications, unless the applicant files within 

one year of publication. Because examiners have not 

determined whether claims in published applications 

are patentable, the initiative is to delete the bar as it 

relates to published domestic or foreign applications, 

and to retain the bar only as it relates to claims in 

patents that have been granted.

Partial Actions implemented: The change requires legislation to 

amend current law and subsequent rule making by 

USPTO. USPTO is drafting legislation. 

Actions not implemented: Further action depends upon 

passage of the legislation, which is anticipated by 2008.

(Continued From Previous Page)

Capability initiatives

Status of actions 

planned through 

December 2004 Implementation details

Productivity initiatives 

Status of actions 

planned through 

December 2004 Implementation details

Fee restructuring Partial Actions implemented: For 2005 and 2006, Congress passed 

legislation allowing USPTO to increase and restructure the fees it 

charges applicants to include separate components for filing the 

application, the examiner’s search of relevant literature, and the 

review of specifications for the proposed invention to determine 

their patentability. In addition the legislation grants USPTO the 

authority to refund portions of the domestic and international 

application fees under certain circumstances and to charge 

higher fees for applications with claims and drawings for the 

proposed invention that exceed 100 pages.

Actions not implemented: USPTO has not issued proposed or 

final rules to allow for refunding domestic fees. 
Appendix III

Progress on Strategic Plan Initiatives

Page 46 GAO-05-720 Intellectual Property

Source: GAO analysis of USPTO data.

Strategic Theme: 

Agility 

To become an organization that responds quickly and efficiently to changes 

in the economy, the marketplace, and the nature and size of workloads, 

USPTO developed initiatives to implement electronic beginning-to-end 

processing of patents (e-government), increase reliance on the private 

sector or other intellectual property offices (flexibility), and streamline 

international patent systems and strengthen protection of patent rights as 

well as share search results with other international patent offices (global 

development).

Offer patent applicants a choice of up to 

five examination options based in part on 

the ability to rely on searches conducted 

by other entities and revise fees 

accordingly. 

Not implemented Progress to date: Preliminary planning only.

Actions not implemented: This initiative is related to the flexibility 

and work-sharing initiatives, and implementation depends upon 

access to additional funds, according to USPTO officials. In 2005, 

USPTO will continue efforts to select contractors and negotiate biand multilateral agreements with other intellectual property 

offices.

Offer applicants seeking patents the 

option for an accelerated examination in 

exchange for payment of a fee.

Not implemented Actions implemented: This initiative seeks to expand the option 

for accelerated examination to applicants for all types of patents. 

The option is currently available to applicants seeking utility 

patents but is not widely used.

Actions not implemented: USPTO has not conducted a pilot 

program or drafted proposed rules or legislation.

Revise postgrant review procedures to 

allow for greater public input.

Not implemented Actions implemented: USPTO drafted proposed legislation that 

was introduced in 2004 but not passed. House members of both 

parties have indicated they will introduce the legislation for 

consideration by the current session.

Actions not implemented: Because the legislation was not 

enacted, no implementing rules or other actions were taken. The 

legislation and rule changes are expected to be in place by 2008.

(Continued From Previous Page)

Productivity initiatives 

Status of actions 

planned through 

December 2004 Implementation details
Appendix III

Progress on Strategic Plan Initiatives

Page 47 GAO-05-720 Intellectual Property

Table 10: USPTO Agility Initiatives

Agility initiatives

Status of actions 

planned through 

December 2004 Implementation details

Establish an information technology 

security program for fully certifying and 

accrediting the security of automated 

information systems.

Implemented Actions implemented: In 2003 and 2004, USPTO achieved full 

accreditation and certification for its seven mission critical 

systems, its classified system, and its eight business essential 

systems. External reviewers noted that many of the risks they 

identified could be addressed in the course of routine 

administration, although some, such as development of policy 

statements and monitoring programs, would need strategic 

planning and resources to address. In 2004, the Office of the 

Inspector General removed information security as a material 

weakness at USPTO. The agency has an ongoing program to 

annually complete security self-assessments of major systems 

including the use of scanning tools to identify weaknesses and 

intrusion detection systems. In 2003 and 2004, all USPTO staff 

and contractors completed the annual security training 

requirements.

Implement an operational system to 

process patent applications electronically, 

including electronic image capture of all 

incoming and outgoing paper documents.

Partial Actions implemented: Using an incremental approach, USPTO 

adopted an image-based electronic-processing system for 

examiners. In fiscal year 2004, examiners processed almost 90 

percent of patent applications electronically. In 2003, all paper 

files of pending applications and newly received applications 

were scanned into image files, and applicants could access their 

files over the Internet. In 2004, the public could access all 

publicly available patent application files via the Internet.

Actions not implemented: USPTO did not achieve the ability to 

exchange electronic documents with the European Patent Office 

(EPO) that had been anticipated. Some tasks were eliminated 

due to both technical changes in the electronic systems used by 

each office and budgetary concerns. However, USPTO is still 

working with EPO to finalize security and protocol between the 

two servers. In addition, USPTO is waiting for EPO to deliver 

software that creates a submission package in compliance with 

USPTO’s national electronic filing standards.

Develop an automated information system 

to support a postgrant patent review 

process.

Partial Actions implemented: Rules have been changed to generally 

allow for electronically filing of documents and for adopting 

streamlined processes implemented since 1998. In 2002, 

USPTO began a pilot program and trained additional judges in 

the streamlined procedures.

Actions not implemented: USPTO has not defined e-records 

management schedules, completed the design for basic 

electronic- processing, or implemented full electronicprocessing capabilities, such as text searching of all documents 

and the ability to receive, file, store, and view multimedia files.
Appendix III

Progress on Strategic Plan Initiatives

Page 48 GAO-05-720 Intellectual Property

Ensure continuity in the availability of 

business critical data in the event of a 

catastrophic failure of the agency’s data 

center. 

Partial Actions implemented: USPTO has completed its analysis of the 

impact to its business operations from the catastrophic loss of 

data and efforts to recover essential data. Specifically, USPTO 

has identified critical services and the associated applications 

required to provide those services; assessed how critical 

applications are to business operations; compiled recovery 

priority lists for each line of business; and compiled vendor cost 

data to support its plan. 

Actions not implemented: USPTO has not had sufficient funding 

to acquire the hardware, software, staff, and facilities for a 

secondary data center. Acquisition of the secondary data center, 

scheduled for operation in June 2004, has been postponed until 

2005 and remains dependent on adequate funding. Until USPTO 

acquires funding for the secondary data center, the agency will 

continue to back up its critical data on a daily basis to tapes that 

are stored in a separate location.

Promote substantive patent law 

harmonization in the framework of the 

World Intellectual Property Organization 

(WIPO), resolve major issues, and pursue 

harmonization goals to strengthen the 

rights of American intellectual property 

owners by making it easier to obtain 

international protection for their inventions.

Partial Actions implemented: Substantive patent treaty discussions 

were held in May 2004 during the meeting of the WIPO Standing 

Committee on the Law of Patents in Geneva. Major issues 

addressed included the first-to-file (European standard) versus 

the first-to-invent (U.S. standard), subject matter eligibility, and 

access to genetic resources.

Because of the sensitive and confidential nature of this initiative, 

specific details were not published and no date was given for 

implementation.

Pursue bi- or multilateral agreements with 

other intellectual property offices to share 

patent search results.

Partial Actions implemented: Pilot programs to compare search results 

were completed in 2003 and 2004 with the Japan and European 

Patent Offices and with patent offices in Australia and the United 

Kingdom. Analysis of the results was hampered because the 

pilot programs did not allow for sharing of search histories. A 

new pilot is ongoing that includes sharing information on the 

areas searched and on the queries used. USPTO is working to 

effect legal changes that would facilitate the use of searches 

conducted by other intellectual property offices.

No date was given for completion of the ongoing pilot or 

implementation of search sharing and legislative changes.

Accelerate Patent Cooperation Treaty 

(PCT) reform efforts, focusing on USPTO’s 

proposal to simplify processing.

Partial Actions implemented: USPTO indicated that some reform 

procedures were adopted in January 2004.

Because of the sensitive and confidential nature of this initiative, 

specific details were not published and no date was given for 

implementation. USPTO indicated it would continue to press for 

further reforms at the PCT Reform Working Group meeting in 

May 2005.

(Continued From Previous Page)

Agility initiatives

Status of actions 

planned through 

December 2004 Implementation details
Appendix III

Progress on Strategic Plan Initiatives

Page 49 GAO-05-720 Intellectual Property

Source: GAO analysis of USPTO data.

Rely on private sector to classify patent 

documents.

Not implemented Progress to date: In 2002 and 2003, USPTO began to identify 

potential contractors, obtained OMB agreement to contract the 

search activities, and began to define the contract requirements. 

According to agency officials, funding constraints halted further 

action. The efforts were planned for implementation in the spring 

of 2004.

Update: In 2005, USPTO will assign a new team to determine 

what changes, if any, are needed because of the delayed 

implementation.

Rely on private sector to support national 

application and Patent Cooperation Treaty 

search activities.

Not implemented Progress to date: In 2002 and 2003, USPTO began to identify 

potential contractors, obtained OMB agreement to contract the 

search activities, and began to define the contract requirements. 

According to agency officials, funding constraints halted further 

action. The efforts were planned for implementation in the spring 

of 2004.

Update: In 2005, USPTO will assign a new team to determine 

what changes, if any, are needed because of the delayed 

implementation.

Rely on private sector to transition to a 

new patent classification system 

harmonized with the systems used by the 

Japan and European Patent Offices.

Not implemented Progress to date: In 2002 and 2003, USPTO began to identify 

potential contractors, obtained OMB agreement to contract the 

search activities, obtained legal advice, and began to define the 

contract requirements. According to agency officials, funding 

constraints halted further action. The efforts were planned for 

implementation in the spring of 2004.

Update: In 2005, USPTO will assign a new team to determine 

what changes, if any, are needed because of the delayed 

implementation.

Develop stringent conflict of interest 

clauses for search firms rather than a 

program to certify search firms.

Not implemented Progress to date: In 2002 and 2003, USPTO began to identify 

potential contractors, obtained OMB agreement to contract the 

search activities, and began to define the contract requirements. 

According to agency officials, funding constraints halted further 

action. The efforts were planned for implementation in the spring 

of 2004.

Update: In December 2004, legislation passed by Congress set 

new requirements for outsourcing searching functions, which no 

longer includes certification of search firms, but instead requires 

stringent conflict of interest clauses.

(Continued From Previous Page)

Agility initiatives

Status of actions 

planned through 

December 2004 Implementation details
Page 50 GAO-05-720 Intellectual Property

Appendix IV

GAO Contact and Staff Acknowledgments ApendxiIV

GAO Contact Anu K. Mittal, (202) 512-3841

Staff 

Acknowledgments

In addition to the contact named above, Cheryl Williams, Vondalee R. Hunt, 

Lynn Musser, Cynthia Norris, and Ilga Semeiks made significant 

contributions to this report. Allen Chen, Amy Dingler, Omari Norman, Don 

Pless, and Greg Wilmoth also contributed to this report.

(360475)
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