a

GAO

United States Government Accountability Office

Report to Congressional Committees

June 2005 INTELLECTUAL 

PROPERTY

Key Processes for 

Managing Patent 

Automation Strategy 

Need Strengthening

GAO-05-336
What GAO Found

United States Government Accountability Office

Why GAO Did This Study

Highlights

Accountability Integrity Reliability

www.gao.gov/cgi-bin/getrpt?GAO-05-336.

To view the full product, including the scope 

and methodology, click on the link above. 

For more information, contact Linda Koontz at 

(202) 512-6240 or koontzl@gao.gov. 

Highlights of GAO-05-336, a report to 

congressional committees 

June 2005

INTELLECTUAL PROPERTY 

Key Processes for Managing Patent 

Automation Strategy Need Strengthening 

As part of its strategy to achieve a paperless, electronic patent process, 

USPTO had planned to deliver an operational patent system by October 

2004. It has been able to deliver important capabilities, such as allowing 

patent applicants to electronically file and view the status of their patent 

applications and the public to search published patents. Nonetheless, after 

spending over $1 billion on its efforts from 1983 through 2004, the agency’s 

existing automation has not provided the fully integrated, electronic patent 

process articulated in its automation plans, and when and how this process 

will be achieved is uncertain. Key systems that USPTO is relying on to help 

reach this goal—an electronic application filing system and a document 

imaging system—have not provided capabilities that are essential to 

operating in a fully electronic environment. Contributing to this situation is 

that the agency took an ad hoc approach to planning and managing its 

implementation of these systems, in which it lacked effective analysis of 

system requirements, alternatives, and costs; made acquisition decisions 

based on management judgment; and acquired software that did not meet its 

needs. 

 

USPTO’s ineffective planning and management of its patent automation 

initiatives, in large measure, can be attributed to enterprise-level, systemic 

weaknesses in its information technology investment management 

processes. Although the agency had begun instituting essential investment 

management mechanisms, such as its enterprise architecture framework, it 

had not yet finalized its capital planning and investment control process nor 

established necessary linkages between the process and its architecture to 

guide the development and implementation of its information technology. 

The Under Secretary of Commerce for Intellectual Property and USPTO’s 

chief information officer acknowledged the need for improvement, but 

specific plans for resolving problems have not yet been developed. 

 

Actual and Projected Patent Applications, Fiscal Years 1994–2009 

0

100

200

300

400

500

1994 2004 2009 

Applications in thousands

Source: USPTO data.

Actual applications (includes utilty, plant, and reissue patent applications)

Projected applications (includes utilty, plant, and reissue patent applications)

The volume and complexity of 

patent applications to the U.S. 

Patent and Trademark Office 

(USPTO) have increased 

significantly in recent years, 

lengthening the time needed to 

process patents. Annual 

applications have grown from 

about 185,000 to over 350,000 in the 

last 10 years and are projected to 

exceed 450,000 by 2009 (see 

figure). Coupled with this growth is 

a backlog of about 750,000 

applications. 

USPTO has long recognized the 

need to automate its patent 

processing and, over the past two 

decades, has been engaged in 

various automation projects. 

Accordingly, GAO was asked to, 

among other things, assess 

progress to date and any problems 

facing USPTO as it develops the 

capability to efficiently handle 

patent information electronically. 

What GAO Recommends

To better position USPTO to 

improve its patent process through 

the use of automation, GAO is 

making recommendations to the 

Secretary of Commerce that 

address the agency’s management 

of its patent automation strategy 

and related information technology 

investments. In commenting on this 

report, USPTO generally agreed 

with our findings, conclusions, and 

recommendations. However, the 

agency only partially agreed with 

several material aspects of our 

assessment. 
Page i GAO-05-336 Intellectual Property: Patent Automation Strategy

Contents

Letter 1

Results in Brief 2

Background 4

USPTO Continues to Pursue a Fully Automated Patent Process, but 

Is Not Effectively Managing Its Strategy for Achieving This 

Capability 9

USPTO’s Patent Automation Is Not Supported by Essential 

Information Technology Investment Management Processes 17

Conclusions 20

Recommendations for Executive Action 21

Agency Comments and Our Evaluation 21

Appendixes

Appendix I: Scope and Methodology 26

Appendix II: Comments from the U.S. Patent and Trademark Office 28

Appendix III: GAO Contact and Staff Acknowledgments 34

Figures Figure 1: USPTO Actual and Projected Patent Applications, Fiscal 

Years 1994-2009 5

Figure 2: USPTO’s Patent Process 7

Figure 3: USPTO’s Patent Automation Progress 11
Contents

Page ii GAO-05-336 Intellectual Property: Patent Automation Strategy

Abbreviations

APS Automated Patent System

OCIO Office of Chief Information Officer

OCR optical character recognition

PDF portable document format

SIRA Search and Information Resources Administration

TEAM Tools for Electronic Application Management

USPTO United States 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-05-336 Intellectual Property: Patent Automation Strategy

United States Government Accountability Office

Washington, D.C. 20548

A

June 17, 2005 Letr

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 Honorable F. James Sensenbrenner, Jr.

Chairman

Committee on the Judiciary

House of Representatives

The United States Patent and Trademark Office (USPTO) helps to promote 

industrial and technological progress in the United States and to strengthen 

the national economy by administering the laws relating to patents and 

trademarks. A critical part of the agency’s mission is to examine patent 

applications and issue patents. However, the rapid growth in both the 

volume and complexity of applications to USPTO has lengthened the time 

necessary to process patents and raised concerns about the quality of the 

patents that are issued. The number of patent applications filed annually 

has increased 91 percent over the last 10 years, from about 185,000 in 1994 

to over 350,000 in 2004. Coupled with this growing workload is a 28-month 

backlog of approximately 750,000 applications.

USPTO has long recognized the need to improve its patent processing 

capability and, for the past two decades, has engaged in various efforts to 

automate its patent process. In light of the agency’s actions, at your 

request, this report describes USPTO’s strategy for automating its patent 

process and assesses its progress and any problems faced in developing 

and using electronic information and systems to achieve this capability. We 

plan to issue a separate report that will address the agency’s progress in 

achieving its strategic milestones and maintaining a qualified workforce.1

To accomplish this objective, we reviewed USPTO’s current and selected 

past initiatives to develop and implement automated patent processing 

capabilities. We analyzed programmatic and technical documentation 

1

GAO, Intellectual Property: USPTO Has Made Progress in Hiring Examiners, but 

Challenges to Retention Remain, GAO-05-720 (Washington, D.C.: June 17, 2005).
Page 2 GAO-05-336 Intellectual Property: Patent Automation Strategy

describing the agency’s patent process, current electronic processing 

capabilities, and plans for future automation. We also evaluated available 

project management documentation, such as project plans, time lines, and 

status reports, to determine its progress in implementing a fully automated 

patent process. In addition, we assessed the agency’s consideration of key 

information technology investment management processes and practices 

in planning and managing the patent automation initiatives. Further, we 

reviewed agency information on the cost of its automation efforts; 

however, we did not verify the accuracy of the cost data. To supplement 

our analysis, we interviewed senior patent officials, including the Deputy 

Commissioner for Patent Resources Planning and the USPTO chief 

information officer and, as part of a series of focus groups, selected patent 

examiners regarding the implementation and use of the systems supporting 

USPTO’s patent process. We also discussed the patent automation efforts 

with the Under Secretary of Commerce for Intellectual Property (who 

serves as the director of USPTO). We conducted our study from June 2004 

through April 2005 in accordance with generally accepted government 

auditing standards. Appendix I contains a detailed discussion of the scope 

and methodology of our review.

Results in Brief USPTO is pursuing a long-standing strategy to implement a paperless, 

electronic patent process, with the goal of replacing the manual processing 

of applications with capabilities for electronically researching patent 

information and viewing and manipulating application text throughout all 

processing phases. To achieve this electronic process, the agency plans to 

integrate its existing systems that enable capabilities such as electronic 

filing of applications with new document imaging and text processing and 

sophisticated document management and workflow capabilities. As part of 

its 21st Century Strategic Plan, issued in 2002, the agency announced an 

acceleration of its goal of delivering an operational system to electronically 

process patents—from fiscal year 2006 to October 1, 2004.

USPTO has made progress in delivering functionality through information 

systems that it has implemented, such as electronic filing and patent 

application classification and search, as well as Internet access for patent 

applicants and the public, respectively, to view the status of their 

applications and to search existing published patents. Nonetheless, 

collectively, these automated functions have not provided the fully 

integrated end-to-end patent processing capability articulated in USPTO’s 

automation plans. Two of the primary systems that the agency is relying on 

to enhance its capabilities—its electronic filing system and a document 
Page 3 GAO-05-336 Intellectual Property: Patent Automation Strategy

imaging system that it acquired from the European Patent Office called 

Image File Wrapper—have not yielded processing improvements that the 

agency had deemed essential to operate successfully in an electronic 

environment. Specifically, patent filers have stated that the electronic filing 

system is cumbersome, time-consuming, and costly, and does not meet 

their business and technical needs; thus, fewer than 2 percent of all patent 

applications are submitted to USPTO electronically. In addition, the Image 

File Wrapper has experienced performance problems and, according to 

patent officials, has not provided many of the capabilities deemed essential 

to eliminating manual actions and improving worker productivity. 

Contributing to this situation is that the agency took an ad hoc approach to 

planning and managing its implementation of these systems. Information 

technology best practices emphasize the need for agencies to undertake 

projects in a disciplined manner based on well-established business cases 

that articulate agreed-upon business and technical requirements; include 

analyses of project alternatives, costs, and benefits; and include measures 

for tracking project costs, schedules, and performance through their life 

cycle. However, patent officials did not rely on such critical measures to 

guide their implementation of these key initiatives.

USPTO’s ineffective planning and management of its patent automation 

projects, in large measure, can be attributed to enterprise-level, systemic 

weaknesses in the agency’s overall information technology investment 

management processes. A key premise of the Clinger-Cohen Act of 19962

 is 

that agencies should have established processes, such as capital planning 

and investment controls, to help ensure that information technology 

projects are implemented at acceptable costs and within reasonable and 

expected time frames, and contribute to tangible, observable 

improvements in mission performance. In addition, as our Enterprise 

Architecture Framework3

 stresses, information technology projects should 

show evidence of compliance with the organization’s architecture. 

Although USPTO had begun instituting certain essential information 

technology investment management mechanisms, it had not yet finalized 

its capital planning and investment control process nor established 

necessary linkages between the process and its enterprise architecture to 

ensure that projects will comply with the architecture. Further, a study 

2

40 U.S.C. sec. 11312. 

3

GAO, Information Technology: A Framework for Assessing and Improving Enterprise 

Architecture Management (Version 1.1), GAO-03-584G (Washington, D.C.: April 2003). 
Page 4 GAO-05-336 Intellectual Property: Patent Automation Strategy

commissioned by the agency in 2004 found that its Office of Chief 

Information Officer was not organized to help accomplish the automation 

goals set forth in its strategic plan and that the agency’s investment 

management processes did not ensure appropriate reviews of automation 

initiatives. As a result, USPTO had not rigorously assessed its patent 

systems’ compliance with the enterprise architecture, and it lacked reliable 

experience-based data to consistently demonstrate the costs and benefits 

of its systems.

In light of the problems that USPTO has encountered with its existing 

capabilities, we are recommending that the agency, before proceeding with 

any new patent automation initiatives, (1) reassess, and, where necessary, 

revise its approach for implementing and achieving effective uses of 

information systems supporting a fully automated patent process; (2) 

establish disciplined processes for planning and managing the development 

of patent systems based on well-established business cases; and (3) fully 

institute and enforce information technology investment management 

processes and practices to ensure that its automation initiatives support 

the agency’s mission and are aligned with its enterprise architecture.

In its written comments on a draft of our report (reprinted in app. II), 

USPTO generally agreed with our findings, conclusions, and 

recommendations. The agency acknowledged weaknesses in its processes 

used to manage patent automation and agreed with the need for key 

improvements, such as (1) developing architectural linkages to the 

planning process, (2) implementing a capital planning and investment 

control guide, and (3) completing planned organizational changes. 

Nonetheless, the agency stated that it only partially agreed with several 

material aspects of our assessment. For example, the agency pointed to our 

awareness of it having initiated a review of the architectural linkages to its 

investments and key decision-making processes. However, during our 

study, agency officials did not inform us of any specific actions that had 

been taken in this regard. As the agency moves forward with actions to 

improve its patent automation, having firmly established and enforced 

investment management practices will be essential to achieving more 

effective use of its information technology. 

Background A patent is a property right granted by the U.S. government to an inventor 

who secures, generally for 20 years from the date of initial application in 

the United States, his or her exclusive right to make, use, offer for sale, or 
Page 5 GAO-05-336 Intellectual Property: Patent Automation Strategy

sell the invention in exchange for disclosing it.4 As indicated in figure 1, the 

number of patent filings to USPTO continues to grow and, by 2009, the 

agency is projecting receipt of over 450,000 patent applications annually.

Figure 1: USPTO Actual and Projected Patent Applications, Fiscal Years 1994-2009

USPTO has repeatedly cited the growing workload of patent applications 

and the difficulty in managing the volumes of paper associated with patent 

processing as impediments to carrying out its mission.

Patent processing essentially involves three phases: pre-examination, 

examination, and post-examination. The process begins when an applicant 

files a patent application and pays a filing fee. As part of the preexamination phase, USPTO staff document receipt of the application and 

process the application fee, scan and convert the paper documents to 

4

According to 35 U.S.C. sec. 154(a)(1), a patentee may also exclude others from importing 

the patented invention into the United States.

0

100

200

300

400

500

 1994 2004 2009

Applications in thousands

Source: USPTO data.

Actual applications (includes utilty, plant, and reissue patent applications)

Projected applications (includes utilty, plant, and reissue patent applications)
Page 6 GAO-05-336 Intellectual Property: Patent Automation Strategy

electronic format, and conduct an initial review of the application and 

classify it by subject matter. During the subsequent examination phase, the 

application is assigned to a patent examiner with expertise in the subject 

area,5

 who searches existing U.S. and foreign patents, journals, and other 

literature (called “prior art”) and sometimes contacts the applicant to 

resolve questions and obtain additional information to determine whether 

the proposed invention can be patented.6

 Examiners document their 

determinations on the applications in formal correspondence, referred to 

as office actions. Applicants may abandon their applications at any time 

during this process. After the examiner has determined that a patent is 

warranted, a supervisor reviews and approves the determination and the 

applicant is informed of the outcome. The application then enters the postexamination phase. Upon payment of an “issue fee,” a patent is granted and 

published. To keep the patent active, the patentee must pay maintenance 

fees at 3.5 years, 7.5 years, and 11.5 years. Historically, the time from the 

date that a patent application is filed to the date that the patent is either 

granted or the application is abandoned has been called “patent pendency.” 

Figure 2 summarizes USPTO’s patent process.

5

USPTO has eight technology centers that define its subject areas as follows: Biotechnology 

and Organic Chemistry; Chemical and Materials Engineering; Computer Architecture, 

Software, and Information Security; Communications; Semiconductors, Electrical and 

Optical Systems and Components; Designs for Articles of Manufacture; Transportation, 

Construction, Electronic Commerce, Agriculture, National Security and License and 

Review; Mechanical Engineering, Manufacturing, and Products. 

6

A proposed invention is patentable if it is a new or useful process, machine, manufacture, 

or composition of matter, or any new and useful improvement thereof.
Page 7 GAO-05-336 Intellectual Property: Patent Automation Strategy

Figure 2: USPTO’s Patent Process

In 1999, Congress gave USPTO broad responsibility for managing its 

operations and controlling its budget allocations and expenditures, 

personnel decisions and processes, procurement, and information 

technology operations.7

 USPTO’s Search and Information Resources 

Administration (SIRA) within the Office of Patent Resources Planning, 

along with its Office of Chief Information Officer (OCIO), are responsible 

for ensuring that the agency’s goal of providing an automated patent 

process is met. SIRA is responsible for identifying patent processing 

business needs, ensuring that the systems developed meet those needs, and 

providing program resources. OCIO determines how best to use 

information technology to fulfill the identified business needs and is 

responsible for the acquisition, development, and integration of the 

information systems.

Source: USPTO.

Receipt and fee processing

Pre-examination: Examination: Post-examination:

Scanning

Classification

Assignment to examiner

Examination and search

Office actions

Receipt of issue fee

Issuance and publication of patent

Supervisory patent examiner review

Notification of approval

7

The American Inventors Protection Act of 1999, 35 U.S.C. sec. 1(a) gave USPTO greater 

flexibility and independence for decisions regarding the management and administration of 

its operation, while the Secretary of Commerce retained policy direction. In addition, 35 

U.S.C. sec. 2(b)(2)(F) empowered the USPTO director to establish regulations that provide 

for the development of a performance-based process that includes quantitative and 

qualitative measures and standards for evaluating cost-effectiveness and is consistent with 

principles of impartiality and competitiveness.
Page 8 GAO-05-336 Intellectual Property: Patent Automation Strategy

Because of long-standing concerns about the increasing volume and 

complexity of patent applications, USPTO has been undertaking projects to 

automate its patent process for about the past two decades. One of the 

agency’s most substantial undertakings was the Automated Patent System 

(APS)—a project begun in 1983 with the intent of automating all aspects of 

the paper-intensive patent process. With this system, USPTO anticipated 

significant improvements in patent quality and productivity. APS was to be 

deployed in 1990, maintained through 2002, and, when completed, consist 

of five integrated subsystems that would (1) fully automate incoming 

patent applications; (2) allow examiners to electronically search the text of 

granted U.S. patents and access selected abstracts of foreign patents; (3) 

scan and allow examiners to retrieve, display, and print images of U.S. 

patents; (4) help examiners classify patents; and (5) support on-demand 

printing of copies of patents.

In reporting on APS more than 10 years following its inception, we noted 

that USPTO had deployed and was operating and maintaining certain parts 

of the system, supporting text search, limited document imaging, orderentry and patent printing, and classification activities.8

 However, it had not 

yet developed the system that was expected to fully automate incoming 

applications and the management of these applications as they moved 

through USPTO, and the estimated date for full deployment of APS had 

been delayed 7 years, to 1997.

Our report raised concerns about USPTO’s ability to adequately plan and 

manage this major project, pointing out that the agency’s processes for 

exercising effective management control over APS were weak. We noted 

that the agency lacked reliable, experience-based data to show that patent 

quality had improved and expected benefits were being achieved and its 

officials were relying on management judgment alone in setting APS 

development and deployment priorities. In light of these concerns, we 

recommended to the Secretary of Commerce that USPTO establish a 

process for identifying and measuring expected benefits to users of the 

system, implement a systematic and repeatable process for estimating the 

system’s costs, and monitor progress against baselines. USPTO agreed with 

the need for such measures.

8

GAO, Patent and Trademark Office: Key Processes for Managing Automated Patent 

System Development Are Weak, GAO/AIMD-93-15 (Washington, D.C.: Sept. 30, 1993). 
Page 9 GAO-05-336 Intellectual Property: Patent Automation Strategy

Through 2002, the agency continued to enhance its capabilities enabling 

examiners to search patent images and text, and upgraded its patent 

application classification and tracking systems.9

 It also began providing 

electronic bibliographic information from patents to the public. 

Nonetheless, USPTO never fully developed and deployed APS to achieve 

the integrated, end-to-end patent processing system that it envisioned. The 

agency reported spending approximately $1 billion on the initiative from 

1983 through 2002.10

In 1998, the agency added to its automated capability by implementing an 

Internet-based electronic filing system, enabling applicants to submit their 

applications online. It further enhanced the electronic filing system in 2002, 

and again in 2004. USPTO reported spending a total of $10 million for this 

system.

USPTO Continues to 

Pursue a Fully 

Automated Patent 

Process, but Is Not 

Effectively Managing 

Its Strategy for 

Achieving This 

Capability

Recognizing that growth in the number and complexity of patent 

applications has outpaced its ability to meet demands and effectively 

manage its workload in a paper-based environment, USPTO has continued 

to pursue a strategic agenda emphasizing paperless, end-to-end, automated 

patent processing, as was its intent with APS. However, while progress has 

been made, the agency has not yet achieved a fully electronic patent 

processing capability. Key systems that USPTO is relying on to help achieve 

this capability have not yielded essential processing improvements, in part 

resulting from the agency’s ad hoc approach to planning and managing 

their implementation. Contributing to this situation is that USPTO has not 

yet fully instituted disciplined processes and practices for managing its 

information technology investments.

USPTO’s Strategy Called for 

a Fully Electronic Patent 

Process

As part of its automation strategy, USPTO planned to develop and integrate 

multiple systems that are intended to move all of its critical patent 

processing components to an electronic business environment. To support 

this strategy, in 2001, the agency undertook its Tools for Electronic 

Application Management (TEAM) automation project with the intent of 

9

The initial deployment of USPTO’s patent tracking system occurred in 1980. This system 

provides workflow tracking, status reporting, and examiner production information.

10The reported cost included system enhancements and maintenance through the end of the 

project’s life cycle in 2002.
Page 10 GAO-05-336 Intellectual Property: Patent Automation Strategy

delivering an end-to-end capability to process patent applications 

electronically by fiscal year 2006. TEAM was to support the entire patent 

application process in electronic mode, beginning with the filing of an 

application and proceeding through pre-examination, examination, and 

post-examination to electronic records archiving.

Under the TEAM concept, the agency had planned to integrate its existing 

electronic filing system and the classification and search capabilities from 

the earlier APS project with new document management and workflow 

capabilities, and with image- and text-based processing11 of patent 

applications to achieve a sophisticated means of handling documents and 

tracking patent applications throughout the examination process. By 

implementing image- and text-based capabilities, USPTO had anticipated 

that patent examiners would be able to view and process applications 

online, as well as manipulate and annotate text within a patent application, 

thus eliminating manual functions and improving processing accuracy, 

reliability, and productivity, as well as the quality of the patents that are 

granted.

In 2002, USPTO altered its approach to accomplishing the patent 

automation with the issuance of its 21st Century Strategic Plan.12

Developed partly in response to a recognized need to improve patent 

quality, aggressively implement electronic government,13 and reduce the 

number of patent applications pending at any one time, the strategic plan 

identified, among other factors, the agency’s high-level information 

technology goals for fully automating the patent process as part of an 

aggressive 5-year modernization effort. The plan incorporated the 

automation concepts from the TEAM project, but announced an 

accelerated goal of delivering an operational system to electronically 

11Image-based processing uses a graphic representation of documents produced by 

scanning paper documents or by converting electronic documents into images. To transform 

image content into text, optical character recognition (OCR) software is used to derive text 

from the image. OCR can convert image documents to hidden text, which is searchable. In 

text-based processing, the words and sentences in the document are retained as text and 

can be stored, processed, and retrieved by a document management system. Unlike imagebased processing, text-based processing allows the text to be searched and extracted. 

12USPTO’s 21st Century Strategic Plan was originally released in 2002 and updated in 2003.

13Electronic government refers to the use of information technology to enhance the access 

to and delivery of government information and service to citizens, business partners, and 

employees, and among agencies at all levels of government.
Page 11 GAO-05-336 Intellectual Property: Patent Automation Strategy

process patent applications earlier than had been scheduled under 

TEAM—by October 1, 2004.

Progress Made, but Ad Hoc 

Implementation of Key 

Systems Has Prevented 

Achieving Full Electronic 

Processing of Patent 

Applications

In carrying out its patent automation plans, USPTO has made progress 

toward delivering important processing capabilities through the various 

information systems that it has implemented. For example, an automated 

search capability, available since 1986, has eliminated the need for patent 

examiners to manually search for prior art in paper files, and the 

classification and fee accounting capabilities have helped with assigning 

applications to the correct subject areas and with managing collections of 

applicable fees. In addition, using the electronic filing system that has 

existed since 1998, applicants can file their applications with the agency via 

the Internet. Also, using the Internet, patent applicants can review the 

status of their applications online and the public can electronically access 

and search existing published patents. Further, as a result of an imaging 

system implemented in August 2004, known as the Image File Wrapper, 

USPTO currently has the capability to scan patent applications and related 

documents, which can then be stored in a database and retrieved and 

reviewed online. Figure 3 illustrates the agency’s progress in implementing 

its automated patent functions.

Figure 3: USPTO’s Patent Automation Progress

Nonetheless, even with the progress that has been made, collectively, 

USPTO’s automated functions have fallen short of providing the fully 

integrated, electronic patent processing capability articulated in the 

agency’s automation plans. Two of the key systems that it is relying on to 

Source: USPTO.

1986 1987 1988 1989 1994 1990 1991 1992 2001 1993 1995 1996 1997 1998 1999 2000 2002 2003 2004

Electronic searching 

of patent text

Electronic 

filing system 

Patent applications 

published on Internet

Image File Wrapper 

image-based patent 

processing system

Classification 

system 

Updated fee 

accounting system 
Page 12 GAO-05-336 Intellectual Property: Patent Automation Strategy

further enhance its capabilities—the electronic filing system and the Image 

File Wrapper—have not yielded the processing improvements that the 

agency has deemed essential to successfully operate in a fully integrated, 

electronic environment.

Specifically, in implementing its electronic filing system in 1998, USPTO 

had projected significant increases in processing efficiencies and quality by 

providing patent applicants the capability to file online, thus alleviating the 

need for them to send paper applications to the agency or for patent office 

staff to manually key application data into the various processing systems. 

However, even after enhancements in 2002 and 2004, the electronic filing 

system has not produced the level of usage among patent filers that the 

agency had anticipated. While USPTO’s preliminary justification for 

acquiring the electronic filing system had projected an estimated usage rate 

of 30 percent in fiscal year 2004, patent officials reported that, as of April 

2005, fewer than 2 percent of all patent applications were being submitted 

to the agency via this system. As a result, anticipated processing 

efficiencies and quality improvements through eliminating the manual rekeying of application data have not yet been realized.

In September 2004, USPTO convened a forum of senior officials 

representing the largest U.S. corporate and patent law firm filers to identify 

causes of patent applicants’ dissatisfaction with the electronic filing system 

and determine how to increase the number of patents being filed 

electronically. According to the report resulting from this forum, the 

majority of participants viewed the system as cumbersome, timeconsuming, costly, inherently risky, and lacking a business case to justify its 

usage. Specifically, among the barriers to system usage that the 

participants identified were (1) users’ lack of a perceived benefit from filing 

applications electronically, (2) liability concerns associated with filers’ 

unsuccessful use of the system or unsuccessful transmission of patent 

applications to USPTO, and (3) significant disruptions to filers’ normal 

office/corporate processes and workflow caused by factors such as 

difficulty in using the automated tools and the inability to download 

necessary software through firewalls.

Further, forum participants identified features that they considered critical 

to increasing their use of the electronic filing system. These included 

implementing a more user-friendly system supported by Web-based 

processes; introducing a system that accepts portable document format 
Page 13 GAO-05-336 Intellectual Property: Patent Automation Strategy

(PDF) files;14 and enabling electronic filing of all documents, versus 

requiring paper filings of certain parts of the application, as is necessary 

with the current system. As incentives to increasing system usage, the 

participants suggested, among other strategies, that USPTO make 

electronic filings of applications a priority over paper filings, reduce the fee 

for electronic filings, and confirm the date on which the agency receives 

electronic applications.

Several concerns raised during the forum mirrored those that USPTO had 

earlier identified in a 1997 analysis of a prototype for electronic filing. 

However, as of April 2005, the agency had not yet completed plans to show 

how they would address the concerns regarding use of the electronic filing 

system.

Beyond electronic filing, the Image File Wrapper also has not resulted in 

critical patent processing improvements. Patent officials explained that, to 

meet the accelerated date for delivering an operational system as outlined 

in the strategic plan, the agency had decided in 2002 to acquire and use a 

document-imaging system owned by the European Patent Office, called 

ePhoenix, rather than develop the integrated patent processing system that 

had been described in the agency’s automation plans. The officials stated 

that the director, at that time, had considered ePhoenix to be the most 

appropriate solution for further implementing USPTO’s electronic patent 

processing capabilities given (1) pressures from Congress and from 

customers and stakeholders to implement an electronic patent processing 

system more quickly than originally planned and (2) the agency’s 

impending move to its new facility in Alexandria, Virginia, which did not 

include provisions for transferring and storing paper patent applications.15

Accordingly, in November 2002, patent officials had signed a memorandum 

of agreement with the European Patent Office, in which that office agreed 

to provide USPTO with a license to use its patent processing software and 

to provide technical assistance in customizing the software to meet 

USPTO’s needs. In turn, USPTO agreed to reimburse the European Patent 

14PDF is a file format that helps reduce errors when files are transferred from one user to 

another. A PDF file can contain fonts, images, printing instructions, keywords, and other 

information related to document production.

15In December 2003, USPTO began relocating its headquarters from Arlington (Crystal City), 

Virginia, to Alexandria, Virginia, with the intent of consolidating all of its major operations in 

a central facility. The agency anticipates completing this move in approximately July 2005. 
Page 14 GAO-05-336 Intellectual Property: Patent Automation Strategy

Office for the cost of modifying the software. It began deploying the 

system—which it renamed Image File Wrapper—in July 2003 and 

completed implementation in August 2004, at a reported total cost of 

approximately $14 million.16

The system includes image technology for storage and maintenance of 

records associated with patent applications and currently provides the 

capability to scan each page of a submitted paper application and convert 

the pages into electronic images. According to comments made by patent 

examiners in a majority of the focus groups that we conducted, the system 

has provided them with the ability to easily access patent applications and 

related information. In addition, patent officials stated that the system has 

enabled multiple users to simultaneously access patent applications.

However, patent officials acknowledged that the system has experienced 

performance and usability problems. Specifically, in speaking about the 

system’s performance, patent officials and agency documentation stated 

that, after its implementation, the Image File Wrapper had been unavailable 

for extended periods of time or had experienced slow response times, 

resulting in decreased productivity. In commenting on this matter, the 

USPTO director stated that the system’s performance has improved over 

the last 6 months. Further, in discussing the system’s performance, OCIO 

and patent officials acknowledged this system problem, and told us that 

they had recently taken measures to alleviate its impact by, for example, 

developing a backup tool, which can store images of an examiner’s most 

recent applications so that the applications can be accessed when the 

examiner cannot use the Image File Wrapper. However, given the recent 

(February 2005) implementation of this tool, the officials were not able to 

show any quantitative benefits from its use.

Regarding the usability of the system, patent officials and focus group 

results indicated that the Image File Wrapper does not fully meet 

processing needs. Specifically, the officials stated that, as an image-based 

system, the Image File Wrapper does not fully enable patent examiners to 

electronically search, manipulate, or track and log changes to application 

text, which are key processing features emphasized in the agency’s 

automation plans. The agency’s documentation also indicated that patent 

examiners have to print images to paper to perform certain functions such 

16The $14 million represents a compilation of costs—provided by USPTO—for the Image 

File Wrapper system.
Page 15 GAO-05-336 Intellectual Property: Patent Automation Strategy

as signing their names to office actions. The examiners commented that a 

limited capability to convert images to text, which was intended to assist 

them in copying and reusing information contained in patent files, is errorprone, contributing to their need to download and print the applications for 

review. In addition, examiners in the focus groups expressed concerns 

about the Image File Wrapper’s capability to manage their workload and 

route documents to and from examiners, noting that these capabilities are 

confusing and difficult to use. Further, because the office’s legacy systems 

are not integrated with the Image File Wrapper, examiners are required to 

manually print correspondence from these systems, which then must be 

scanned into the Image File Wrapper in order to be included as part of an 

applicant’s electronic file.

Patent and OCIO officials largely attributed the system’s performance and 

usability problems to the agency’s use of the software that it acquired from 

the European Patent Office. They indicated that the original design of the 

ePhoenix system had not been compatible with USPTO’s technical 

platform for electronic patent processing. Specifically, they stated that the 

European Patent Office had designed the system to support only the 

printing of files for subsequent manual reviews, rather than for electronic 

review and processing. The officials also stated that the system had not 

been designed for integration with other legacy systems or to incorporate 

additional capabilities, such as text processing, with the existing imaging 

capability. Further, an official of the European Patent Office noted that 

ePhoenix had supported their office’s much smaller volume of patent 

applications.17 Thus, with USPTO’s patent application workload being 

approximately twice as large as that of its European counterpart, the 

agency placed greater stress on the system than it was originally designed 

to accommodate. OCIO officials overseeing the Image File Wrapper told us 

that, although they had tested certain aspects of the system’s capability, 

many of the problems encountered in using the system were not revealed 

until after the system was deployed and operational.

The European Patent Office official serving as liaison to USPTO identified 

similar technical problems with the Image File Wrapper. The official 

acknowledged that the version of the ePhoenix software that USPTO had 

acquired did not provide some of the capabilities that the agency wanted, 

such as text processing. He added that the European Patent Office was 

17Over the past 2 years, the European Patent Office reported processing about 160,000 to 

170,000 patent applications per year using ePhoenix. 
Page 16 GAO-05-336 Intellectual Property: Patent Automation Strategy

developing a newer version of the software that would include text- and 

image-based processing capabilities. At the time of our discussion, the 

official said that USPTO officials had not informed them of their plans to 

use the newer version of the software.

Patent and OCIO officials acknowledged the problems with the Image File 

Wrapper and that the agency had acquired ePhoenix, although senior 

officials were aware that the original design of the system had not been 

compatible with USPTO’s technological platform for electronic patent 

processing. They stated that, despite knowing about the many problems 

and risks associated with using the software, the agency had nonetheless 

proceeded with this initiative because senior officials, including the former 

USPTO director, had stressed their preference for using ePhoenix in order 

to expedite the implementation of a system. The officials also 

acknowledged that management judgment, rather than a rigorous analysis 

of costs, benefits, and alternatives, had driven the agency’s decision to use 

the system.

In January 2005, patent officials told us that, given the performance and 

usability problems, they planned to begin replacing the Image File Wrapper 

in September 2005 with a system that would provide the capabilities, 

including text- and image-based processing, that were outlined in the 

agency’s automation plans. Preliminary information that the agency 

provided about the replacement system indicated that it would cost 

approximately $56 million over 6 years, and would not include continued 

use of the European Patent Office’s software. However, while having made 

this determination about a new system, the agency had not developed a 

supporting business case—based on requirements, cost/benefit, and 

alternatives analyses—to justify this particular acquisition, or a project 

plan to guide the system’s implementation. Thus, it is difficult to gauge the 

soundness of this planned investment or how it will enable USPTO to 

accomplish its automation plans. In response to our concerns about the 

lack of project documentation to support the planning and management of 

this initiative, the officials stated that they would reconsider their approach 

to planning and carrying out this project.

USPTO’s difficulty in realizing intended improvements through its 

electronic filing system and Image File Wrapper can largely be attributed to 

the fact that the agency has taken an ad hoc approach to planning and 

managing its implementation of these systems, driven in part by its 

accelerated schedule for implementing an automated patent processing 

capability. The Clinger-Cohen Act, as well as information technology best 
Page 17 GAO-05-336 Intellectual Property: Patent Automation Strategy

practices and our prior reviews, emphasize the need for agencies to 

undertake information technology projects in a disciplined manner, based 

on well-established business cases that articulate agreed-upon business 

and technical requirements; effectively analyze project alternatives, costs, 

and benefits; include measures for tracking projects through their life cycle 

against cost, schedule, benefit, and performance targets; and ultimately, 

provide the basis for credible and informed decision making and project 

management. Yet, patent officials did not rely on established business cases 

to guide their implementation of these key automation initiatives.

With its ad hoc approach to implementing the electronic filing system and 

the Image File Wrapper, USPTO has continued a practice of ineffective 

project management that characterized its implementation of APS of two 

decades ago. The absence of sound project planning and management for 

these initiatives has left the agency without critical capabilities, such as 

text processing, and consequently, impeded its successful transition to an 

integrated and paperless patent processing environment. By continuing to 

implement information systems in this manner, USPTO undermines the 

intent of its patent automation strategy and jeopardizes its credibility 

regarding improving the efficiency of the patent process. At the conclusion 

of our review, the Under Secretary of Commerce for Intellectual Property, 

who also serves as the director of USPTO, stated that he recognized and 

intended to implement measures to address the weaknesses in the agency’s 

planning and management of its automated patent systems.

USPTO’s Patent 

Automation Is Not 

Supported by Essential 

Information 

Technology Investment 

Management Processes

USPTO’s ineffective planning and management for its patent automation 

projects, in large measure, can be attributed to enterprise-level, systemic 

weaknesses in the agency’s information technology investment 

management processes. A key premise of the Clinger-Cohen Act is that 

agencies have established processes, such as capital planning and 

investment control, to help ensure that information technology projects are 

implemented at acceptable costs and within reasonable and expected time 

frames, and contribute to tangible, observable improvements in mission 

performance. Such processes guide the selection, management, and 

evaluation of information technology investments by aiding management in 

considering whether to undertake a particular investment in information 

systems and providing a means to obtain necessary information regarding 

the progress of an investment in terms of cost, capability of the system to 

meet specified requirements, timeliness, and quality.
Page 18 GAO-05-336 Intellectual Property: Patent Automation Strategy

Further, as emphasized in our Enterprise Architecture Framework, 

information technology projects should show evidence of compliance with 

the organization’s enterprise architecture, which serves as a blueprint for 

systematically and completely defining an organization’s current (baseline) 

operational and technology environment and as a roadmap toward the 

desired (target) state. Effective implementation of an enterprise 

architecture can facilitate an agency by serving to inform, guide, and 

constrain the decisions being made for the agency, and subsequently 

decrease the risk of buying and building systems that are duplicative, 

incompatible, and unnecessarily costly to maintain and interface.

At the time of our study, USPTO had begun instituting certain essential 

information technology investment management mechanisms, such as a 

framework for its enterprise architecture and components of a capital 

planning and investment control process. However, it had not yet 

established the necessary linkages between its enterprise architecture and 

its capital planning and investment control process to ensure that its 

automation projects will comply with the architecture or fully instituted 

enforcement mechanisms for investment management. For example, 

USPTO drafted a capital planning and investment control guide in June 

2004 and issued an agency administrative order requiring unit heads to use 

the guide in February 2005. However, according to senior agency officials, 

many of the processes and procedures in the guide had not been completed 

and fully implemented. In addition, while the agency had completed the 

framework for its enterprise architecture, it had not aligned its business 

processes and information technology in accordance with the architecture. 

Also, according to OCIO officials, the architecture review board 

responsible for enforcing compliance with the architecture was not yet in 

place; thus, current architecture reviews are only of an advisory nature and 

are not required for system implementation. Our analysis of architecture 

review documents that system officials provided for the electronic filing 

system and Image File Wrapper confirmed that the agency had not 

rigorously assessed either of these systems’ compliance with the enterprise 

architecture.

Beyond these concerns, USPTO lacked reliable, experienced-based data 

and a process for consistently demonstrating that expected benefits of the 

systems are being achieved. As noted in our prior work, key system 

development decisions should be based on reliable data showing that 

resource investments will produce commensurate value, and as systems 

are developed, expected benefits and estimated costs should be 

periodically validated through actual experience. Although patent officials 
Page 19 GAO-05-336 Intellectual Property: Patent Automation Strategy

asserted that processing improvements had resulted from the automation 

that had been implemented, they acknowledged that the agency had not 

established performance metrics to aid in measuring the impact of the 

automation or validated actual experiences against established baselines. 

Rather, patent officials told us, they had based their accounts of 

performance improvement, such as reductions in the number of lost or 

destroyed paper patent applications as a result of the Image File Wrapper, 

largely on ad hoc occurrences and/or feedback from patent examiners and 

clerical and administrative staff. As a result, the agency lacked a basis for 

substantiating benefits from its automation efforts.

In addition, USPTO lacked reliable cost data for the patent automation 

initiatives due to weaknesses in the agency’s processes for tracking and 

reporting project expenses. Our guide on agencies’ information technology 

investment decision-making stresses the need for reliable and current 

project cost data to aid management in making critical investment 

decisions.18 While the agency had systems in place to track the costs of 

specific tasks, particularly those assigned to its contractors, it did not have 

an effective means of providing aggregate cost information for its overall 

patent automation effort. Patent officials stated that they faced difficulties 

in accessing and providing comprehensive cost information for the patent 

systems because the agency had modified its approach to capturing and 

reporting cost information, along with the information systems containing 

this information. The difficulty that USPTO management faced in providing 

comprehensive information on its patent automation costs could 

compromise the agency’s ability to provide a credible accounting for its 

investments and make informed management decisions about them.

Adding to these conditions, a study commissioned by USPTO’s senior 

management in 2004 found that OCIO was not organized to help USPTO 

achieve its mission or accomplish the goals set out in its automation 

strategy.19 The study, undertaken by an independent contractor, noted that 

the agency’s investment management processes did not ensure appropriate 

reviews of automation initiatives and that the chief information officer’s 

organization lacked sufficient credibility with its business units to ensure 

an effective partnership. During our review, USPTO’s director made 

18GAO, Assessing Risks and Returns: A Guide for Evaluating Federal Agencies’ IT 

Investment Decision-making, GAO/AIMD-10.1.13 (Washington, D.C.: February 1997).

19We did not independently assess the results of this study, but USPTO’s chief information 

officer generally concurred with its findings.
Page 20 GAO-05-336 Intellectual Property: Patent Automation Strategy

changes in key leadership positions within OCIO and the Patent Resources 

and Planning Office, which he considered essential to defining and 

implementing the patent automation strategy and bringing stability to the 

agency’s operations. However, officials had not yet begun to improve the 

investment management processes to ensure appropriate reviews of the 

agency’s automation initiatives.

USPTO has an explicit responsibility for ensuring that the automation 

initiatives that it is counting on to enhance its overall patent process are 

consistent with the agency’s priorities and needs and are supported by the 

necessary planning and management to ensure that they are successfully 

accomplished. USPTO’s 21st Century Strategic Plan was intended to help 

the agency accomplish a smooth transition to performance-based 

operations, and having firmly established and enforced investment 

management practices will be crucial to achieving this. At the conclusion of 

our review, USPTO’s director and the new chief information officer, 

appointed in February 2005, told us that they were aware of organizational 

and management weaknesses within OCIO and acknowledged the need to 

strengthen the agency’s investment management processes and practices 

and effectively apply them to USPTO’s patent automation initiatives.

Conclusions USPTO has been attempting to implement an integrated, paperless patent 

process for about two decades and, in the process, has delivered important 

automated capabilities. Nonetheless, after spending over a billion dollars 

on its efforts, the agency is still not yet effectively positioned to process 

patent applications in a fully automated environment; moreover, when and 

how it will actually achieve this capability remains uncertain. System 

performance and usability problems, resulting largely from ineffective 

planning and management of its automated capabilities, have limited the 

effectiveness of key systems that the agency has implemented to support 

critical patent processes. USPTO’s director and new chief information 

officer have recognized the need to improve the agency’s planning and 

management of its automation initiatives. However, weaknesses in key 

information technology management processes needed to guide the 

agency’s investments in patent automation, such as incomplete capital 

planning and investment controls and a lack of reliable cost data, could 

preclude its ability to successfully accomplish this. Under such 

circumstances, USPTO risks continuing to implement information 

technology that does not support the agency’s needs, and that threatens its 

overall goal of achieving a fully electronic capability to process its growing 

patent application workload.
Page 21 GAO-05-336 Intellectual Property: Patent Automation Strategy

Recommendations for 

Executive Action

To more effectively position USPTO to achieve key patent processing 

improvements through the use of information technology, we recommend 

that the Secretary of Commerce direct the Under Secretary of Commerce 

for Intellectual Property to take the following actions before proceeding 

with any new patent automation initiatives:

• reassess, and where necessary, revise the approach for implementing 

and achieving effective uses of major information systems to support a 

fully automated patent process, including electronic filing and imageand text-based patent processing capabilities;

• establish disciplined processes for planning and managing the 

development of patent systems based on well-established business 

cases that articulate agreed-upon business and technical requirements; 

include analyses of project alternatives, costs, and benefits; and include 

measures for tracking projects through their life cycle against cost, 

schedule, benefit, and performance targets; and

• fully institute and enforce at the enterprise level, information 

technology investment management processes and practices to ensure 

that automation initiatives support the agency’s mission and are aligned 

with the agency’s enterprise architecture, to include (1) finalizing and 

implementing a capital planning and investment control guide, (2) 

establishing an architecture review board and requiring its oversight of 

major information technology investments, (3) establishing a process to 

identify expected benefits to internal and external users of information 

systems and to measure performance against expected benefits, and (4) 

establishing a process for tracking and reporting aggregate cost 

information for automation initiatives.

Agency Comments and 

Our Evaluation

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

Commerce for Intellectual Property and Director of USPTO generally 

agreed with our findings, conclusions, and recommendations. The agency 

acknowledged weaknesses in its processes used to manage patent 

automation and agreed with the need for key improvements, such as (1) 

developing architectural linkages to the planning process, (2) 

implementing a capital planning and investment control guide, and (3) 

completing planned organizational changes. The Under Secretary 

emphasized that USPTO had already initiated reforms to ensure more 

effective implementation of its automation projects, including personnel 
Page 22 GAO-05-336 Intellectual Property: Patent Automation Strategy

changes in key patent-management positions, and indicated that the agency 

would rely on the results of our study in conjunction with other 

assessments that have been conducted to further improve management 

processes guiding the agency’s use of information technology. 

Nonetheless, the agency only partially agreed with several specific aspects 

of our assessment. The Under Secretary pointed out, for example, that in 

February 2005, USPTO had issued an agency administrative order covering 

its information technology investment review board and reemphasizing its 

commitment to integrated investment decision practices. In addition, the 

agency pointed to our awareness of it having also initiated a review of the 

architectural linkages to its investments and key decision-making 

processes being implemented. Further, it stated that it had instituted 

investment decision papers to provide its investment review board 

members with improved documentation, including more thorough 

financial, technical, and alternatives analyses, to assist in making 

appropriate investment decisions. 

The actions that USPTO stated that it has taken could help to improve its 

overall investment management and decision making. In mid-April 2005, 

patent officials provided us with a finalized copy of the agency 

administrative order requiring unit heads to use the capital planning and 

investment control guide in selecting, controlling, and evaluating 

information technology investments. However, they stated that the agency 

had not yet completed the capital planning and investment control 

processes and procedures. Nonetheless, we have revised our report to 

reflect the agency’s issuance of this order. Further, during our study, agency 

officials did not inform us of any specific actions that had been initiated to 

review architectural linkages to investments and gave no indication that 

the agency had instituted investment decision papers to improve 

information technology investment documentation and related decision 

making. Therefore, we lack a basis for evaluating and/or commenting on 

these particular actions. 

USPTO also provided comments on the recommendations contained in our 

report. Specifically, regarding our recommendation to reassess, and where 

necessary, revise the approach for implementing and effectively using 

information systems to support a fully automated patent process, the 

agency commented that it was changing the method of implementing and 

achieving effective use of its information technology. The agency stated 

that it had chosen to follow a more systematic and phased approach to 

using information technology, in which alternatives are thoroughly 
Page 23 GAO-05-336 Intellectual Property: Patent Automation Strategy

considered and evaluated against architectural standards, implementation 

costs, and the ability to effectively meet users’ needs, and that detailed 

investment decision papers are being prepared for all major investments. It 

added that future patent development initiatives, including those for 

electronic filing and text-based processing capabilities, would be subjected 

to this approach to ensure that automated systems are used most 

effectively to achieve patent program goals. As the agency takes action to 

achieve more effective use of its information technology, we look forward 

to monitoring its use of these measures to successfully implement future 

patent automation initiatives. 

Regarding our recommendation to establish disciplined processes for 

planning and managing the development of patent systems based on wellestablished business cases, USPTO stated that it was in the process of 

improving its capital planning and investment control process. For 

example, it stated that an already-established committee had proposed a 

format for developing improved business cases that would articulate 

business needs and expected benefits, require consideration of alternative 

solutions, and reflect compliance with the agency’s enterprise architecture. 

As stressed in our report, such measures are essential to ensuring effective 

management of the agency’s information technology initiatives and to 

achieving patent processing improvements through the use of information 

technology.

Finally, in commenting on our recommendation that the agency fully 

institute and enforce information technology investment management 

processes and practices at the enterprise level, USPTO (1) reiterated its 

actions toward improving its capital planning and investment control 

process; (2) stated that its Office of Applications Architecture and Services 

functions as the agency’s architectural review board with responsibility for 

ensuring that information technology systems’ designs comply with the 

enterprise architecture; (3) stated that it would, upon completion of its 

capital planning and investment control guide, formally establish 

procedures for reviewing its investments’ performance against expected 

benefits; and (4) stated that it is refining its tools to more completely 

capture the total cost of its information technology investments. 

Such measures, if successfully applied, could substantially improve 

USPTO’s accountability for its information technology investments. 

However, it is important to note that, during our study, the agency could 

not provide evidence of a functioning architecture review board. Patent 

officials told us that such an organization had not been established and that 
Page 24 GAO-05-336 Intellectual Property: Patent Automation Strategy

reviews had not been required to ensure that planned information 

technology projects were consistent with the enterprise architecture. As 

stated earlier in this report, our analysis of documentation supporting the 

electronic filing system and Image File Wrapper determined that the 

agency had not rigorously assessed either of these systems’ compliance 

with the enterprise architecture. Given this finding, we continue to stress 

the need for the agency to enforce its architecture review board’s oversight 

of major information technology initiatives.

Beyond these points of discussion, USPTO offered detailed comments on 

its Image File Wrapper. While agreeing with the need for more rigorous 

decision making to support its implementation of this system, the Under 

Secretary nonetheless believed that moving forward with this initiative was 

an appropriate step that had fulfilled the agency’s promise to provide 

electronic (paperless) processing of patent applications, and that had 

provided numerous benefits for the agency in a short period of time. For 

example, the Under Secretary stated that the Image File Wrapper had 

eliminated the agency’s need for space to house paper patents and, in 

conjunction with Internet access to patent applications, had alleviated 

problems associated with lost application files and file integrity. As such, 

the agency did not see a need to assess the key management processes 

guiding its decision to undertake this investment. 

As reflected in this report, we recognize that the Image File Wrapper, along 

with Internet access to patent applications, has provided USPTO with 

important capabilities to support the processing of patents. However, 

patent officials and examiners acknowledged that performance and 

usability problems had rendered the system incapable of fully meeting 

processing needs. Further, patent and OCIO officials had largely attributed 

the system’s problems to known limitations in the design of the software 

that the agency had acquired from the European Patent Office. They added 

that, given the performance and usability problems, the agency planned to 

replace the Image File Wrapper. Thus, while certain benefits should be 

inherent from having this system in place, in our view, the agency could 

nonetheless take important lessons from the ad hoc approach in which this 

investment was undertaken. USPTO opted to undertake this initiative in a 

manner that did not ensure that it had fully evaluated its patent processing 

requirements against the most cost-efficient and effective solution for 

addressing its needs. Moreover, in undertaking the initiative without full 

consideration of potential alternatives, costs, and benefits, the agency put 

itself at risk of not fully realizing desired outcomes in terms of improved 

processing of patent applications. 
Page 25 GAO-05-336 Intellectual Property: Patent Automation Strategy

Appendix II contains the text of USPTO’s comments on our draft report. 

The agency also provided technical comments, which we have 

incorporated, as appropriate.

We are sending copies of this report to the Secretary of Commerce, the 

Under Secretary of Commerce for Intellectual Property, and the Director, 

Office of Management and Budget. Copies will also be available at no 

charge on our Web site at www.gao.gov.

Should you have any questions on matters contained in this report, please 

contact me at (202) 512-6240. I can also be reached by email at 

koontzl@gao.gov. Contact points for our Office of Congressional Relations 

and Public Affairs may be found on the last page of this report. Key 

contributors to this report are listed in appendix III. 

Linda D. Koontz

Director, Information Management Issues
Page 26 GAO-05-336 Intellectual Property: Patent Automation Strategy

Appendix I

Scope and Methodology ApApenednxidexiIs

To accomplish our objective, we reviewed USPTO’s 21st Century Strategic 

Plan, Tools for Electronic Application Management project documentation, 

and related information technology plans to determine the agency’s vision 

for and approach to automating its patent process. We also assessed 

current and selected past initiatives that USPTO has undertaken to develop 

and implement its automated patent processing capabilities. Specifically, 

we analyzed programmatic and technical documentation describing the 

agency’s patent process, current electronic patent processing capabilities, 

and plans for future automation. We evaluated available project 

management documentation, such as project plans, time lines, and project 

status reports to determine the agency’s progress in implementing a fully 

automated patent processing system. In addition, to assess key decisions 

and actions related to the USPTO’s development and use of specific 

electronic information and systems to support patent processing, we 

examined the agency’s consideration of key information technology 

investment management procedures and practices, such as capital 

planning and investment control, enterprise architecture, and risk 

management, in planning and managing the patent automation initiatives. 

Further, we examined cost information for USPTO’s patent automation 

initiatives, as provided by the agency; however, we did not verify the 

accuracy of this reported information.

As part of our review, we also examined internal reports documenting an 

independent contractor’s assessment of USPTO’s information technology 

organization. We did not independently validate the findings contained in 

the reports; however, in discussing their contents with us, USPTO’s chief 

information officer generally concurred with the findings. In addition, we 

reviewed relevant reports discussing the patent operations that had been 

prepared by the Department of Commerce’s Office of Inspector General.

To supplement our analysis, we interviewed senior patent officials, 

including the Deputy Commissioner for Patent Resources Planning; the 

Administrator, Search and Information Resources Administration; and the 

USPTO chief information officer, who was appointed in February 2005. We 

also discussed the agency’s patent automation efforts with the Under 

Secretary of Commerce for Intellectual Property, who serves as the 

director of USPTO. In addition, we met with relevant systems officials who 

were involved in or knowledgeable about the development and 

implementation of the automated patent capabilities and with patent 

managers in charge of the systems’ operations. We also interviewed 

officials of the European Patent Office who worked with USPTO on its 

implementation of the Image File Wrapper and representatives of the 
Appendix I

Scope and Methodology

Page 27 GAO-05-336 Intellectual Property: Patent Automation Strategy

patent examiners union. In these interviews, we discussed USPTO’s 

strategy and supporting plans for automating the patent processes and 

elicited their views about and understanding of key management decisions 

and challenges associated with the automation initiatives.

Further, as part of a series of 11 focus groups undertaken by GAO, we 

obtained patent examiners’ views of and experiences with the automated 

patent processes. The focus groups consisted of from 6 to 11 employees 

each and included supervisory patent examiners (3 groups) and patent 

examiners (8 groups). In total, 91 examiners participated in the focus 

groups. The 91 participants were randomly selected from the seven 

technical areas at USPTO’s two locations (in Crystal City and Alexandria, 

Virginia), and all participants had been employed at the agency for at least 

9 months. A GAO facilitator led each focus group. The responses were then 

systematically analyzed using a content analysis.

We conducted our study from June 2004 through April 2005, in accordance 

with generally accepted government auditing standards.
Page 28 GAO-05-336 Intellectual Property: Patent Automation Strategy

Appendix II

Comments from the U.S. Patent and 

Trademark Office ApendxiI
Appendix II

Comments from the U.S. Patent and 

Trademark Office

Page 29 GAO-05-336 Intellectual Property: Patent Automation Strategy
Appendix II

Comments from the U.S. Patent and 

Trademark Office

Page 30 GAO-05-336 Intellectual Property: Patent Automation Strategy
Appendix II

Comments from the U.S. Patent and 

Trademark Office

Page 31 GAO-05-336 Intellectual Property: Patent Automation Strategy
Appendix II

Comments from the U.S. Patent and 

Trademark Office

Page 32 GAO-05-336 Intellectual Property: Patent Automation Strategy
Appendix II

Comments from the U.S. Patent and 

Trademark Office

Page 33 GAO-05-336 Intellectual Property: Patent Automation Strategy
Page 34 GAO-05-336 Intellectual Property: Patent Automation Strategy

Appendix III

GAO Contact and Staff Acknowledgments ApendxiI

GAO Contact Linda D. Koontz (202) 512-6240

Staff 

Acknowledgments

In addition to the individual named above, Valerie Melvin, Mary J. Dorsey, 

and Vijay D’Souza made significant contributions to this report. Evan 

Gilman, Nancy Glover, and J. Michael Resser also contributed to this 

report.

(310720)
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