UNITED STATES DEPARTMENT OF COMMERCE 

The Inspector General 

Washington. D.C. 20230 

November 5,2010 

MEMORANDUM FOR: David Kappos, Under Secretary ofCommerce for Intellectual 

Property and Director of the U.S. Patent and Trademark Office 

~~·3~ FROM: Todd J. Zinser 

Inspector General 

SUBJECT:	 U.S. Patent and Trademark Office (USPTO) Patent Quality 

Assurance Process (Final Report No. OIG-II-006-I) 

We are providing our final report on our inspection to determine the effectiveness ofUSPTO's 

patent quality assurance program in ensuring that established quality standards are met, and 

whether USPTO's patent quality assurance process complies with applicable federal, bureau, and 

other laws, regulations, policies, procedures, and guidelines. Our report describes internal control 

weaknesses and recommends steps to improve internal controls related to the quality assurance 

program. 

While USPTO incorporates quality assurance into its patent review process, our review found 

that USPTO lacks standard policies, procedures, and practices for the patent quality assurance 

program in both the technology centers (TCs) and the Office of Patent Quality Assurance 

(OPQA). We also found that TCs are not required to consider OPQA's decisions during the 

resolution and adjudication of patent errors, and that OPQA does not monitor how the patent 

processing errors it finds in its reviews are adjudicated within the TCs. Lastly, we discovered 

potential violations of departrnentallitigation hold notices and improper disposition ofrecords. 

We recommend that the Commissioner for Patents establish standard policies, procedures, and 

practices for quality assurance reviews within the TCs and OPQA; clarify OPQA's role in 

monitoring the final adjudication of patent errors within the TCs; implement practices to ensure 

that patents are reviewed and issued within the timeframes established by the American 

Inventors Protection Act (AIPA); adhere to USPTO's Comprehensive Records Schedule; and 

comply with litigation hold notices. 

We met with USPTO officials on October 14,2010, to discuss our findings and 

recommendations; we later received written comments from USPTO in which the agency 

generally concurred with our findings and recommendations. Based upon this input from 

USPTO, we modified certain recommendations and made other technical edits as appropriate. 

According to USPTO, since we completed our review the agency has begun to develop and 

implement changes that address our recommendations. We request that, within 60 days of this 

letter, you provide us with an action plan outlining the actions USPTO has taken or will take to 

address our recommendations. 
We thank USPTO personnel for the assistance and courtesies they extended to us during the 

review. If you have any further questions or comments about the report, please feel free to 

contact me at (202) 482-4661 or Ron Prevost, Assistant Inspector General for Economic and 

Statistical Program Assessment, at (202) 482-3052. 

Background 

The mission ofUSPTO is to foster U.S. innovation and competitiveness by providing highquality, timely examinations of patent and trademark applications; guiding domestic and 

international intellectual property policy; and delivering intellectual property information and 

education worldwide. In its 2007-2012 Strategic Plan, USPTO defines quality as "accurate and 

consistent results in examination. It presumes improved inputs, better-focused examination, 

improved review processes, and consistent examination results." 

USPTO's quality assurance program is executed through two major components: integrated 

quality reviews within each ofUSPTO's nine TCs l and quality assurance reviews by OPQA. 

Within each TC, supervisory patent examiners (SPEs) and training quality assurance specialists 

(TQASs) support quality assurance. The SPEs directly supervise the performance of primary and 

junior examiners. The TQASs assist examiners with questions, conduct examination reviews, 

and determine training needs for the TC. Both SPEs and TQASs report to TC directors. 

OPQA's primary goal is to assess the quality of patent examination and to provide the metrics 

used by USPTO to report patent quality: the allowance compliance rate (i.e., the percent of 

allowed patent cases reviewed in which no unpatentable claims were found), and the in-process 

review compliance rate (i.e., the percent of final and non-final actions reviewed in which no 

examination deficiency was found). OPQA is under the direction of the Deputy Commissioner 

for Patent Examination Policy, and OPQA's performance is evaluated independently of the TCs. 

Objectives, Scope, and Methodology 

In June 2008, the Senate Subcommittee on Commerce, Justice, and Science requested that the 

Department of Commerce's Office of Inspector General examine USPTO's quality assurance 

program. The objectives of our inspection were to determine 

•	 the effectiveness of USPTO's patent quality assurance process in ensuring that
 

established standards are met for patent examination quality, and
 

•	 whether USPTO's patent quality assurance process complies with applicable federal, 

bureau, and other laws, regulations, policies, procedures, and guidelines. 

We performed our fieldwork from August 2008 to November 2009 at USPTO's headquarters in 

Alexandria, Virginia. We reviewed applicable laws, regulations, and USPTO operating 

procedures. We also interviewed USPTO officials and representatives from the Patent Office 

Professional Association (the patent examiners' union) and conducted analyses of the quality 

assurance policies, procedures, and practices ofTCs and OPQA. 

1 TC 1600, 1700,2100,2600,2800,2900,3600,3700, and 4100. 

2 
We conducted this review in accordance with the Quality Standards for Inspections issued by the 

President's Council on Integrity and Efficiency, dated January 2005, and under the authority of 

the Inspector General Act of 1978, as amended, and Department Organizational Order 10-13, 

dated August 31, 2006. Our findings are discussed in detail in the following sections. 

Technology Centers Lack Standard Policies and Procedures for Quality Assurance 

Reviews 

USPTO reviews and processes patent applications in compliance with Title 35 of the U.S. Code; 

Title 37 of the Code of Federal Regulations; and USPTO's own Manual ojPatent Examining 

Procedure.2 However, the criteria do not require or recommend that USPTO prepare written 

policies, procedures, and standards for its quality assurance program. 

While the TCs have guidelines for preparing examiner performance appraisal plans and 

checklists for conducting quality assurance reviews, they lack comprehensive, consistent policies 

and procedures for ensuring the quality assurance process was performed accurately and timely. 

Specifically, the TCs are not consistently (I) resolving errors reported in OPQA reviews, 

(2) reviewing quality assurance cases in a timely manner, (3) practicing consistency in charging 

examiners with errors, and (4) ensuring impartial selection of individual patent cases for closer 

revIew. 

As a result, improper patents could potentially be issued; errors in patent applications may not be 

corrected; processing time for patent applications may exceed AlPA timeframes; errors charged 

to examiners may be inconsistently determined, thereby negatively impacting staff performance 

appraisals; and favoritism may be introduced into the selection process for reviewing examiners' 

patent cases. 

Recommendation 

We recommend that the Commissioner for Patents establish policies and procedures for quality 

assurance reviews, including standards for 

I. resolving errors reported in the OPQA reviews, 

2. reviewing the OPQA referrals within AlPA timeframes, 

3. implementing consistent practices for charging examiners with errors, and 

4. establishing clear criteria for closer reviews of individual patent cases. 

'See 35 U.S.C. §§ 1 - 376 (2010); 37 CFR §§ 1.1-5.25 (2010); and Manual ofPatent Examining Procedure, revised 

July 2008. 

3
 
OPQA Lacks a Substantive Role in the Final Disposition of Conceded Error Adjudication 

Although OPQA's primary role is to assess the quality of patent examination, OPQA does not 

have the authority to ensure that the TCs implement any change that impacts the final decision 

on an application, even when the TCs agree the application contains errors. Also, based on our 

review, OPQA is not involved in the final disposition of conceded errors, nor does it collect data 

on how these errors are adjudicated within the TCs. 

If the TCs inform OPQA of their responses to conceded errors, or provide OPQA copies of 

applicable corrective action forms, it would clarify OPQA's role in the quality review process, 

potentially limiting the number of applications issued in error. The lack of OPQA follow-up 

prevents USPTO from receiving valuable information that it could use to improve patent 

examination quality and examiner competency, such as feedback on the quality review process, 

potential training indicators, deficiencies in review criteria, error resolution processes, and 

adherence to timeframes. 

RecolI/mendation 

We recommend that the Commissioner for Patents (1) clarify the role for OPQA in the resolution 

process and in monitoring the final adjudication of agreed-upon errors within the TC, and 

(2) establish a transparent resolution process, including procedures for use within the TCs. 

OPQA Lacks a Formal Training Program and Uniform Guidance for Its Quality 

Assurance Process 

OPQA does not have an established quality assurance specialist training program or documented 

training procedures. Because ofOPQA's mission, the lack of such processes is detrimental to 

patent quality. Without training programs and procedures in place, OPQA cannot ensure a 

consistent and equitable review process. Furthermore, at the time of our review, USPTO lacked a 

documented, uniform process to ensure the effectiveness of its quality assurance program; 

however, USPTO stated that it has since updated its standards for the quality review process. 

Given the increased complexity and volume of patent applications, it is more important than ever 

to establish standard policies and procedures governing the quality assurance process so that 

examiners and quality assurance specialists can identify errors in a timely, efficient, and accurate 

manner. 

RecolI/mendation 

We recommend that the Commissioner for Patents establish documented procedures and 

standards for quality examination reviews, and develop and implement a consistent training 

policy and program for quality assurance specialists. 

Instances of Potential Improper Records Disposition Were Identified 

USPTO's Comprehensive Records Schedule provides record retention requirements for the TCs, 

including what should be maintained and when it may be destroyed. According to the schedule, 

the types of records, including documents related to signatory authority, used in the quality 

4
 
assurance program should be maintained for at least 2 years.) Further, during the period covered 

by our review, USPTO was under active litigation holds from the Department of Commerce's 

Office of General Counsel. Each of the two litigation holds prohibited the destruction of humanresource-related information. One litigation hold dated back to November 1997 and was in effect 

during the entire time of our review;4 the other, dated June 2008, related to two cases with 

similar issues as the case in the 1997 notice. The two cases identified in the 2008 notice were 

both resolved by late 2009, but the litigation hold notice was not rescinded because it pertained 

to the same documents identified in the 1997 notice. 

During our review, we discovered several potential instances of improper disposition of records. 

In interviews conducted during our review, three TC directors and nine TQASs informed us that 

the TCs do not maintain quality review documentation as called for by USPTO's Comprehensive 

Records Schedule. Personnel in six of the nine TCs said that information on quality assurance, 

such as examiner errors, are not readily available and are intentionally not maintained. Some TC 

officials stated that records are not readily available because USPTO lacks a central repository to 

store such data, while several TC officials said that records are intentionally not maintained (i.e., 

it has been USPTO practice for years to shred signatory review data and other quality assurance 

data) in order to minimize requests for such information through the Freedom of Information Act 

and the Patent Office Professional Association. 

USPTO's practice of destroying signatory review records appears to violate the Federal Records 

Act, USPTO's records retention policies, and Departmental litigation holds. The potential cases 

of improper disposition will be examined in greater detail by our Office of Investigations. 

Recommendation 

We recommend that the Commissioner for Patents ensure that the TCs are adhering to litigation 

hold notices, and that they clarify and comply with USPTO's Comprehensive Records Schedule 

for the appropriate retention and disposition of records. 

cc:	 Welton Lloyd, Audit Liaison, USPTO 

Robert Stoll, Commissioner for Patents, USPTO 

Margaret Focarino, Deputy Commissioner for Patents, USPTO 

Robert Bahr, Acting Associate Commissioner for Patent Examination Policy, USPTO 

Bo Bounkong, Associate Commissioner for Patent Resource and Planning, USPTO 

Paula Hutzell, Director, Office of Patent Quality Assurance, USPTO 

John Mielcarek, Administrator for Patent Resource, USPTO 

(BSD-19345) 

3 United States Patent and Trademark Office. 2008. Comprehensive Records Schedule. September 2008 Edition. 

4 This litigation hold remains in effect because that particular case is still open in Federal Court. 

5