Date: 201707
Local time of day: 1801-2400
Location: PAO.Airport, CA
Flight conditions: VMC
Light: Daylight
Aircraft: Amateur/Home Built/Experimental
Operator: Personal
Operating under: Part 91
Flight plan: VFR
Mission: Personal
Flight phase: Initial Approach
Airspace: Class D PAO
ATC / advisory: Tower PAO
Second aircraft: Small Aircraft; High Wing; 1 Eng; Fixed Gear
Reporter organization: Government
Reporter function: Instructor; Local
Reporter qualification: Air Traffic Control Fully Certified
Human factors: Workload; Training / Qualification; Distraction; Situational Awareness
Second reporter function: Local
Anomaly: ATC Issue All Types; Conflict NMAC
Detector: Person Flight Crew
When detected: In-flight
Result: Flight Crew Requested ATC Assistance / Clarification; Flight Crew Took Evasive Action; General Flight Cancelled / Delayed
Contributing factors: Human Factors; Airspace Structure; Airport; Procedure; Staffing
Primary problem: Procedure

Narrative: I was providing OJT on Local Control at the time of the event. Aircraft X entered the traffic pattern via left traffic and Aircraft Y entered via mid-field left-downwind entry. The aircraft were on converging courses after a few minutes. To resolve the conflict; the trainee controller told Aircraft Y to widen out to the left and pass behind Aircraft X. While the developmental was providing control instructions; I looked and found both aircraft out the window. The instructions alleviated the conflict.Several minutes later; Aircraft X was opposite direction with an aircraft inbound on a GPS Approach. The GPS Approach brings aircraft into the pattern slightly offset south of final and often in the face of left-downwind traffic. The trainee controller told Aircraft X to widen out their left-downwind and quoted traffic about the approaching aircraft. Aircraft Y who had been following Aircraft X did not widen out their downwind and due to a speed reduction by Aircraft X; ended up passing Aircraft X.The two aircraft passing each other placed Aircraft Y on the left side of Aircraft X. As Aircraft X attempted left base; they noticed the aircraft off their left wing and reported something about 'traffic blowing through the pattern.' I was distracted by the complexity of the situation and trying to assist the trainee controller to keep the operation flowing. I failed to notice that Aircraft Y had passed or even encroached upon Aircraft X because Aircraft X's RADAR tag was covering up data tag for Aircraft Y and the tag from the aircraft on the GPS approach was also interfering.The GPS approach causes unnecessary conflicts with left-downwind traffic due to the opposite direction nature of the two pattern legs. A thorough review of the GPS course and potentially re-writing the approach to bring aircraft 'straight-in' would provide great benefit and improve safety all around. Had the approaching aircraft on the GPS approach not been a factor for the two aircraft in left-downwind; the two aircraft would have continued to follow each other preventing a 'cut out' and NMAC report.My recommendation is to revise the GPS approach to mimic a straight-in.


Second narrative: [Report narrative contained no additional information.]


Synopsis: PAO Tower Controllers and a pilot reported an NMAC in the traffic pattern. The GPS Runway 31 approach was cited as a contributing factor.