Growing recognition of the crucial role that technological innovation plays in the U.S economy has led to increased congressional activity with respect to the intellectual property laws. As evidenced by patent reform proposals currently before the 112 th Congress, the operation of the U.S. Patent and Trademark Office (USPTO) is among the subjects of legislative interest. Stakeholders have expressed concerns over a number of issues, including the USPTO's backlog of filed but unexamined applications, as well as the quality of the patents issued by the agency. Some knowledgeable observers have expressed concern that the USPTO does not possess the capability to process the large number of patent applications that it receives. The growing backlog of applications awaiting examiner review could potentially lead to long delays in the time the USPTO requires to grant patents. Extended USPTO delays in reviewing applications may increase industrial uncertainty about whether a patent will cover a particular technology or not. Lengthy approval delays may also decrease the usefulness of the patent system for industries subject to a brisk pace of technological change, as a patent on an invention that is rapidly becoming obsolete has limited value. The USPTO has long strived to approve only those patent applications that meet the statutory requirements for obtaining a patent. Because they meet all the requirements imposed by the Patent Act, quality patents may be dependably enforced in court and employed as a technology transfer tool. In contrast, improvidently granted patents may require firms to spend considerable resources either obtaining a license or mounting a legal challenge to the patent. Some commentators believe that within an era of increasingly complex, fast-moving technology, the task of issuing quality patents on a consistent basis presents a considerable challenge to the USPTO. The USPTO has actively engaged in efforts to address its application backlog and concerns over patent quality, and more generally to improve contemporary patent administration. A number of USPTO initiatives have responded to perceived concerns about the patenting process. Among them are The Patent Application Backlog Reduction Stimulus Plan, which allows an individual who has filed multiple pending applications to receive expedited review of one patent application when he agrees to withdraw another, unexamined application. The Patent Prosecution Highway (PPH), which potentially applies to inventors who have filed patent applications in multiple countries. If the inventor receives a favorable ruling from the patent office of the country where he filed first, he may request expedited review in other patent offices participating in the PPH. The Enhanced First Action Interview Pilot Program, which allows participants to conduct an interview with the patent examiner early in the application review process. The "Three-Track Initiative," under which applications would be placed into one of three queues: prioritized examination, traditional examination, or delayed examination. The Adoption of Metrics for the Enhancement of Patent Quality, which endeavors to improve USPTO mechanisms for measuring the quality of patent examination. This report reviews a number of recent USPTO initiatives designed to enhance the patent application review process. It begins by offering a brief review of patent acquisition proceedings as well as challenges faced by the USPTO. This report then reviews the innovation policy issues that are implicated by patent administration policies. Recent USPTO initiatives are then discussed. The report closes by reviewing possible congressional options. The U.S. Constitution provides Congress with the power "To promote the Progress of Science and useful Arts, by securing for limited Times to ... Inventors the exclusive Right to their ... Discoveries...." In accordance with the Patent Act of 1952 (the "Patent Act"), an inventor may seek the grant of a patent by preparing and submitting an application to the USPTO. Under current law, each application is then placed into queue for eventual review by officials known as examiners. The USPTO publishes most, but not all, pending patent applications "promptly after the expiration of a period of 18 months" from the filing date. Among the applications that are not published prior to grant are those that the applicant represents will not be the subject of patent protection abroad. In particular, if an applicant certifies that the invention disclosed in the U.S. application will not be the subject of a patent application in another country that requires publication of applications 18 months after filing, then the USPTO will not publish the application. USPTO officials known as examiners then determine whether the invention disclosed in the application merits the award of a patent. The USPTO examiner will consider a number of legal requirements, including whether the submitted application fully discloses and distinctly claims the invention. In particular, the application must enable persons skilled in the art to make and use the invention without undue experimentation. In addition, the application must disclose the "best mode," or preferred way, that the applicant knows to practice the invention. The examiner will also determine whether the invention itself fulfills certain substantive standards set by the patent statute. To be patentable, an invention must meet four primary requirements. First, the invention must fall within at least one category of patentable subject matter. According to the Patent Act, an invention that is a "process, machine, manufacture, or composition of matter" is eligible for patenting. Second, the invention must be useful, a requirement that is satisfied if the invention is operable and provides a tangible benefit. Third, the invention must be novel, or different, from subject matter disclosed by an earlier patent, publication, or other state-of-the-art knowledge. Finally, an invention is not patentable if "the subject matter as a whole would have been obvious at the time the invention was made to a person having ordinary skill in the art to which said subject matter pertains." This requirement of "nonobviousness" prevents the issuance of patents claiming subject matter that a skilled artisan would have been able to implement in view of the knowledge of the state of the art. If the USPTO allows the patent to issue, its owner obtains the right to exclude others from making, using, selling, offering to sell or importing into the United States the patented invention. Those who engage in those acts without the permission of the patentee during the term of the patent can be held liable for infringement. Adjudicated infringers may be enjoined from further infringing acts. The patent statute also provides for an award of damages "adequate to compensate for the infringement, but in no event less than a reasonable royalty for the use made of the invention by the infringer." The maximum term of patent protection is ordinarily set at 20 years from the date the application is filed. At the end of that period, others may employ that invention without regard to the expired patent. Although patent term is based upon the filing date, the patentee gains no enforceable legal rights until the USPTO allows the application to issue as a granted patent. A number of Patent Act provisions may modify the basic 20-year term, including examination delays at the USPTO and delays in obtaining marketing approval for the patented invention from other federal agencies. Like most rights, those provided by a patent are not self-enforcing. Patent owners who wish to compel others to respect their proprietary interests must commence enforcement proceedings, which most commonly consist of litigation in the federal courts. Although issued patents enjoy a presumption of validity, accused infringers may assert that a patent is invalid or unenforceable on a number of grounds. The Court of Appeals for the Federal Circuit (Federal Circuit) possesses nationwide jurisdiction over most patent appeals from the district courts. The Supreme Court enjoys discretionary authority to review cases decided by the Federal Circuit. The growing popularity of the patent system has placed strains upon the resources of the USPTO. During 2010, the USPTO received 520,277 applications—an increase of 7.8% from the 482,871 applications it received during the 2009 fiscal year. The increase in filings is substantial when viewed over a longer time frame. For example, the number of applications filed in 2005 was 417,508; and 293,244 applications were filed at the USPTO in 2000. The USPTO has candidly admitted that "the volume of patent applications continues to outpace our capacity to examine them." As a consequence, the USPTO reportedly holds an inventory in excess of 1.2 million patent applications that have yet to be reviewed by an examiner. In addition, a USPTO examiner in 2009 would not review a patent application until, on average, 25.8 months after it was filed. The "first action pendency" during 2000 was 13.6 months. Many observers believe that if current conditions continue, the backlog and delay are likely to grow at the USPTO in coming years. Long delays for patent approvals may negatively impact high technology industries by increasing uncertainty about the availability and scope of patent rights. For market segments that feature a rapid pace of innovation and short product cycles, such as consumer electronics, lengthy USPTO delays may also significantly devalue the patent right. Put simply, by the time a patent issues, the entire industry might have moved on to more advanced technologies. Commerce Secretary Gary Locke reportedly described the length of time the USPTO requires to issue patents as "unacceptable," explaining that "[t]his delay causes uncertainty for inventors and entrepreneurs and impedes our economic recovery." USPTO Director David Kappos recently opined that "[e]very quality patent application that sits on the shelf represents jobs not created." In addition, under current law, USPTO delays may qualify certain patents for an extension of term. For example, if the UPSTO does not respond to an application within 14 months of the day it is filed, the term of a patent that results from that application is extended by one day for each day of delay. Given that the average first action pendency is now almost 26 months, this rule of "Patent Term Adjustment" may cause many U.S. patents to have a term that exceeds 20 years.