USPTO administers U.S. patent and trademark law to encourage innovation and advance science and technology in two ways. First, USPTO grants to inventors exclusive rights to their inventions for a limited period of time, usually 20 years. During this time, the inventor can exclude others from making, using, selling or importing the invention. Second, the agency preserves and disseminates patent information, for example on issued patents and most patent applications. Such information allows other inventors to improve upon the invention in the original application and apply for their own patent. To obtain a patent, inventors—or more usually their attorneys or agents— submit to USPTO an application that fully discloses and clearly describes one or more distinct innovative features of the proposed invention (called claims) and pays a filing fee to begin the examination process. USPTO evaluates the application for completeness, classifies it by the type of patent and the technology involved, and assigns it for review to one of its operational units, called technology centers, that specialize in specific areas of science and engineering. Supervisors in each technology center then assign the application to a patent examiner for further review. For each claim in the application, the examiner searches and analyzes relevant United States and international patents, journals, and other literature to determine whether the proposed invention merits a patent—that is, whether the invention is a new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement to one that already exists. The examiner may contact the applicant on one or more occasions to resolve questions and obtain additional information to determine the proposed invention’s potential patentability. If the examiner determines that the proposed invention merits a patent, the applicant is informed, and, upon payment of a fee, USPTO issues a patent. The applicant may abandon the application at any time during the examination process. If the application is denied a patent, the applicant may appeal the decision within an established time. Each examiner typically reviews applications in the order in which they are received by USPTO. The time from the date an application is filed until a patent is granted, denied, or the application is abandoned is called “overall pendency.” Over the past decade, overall pendency has increased on average from 20 to almost 28 months. However, pendency varies by technology center, ranging from 24 months for applications in such fields as transportation, agriculture, electronic commerce, mechanical engineering, and manufacturing to 41 months for applications in the fields of computer architecture, software and information security (see table 1). In addition to overall pendency, USPTO monitors the time from when an application is filed until the examiner makes an initial assessment of the proposed invention’s patentability and informs the applicant, called first action pendency. First action pendency also has generally increased in the past decade from 8 to over 20 months. In 2004, first action pendency ranged from an average of 14 months for applications in such fields as semiconductors and optical systems to 33 months for computer architecture and software applications. Such measures of pendency help USPTO assess its effectiveness in reviewing patent applications. USPTO has made greater progress in implementing its Strategic Plan initiatives to make the patent organization more capable than it has been in implementing its productivity and agility initiatives. Specifically, of the activities planned for completion by December 2004, the agency has fully or partially implemented all 23 of the initiatives related to its capability theme to improve the skills of employees, enhance quality assurance, and alter the patent process through legislative and rule changes. In contrast, USPTO has partially implemented only 1 of the 4 initiatives related to the productivity theme to restructure fees and expand examination options for patent applicants and has fully or partially implemented 7 of the 11 initiatives related to the agility theme to increase electronic processing of patent applications and reduce examiners’ responsibilities for literature searches. In explaining why some initiatives have not been implemented, agency officials primarily cited the need for additional funding. With passage of the legislation in December 2004 to restructure and increase the fees available to USPTO, the agency is re-evaluating the feasibility of many initiatives that it had deferred or suspended. For more details on USPTO’s progress in implementing the 38 initiatives in the Strategic Plan, see appendix III. To improve the quality of its reviews of patent applications through workforce and process improvements, USPTO developed 23 capability initiatives: 9 to improve the skills of its workforce, 5 to enhance its quality assurance program, and 9 to improve processes through legislative and rule changes. As shown in table 2, USPTO has implemented 5 and partially implemented 4 of the 9 workforce skills initiatives. Although the agency has not estimated how much funding would be needed to implement the final 4 initiatives, their full implementation was hindered, in part by funding constraints, agency officials said. The current status of these partially completed initiatives is as follows: To improve the selection and training of managers, USPTO has added proficiency in supervisory skills to the requirements for a supervisory examiner and in 2004 required applicants for such positions to pass an examination, but the agency has not fully developed the supervisory curriculum or trained supervisors. To help ensure that new examiners have the requisite skills prior to promotion, USPTO has identified the knowledge, skills, and abilities needed for patent examiners and established training units in work groups for new examiners, but has not developed a structured process for subsequent promotions. To implement a pre-employment test to assess English language communication skills of new patent examiners, USPTO has, among other things, revised its vacancy announcements to include English language proficiency as a required skill but has not developed an automated pre-employment test of such skills. USPTO has developed an action plan to establish an Enterprise Training Division, which was to have been in place in 2003, to consolidate responsibility for conducting legally required and other agencywide training, developing training policy, and monitoring funds spent on training. As shown in table 3, USPTO has implemented 3 and partially implemented 2 of the 5 capability initiatives to enhance its quality assurance program. The status of the initiatives USPTO has partially implemented is as follows: The agency has begun to develop a plan and criteria to review the quality of searches and anticipates incorporating such reviews in the quality assurance program during fiscal year 2006. To enhance the reviewable record for patent applications, USPTO has developed guidance and amended forms to allow both examiners and applicants to provide additional information on the content of interviews and reason for decisions and strongly recommends, rather than requires, applicants and examiners to do so. As shown in table 4, of the 9 capability initiatives to streamline patent processing through legislative and rule changes, USPTO has implemented 1 and partially implemented 8. Although full implementation of these initiatives is largely dependent on actions by Congress, the status of the 8 partially implemented initiatives is as follows: To certify the legal knowledge of newly registering and practicing patent attorneys and agents and to monitor their practice, the agency offers registration examinations electronically year-round and issued proposed rules to harmonize ethics and disciplinary actions with the requirements in place in most states, but has not yet developed a formal program of continuing legal education requirements to periodically recertify the skills of practicing attorneys and agents. To evaluate whether to adopt a unity standard to harmonize U.S. examination practices with international standards and allow U.S. applicants to obtain a single patent on related claims that must currently be pursued in separate patent applications in the United States, USPTO began a study of the changes needed to adopt a unity standard and sought public comment but has not completed its analysis, reached a decision, or drafted and introduced implementing legislation. For the other 6 partially implemented initiatives, USPTO is drafting proposed legislation or obtaining administrative clearance to introduce it. As shown in table 5, USPTO has not implemented 3 of the 4 initiatives that focus on accelerating the time to process patent applications and expand public input and has partially implemented only 1 of the productivity initiatives that allow the agency to increase fees and retain the funds. Following passage of legislation in 2004, USPTO has issued rules to increase fees generally and restructure fees to include separate components for different stages of processing both domestic and international patent applications, and for filing the application, searching the literature, and examining the claims. The separate components could, under certain circumstances, be refunded to the applicant. USPTO has not issued rules governing the refund of domestic fees. The revised fees are effective for 2005 and 2006. Similarly, as shown in table 6, USPTO has not implemented 4 of the 11 initiatives related to agility, has only implemented 1 and partially implemented 6. These 11 initiatives are designed to further the agency’s goal to create a more flexible organization and include efforts to increase electronic processing of patent applications, reduce examiners’ responsibilities for literature searches, and participate in worldwide efforts to streamline processes and strengthen intellectual property protection. The status of the 6 partially implemented agility initiatives to increase electronic processing and harmonize U.S. and international practices is as follows: Although USPTO has largely accomplished the actions related to implementing image-based electronic processing of patent applications, it has not achieved the full extent of electronic sharing of patent documents with the European Patent Office the initiative had anticipated and the two offices continue to finalize security and protocols between their servers. USPTO has amended rules to generally allow electronic filing of postgrant review documents and trained additional judges in streamlined procedures, but it has not defined records management schedules for electronic documents or implemented full electronic processing capabilities to support these reviews, such as text searching and the ability to receive, file, store, and view multimedia files. To ensure the availability of critical data in the event of a catastrophic failure, USPTO has certified and accredited its classified system and its mission-critical and business-essential systems, uses scanning tools to identify security weaknesses, and uses intrusion detection systems, but has not acquired the hardware, software, staff, and facilities for a backup data center.