Before the







"The U.S. Patent and Trademark Office:

Fee Schedule Adjustment and Agency Reform"

July 18, 2002
10:00 a.m.
2141 Rayburn House Office Building

(download MS Word version kirk.doc)

Mr. Chairman:

    I  am  pleased  to  have  the  opportunity  to  present  the  views  of  the  American Intellectual  Property  Law  Association  (AIPLA)  on  “The  U.S.  Patent  and  Trademark Office: Fee Schedule Adjustment and Agency Reform.”

    The AIPLA is a national bar association of more than 14,000 members engaged in private and corporate practice, in government service, and in the academic community.   The  AIPLA  represents  a  wide  and  diverse  spectrum  of  individuals,  companies  and institutions involved directly or indirectly in the practice of patent, trademark, copyright, and unfair competition law, as well as other fields of law affecting intellectual property.    Our members represent both owners and users of intellectual property.


    At the Oversight Hearing which the Subcommittee held on April 11, 2002 on the “The  U.  S.  Patent  and  Trademark  Office:  Operations  and  Fiscal  Year  2003  Budget,” AIPLA testified that achieving a strong and effective Patent and Trademark Office would require focusing on three critical objectives:  quality, timeliness and improved electronic filing and processing capabilities. These objectives were stated in H.R. 2047, the “Patent and Trademark Office Authorization Act of 2002.” This legislation calls for the Director to develop a five-year strategic plan that would -

1)      "enhance patent and trademark quality;

2)      reduce patent and trademark pendency; and

3)      develop and implement an effective electronic system for use by the Patent and  Trademark  Office  and  the  public  for  all  aspects  of  the  patent  and     trademark processes….”

    Under Secretary Rogan announced in March that he was preparing to begin a top- to-bottom  review  of  all  non-examination  and  administrative  support  operations,  and   expected to see a compelling justification for every non-examination operation within the agency.  Shortly  thereafter,  the  PTO  began  working  intensively  to  develop  a  five-year strategic plan called for  by Congress. The “The  21st Century Strategic Plan” (hereafter “Strategic Plan”) published on July 5th represents the current status of that effort.

    AIPLA  established  a  three-pronged  Task  Force  under  the  leadership  of  AIPLA First  Vice-President  Rick  Nydegger  –  focusing  on  Patents,  Trademarks,  and  Patent  e‑Commerce  -  to  work  with  the  Office  to  critique  and  offer  suggestions  on  various proposals that the PTO shared with us and on which our input was solicited. The PTO accepted  some  of  the  suggestions  of  the  Task  Force  for  modifying  its  proposals  and rejected  others  as  it  developed  its  Strategic  Plan.  More  recently,  the  PTO  proposed  a sweeping adjustment of the patent and trademark fee structure contained in the fee bill which we are asked to address today. The AIPLA Board of Directors then debated and discussed the PTO’s proposed fee legislation and Strategic Plan for more than six hours of meetings and arrived at the views which I express today. We will continue to review the newer proposals which we have only recently received and to provide our comments to both this Subcommittee and the PTO.

 PTO’s Proposed Fee Bill

       At the outset, I would like to make it very clear that the AIPLA strongly opposes the  PTO’s  proposed  fee  bill.  In  our  testimony  three  months  ago  on  the  President’s Budget, we reiterated our strong opposition to any diversion of patent and trademark fees. We  added  that  if  there  is  a  need  for  additional  resources  for  some  urgent  program  or  service  unrelated  to  the  patent  and  trademark  systems,  the  President  and  the  Congress should explain that need and, if the existing tax revenues are insufficient, propose a tax increase on all citizens who will receive the benefits of such program or service. It should not be hidden away as a stealth tax increase only on America’s inventive community.

      AIPLA continues to oppose diversion and, for that reason and others, we strongly oppose  the  PTO’s  fee  bill.  The  fees  are  fixed  in  the  fee  bill  at  levels  to  recover  the arbitrary amount of revenue targeted in the President’s February Budget, $1.527 billion. This is the same amount that the President had proposed to raise through the imposition of 19% and 10% surcharges on patent and trademark fees, respectively, in order to raise an additional $162 million in revenue to be available for siphoning-off to other, unrelated government  programs.  AIPLA  opposed  the  President’s  Budget  for  the  PTO  principally because of its proposed fee diversion; AIPLA opposes the fee bill proposed by the PTO because it contemplates the same diversion.

      At the Oversight Hearing on the PTO’s Fiscal Year 2003 Budget in April, AIPLA stated  that  “We  would  support  a  reasonable  statutory  fee  increase  to  implement  a  five year plan that would achieve the goals Congress and we seek.” Unfortunately, the fees contained in the bill are excessive because they  are arbitrarily set to bring in a total of $1.527 billion.

      Moreover,  the  fees  are  not  reasonably  tied  to  achieving  the  objectives  of  a thoughtful  business  plan.  There  are  several  aspects  of  the  fee  bill  which  fail  in  this respect. For example, under the President’s FY 2003 Budget, the PTO proposed to collect $1.527 billion in revenue from user  fees (including the surcharges noted above) which were  to  be  paid  for  and  used  to  process  404,600  patent  applications  and  330,000 trademark  applications.  Due  in  part  to  the  current  economic  downturn,  the  PTO  has downwardly revised its projections for patent and trademark application filings, and now estimates that only 338,000 patent applications and 254,000 trademark applications will be filed in FY 2003. Notwithstanding this significant projected reduction in filings, the PTO still proposes a fee bill designed to raise the same $1.527 billion in fee revenues as proposed in the President’s FY 2003 budget when the combined application filings were projected to be some 24% greater. The fees have simply been set at levels designed to raise the targeted revenue amount of $1.527 billion dollars, rather than being tied to real costs of doing business under the Strategic Plan.

      The levels of fees necessary to raise the President’s targeted amount of revenue are in fact so high that we believe that the PTO underestimates the adverse impact these fees will have on patent applicants. And it must be kept in mind that U.S. inventors and companies  will,  under  the  Strategic  Plan  proposed  by  the  PTO,  have  the  additional expenses  of  paying  to  obtain  a  search  and  to  request  examination  based  on  the  search results. These fees and other associated costs will preclude some independent inventors and  start-up  companies  from  using  the  patent  system  and  they  will  clearly  have  a dampening effect on the use of the system by major American companies.

      We  also  believe  that  the  fee  schedule  proposed  by  the  PTO  could  possibly generate more than $1.527 billion in revenue. In this regard, we understand that, under the President’s Budget, the PTO expected to recover $411,300,000 in maintenance fees in FY 2003. Under the revised fee schedule, where maintenance fees are increased by 48%, the  PTO  is  estimating  that  in  FY  2003  it  will  receive  only  $449,632,392  in  patent maintenance  fees  -  a  mere  9%  increase.  Similarly,  the  new  patent  examination  fee  of $1250 for utility patent applications is expected to raise $153,500,000 in FY 2003, but we understand  from  the  PTO  that  this  amount  represents  only  one-half  of  the  amount  that this new fee will generate in the following years. This is because the Office expects that only 50% of the applicants who file in FY 2003 under the proposed 18-month deferred examination system will request examination in FY 2003. This means that the overall fee revenue for the PTO will automatically increase by more than 10% in FY 2004 from just this  one  fee,  without  taking  workload  or  inflation  into  account.  While  we  cannot definitively say that this will be the case with other fees as we have not yet had sufficient opportunity  to  study  the  proposed  fees  and  PTO  workload  assumptions  (which  have changed  during  the  process),  these  points  demonstrate  some  of  the  reasons  why  we believe the proposed fee bill must be rejected by this Subcommittee.

      We do not, however, want to leave the impression that there are not some useful concepts in the fee bill. We believe that certain types of fees as contemplated in the fee bill  can  be  reasonably  tailored  to  foster  best  practices.  Establishing  fees  to  ensure  that applicants  will  pay  the  actual  costs  of  the  effort  required  on  the  part  of  the  PTO  to examine  applications  could  have  the  salutary  effect  of  discouraging  applicants  from needlessly  filing  inordinately  large  numbers  of  claims  and  excessively  long  patent specifications. It would also be fairer to those applicants whose applications are shorter and do not require as much examination effort. We do not believe, however, that steeply escalating  fees  for  claims  should  begin  with  the  4th  independent  claim  or  the  21st  total claim  in  an  application.  Beginning  moderately  increased  fees  with  the  7th  independent claim and the 41st total claim would avoid penalizing the more than 95% of applicants who currently fall below these thresholds. Similarly, we believe that the charge for excess pages in patent specifications should not begin at the 51st page if drawings are included – the  76th  page  would  be  more  appropriate  –  and  that  sequence  listings,  source  code listings, and other similar types of lengthy submissions of information, which should be required to be filed on CD-ROMs, should not be included in such calculations.

      The   imposition   of   an   appropriate   surcharge   on   the   filing   of   continuing applications  and  continuation-in-part  applications  beyond  a  reasonable  limit  would discourage the filing of such applications and avoid the prolonged public uncertainty as to the scope of any patent that may ultimately be granted. We do not, however, believe that  such  a  surcharge  should  be  imposed  on  divisional  applications  necessitated  by restriction  requirements  ordered  by  examiners.  In  addition,  we  do  not  believe  that  the Director should have the discretion to begin the imposition of such fees prior to the third continuation or continuation-in-part application.

      Thus, fees designed to encourage best practices  should be set to begin at limits and levels that are not punitive and do not penalize legitimate practices and events. They should  be  fixed  at  limits  and  levels  so  that  those  applicants  who  file  applications  with inordinately large numbers of claims and long specifications will pay for the added effort they impose on the PTO.    The fee  bill would also  impose surcharges on applications merely because they contain  claims  that  are  patentably  indistinct  from  claims  in  other  applications.  The TRANSITIONAL PROVISIONS in Section 4(3)(A) would impose a fee of over $10,000 for a first occurrence of such overlap, with much higher fees for additional cases of such overlap. Revised Section 41(a)(3)(B) in Section 2 of the fee bill would give the Director discretion  to  adjust  this  amount.  We  are  informed  that  this  surcharge  is  “particularly necessary to mitigate any tactical applicant use of multiple applications to circumvent the proposed increases in fees for additional claims.” We believe that such a surcharge would in fact adversely impact applicants who are not seeking to game the system, and that few applicants would engage in such tactics in any event. It is a dangerous solution in search of a problem and should be rejected.

      One of the most fundamental issues that is addressed both in the fee bill and in the proposals  for  procedural  and  operational  changes  relates  to  deferred  examination.  The notion of deferred examination is an integral feature of the PTO’s proposed Four-Track system.   The   fee   bill   addresses   deferred   examination   in   two   places.   First,   in   the TRANSITIONAL PROVISIONS in Section 4(3)(A), the fee bill sets an initial period of 18  months  from  the  earliest  effective  U.S.  filing  date  for  requesting  examination  and paying the examination fee. Second, in revised section 41(a)(4) contained in Section 2 of the fee bill, the Director would be given discretion to modify the period for requesting examination and paying the examination fee.

    The adoption of a deferred examination system by the United States would be a significant  departure  from  the  existing  U.S.  system  where  all  applications  filed  are automatically  examined.  The  PTO  is  proposing  18-month  deferred  examination  to “allocate USPTO resources more rationally and to serve the actual needs of the customer better.” The PTO expects that the imposition of the additional fee for examination, after the opportunity to evaluate the search results, will induce a reduction in the number of applicants  opting  for  substantive  examination.  It  reasons  that  this  will  both  free  up examiner  resources  and  allow  applicants  to  avoid  paying  the  examination  fee  for applications they are no longer interested in pursuing. The PTO estimates a drop-out rate of 10% with the proposed 18-month deferral period.

      With  the  benefits  projected  for  the  PTO  and  patent  applicants,  however,  come certain costs for the public and the competitors of applicants. Delay in beginning of the examination process extends the period of uncertainty during which the public will not know whether a patent will issue or what its scope will be. Thus, a deferred examination system should only be adopted if it is clear that the benefits outweigh the drawbacks. The balance  that  AIPLA  strikes  between  these  two  competing  interests  is  driven  by  the constraints which exist in the world in which we find ourselves.

      Having considered the competing interests and the structure proposed by the PTO in its Four-Tracks system, AIPLA has determined that it would not object to a period of deferral of 14 months or less. We believe that this strikes an appropriate balance; it would allow  both  domestic  and  foreign  applicants  the  opportunity  to  obtain  a  search  from  an examiner,  Certified  Search  Service  (or  CSS),  or  a  foreign  patent  office,  and  would minimize the delays inherent in this procedure. For this reason, however, AIPLA opposes the  18-month  period  of  deferral  in  the  TRANSITIONAL  PROVISIONS  of  the  fee  bill and opposes the provision in revised section 41(a) (4) giving the Director discretion to modify  the  period  for  requesting  examination  and  paying  the  examination  fee.  Any period of deferral should be fixed by statute.

      Finally,  we  would  note  that  our  position  on  deferred  examination  is  within  the context of the proposed Four-Tracks system. Were AIPLA given a blank sheet of paper, we would not have opted for the plan before us today. Thus, whether AIPLA would reach the  same  conclusion  regarding  deferred  examination  in  a  different  context  can  only  be determined after we have had the opportunity to review any such proposal.

      For  the  reasons  stated  above,  we  urge  the  Subcommittee  to  reject  the  PTO’s proposed fee bill. We have heard the dire prediction that if this fee bill is rejected, the PTO  will  not  be  given  sufficient  funding  to  carry  out  its  Strategic  Plan.  We  find  that prospect considerably less frightening than a fee bill that prices the inventing community out of the patent system.

 Proposals for Procedural and Operational Changes

       AIPLA approaches the evaluation of the PTO’s operational changes in the real- world  context  in  which  it  has  been  proposed.  The  United  States  patent  examination system  has  been  developed  over  a  two-hundred-year  period,  with  constant  refinements and improvements. And although the Plan before us differs significantly from this time- tested system, we recognize that the PTO has to work in a system of constraints imposed by the Executive Branch and the Congress. While the PTO could continue to pursue a more traditional approach of asking for increased examiner resources to improve quality and reduce pendency, neither the Executive Branch nor the Congress are going to listen. Congress  has  made  it  very  clear  that  it  demands  a  new  approach,  one  that  seeks  other ways  to  tackle  these  problems.  So  we  could  pursue  the  old  way  and  watch  the  system continue to deteriorate, or we can try to work with the PTO to develop alternative ways to fix  the  problems,  ways  that  might  gather  the  needed  support.  We  can  either  curse  the darkness or try to light a candle. AIPLA has chosen to try to light a candle.

      AIPLA  appreciates  the  comprehensive  effort  the  PTO  is  making  to  address  the quality,  pendency,  and  electronic  processing  issues  it  faces.  In  this  regard,  the  “21st Century  Strategic  Plan”  evidences  an  effort  to  develop  a  strategy  for  enlisting  the capabilities  of  patent  examining  offices  globally  to  join  in  the  common  struggle  all offices face under the increasing crush of patent applications worldwide. While we have concerns  about  several  of  the  specific  details  of  the  Plan,  we  would  not  wish  our reservations to obscure the desirable innovations proposed.

      The  initiatives  to  create  a  competitive  compensation  package  for  Supervisory Patent  Examiners  to  attract  and  retain  the  best  employees  in  these  jobs,  develop suitability tests for potential examiner candidates, establish “training art  units” for new examiners in high volume hiring areas, and develop a testing process to certify examiners for promotions are all right-on to enhance patent quality. Expanding the “second set of eyes”  concept  successfully  used  with  business  method  patent  applications  to  other technology areas and to the expedited examination options in the trademark area would be welcome. Enhancing the reviewable record by increasing the amount of information included in patent application files regarding applicant/examiner interviews will assist the public  to  better  appreciate  the  exact  metes  and  bounds  of  any  resulting  patent.  AIPLA supports  these  steps  and  a  number  of  other  actions  that  the  PTO  has  proposed  in  the papers  associated  with  the  Strategic  Plan.  We  turn  now  to  the  central  features  of  the restructuring proposed by the PTO.

Four-Tracks System

      Central  to  the  PTO’s  plans  for  restructuring  its  patent  examination  process  in order  to  improve  the  quality  and  reduce  the  pendency  of  patents  is  its  “Four-Tracks Patent   Examination Process” which would   base   examination   on   patent   searches conducted by private firms and other patent offices. By using searches from CSSs, and other patent offices, the PTO hopes to off-load the search work from examiners, allowing them  to  concentrate  on  the  core  government  function  of  examination.  And  as  noted above, the proposed adoption of an 18-month deferred examination system, is an integral feature of the Four-Tracks system.

      There is one point about which AIPLA would like to be very clear. Page three of the  Strategic  Plan  states  that,  provided  the  PTO  receives  the  funding  and  statutory changes  necessary  to  implement  the  Strategic  Plan,  it  will  “Achieve  and  maintain  18 months  patent  pendency2  by  2008,  compared  to  over  25  months  in  the  2003  Business Plan.” However, footnote 2 states that

[P]endency  [under  the  Strategic  Plan]  is  redefined  as  the  examination  duration period  (i.e.,  from  the  time  the  applicant  requests  examination  to  the  ultimate disposition  of  the  patent  application).  This  measure  is  the  same  measure  that  is used internationally in systems that permit deferred examination and is the proper metric of USPTO examination performance. When the average period of deferral is  added,  the  average  pendency  from  filing  of  the  application  to  issue  or abandonment would be 27 months.

 Measuring  pendency  from  the  time  applicants  request  examination  would  change  the traditional method for measuring patent application pendency.  It would  make it appear that the PTO was achieving success in reducing pendency, when the pendency could in fact be greater than today, e.g., note the need to add 9 months to the 18-month 2008 goal if pendency were measured in the traditional manner. While we do not object to the PTO measuring   pendency   from   the   date   examination   is   requested   to   the   date   of issue/abandonment,  measuring  pendency  from  the  date  an  application  is  filed  in  the United States to the date of issue/abandonment is the critically important measure of the period of uncertainty that the public and competitors endure.

      AIPLA welcomes the PTO’s proposal to make greater use of International Style Search  Reports  (ISSRs)  prepared  by  International  Search  Authorities  under  the  Patent Cooperation Treaty and by other patent offices under their national procedures by giving such searches “near full faith and credit.” We understand that such searches will be used by  the  PTO  only  following  its  determination  that  a  given  office  can  produce  quality searches, a necessary prerequisite to achieving the quality levels we seek. This is clearly a step  in  a  direction  that  will  lead  to  greater  cooperation  and  work-sharing  among  the world’s major patent offices. We are not prepared, however, for the PTO to give “near full faith and credit” to the examination conducted by another patent office. Not only do the laws, practices, and procedures of other patent offices differ from those of the PTO, but even the translation of the claims can distort the exact scope of what was allowed. AIPLA can only agree to giving “near full-faith-and-credit” to the search done by another IP office that has been approved by the PTO.

      AIPLA can accept the proposal of the Office to develop qualified CSSs to prepare ISSRs  using  criteria  similar  to  those  used  to  designate  an  International  Searching Authority under the Patent Cooperation Treaty. Our position is based on the assurances that the PTO has given that it will particularly focus on the competency of the CSS to perform  high  quality   searches  and  that   each  CSS  will  be  subject  to  regular  re-certifications.

      We do not believe, however, that applicants should be required or even permitted to procure searches directly from CSSs and submit them to the PTO when they request examination  of  their  applications.  We  are  concerned  that  the  presumption  of  validity could be adversely affected if the PTO simply hands off the responsibility for obtaining the search to applicants and CSSs. The PTO must ultimately be responsible for ensuring that the searches it relies upon are of the highest quality, whether done by its examiners, CSSs, or qualified foreign patent offices. Particularly with a CSS, PTO examiners should always  assess  whether  the  search  was  complete  and,  if  not,  demand  that  the  CSS  re- search the application and “get it right.” The PTO will select and certify the CSSs and therefore it must exercise the same control over them to provide quality search results as it does over its own examiners. Finally, the ultimate responsibility in each individual case must  rest  with  the  PTO  examiner,  to  ensure  that  the  search  is  complete  in  the  first instance  and  to  conduct  supplemental  searches  as  appropriate  as  the  claims  in  the application are modified as the application advances through the examination process.

Mandatory Information Disclosure Statements (IDS)

For those applicants that have not received a first action on the merits by the time the  PTO’s  proposed  Plan  would  go  into  effect,  the  PTO  proposes  to  impose  what  it describes as a “limited duty of inquiry” on such applicants (as to documents within their possession)  and  a  mandatory  IDS.  The  PTO’s  stated  focus  of  the  information  to  be submitted will be non-patent literature that is related to the claimed invention, including information used to draft the application, information used in the inventive process and information concerning improvements and state-of-the-art. Applicants are to submit the required  information,  with  an  explanation  of  relevancy  for  citations  of  patents  over twenty  and  of  non-patent  literature  over  twenty.  This  mandatory  IDS  procedure  is intended  by  the  PTO  as  a  way  to  transition  those  applications  already  on  file  into  a separate  search  and  examination  procedure  similar  to  those  contemplated  under  the PTO’s Four-Track system.

      AIPLA opposes the imposition of this kind of obligation as well as the proposed requirement  for  applicants  to  explain  the  relevancy  of  prior  art  to  the  claims  for  any references  in  excess  of  twenty.  The  PTO  proposal  goes  far  beyond  the  current  duty  of candor under Rule 56(c). This proposal would unfairly impose an incredible burden on tens of thousands of applicants who have filed patent applications in the last few years, paid the required fees, and expect examination. In terms of time and costs, this burden will fall particularly hard on the largest filers, corporations with hundreds of unexamined applications in the pipeline.

      We also strongly disagree with the PTO’s statement that the public’s concern with the issue of inequitable conduct can be addressed simply by amending Rule 56. Not only would  a  rule  not  adequately  protect  applicants  from  challenges  under  the  judicially- created doctrine of inequitable conduct, but the specific rule proposal once again, as in the case of the proposed CSS procedure, seeks to shift the responsibility for conducting the examination from the PTO to the applicant.

Post-Grant Review

    One final comment about the PTO’s plans to enhance patent quality is in order. Throughout the proposals by the PTO for restructuring the patent examination process, a consistent theme is that a more vigorous post-grant review procedure will be established as  a  safety  net.  While  AIPLA  has  long  advocated  and  supported  a  robust  post-grant opposition  system,  we  do  not  agree  with  the  emphasis  of  the  PTO  on  using  such  a procedure  as  an  integral  part  of  its  quality  enhancement  plans.  In  our  view,  the  PTO should “get it right the first time.”

      In conversations which the AIPLA Patent Task Force had with the PTO, it was reported that the emphasis on post-grant review was in response to mandates it faces to measure the success it makes in improving quality. We cannot see any basis from either the extent of use or the outcome of post-grant proceedings for drawing conclusions of this type as to the quality of the examination process. For example, there has been a grand total of four inter  partes reexamination proceedings instituted since that procedure was created  in  1999.  The  only  conclusion  we  draw  from  this  fact  is  the  conclusion  almost everyone  already  knew:  that  procedure  is  fatally  flawed.  It  informs  no  one  about  the quality of the patents being issued by the PTO.

      Finally, as noted above, AIPLA supports a vigorous post-grant review procedure as  we  have  stated  previously  in  testimony  before  this  Subcommittee.  While  there  are several features in the post-grant procedure proposed by the PTO with which we agree, we also have a number of suggestions for improvements which we are prepared to offer at an appropriate time.


      The  PTO  is  proposing  that  trademark  applicants  be  allowed  to  choose  between four filing options that will affect fees, method of filing, and speed of process. The first of  these  options  would have  the  trademark  applicant  provide  a  likelihood  of  confusion search from a USPTO Certified Search Service. AIPLA does not believe that this option will enhance quality or reduce pendency or costs. The searches that trademark examining attorneys  perform  for  likelihood  of  confusion  issues  are  straightforward  computer searches  of  PTO  records  which  can  be  done  with  relative  ease.  The  issues  in  the trademark  examining  operation  are  very  different  from  those  in  the  patent  examining operation. Moreover, there is concern that search quality, the presumption of validity, and the value of trademark registrations may suffer. Given the absence of any demonstrated need for this proposal, such as a shortage of examiners or growing pendency (as exists on the patent side), AIPLA opposes this option.

      We would like to express our continued support for the Trademark e-Government plan  to  implement  an  electronic  file  management  system  and  begin  e-Government operations on October 1, 2003. Full electronic processing of trademark applications will improve quality and restrain, if not reduce, costs and the need for increasing numbers of employees or contractors to handle increases in filings as the reliance on paper disappears from internal processes.

 Patent e-Commerce

    AIPLA fully supports the PTO’s ongoing effort to accelerate its electronic filing and  processing  initiatives  in  the  patent  operations.  The  implementation  of  a  truly effective, user-friendly system that would permit applicants not only to file, but also to prosecute,  their  applications  electronically  will  save  resources  in  terms  of  staff,  space, and  the  reduction  of  clerical  errors.  We  have  continuing  concerns,  however,  that  those initiatives will not be sufficiently user-friendly to encourage widespread electronic filing of patent applications. Notwithstanding all of the agreements the PTO has entered into with  contractors  and  other  IP  organizations,  we  still  have  not  seen  evidence  that applicants   will   even   be   able   to   easily   and   quickly   file   their   patent   applications. Notwithstanding any agreements or contracts that constrain the manner in which the PTO processes information internally or shares files with other patent offices, we urge the PTO to adopt a system that  will permit applicants to electronically  file documents produced using image files (such as .pdf or .tif) or documents produced using Word or WordPerfect and to receive office actions and all other PTO communications in such formats.


    While AIPLA strongly opposes and urges the rejection of the proposed fee bill for the reasons stated above, we recognize that the PTO must be adequately funded if it is to achieve the quality, pendency, and e-commerce goals it has announced and which AIPLA fully supports. The Task Force established by AIPLA has worked very hard to assist the PTO in its restructuring efforts. Notwithstanding our views on the fee bill, as well as on a number of the structural changes, AIPLA is committed to continuing the efforts begun by the Task Force. The road to strong and healthy patent and trademark systems is going to be  long  and  arduous.  There  will  be  no  magic  wands.  We  believe  that  a  foundation  is being  laid  on  which  we  can  make  real  and  lasting  improvements  to  the  PTO.  AIPLA pledges  its  continuing  support  for  the  goals  Under  Secretary  Rogan  is  seeking  to accomplish and its willingness to work with the PTO and this Subcommittee to achieve those goals.