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PTO 21st Century Strategic Plan Proposes Deferred Patent Examination, 4-Tier Fee System



Strategic Plan

Table of Contents    (pdf ver.)

Executive Overview

Today, the United States Patent and Trademark Office (USPTO) is under siege.  Patent application filings have increased dramatically throughout the world.  There are an estimated seven million pending applications in the world’s examination pipeline, and the annual workload growth rate is in the range of 20-30 percent.  Technology has become increasingly complex, and demands from customers for higher quality products and services have escalated.  Our applicants are concerned that the fees they pay to have their patent and trademark applications examined are being diverted for other purposes, thereby jeopardizing the benefits intellectual property rights bring to our national economy.  In the United States, these demands have created substantial workload challenges in the processing of patents.  The Congress, the owners of intellectual property, the patent bar, and the public-at-large have all told us that we must address these challenges aggressively and promptly. 

We agree.  We believe that the USPTO must transform itself into a quality-focused, highly productive, responsive organization supporting a market-driven intellectual property system.  And we believe that we have the tools, the skills, the will and the plan to do so. 

•     The tools:  The technology exists to create a high-quality, cost-effective, responsive, paperless patent examination process, building on our current success in automating trademarks.

•     The skills:  We have a cadre of talented staff with the expertise and the vision to help guide and support the technical and, even more important, the cultural transformation of the USPTO. 

•     The will:  Organizational transformations require sustained commitment and constancy of purpose “from the top.”  The USPTO leadership is dedicated to this task.

•     The plan:  This strategic plan lays out our approach for creating, over the next five years, an agile, capable and productive organization fully worthy of the unique leadership role the American intellectual property system plays in both the American and the global economies.

This new 21st Century Strategic Plan is aggressive and far-reaching.  However, anything less would fall short of the expectations of the U.S. Congress, the applicants for, and owners of, patents and trademarks, the patent and trademark bar, and the public-at-large.  Additionally, the failure to adopt this strategic plan would have serious negative consequences.  We would be unable to implement our quality and e-Government initiatives,  pendency would rise to uncontrollable levels, and our costs would continue to grow.

After the implementation of this strategic plan:

•     Market forces will drive our business model.

•     Geography and time will be irrelevant when doing business with the USPTO.

•     We will strengthen our ability to be ranked as one of the highest quality, most-efficient intellectual property organizations in the world.

•     Our products and services will be tailored to meet the needs of customers.

•     Examination will be our core expertise.

•     Our employees will be recognized as expert decision makers.

•     Independent inventors, U.S. industry and the public will benefit from stronger, more enforceable intellectual property rights worldwide.

•     Our workplace will become a state-of-the art facility designed for the 21st Century.

•     Costs will be almost half-a-billion dollars less than under a business-as-usual scenario. 

•     Fees will remain steady for the foreseeable future.

About the 21st Century Strategic Plan

This five-year strategic plan reflects both a thorough internal process review and a systematic attempt to incorporate the best-thinking of our applicants, our counterparts in Europe, Japan and other countries, and our stakeholders.  Key stakeholders also include our dedicated employees, without whose commitment the strategic plan could not have been developed and its success could not be assured. 

The strategic plan takes a global perspective by envisioning the patent and trademark systems of the future that American innovators would need to remain competitive around the world.  It is built on the premise that American innovators need to obtain enforceable intellectual property rights here and abroad as seamlessly and cost-effectively as possible.  It emphasizes the need for the USPTO to collaborate with other intellectual property organizations in automation, global patent classification, and mutual reliance on search results.  Finally, the plan is predicated not only on behavioral changes within the USPTO, but appropriate behavioral changes by all players in the intellectual property system. 

The strategic plan is supported with detailed documentation analyzing all of the related issues, a five-year implementation plan with identified critical tasks, proposed revisions to the fiscal year 2003 budget request to enable early implementation of the strategic plan, and corresponding proposed legislation and regulations necessary for a successful multi-year implementation.

The strategic plan cannot succeed without enactment of the President’s fiscal year 2003 budget, legislation changing the USPTO’s current fee schedule, revisions to current rules, and legislation for streamlining the patent and trademark systems to facilitate these changes.


The USPTO will lead the way in creating a quality-focused, highly-productive, responsive organization supporting a market-driven intellectual property system for the 21st Century. 

We believe that quality must permeate every action taken by every employee of the USPTO.  The new initiatives in our strategic plan are targeted toward timeliness, e-Government, employee development and competitive sourcing – all with a central quality focus. 


The USPTO mission is to ensure that the intellectual property system contributes to a strong global economy, encourages investment in innovation, fosters entrepreneurial spirit, and enhances the quality of life for everyone.

In order to accomplish our mission, we have prepared this strategic plan.  Provided we receive the funding and statutory changes necessary to implement this new strategy, we will:

•     Enhance the quality of patent and trademark examining operations through consolidation of quality assurance activities in fiscal year 2003. 

•     Achieve an average time to first action in patent applications that is more than 50 percent lower than the time projected in the 2003 Business Plan; i.e., 5.8 months in 2008 rather than 12.3 months.

•     Achieve and maintain 18 months patent pendency by 2008, compared to over 25 months in the 2003 Business Plan.

•     Accelerate processing time by implementing e-Government in Trademarks by October 1, 2003, and in Patents by October 1, 2004. 

•     Reduce total patent examiner hires through fiscal year 2008 by 2,500 compared to the 2003 Business Plan projection. 

•     Competitively source classification and search functions, and concentrate Office expertise as much as possible on the core government functions.

•     Expand our bilateral and multilateral discussions to strengthen intellectual property rights globally and to reduce duplication of effort among offices.

1 The 2003 Business Plan was submitted to the Congress in February 2002 as part of the USPTO’s fiscal year 2003 President’s Budget.

2 Pendency, or the time to process a patent application, will be measured from the time the applicant requests examination, consistent with the method used internationally.

Strategic Themes

To achieve our vision and accomplish our mission, we must transform our organization and become a more agile, more capable and more productive USPTO.  The Congress has directed us to (1) improve patent and trademark quality, (2) aggressively implement e-Government to handle the workload associated with the 21st Century economy, and (3) reduce patent and trademark pendency.  We have identified three strategic themes that correspond directly to these Congressional requirements:

21st Century economy.  We will work, both bilaterally and multilaterally, with our partners to create a stronger, better-coordinated and more streamlined framework for protecting intellectual property around the world.  We will transform the USPTO workplace by radically reducing labor-intensive paper processing.

We will transform the USPTO by adhering to these themes in each of the improvement initiatives upon which this strategic plan is based, as well as in all of our other programs. These initiatives are discussed in more detail under each of the major theme sections.

Agility:  Address the 21st Century Economy By Becoming a More Agile Organization

An agile organization responds quickly and efficiently to changes in the economy, the marketplace, and the nature and size of workloads.  In pursuit of an agile organization, the USPTO will focus both internally and externally.

As a first priority, we have made electronic end-to-end processing of both patents and trademarks the centerpiece of our business model.

We will create a nimble, flexible enterprise that responds rapidly to changing market conditions.  We will make the USPTO a premier place to work; we will rely on a smaller cadre of highly trained and skilled employees; and we will place greater reliance on the private sector, including drawing on the strengths of the information industry.  We will enhance the quality of work life for our employees by exploring expansion of work-at-home opportunities and moving to the new Carlyle campus facility in Alexandria, Virginia.

Further, we will establish alliances with our friends in other national and international intellectual property organizations to strengthen American intellectual property rights around the world.

Specific actions, with parenthetical cross-references to the analyses and implementation plans in the Appendices, include:

Implement automation for patent and trademark applications

•     Develop a trademark electronic file management system and begin e-Government operations on October 1, 2003.  [E-Government 1]

•     Deliver an operational system to process patent applications electronically by October 1, 2004, including electronic image capture of all incoming and outgoing paper documents.  [E-Government 2]

•     Develop an automated information system to support a post-grant patent review process.  [E-Government 3]   

•     Establish an information technology security program for fully certifying and accrediting the security of every automated information system.  [E-Government 4]  

•     Provide maximum availability of computer systems to examiners, attorneys, the public and other patent and trademark offices in the event of an outage.  [E-Government 5]

Expand work-at-home opportunities

•     Increase the efficiency and return on investment of our work-at-home program and thereby encourage more employees to participate.  [Work-at-home 1]  

Increase flexibility through greater reliance on the private sector or other intellectual property offices

•     Increase reliance on the private sector or other intellectual property offices for:   

•      Classifying patent documents.  [Flexibility 1]

•      Supporting national application and Patent Cooperation Treaty search activities.  [Flexibility 2] 

•      Transitioning to a new global patent classification system.  [Flexibility 3] 

•      Classifying trademark goods/services and searching design codes.  [Flexibility 4]  

Global Development:  Streamline intellectual property systems and strengthen intellectual property rights around the world

•     Promote harmonization in the framework of the World Intellectual Property Organization and its Standing Committee on the Law of Patents; resolve major issues in a broader context and pursue substantive harmonization goals that will strengthen the rights of American intellectual property holders by making it easier to obtain international protection for their inventions and creations.  [Global Development 1] 

•     Negotiate bilateral and multilateral agreements to facilitate global convergence of patent standards.  [Global Development 2] 

•     Accelerate Patent Cooperation Treaty reform efforts, focusing on the USPTO’s proposal for simplified processing.  [Global Development 3] 

•     Develop a “universal” electronic application by leveraging the United States’ experience with electronic filing of trademark applications.  [Global Development 4]

Share search results with other intellectual property offices

•     Reduce duplication of effort and decrease workload by relying on search results obtained via partnerships with other intellectual property offices.  [Work Sharing 1] 

Planned Agility Accomplishments

•     Accelerate processing time by implementing e-Government in Trademarks by October 1, 2003, and in Patents by October 1, 2004. 

•     Competitively source classification and search functions, and concentrate USPTO expertise as much as possible on its core government functions.

•     Expand our bilateral and multilateral discussions to strengthen intellectual property rights globally and to reduce duplication of effort among intellectual property offices.

Capability:  Enhance Quality Through Workforce and Process Improvements

A capable organization has a highly skilled, appropriately sized workforce; it has systems and procedures that enhance the capability of every employee; and it has in place effective quality management processes to ensure high quality work and continuous performance improvement.  In other words, a capable organization is committed to doing the right job right – the first time and every time.  We will be such an organization.

Quality will be assured throughout the process by hiring the people who make the best patent and trademark examiners, certifying their knowledge and competencies throughout their careers at the USPTO, and focusing on quality in all aspects of the examination of patent and trademark applications.  By bolstering confidence in the quality of U.S. patents and trademarks, the USPTO will enhance reliability in the quality of products and services needed to increasingly spur our economy and reduce litigation costs.

Specific actions, with parenthetical cross-references to the analyses and implementation plans in the Appendices, include:

Enhance workforce capabilities by certifying competencies

•     Create an enterprise-wide training strategy that meets the needs of the new business model and the e-Government generation.  [Transformation 1]

•     Restructure the USPTO by redirecting resources to core examination activities, implement revised performance plans to incorporate changes required to implement an e-Government workplace, meet agency-wide standards for senior executives, and implement selected award packages.  [Transformation 2] 

•     Transform the workforce by exploring alternative organizational concepts and structures. [Transformation 3] 

•     Ensure that professionals, support staff and supervisors responsible for the patent process possess the requisite skills needed to carry out their responsibilities.  [Transformation 4] 

•     Address employee skills needed for e-Government within patents and trademarks.  [Transformation 5]  

•     Implement pre-employment testing for patent examiners.  [Transformation 6] 

•     Recertify the knowledge, skills and abilities of primary examiners to ensure currency in patent law, practice and procedures.  [Transformation 7] 

•     Certify the legal competency and negotiation abilities of patent examiners before promotion to grade 13.  [Transformation 8]  

•     Improve the selection and training of supervisory patent examiners to focus on their primary responsibilities of training patent examiners and reviewing and approving their work.  [Transformation 9] 

Make improvements in patent and trademark quality assurance techniques

•     Enhance the current quality assurance programs by integrating reviews to cover all stages of examination.  [Quality 1]

•     Expand reviews of primary examiner work.  [Quality 2]

•     Engineer quality into our processing, including the selective expansion of the “second-pair-of-eyes” review of work products in such advanced fields of technology as semiconductors, telecommunications, and biotechnology. 
[Quality 3] 

•     Incorporate an evaluation of search quality into the patent work product review process, and survey practitioners on specific applications.  [Quality 4]  

•     Enhance the reviewable record of prosecution in patent applications.  [Quality 5]

3 A secondary review of applications for proper claim interpretation and to ensure that the closest prior art has been discovered and correctly applied.

•     Certify and monitor the quality of newly created searching authorities to ensure that patent searches provided by the private sector or other patent offices are complete and of high quality.  [Quality 6] 

Make process improvements that contribute to enhanced quality through legislative/rule changes.

•     Propose legislation and/or rule changes that have been identified as critical for the accomplishment of this strategic plan.  Continue the process of seeking comments from stakeholders on proposed changes. 

Planned Capability Accomplishments

•     Enhance the quality of patent and trademark examining operations through a comprehensive quality assurance program in fiscal year 2003. 

Productivity:  Accelerate Processing Times Through Focused Examination

We are committed to promoting advances in technology, expansion of business opportunities and creation of jobs through the timely issuance of high quality patents and trademarks.  A productive organization maximizes its output of work performed.  Improved productivity is key to reducing pendency and inventory. 

This strategic plan, when fully implemented, would ensure a steady 18-month average pendency time in Patents – by far the fastest in the world – and a 12-month pendency time in Trademarks.  This will be accomplished through a radical redesign of the entire patent search and examination system based upon four examination tracks, greater reliance on commercial service providers, and variable, incentive-driven fees.  Likewise, Trademarks will restructure the way it does business to be compatible with an e-Government environment.

A secondary review of applications for proper claim interpretation and to ensure that the closest prior art has been discovered and correctly applied.

Specific actions, with parenthetical cross-references to the analyses and implementation plans in theAppendices, include:

Transition to market-driven examination options

•     Adopt procedures that give greater choice and flexibility to trademark applicants for filing and examination of applications for the registration of trademarks, with a focus on using technology to improve the process and provide a lower cost filing option.  [Pendency 1]  

•     Move from a “one-size-fits-all” patent examination process to a four-track examination process that leverages search results of other organizations and permits applicants to have freedom of choice in the timing of the processing of their applications.  This new process will eliminate duplication of effort, encourage greater participation by the applicant community and public, permitting lapse of applications when examination is not requested, and improving the quality of our patents and decreasing processing time.  [Pendency 2] 

•     Reduce the number of claims presented for examination in an application and the size of applications through fee-setting legislation.  [Pendency 3]  

•     Achieve greater examiner productivity by reducing their prior art search burden.  [Pendency 4]  

Implement an accelerated examination path option

•     Offer patent applicants the market-driven “new rocket docket” option of choosing an accelerated examination procedure with priority processing and a pendency time of no longer than 12 months.  [Accelerated Examination 1] 

Share responsibility for timely and high quality patents and trademarks
between applicants and the USPTO

•     Seek legislation to restructure the USPTO fee schedule by October 1, 2002, and thereby create incentives and disincentives that contribute to achievement of USPTO goals, for example, the filing fee will be reduced to incentivize applicants to file, and a separate examination fee will be established to permit applicants to choose the timing for examination.  [Shared Responsibility 1]

•     Make patents more reliable by proposing amendments to patent laws to improve a post-grant review of patents.  [Shared Responsibility 2] 

Planned Productivity Accomplishments

•     Achieve an average time to first action in patent applications that is more than 50 percent lower than the time projected in the fiscal year 2003 Business Plan; i.e., 5.8 months in 2008 rather than 12.7 months.

•     Achieve and maintain 18 months patent pendency by 2008, compared to over 25 months in the 2003 Business Plan.  [See Figure 1 on page 10]  

•     Reduce total patent examiner hires through fiscal year 2008 by 2,500 compared to the 2003 Business Plan projection.  [See Figure 2 on page 10]   

[link-chart]Patent Examiner Hiring Comparison

Figure 1.  Patent Examiner Hiring Comparison

[link-chart]Patent Pendency Comparison

Figure 2.  Patent Pendency Comparison

Critical Needs

The performance commitments outlined in this strategic plan demand extraordinary effort from every USPTO employee and the full support of our key stakeholders.  Our strategic plan is built around the following critical needs.

Multilateral and Bilateral Agreements

We will need  to consult with, and receive the support of, other patent offices in structuring new bilateral and multilateral initiatives.


We will need enactment of legislation by the Congress to adjust certain patent and trademark fees by October 1, 2002.  We also will need to promulgate final rules to effect fee changes. 

We will need to continue working to develop the proposed legislative and rule changes that have been identified and continue the process of seeking comments from interested parties on ways to improve our operations. 

Labor Relations

We will need to notify the three bargaining units representing USPTO employees of proposed changes and negotiate, where necessary, any changes in working conditions.


We will need enactment of an appropriation for fiscal year 2003 that is consistent with the level of the President’s 2003 budget. 

Move to Carlyle in Alexandria, Virginia

We will need to concentrate on the high priority of relocating to a consolidated campus in Alexandria, Virginia, while minimizing any adverse effects on employees, applicants and the public.  The USPTO is quickly moving into the implementation phase of the relocation of its facilities from 18 buildings spread throughout Crystal City to a single lease in a consolidated campus.  This consolidation is expected to save $72 million over the 20-year term of the lease, but it is a highly complex and difficult endeavor. 

President’s Management Agenda

Secretary Donald Evans has committed the Department of Commerce to speedy implementation of the President’s Management Agenda.  President Bush has stated that true government reform must be based on a reexamination of the role of the Federal government.  In this regard, he has called for “active, but limited” government:  a government that empowers states, cities, and citizens to make decisions; ensures results through accountability; and promotes innovation through competition.  The reforms he has identified to help the Federal government adapt to a rapidly changing world include a government that is:

•     Citizen-centered – not bureaucracy-centered;

•     Results-oriented – not process-oriented; and

•     Market-based – actively promoting, not stifling, innovation, and competition.

This strategic plan supports the President’s Management Agenda:

Human Capital – We will provide the tools and the resources to ensure that we have a highly qualified, certified, knowledge-based, accountable workforce.  Specifically, we will strengthen  pre-employment testing, develop a competency certification program; create a new labor-management paradigm to meet changing business needs; streamline our workforce to maximize quality and efficiency; and focus our training, performance evaluation and assessment environment on our core expertise – examination.

Competitive Sourcing – We are committed to achieving performance enhancements and cost-savings, through the process of competitive sourcing.  This process compares the capabilities and costs of commercial service providers with current government program providers.  Greater competition drives down costs and yields more innovative solutions.  We will seek improved effectiveness in the following areas: patent and trademark searching, patent document classification, and information technology and logistical support operations.

Improved Financial Management – The USPTO has a strong, fully integrated financial management system in place and we will continue to strengthen our internal controls, improve the timeliness and usefulness of our management information and continue to achieve an unqualified financial audit opinion.

E-Government – We are accelerating the deployment of critical automated information systems, particularly electronic end-to-end processing of patent and trademark applications.  In addition, we are currently working on ways to improve delivery schedules, reliability, performance, security and the cost of all of our automated information systems.

Budget/Performance Integration – We will allocate budget resources based on the concept of linking them to the achievement of both enterprise-wide goals and individual unit performance.  The USPTO will expand the involvement of applicants and the public in assessing the accomplishment of our goals and performance targets. 

As a reflection of our commitment to fund our strategic priorities, we have identified over $81 million in fiscal year 2003 resources that we will redirect to the examination process. 

Long-Term Agenda

This strategic plan is only the first step toward creating a quality-focused, highly productive, responsive USPTO that supports a market-based intellectual property system for the 21st Century.  Once the initial phases of this plan have been supported, adopted and implemented, the USPTO
will explore further options to enhance its ability to more operate like a business. 

Within the framework of the legislative and regulatory packages there are a number of items that will be implemented in the out years of the strategic plan:

Restriction practice – We will continue to explore the treatment of applications containing multiple inventions at the international level in connection with WIPO’s Standing Committee on Patents and within the framework of the Trilateral Offices (Europe, Japan, and the U.S.).  Therefore, any changes to restriction practice would be considered within the context of this international framework. 

Patent term adjustment – Before seeking legislation to simplify patent term adjustment, we will explore a number of options to address this issue with the small business community and other key stakeholders. 

Mutual exploitation of examination results – We will take a cautious approach to mutual exploitation of examination results by first evaluating International Preliminary Examination Reports that are generated during national stage examination.  We will then consider whether the acceptance of examination results (granted patents) from foreign offices is a proper basis for use in counterpart applications in the United States.  However, the USPTO will never recommend any changes that would compromise our sovereign right to determine patentability issues or to preclude our right to make further examinations when necessary.

Copyright issues – As part of the implementation of the electronic file wrapper, we will ascertain the best means for assuring that these documents in an application file that may be subject to copyright protection can be included in the USPTO’s databases.  The intent of this option would be to ensure full public access to all the information contained in a pending application file.

Third party request for reexamination – As part of the initiative to seek post-grant review legislation, we will explore the need for retention of third-party requested reexamination.

District court actions – We will evaluate the desirability of revising the provisions for judicial review of USPTO decisions to make an appeal to the U.S. Court of Appeals for the Federal Circuit the sole avenue for judicial review of a Board of Patent Appeals and Interferences or the Trademark Trial and Appeal Board decision.

Patent Cooperation Treaty Activities – We will actively pursue revisions to Patent Cooperation Treaty search and examination guidelines to achieve an enhanced level of reliance on International Search Reports and International Preliminary Examination Reports.

Business-like practices – We also will explore whether we have a good justification for operating in a more business-like manner.

USPTO Campus – Once we have settled into the Carlyle campus and have fully implemented automated patent and trademark processing, we will be able to assess the feasibility of expanding our work-at-home program by using such virtual office concepts as telecommuting and flexible workplace to the maximum potential.

Examiner Training – We will evaluate the feasibility of reinstating the Examiner Education Program through corporate sponsorship to enable patent examiners to gain better insights into technological developments in the fields in which they examine.

Some Final Thoughts

This 21st Century Strategic Plan sets forth an ambitious agenda to resolve the crisis all intellectual property organizations are facing.  We believe economic and technological progress in the United States and the global market can be significantly enhanced through the implementation of the initiatives proposed in this plan.

We intend to refine and update our strategic plan periodically to adjust to changing conditions and to incorporate the best thinking of the entire intellectual property community.  We are eager to work with those who believe, as we do, that American innovators and businesses must have the very best intellectual property system in the world.  This 21st Century Strategic Plan represents an important first step in the pursuit of this goal.

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