1

PPACPatents Operations Update

June 18th, 2009

2

Filings, First Actions, & Backlog

471,382528,685

611,114

701,147760,924 771,529 760,795

200,000

300,000

400,000

500,000

600,000

700,000

800,000

900,000

2003 2004 2005 2006 2007 2008 2009Filings First Actions Backlog

FY08•Backlog

increased 1.4%•Filings increased

6.1%•1st Actions

increased 16.6%

•As of 5/31/09

3

Backlog Projections

558,420

177,300

722,400

0

100,000

200,000

300,000

400,000

500,000

600,000

700,000

800,000

2009 2010 2011 2012 2013 2014 2015

Hiring level FY 09/10: 600 examiners; FY 11/15: 1,200 examiners

Hiring level FY 09: 600 examiners; FY 10/14: 1,500 examiners; FY 15: 600 examiners

Hiring level FY 09/15: 600 examiners

4

Total Pendency Projections

32.3

21.7

36.4

0

5

10

15

20

25

30

35

40

2009 2010 2011 2012 2013 2014 2015

Hiring level FY 09/10: 600 examiners; FY 11/15: 1,200 examiners

Hiring level FY 09: 600 examiners; FY 10/14: 1,500 examiners; FY 15: 600 examiners

Hiring level FY 09/15: 600 examiners

5

RCE and Continuations Percentage of Total UPR Filings

RCE and Continuations Percentage of Total UPR Filings *as of March 31, 2009

6.1%6.7%

7.8% 7.9% 7.9% 8.0% 7.8% 7.6% 7.8%

6.3%

11.0% 10.7% 10.4%

12.6% 13.0%14.4%

17.8%

19.7%

24.1%

28.5%

0%

5%

10%

15%

20%

25%

30%

FY 2000 FY 2001 FY 2002 FY 2003 FY 2004 FY 2005 FY 2006 FY 2007 FY 2008 FY 2009*

CON/ Total UPR Filings RCE&CPA&R129/ Total UPR Filings

6

Patent Pendency – FY 2008 and FY 2009

Technology Center Average 1st Action

Pendency (months)1 4th Quarter

FY08

Average 1st Action

Pendency (months)1

2nd Quarter FY09

Average Total Pendency (months)2

4th Quarter FY08

Average Total Pendency (months)2

2nd Quarter FY09

1600 - Biotechnology and Organic Chemistry 19.9 24.3 34.8 34.8

1700 - Chemical and Materials Engineering 27.5 27.3 36.3 37.3

2100 - Computer Architecture Software 30.8 30.0 42.4 41.0

2400 - Networking, Multiplexing, Cable, and Security

36.0 48.3

2600 – Communications 32.5 34.1 43.6 42.6

2800 - Semiconductor, Electrical, Optical Systems

19.5 20.6 28.2 29.1

3600 - Transportation, Construction, Electronic Commerce

24.3 25.1 34.8 34.5

3700 - Mechanical Engineering, Manufacturing and Products

24.7 25.9 32.7 34.7

UPR Total 4th Quarter FY 2008 25.6 26.9 32.2 33.71 “Average 1st action pendency” is the average age from filing to first action for a newly filed application.2 “Average total pendency” is the average age from filing to issue or abandonment of a newly filed application.

7

Hires and Attritions

Staff includes UPR Examiners, SPEs and academy trainers.

1600 1700 2100 2400 2600 2800 3600 3700 4100 Corps

FY 08 Hiring 33 209 183 294 132 173 187 1211

FY 08 Attrits 42 58 105 135 86 69 88 583

FY 08 EOY Staff 540 597 622 531 770 1011 694 644 1008 6417

FY 09 Hires As of April 09

33 63 76 43 85 45 61 77 483

8

End-of-Year Statistics (FY 2008)

468,669 UPR applications filed 28,217 design applications filed 6.1% filing growth over 2007 9.5% attrition (9.9% in FY07, 10.6% in FY06) Patents Staff is composed of the following:

• 6,055 examiners• 414 Supervisory Patent Examiners• 101 Quality Assurance Specialists• 48 SPE/trainers for Patent Training Academy

9

Quality Results

Improving Quality is our Highest Priority.2004

Result2005 Result

2006 Result

2007 Result

2008 Result

5.3% allowance

error

4.6% allowance

error

3.5% allowance

error

3.5% allowance

error

3.7% allowance

error

82% in-process

compliance

86.2% in-process

compliance

90% in-process

compliance

92.2% in-process

compliance

92.5% in-process

compliance

10

Allowance Error Rate

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

Fiscal Year

11

Allowance Rate

30.0

35.0

40.0

45.0

50.0

55.0

60.0

65.0

70.0

75.0

1975 1978 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008

Fiscal Year

41%Mid Year2009

12

Performance Measures FY02-08

40%

50%

60%

70%

80%

90%

100%

2002 2003 2004 2005 2006 2007 2008 2009*

Allowance Compliance Rate IPER Compliance RateBPAI Affirmance/AIP Pre App. Brief - proceed to appeal

*As of May 2009

13

Appeal Conference Effects Actions in Response to Appeal

Brief

58.3%

52.7%

47.0%

40.8%39.3% 39.9% 40.1%

42.8%

51.2%

58.6%61.3%

26.8%

11.4%

0%

10%

20%

30%

40%

50%

60%

70%

FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08

Examiner's Answers Reopens Allowances Other Actions

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Actions Per Disposal

2.34 2.38 2.40 2.32 2.26 2.27

2.602.76 2.85 2.91 2.91

0.00

0.50

1.00

1.50

2.00

2.50

3.00

3.50

1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009(MY)

Actions Per Office Disposal

15

Affirmance Rate* at BPAI by TC

Technology Center

FY 06 FY 07 FY 08 FY 09 (May 09)

1600 Biotech 54% 73% 70% 73%

1700 Chemical Eng.

77% 81% 80% 81%

2100 Computers 60% 68% 76% 79%

2600 Communications

62% 80% 74% 77%

2800 Electrical 70% 74% 77% 77%

3600 Mechanical 50% 63% 70% 74%

3700 Mechanical Eng.

56% 73% 73% 74%

Corps. Total 62% 72% 74% 77%* Affirmed and Affirmed in Part

16

Patents’ Initiatives And

Projects

Present and Future - Issues and Solutions

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A Sample of the Strategic Plan Initiatives

Enhance Recruitment & Retention EffortsImplement University Style Patent Training AcademyExpand telework initiativesExplore the development of alternative approaches to examination in collaboration with stakeholders

Pilot Peer Review of Published ApplicationsImplement Accelerated Examination InitiativePilot First Action InterviewContinue increase of e-filingStudy/Pilot/Implement Worksharing amongst IP Offices

18

Hiring & Recruitment

Hiring Efforts• FY 2008:1211 Examiners hired

Recruiting• Targeted TV, print, radio, and Internet

banner advertising: “Examine the Possibilities”

• Increased career and job fair participation• Recruitment incentives• Partnerships with universities

19

Training Academy

Eight month university style training academy

•Begun in FY 2006•Have begun 30 classes; graduated 22

o Nearly 2,289 new examiners graduated into the corps to date

•Facilitate more efficient training of large numbers of new hires; reduce early attritions

Foreign Examiners In Residence (FEIR)Chief Scientist / Academy Professor Position

20

Outreach Programs

University Outreach– Educating students on intellectual property

» Ensuring that students are thinking about protecting their own innovations

» Ensuring that students understand the impacts of piracy and other forms of intellectual property theft

» Ensuring USPTO name recognition » Ensuring that students know the advantages of a career at

the USPTO

– Creating a pool of potential hires who have a foundation of patent examination knowledge

» Engaged with universities on hosting  IP programs in their engineering and business schools 

– Leveraging university resources to train examiners» Webster University providing advanced legal training to

senior examiners » 3 part course on how patent litigators use prosecution

history in infringement proceedings (enhances examiners understanding of the importance of file history accuracy and clarity)

21

Retention

Initiatives to develop USPTO as an “employer of choice”

“Maximum Opportunity” & “Maximum Flexibility”:• Telework• Hoteling• Flexible work hours• Retention bonuses• Higher general pay

22

Patents Hoteling Programs

Patent Examiner Hoteling Program•Over 1,500 Patent Examiners participating in the Patents Hoteling Program, since initiated in 2006•Program allows examiners to work from home 4 days per week with USPTO electronic tools•Will add additional 500 examiners to program in FY 2009

TSS Hoteling Program•Piloted from September 2006 to September 2007•Currently, 87 TSS hoteling•Survey indicated high levels of satisfaction with pilot and desire to continue

23

Patents Teleworking & Laptop Programs

Over 2300 laptops distributed through PELP

Both Hoteling and Laptop programs show production gains in line with increase in total examination time, as well as improved morale and job satisfaction

24

Worksharing

Number of initiatives underway to promote examination efficiencies in participating IP offices.Patent Prosecution Highway (PPH)

•An initiative which leverages fast-track patent examination procedures available in Partnering Offices to obtain patents faster and more efficiently. •It permits Partnering Offices to benefit from work previously done by the other office, in turn reducing examination workload and improve patent quality.•Full implementation (January 4, 2008) - JPO•Pilot – UK IPO, CIPO (Canada), EPO, IPAU (Australia) and KIPO (Korea)

25

Worksharing - Foundation Projects

Common documentation database (EPO): Assemble a common set of relevant patent and non-patent literature from around the world to assist patent examiners in their prior art searches

Common approach for a hybrid classification (EPO): Enable joint and efficient updating of patent classification and facilitate reuse of work among the patent offices

Common application format (JPO): Facilitate the filing procedure of each office by using a common application format and an electronic or digitized patent application filing (in XML) and subsequent processing and publication in XML

Common access to search & examination results (JPO): Enable examiners to find one-stop references in the dossier information of other offices, such as search and examination results, and conduct priority document exchange (PDX) to reduce costs of ordering copies of priority documents for applicants and administrative costs of electronic processing for offices

Common training policy (KIPO): Standardize the training of patent examiners at each office, helping examiners to produce equivalent results of search and examination at the five offices

Mutual machine translation (KIPO): Help offices overcome the language barrier of patent information and allow greater access to each other's patent information

Common rules for examination practice & quality control (SIPO): Execute patent examinations at a similar standard and quality through common rules of examination practice and quality control

Common statistical parameter system for examination (SIPO): Establish a system of common statistical parameters for all examinations at the five offices; and conduct statistical tasks and exchange information on examination practices under common rules and parameters, building on work of the Trilateral statistical working group

Common approach to sharing & documenting search strategies (PTO): Promote re-utilization by enabling patent examiners of each office to understand each other's search strategy

Common search & examination support tools (PTO): Establish system of common search and examination tools to facilitate work-sharing

26

PPH Statistics

PPH Partner Type Start Date End date Requests Received (4/1/09)

JPO pilot 7/3/06 1/3/08 274

JPO Full 1/4/08 520

UKIPO pilot 9/4/07 9/4/08 (extended until further notice)

50

KIPO (Korea) pilot 1/28/08 1/28/09 125

CIPO (Canada) pilot 1/28/08 1/28/09 6

IPAU (Australia) pilot 4/14/08 4/14/09 4

EPO pilot 9/29/08 9/29/09 4

DKPTO (Denmark)

pilot 11/3/08 11/3/09 0

IPOS (Singapore) pilot 2/2/09 2/2/10 0

27

Peer Review Pilot

For members of the public to submit prior art with commentary, using Internet peer review techniques, in volunteered published applications to a public website (www.peertopatent.org) – 143 applications volunteered – TC 2100 and 3600 Business Methods technology only – 10 pieces of prior art max per application (avg. was 4)

56 applications have received at least a first action on the merits – 7 received a rejection using peer found prior art – 10 others received a rejection using art found by both the examiner and the

peers – 39 art found by examiner

Pilot extended 1 year to include Business Methods – Class 705 – Encourage more participation – Technology heavy with Non-patent literature

Over 22,000 letters from the USPTO were mailed out in applications that may be eligible for the pilot, 52 consent forms were filed as a direct result of this mailing

28

Accelerated Examination

Change in practice effective August 25, 2006.

Opportunity for final determination in 12 months.

Participation requires:• Applicants provide greater information up

front – pre-examination search and accelerated examination support document

• File application using electronic fling system • Agree to interviews• Limited number of claims

29

Accelerated Examination Current Statistics

As of May 2009:• 914 applications allowed

o On average, 197 days to complete prosecutiono Minimum number of days to complete prosecution: 18

69.7% Allowance Rate for FY08 80.3% Allowance Rate for FY09 (as of May 09)

Participants’ response & comments positive• Not only faster, but high quality

30

Accelerated Examination Current Statistics

AE Petitions filed per month

11

37 3624

4049 54 56

78 76 7971

4935

110

7489

99 94

172

192201

167

241

172158

120

97

136

88

4049

0

50

100

150

200

250

300

Aug-0

6

Sep-0

6

Oct-

06

Nov-0

6

Dec-0

6

Jan-

07

Feb-0

7

Mar

-07

Apr-0

7

May

-07

Jun-

07

Jul-0

7

Aug-0

7

Sep-0

7

Oct-

07

Nov-0

7

Dec-0

7

Jan-

08

Feb-0

8

Mar

-08

Apr-0

8

May

-08

Jun-

08

Jul-0

8

Aug-0

8

Sep-0

8

Oct-

08

Nov-0

8

Dec-0

8

Jan-

09

Feb-0

9

Mar

-09

31

First Action Interview Pilot

Applicant requests to participate, 493 applicants had joined the pilotApplication is NOT taken out of turn “Preliminary office action” is prepared and mailed to applicant – condensed version of typical first action on the merits After interview applicant receives copy of action or allowance with entry of proposed amendmentPiloted in two workgroups of TC 2100

32

FAI Statistics as of May 4, 2009

493 Applicants have joined the pilot program370 Pre-interview Communications (PFA OA)

have been mailed263 Interviews have been conducted226 First Action Interview Office Actions have

been mailed84 Allowances

– 44   allowed after pre-interview communication but before FAI office action

– 15   allowed after the FAI office action– 25   allowed without/before pre-interview

communication

33

FAI Expansion

– POPA Exec Committee agrees to selection of proposed areas for expansion. » These areas are – 1610, 1795, 2160 (in

original pilot), 2440&50 (in original pilot), 2617, 2811+, 3670 and 3760.

– Pilot process changes– PALM tracking changes– EFS and EDAN changes– Applicant survey

34

Electronic Filing

New EFS-Web system launched March 2006: Allows PDF-based submissions Replaced XML-based system

2005 result: 2.2% of applications filed electronically.2008 result: 71.6% of applications filed electronically.2009 Goal: 80%

As of Dec 14, 2008, 147,640,728 pages have been filed using EFS