Under Secretary of Commerce For Intellectual Property and Director of the United States Patent and Trademark Office

Washington, DC 20231 www.uspto.gov A MESSAGE FROM THE UNDER SECRETARY AND DIRECTOR When the Founding Fathers created our new Republic, they carefully drafted our C onstitution to be limited in scope and Federal authority. As they painstakingly crafted the ins titutions of our new government - institutions such as the presidency, the Congress, and the judi cial system - the Founders also saw fit to include a clause anticipating the establishment of a pa tent system and the protection of intellectual property. With their attention focused on the bir th of a new Republic, why did they feel the need to deal with what appears to be, at first b lush, an obscure area of law? The answer is as important to our generation as it was to theirs: they understoo d that their agrarian colony would never grow to be an economic and technological giant unles s there was an incentive for inventors to create, and for other inventors to study and improve upon the creations. From this foresight came the American systems of patents, trademarks and copyrig ht protection, which give inventors and authors the ability to enjoy, for a limited period of t ime, the exclusive economic benefits of their genius. This month marks the 200th anniversary of what is now the United States Patent a nd Trademark Office (USPTO). Although it is much larger and far more technologically advanced than the days when our first unofficial commissioner, Thomas Jefferson, personally examin ed patent applications, it is also hobbled by significant challenges. In Jefferson s day, ap plications fit on a single page; now applications come in on CD-ROMs containing the equivalent of mi llions of pages of data. As the number and technological complexities of applications incr ease, the time required to process them continues to grow. Patent pendency rates now average ov er two years; recent data suggests it soon could grow to over three years. The backlog of olde r applications continues to grow: in 2002 some 340,000 new applications are expected to be file d; they will join a backlog of 408,000 older applications. With only 3,400 examiners to handl e this massive job, a further degradation of the patent system s ability to help bring the newest technologies to market at the earliest possible date will continue unless the paradigm under whi ch the old system operates is changed. Europe, Japan and other industrialized nations face this same crisis. Because ma ny American inventors also seek patent protection in other countries, these international pe ndency tribulations directly injure the ability of American inventors to get prompt overseas protect ion for their

intellectual property. Fully 50 percent of all U.S. exports depend upon intellec tual property protection. Without the assurance of timely and high quality patents, innovation, technology , employment, and economic growth dramatically suffer. The time has come to transform the USPT O from a one-size-fits-all government bureaucracy into a quality-focused, responsive, mar ket-driven intellectual property institution. The Bush Administration will aggressively res pond to this challenge by retooling a two-centuries-old agency to meet the needs of America s n ew Century. This 2 1 st Century Strategic Plan creates an organization worthy of the unique role intellectual property plays in the American and global economies. It begins with a thorough t op-to-bottom review of the entire agency, focused on shifting all our resources toward qualit y and timeliness. It incorporates the best ideas of American inventors and creators, and our count erparts in other industrialized countries. We will pursue three main directions: l Making our processes simpler, faster, and more accurate. l Listening more closely to the voices of our applicants and to the demands of the national and global marketplaces. l Being more productive and spending almost half a billion dollars less than we would otherwise using our current approaches. This strategic plan is our road map for transformation. It lays out exactly what we will do over the next five years to reduce to 18 months the total time it takes to receive a patent, to make both patent and trademark processes almost paperless, and to work with intellectual p roperty offices around the world to create a global framework for enforceable intellectual prope rty rights. It describes initiatives that, once implemented, will allow us to hold fees steady for the foreseeable future. We envision the day when American inventors and businesses can be more competiti ve around the world by obtaining protection worldwide as seamlessly and cost-effectively a s possible. It emphasizes our need to partner with like-minded international intellectual prope rty organizations in areas like e-Government, classification, and mutual reliance on search result s. We will work, both bilaterally and multilaterally, with our global partners to create a highly coordinated and streamlined framework for protecting U.S. intellectual property around the world . Clearly, this 21st Century Strategic Plan is an ambitious one. It also is long o verdue. It will require behavioral changes within the USPTO and among our users. We will need Co ngress to pass legislation relating to our fee schedule. It will depend upon our ability t o streamline operations, and the enactment of President Bush s budget request to fund these nee ded changes. It will require revisions to current rules. In short, it will require a broad ef fort from all

stakeholders to do what our Founders intended us to do: understand that American intellectual property is our single greatest national resource - and encourage its protection and development. Developing the strategic plan was an open and participative process. We are grat eful for the wisdom and experience of the many USPTO employees who contributed, and for the c andor and positive spirit of representatives of the industry groups and others who shared their views. Displayed in my office is the original 1880 patent model for Thomas Edison s incan descent light bulb. It reminds me each day of the USPTO s mission: expedite the market opportuni ties for tomorrow s technologies that will enhance the quality of life for every human bein g. That is why our Founders focused on intellectual property when they drafted our Constitu tion; that is why the Bush Administration intends to remain faithful to their dreams for tomor row. Now it is time to turn promises m nto promises kept. I look forward to working w ith all the system to ensure that the goals presented here become UNITED STATES PATENT AND TRADEMARK OFFICE The 21st Century Strategic Plan June 3, 2002 THE 21ST CENTURY STRATEGIC PLAN EXECUTIVE OVERVIEW VISION MISSION STRATEGIC THEMES AGILITY CAPABILITY PRODUCTIVITY FIGURE 1: PATENT EXAMINER HIRING COMPARISON FIGURE 2: PATENT PENDENCY COMPARISON CRITICAL NEEDS PRESIDENT S MANAGEMENT AGENDA LONG-TERM AGENDA UNITED STATES PATENT AND TRADEMARK OFFICE TABLE OF CONTENTS 1 3 3 4 5 7 8 10 10 11 12 13 UNITED STATES PATENT AND TRADEMARK OFFICE EXECUTIVE OVERVIEW Today, the United States Patent and Trademark Office (USPTO) is under siege. Pat ent 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 dema nds from customers for higher quality products and services have escalated. Our applicant s are concerned that the fees they pay to have their patent and trademark applications examined are b eing diverted for other purposes, thereby jeopardizing the benefits intellectual property rights b ring to our national economy. In the United States, these demands have created substantial workload c hallenges in the processing of patents. The Congress, the owners of intellectual property, the pa tent bar, and the public-at-large have all told us that we must address these challenges aggressiv ely 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, an ything less would fall short of the expectations of the U.S. Congress, the applicants for, and own ers 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 leve ls, and our costs would continue to grow. 21ST CENTURY STRATEGIC PLAN 1 UNITED STATES PATENT AND TRADEMARK OFFICE 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, Our workplace will become a state-of-the art facility designed for the more enforceable intellectual property rights worldwide. 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 a nd 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 dedicat ed employees, without whose commitment the strategic plan could not have been developed and it s success could not be assured. The strategic plan takes a global perspective by envisioning the patent and trad emark systems of the future that American innovators would need to remain competitive around the worl d. It is built on the premise that American innovators need to obtain enforceable intellectual propert y rights here and abroad as seamlessly and cost-effectively as possible. It emphasizes the need for the U SPTO to collaborate with other intellectual property organizations in automation, global patent classific ation, and mutual reliance on search results. Finally, the plan is predicated not only on behavioral change s within the USPTO, but appropriate behavioral changes by all players in the intellectual property syste m. The strategic plan is supported with detailed documentation analyzing all of the related issues, a five-year implementation plan with identified critical tasks, proposed revisio ns to the fiscal year 2003 budget request to enable early implementation of the strategic plan, a nd corresponding proposed legislation and regulations necessary for a successful multi-year imple mentation. 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. 21ST CENTURY STRATEGIC PLAN 2 VISION MISSION of life for everyone. UNITED STATES PATENT AND TRADEMARK OFFICE The USPTO will lead the way in creating a quality-focused, highly-productive, re sponsive organization supporting a market-driven intellectual property system for the 21s t Century. We believe that quality must permeate every action taken by every employee of th e USPTO. The new initiatives in our strategic plan are targeted toward timeliness, e-Gove rnment, 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, an d enhances the quality In order to accomplish our mission, we have prepared this strategic plan. Provid ed 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 Plan1 ; i.e., 5.8 months in 2008 rather than 12.3 months. Achieve and maintain 18 months patent pendency2 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. The period of issuance of the first Office action is measured from the d ate the application is available for examination until the first Office action is completed. 2 This comparison is a measurement of USPTO s traditional examination processing t ime. However, in the 21st Century Strategic Plan, pendency is redefined as the examination duration period(i.e., f rom 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 p erformance. When the average period of deferral is added, the average pendency from filing of the application to issue or abandonment would be 27 months. 21ST CENTURY STRATEGIC PLAN 3 UNITED STATES PATENT AND TRADEMARK OFFICE STRATEGIC THEMES To achieve our vision and accomplish our mission, we must transform our organiza tion and become a more agile, more capable and more productive USPTO. The Congress has di rected us to (1) improve patent and trademark quality, (2) aggressively implement e-Gov ernment to handle the workload associated with the 21st Century economy, and (3) reduce pat ent and trademark pendency. We have identified three strategic themes that correspond directly to these Congressional requirements: 1. Agility: Address the 21st Century Economy by Becoming a More Agile Organization We will create a flexible organization and work processes that can handle the increasing expectations of our markets, the growing complexity and volume of our work, and the globalization that characterize the 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. 2. Capability: Enhance Quality through Workforce and Process Improvements We will make patent and trademark quality our highest priority by emphasizing quality in every component of this strategic plan. Through the timely issuance of high-quality patents and trademarks, we will respond to market forces by promoting advances in technology, expanding business opportunities and creating jobs.

3. Productivity: Accelerate Processing Times Through Focused Examination We will reduce patent and trademark pendency, substantially cut the size of our backlog of work, and recover our investments in people, processes and technology. We will transform the USPTO by adhering to these themes in each of the improveme nt initiatives upon which this strategic plan is based, as well as in all of our ot her programs. These initiatives are discussed in more detail under each of the major theme sec tions. 21ST CENTURY STRATEGIC PLAN 4 UNITED STATES PATENT AND TRADEMARK OFFICE 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 U SPTO will focus both internally and externally. As a first priority, we have made electronic end-to-end processing of both paten ts and trademarks the centerpiece of our business model. We will create a nimble, flexible enterprise that responds rapidly to changing m arket 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 wor k 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 inte rnational intellectual property organizations to strengthen American intellectual property rights aroun d the world. Specific actions, with parenthetical cross-references to the analyses and implem entation 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] 21ST CENTURY STRATEGIC PLAN 5 UNITED STATES PATENT AND TRADEMARK OFFICE 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] 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 f or: 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 Organi zation and its Standing Committee on the Law of Patents; resolve major issues in a broa der context and pursue substantive harmonization goals that will strengthen the righ ts of American intellectual property holders by making it easier to obtain internation al 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 experien ce 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] 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 pro perty rights globally and to reduce duplication of effort among intellectual property offices. 21ST CENTURY STRATEGIC PLAN 6 UNITED STATES PATENT AND TRADEMARK OFFICE CAPABILITY: ENHANCE QUALITY THROUGH WORKFORCE AND PROCESS IMPROVEMENTS A capable organization has a highly skilled, appropriately sized workforce; it h as systems and procedures that enhance the capability of every employee; and it has in place ef fective quality management processes to ensure high quality work and continuous performance impr ovement. 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 paten t and trademark

applications. By bolstering confidence in the quality of U.S. patents and tradem arks, the USPTO will enhance reliability in the quality of products and services needed to incre asingly spur our economy and reduce litigation costs. Specific actions, with parenthetical cross-references to the analyses and implem entation 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] Certification of Knowledge, Skills and Ability in Trademark Process. [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] 21ST CENTURY STRATEGIC PLAN 7 3 UNITED STATES PATENT AND TRADEMARK OFFICE Make improvements in patent and trademark quality assurance techniques Enhance the current quality assurance programs by integrating reviews to cover a ll 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 review3 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] 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 fo r 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 oppo rtunities and creation of jobs through the timely issuance of high quality patents and tradema rks. A productive organization maximizes its output of work performed. Improved productivity is ke y to reducing pendency and inventory. This strategic plan, when fully implemented, would ensure a steady 18-month aver age pendency time in Patents by far the fastest in the world and a 12-month pendency time in Trade marks. This will be accomplished through a radical redesign of the entire patent search and exami nation 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 bus iness 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. 21ST CENTURY STRATEGIC PLAN 8 UNITED STATES PATENT AND TRADEMARK OFFICE Specific actions, with parenthetical cross-references to the analyses and implem entation plans in the Appendices, include: Transition to market-driven examination options Adopt procedures that give greater choice and flexibility to trademark applicant s 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 optio n. [Pendency 1] Move from a one-size-fits-all patent examination process to a four-track examinati on process that leverages search results of other organizations and permits applica nts to have freedom of choice in the timing of the processing of their applications. This ne w process will eliminate duplication of effort, encourage greater participation by the app licant community and public, permitting lapse of applications when examination is not r equested, and improving the quality of our patents and decreasing processing time. [Penden cy 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 o f no longer than 12 months. [Accelerated Examination] 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 t hereby

create incentives and disincentives that contribute to achievement of USPTO goal s, for example, the filing fee will be reduced to incentivize applicants to file, a nd a separate examination fee will be established to permit applicants to choose the timing fo r 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 m onths in 2008 rather than 12.7 months. Achieve and maintain 18 months patent pendency by 2008, compared to over 25 mont hs 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] 21ST CENTURY STRATEGIC PLAN 9 1,000 800 550 300 UNITED STATES PATENT AND TRADEMARK OFFICE 2002 2003 2004 2005 2006 2007 2008 30 25 20 15 Fiscal Year 2003 Business Plan 21st Century Strategic Plan FIGURE 1. PATENT EXAMINER HIRING COMPARISON 2002 2003 2004 2005 2006 2007 2008 Fiscal Year 2003 Business Plan 21st Century Strategic Plan FIGURE 2. PATENT PENDENCY4 COMPARISON 4 Figure 2 shows comparable periods for the patent grant measured from when appl ications are available for examination. To determine average total pendency in the 21st Century Strategic Plan, 9 months should be added to reflect the estimated average request for examination period. Patent Examiners Hired Months 21ST CENTURY STRATEGIC PLAN 10 UNITED STATES PATENT AND TRADEMARK OFFICE 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 i n structuring new bilateral and multilateral initiatives.

Legislation/Rules We will need enactment of legislation by the Congress to adjust certain patent a nd trademark fees by October 1, 2002. We also will need to promulgate final rules to effect fee ch anges. We will need to continue working to develop the proposed legislative and rule ch anges 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 o f proposed changes and negotiate, where necessary, any changes in working conditions. Budget We will need enactment of an appropriation for fiscal year 2003 that is consiste nt 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 facilit ies 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 hig hly complex and difficult endeavor. 21ST CENTURY STRATEGIC PLAN 11 UNITED STATES PATENT AND TRADEMARK OFFICE PRESIDENT S MANAGEMENT AGENDA Secretary Donald Evans has committed the Department of Commerce to speedy implem entation of the President s Management Agenda. President Bush has stated that true government refo rm must be based on a reexamination of the role of the Federal government. In this regard, he has ca lled for active, but limited government: a government that empowers states, cities, and citizens to make deci sions; 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 governme nt 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 w ill 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 q uality and efficiency; and focus our training, performance evaluation and assessment enviro nment 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 capabilit ies 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 effective ness in the following areas: patent and trademark searching, patent document classification, and infor mation 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 contr ols, improve the timeliness and usefulness of our management information and continue to achi eve an unqualified financial audit opinion. E-Government We are accelerating the deployment of critical automated informatio n systems, particularly electronic end-to-end processing of patent and trademark applicatio ns. In addition, we are currently working on ways to improve delivery schedules, reliability, per formance, security and the cost of all of our automated information systems. Budget/Performance Integration We will allocate budget resources based on the co ncept of linking them to the achievement of both enterprise-wide goals and individual uni t 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 iden tified over $81 million in fiscal year 2003 resources that we will redirect to the examinati on process. 21ST CENTURY STRATEGIC PLAN 12 UNITED STATES PATENT AND TRADEMARK OFFICE LONG-TERM AGENDA This strategic plan is only the first step toward creating a quality-focused, hi ghly productive, responsive USPTO that supports a market-based intellectual property system for t he 21st Century. Once the initial phases of this plan have been supported, adopted and implemente d, the USPTO will explore further options to enhance its ability to more operate like a busin ess. Within the framework of the legislative and regulatory packages there are a numb er 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 c ontaining 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.). Th erefore, any changes to restriction practice would be considered within the context of this internati onal framework. Patent term adjustment Before seeking legislation to simplify patent term adjust ment, we will

explore a number of options to address this issue with the small business commun ity and other key stakeholders. Mutual exploitation of examination results We will take a cautious approach to m utual exploitation of examination results by first evaluating International Preliminary Examination Reports that are generated during national stage examination. We will then consider whether the a cceptance 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 c hanges that would compromise our sovereign right to determine patentability issues or to pre clude our right to make further examinations when necessary. Copyright issues As part of the implementation of the electronic file wrapper, w e 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 wou ld be to ensure full public access to all the information contained in a pending application fil e. Third party request for reexamination As part of the initiative to seek post-gra nt 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 provisi ons for judicial review of USPTO decisions to make an appeal to the U.S. Court of Appeals for the Federa l 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 In ternational Search Reports and International Preliminary Examination Reports. 21ST CENTURY STRATEGIC PLAN 13 UNITED STATES PATENT AND TRADEMARK OFFICE Business-like practices We also will explore whether we have a good justificatio n for operating in a more business-like manner. USPTO Campus Once we have settled into the Carlyle campus and have fully impleme nted automated patent and trademark processing, we will be able to assess the feasibi lity 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 E ducation 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 c risis all intellectual property organizations are facing. We believe economic and technolo

gical 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 chan ging 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 m ust 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. 21ST CENTURY STRATEGIC PLAN 14 Actions Agility e-Government 1 e-Government 2 e-Government 3 e-Government 4 e-Government 5 Agility Work-at-Home TRADEMARK WORK-AT-HOME Agility Flexibility 1 Flexibility 2 Flexibility 3 Flexibility 4 Agility Global Development 1 PURSUIT OF SUBSTANTIVE PATENT LAW Global Development 2 Global Development 3 Global Development 4 Table of Contents TRADEMARK E-GOVERNMENT PATENT E-GOVERNMENT POST-GRANT PATENT REVIEW E-PROCESSING INFORMATION TECHNOLOGY SECURITY PROGRAM DATA REPLICATION FOR DISASTER RECOVERY INITIAL AND PG-PUB CLASSIFICATION OF NEWLY RECEIVED APPLICATIONS SUPPORT FOR PATENT COOPERATION TREATY (PCT) SEARCH ACTIVITY COMPETITIVE SOURCING OF RECLASSIFICATION FUNCTIONS AND TRANSITION TO INTERNATIONAL PATENT CLASSIFICATION SYSTEM COMPETITIVE SOURCING OF PRE-EXAMINATION PROCESSING RELATED TO PAPER APPLICATIONS HARMONIZATION OTHER BILATERAL/MULTILATERAL AGREEMENTS PATENT COOPERATION TREATY REFORM INTERNATIONAL COOPERATION: E-FILING AND CLASSIFICATION OF GOODS/SERVICES Agility Work Sharing Capability Transformation 1 Transformation 2 Transformation 2a Transformation 3 Transformation 4

Transformation 5 Transformation 6 Transformation 6a Transformation 7 Transformation 8 Transformation 9 PROPOSED PROCEDURES TO IMPLEMENT MUTUAL RELIANCE OF SEARCH RESULTS PROGRAM ENTERPRISE TRAINING STRATEGY COMPETITIVE COMPENSATION PACKAGES FOR SUPERVISORY PATENT EXAMINERS AND MANAGERS EXAMINING ATTORNEY PERFORMANCE APPRAISAL PLAN TRANSFORM THE WORKFORCE BY EXPLORING ALTERNATIVE ORGANIZATIONAL CONCEPTS AND STRUCTURES C ERTIFICATION OF KNOWLEDGE, SKILLS AND ABILITY IN PATENT PROCESS TO ENSURE PROPER HIRING, RETENTION, AND PROMOTION OF PATENT EXAMINERS C ERTIFICATION OF KNOWLEDGE, SKILLS AND ABILITY IN TRADEMARK PROCESS IMPLEMENTATION OF PRE-EMPLOYMENT TESTING FOR PATENT EXAMINERS INTERIM IMPLEMENTATION OF PRE-EMPLOYMENT TESTING OF PATENT EXAMINERS RE-CERTIFICATION OF KNOWLEDGE, SKILLS, AND ABILITY OF PRIMARY EXAMINERS, INCLUDING LEGAL AND AUTOMATION TRAINING OF PRIMARY EXAMINERS CERTIFICATION OF KNOWLEDGE, SKILLS, AND ABILITIES OF EXAMINERS BEFORE PROMOTION TO GS-13 IMPROVE THE SELECTION AND TRAINING OF SUPERVISORY PATENT EXAMINERS Capability Quality 1 Quality 2 Quality 3 Quality 3a Quality 4 Quality 4a APPLICATIONS Quality 5 Quality 6 Capability Legislation/Rules 1 Legislation/Rules 1a Legislation/Rules 1b Legislation/Rules 1c Legislation/Rules 1d Legislation/Rules 1e Legislation/Rules 1f Legislation/Rules 1g EXPANSION OF PATENT APPLICATION WORK PRODUCT REVIEWS EXPAND REVIEWS OF PRIMARY EXAMINER WORK PATENT QUALITY IMPROVEMENT: IN PROCESS

REVIEW AND SECOND-PAIR-OF-EYES TRADEMARK QUALITY IMPROVEMENT: IN PROCESS REVIEW AND SECOND-PAIR-OF-EYES EVALUATION OF SEARCH QUALITY SURVEYING PRACTITIONERS ON SPECIFIC ENHANCE THE REVIEWABLE RECORD CERTIFICATION OF SEARCHING AUTHORITIES RESTRICTION PRACTICE FOR MARKUSH AND SEQUENCE CLAIMS MANDATORY INFORMATION DISCLOSURE STATEMENTS (IDS) SIMPLIFICATION OF PATENT TERM ADJUSTMENT ASSIGNEE FILING ALLOW ASSIGNEE TO MAKE THE APPLICATION AND SIGN THE OATH DUTY TO DISCLOSE PROCEEDINGS WITH CONFLICTING CLAIMS MONITOR PRACTITIONER ADHERENCE TO RULES OF PRACTICE: PERIODIC CERTIFICATION FOR REGISTERED PRACTITIONERS AND MONITOR PRACTITIONER ADHERENCE TO RULES OF PATENT PRACTICE: DISCIPLINARY INITIATIVES E LIMINATION OF THE INTERFERENCE BAR CREATED BY APPLICATION PUBLICATIONS TECHNICAL CORRECTION IN 35 U.S.C. 119(e)(1) Legislation/Rules 1h Legislation/Rules 1i OF THE PATENT Legislation/Rules 1j Legislation/Rules 1k Productivity Pendency 1 Pendency 2 Pendency 3 Pendency 4 Productivity Accelerated Examination Productivity Shared Responsibility 1 Shared Responsibility 2 Legislation Proposed Fee Legislation PERMIT ASSIGNEES TO FILE BROADENING REISSUE DELETE REQUIREMENT FOR PHYSICAL SURRENDER EIGHTEEN-MONTH PUBLICATION ELIMINATION OF NON-PUBLICATION AND REDACTION EXCEPTIONS AND EXCLUSIONS OF PLANT APPLICATIONS LEGISLATIVE AND RULEMAKING ISSUES TRADEMARKS TRANSFORMING WORK: THE e-GOVERNMENT WORK PLACE FOUR-TRACKS PATENT EXAMINATION PROCESS LIMITATION ON THE NUMBER OF CLAIMS REFER TO OTHER PENDENCY PAPERS 1, 2, & 3 PROPOSAL TO RESTRUCTURE PATENT FEES AND PRACTICES FOR FISCAL YEARS 2003 AND 2004 POST-GRANT REVIEW OF PATENT CLAIMS The following are specific issue papers developed by USPTO. These documents offer background on the issues, options for implementation, discussion of the risks and benefits of the options, and a USPTO recommended course of action. These recommendations arose during

the internal USPTO strategic planning process and, as this work is in its initial stages, do not necessarily reflect the views of the Administration. The USPTO looks forward to working within the Administration, and with its partners on Capitol Hill and in the intellectual property community, to refine and implement the actions outlined in its 21st Century Strategic Plan. Agility e-Government 1 e-Government 2 e-Government 3 e-Government 4 e-Government 5 Actions TRADEMARK E-GOVERNMENT PATENT E-GOVERNMENT POST-GRANT PATENT REVIEW E-PROCESSING INFORMATION TECHNOLOGY SECURITY PROGRAM DATA REPLICATION FOR DISASTER RECOVERY UNITED STATES PATENT AND TRADEMARK OFFICE TRADEMARK E-GOVERNMENT Action: Trademarks should continue with the planned implementation of e-government. Background Information: Under the USPTO fiscal year 2003 Business Plan, Trademarks is scheduled to imple ment an electronic file management system and begin e-government operations on October 1, 2003 (fiscal year 2004). The current concept for development of elect ronic file management and moving to electronic operations is to use rapid prototyping, review by the users for proof of concept, and modular release schedules throughout fisc al year 2003 development cycle until the entire system is in place at the beginning of f iscal year 2004. The funding for the final phase of Trademarks move to e-government was included in the President s 2003 budget. This will complete a ten-year business process reengineering plan1 to move Trade marks from primarily doing business with paper to doing business digitally. With the implementation of electronic processing in 2004, Trademarks is committed to redu cing pendency to first action to two months in fiscal year 2004 and to bring disposal pendency down to 12 months thereafter. It is anticipated that costs for handling applicat ions and related materials, and reliance on increasing numbers of employees or contractor s to handle increases in filings, will be substantially reduced as the reliance on pa per disappears from internal processes. Additionally, applicants will see improved q uality of products as Trademarks moves to using electronic data submitted by applicants to support examination and publish end products. Beginning in the mid-1980s, Trademarks has been investing in information technol ogy. However, improvements in productivity, quality and reductions in pendency relate d to these investments in technology have not been achieved at levels satisfactory to applicants and other stakeholders. In 1993, Trademarks adopted a business reengi

neering plan that was focused on applying technology to internal and external processes in a series of modules that would ultimately transform the organization from heavy re liance on paper to leveraging information system technologies to replace paper-based pr ocesses. By 2001, a highly successful electronic filing system was in place and an electr onic publication system allowed Trademarks to concurrently publish its Official Gazet te on paper and on the Web. Although there is significant use of computers in the examination area for activ ities ranging from searching to tracking files and measuring production, examination processes are still dominated by paper. Trademarks will move aggressively over t he next two years to fully implement e-government in fiscal year 2004 as the primary mea ns of 1 See attachment: Trademark Process Reengineering, 1993 1 T-02 UNITED STATES PATENT AND TRADEMARK OFFICE doing business with applicants and registrants, and as the sole means for proces sing work inside the examining operation. Applicants who chose to use Trademark electronic systems will see improvements in timeliness, quality and services. Redundant pap er and electronic processes will be eliminated in favor of processes designed to perfor m work electronically. Potentially, the most significant obstacle to success is accepta nce of this change in doing business by applicants and employees. Options Considered: Accelerate the development schedule. A review of the project schedule by Tradema rks and CIO did not reveal any areas where additional resources or effort would subs tantially advance the project. This option is not recommended because the return on invest ment would be minimal and there is not a clear indication that there would be positiv e results. USPTO Recommended Course of Action: Trademarks should continue to follow strategy that was put forth in the USPTO fiscal year 2003 Budget and complete it s plan to develop an electronic file management system - Trademark Information System (TIS ) and begin e-government operations in fiscal year 2004. With the implementation of TIS in October 2003, Trademarks will complete its transition from a paper-based operati on to an e-government operation. With the exception of TIS, the underlying systems necess ary to support this move from paper-based processing to electronic processing are eithe r in place or nearing completion and the organization has a high level of confidence that e-government operations will be implemented early in fiscal year 2004. Projects in fiscal years 2001 and 2002 have focused on: (1) upgrading the existi ng trademark electronic filing system, (2) laying the foundation for moving from pa

per file wrappers to electronic file wrappers, and (3) electronic publication of the Trad emark Official Gazette. Specifically, the successful Web-based electronic filing syste m, the Trademark Electronic Application System (TEAS), which was implemented in 1998 using SGML (Standard Generalized Markup Language) tagging structures, is being upgraded to use XML (Extensible Markup Language). This change, to be completed i n August 2002, will facilitate the transfer and exchange of data between applicant s and other Intellectual Property Organizations. In this same time frame, additional f orms are being added to the system that will essentially allow applicants to complete all transactions with the USPTO using structured, XML-based formats for all communications, e.g., responses to examiner office actions, changes of address, petitions to the Director, etc., and to allow examiners in Trademarks to send office actio ns to applicants using electronic communications. Finally, in late 2003, Trademarks is planning to implement Simple Object Access Protocol (SOAP) or a similar technology as the gateway or electronic envelop to move XML-tagged communications in and out of the Office. Moving to SOAP, XML will provide external parties with greater flexibility to design their own fo rms for communications as long as they use XML data tags established by the Office. This environment will maximize the Office s flexibilities for data exchange with 2 T-02 UNITED STATES PATENT AND TRADEMARK OFFICE applicants and registrants. It will also provide applicants and registrants with an improved capability to incorporate trademark documents into their existing elect ronic docketing systems, removing another barrier to potential adoption of electronic communications with the USPTO. In conjunction with the upgraded document formats, based on input from early ado pters of the electronic filing system, electronic payment methods were upgraded in Nov ember 2001 from solely relying on electronic credit card payments to the use of the au tomated clearing house and electronic debt of deposit accounts. This upgrade removed a significant complaint from law firms regarding the sole use credit cards for ele ctronic payment. The upgrade essentially offers the same capabilities they have using pa per filings. Trademarks is also pursuing changes to the Rules of Practice that will encourage applicants and registrants to use electronic filing over using paper. In 2002, c hanges are proposed that will eliminate the current provision under CFR 1.10 that allows a filing date to be established based on the date of deposit of express mail with the U.S . Postal Service. For all incoming paper documents and electronic documents, the date of receipt in the USPTO will be the filing date. Further, Trademarks will propose a fee for filing paper, where an electronic form is available for use, commensurate wi th the

cost of handling paper. It is believed these two CFR changes will encourage use of electronic systems. Early in 2001, Trademarks upgraded its electronic publication system for the Tra demark Official Gazette (TMOG). The previous publication environment that was adopted i n 1985 had used electronic text data from internal systems but still required that a paper copy of graphic drawings of marks, approximately 40% of the marks registered, be removed from the file and forwarded to the Government Printing Office (GPO) for composition of the TMOG. In April 2001, Trademarks began providing GPO with an encapsulated postscript file containing electronic text and images to print the TMOG. At the same time, in 2001, Trademarks also began publishing an electronic version of the TMOG on the USPTO Web site using Portable Document Format. In 2003, Trademarks will propose that the electronic TMOG published on the USPTO Web site be designated the official publication for marks published for opposition and all oth er purposes. After the electronic edition becomes the official publication, the reg istration cycle could be reduced by up to six weeks or more. The current registration cycl e is 18 weeks (six weeks of prepublication GPO processing, four weeks for publication for opposition, two weeks to process opposition papers and withdraw files from regis tration, and six weeks for GPO to process and print registration certificates). In April 1999, Trademarks began capturing all incoming new applications, regardl ess of whether they were filed on paper or electronically, in the Trademark Information Capture and Retrieval System (TICRS). Later, retrieval capabilities were added to all de sktop systems in Trademarks which allow employees to electronically view applications a s filed at their desk. In February 2002, a pilot was implemented to capture all inc oming correspondence in TICRS and later in 2002 all outgoing correspondence will be ad ded to 3 T-02 UNITED STATES PATENT AND TRADEMARK OFFICE TICRS. At that point, Trademarks will essentially be creating electronic file wra ppers for all applications pending in the examining operation that have an action or e vent requiring input from the applicant or the Office. In 2003, electronic applicatio n records in TICRS will be delivered to examining attorneys for initial examination rather than paper file wrappers. With this implementation, the final move from reliance on p aper processes to electronic processes will begin in Trademarks. Further, early in fi scal year 2004, we plan to designate electronic file wrappers as the official record for all applications under examination in the Trademark Operation regardless of whether submissions from applicants are received on paper or electronically. The perform

ance appraisal plan for all examiners in Trademarks is being amended to focus on usin g electronic communications as the primary means of communication with Trademark applicants and registrants. As indicated previously, in a the final step to move from paper-based operations to electronic operations, Trademarks will develop and implement an electronic file management system known as the Trademark Information System (TIS) in fiscal year 2004. The project will be the last phase in a ten-year effort to move to e-gover nment processes in Trademark Operations. In conjunction with implementation of TIS, cu rrent paper-based processes in the law offices and support services will be consolidat ed into a new electronic law office structure. With the exception of Post Registration ope rations, and law office processes will be restructured with the goal of eliminating taskoriented processes and reducing cycle times by consolidating processes and leveraging ele ctronic systems to the maximum extent to improve services to applicants and registrants. With the implementation of TIS, a scanning on demand operation will be established to capture any pending paper files for entry into TICRS so all pending paper file wrappers can be removed from operation s areas and moved to a paper repository. TIS will play a significant role, and is a key element, in the effort to improve productivity, q uality and reduce cycle times in Trademarks by the end of fiscal year 2004. With the implementation of TIS in 2004, examiners will be required to communicat e electronically with applicants on all matters unless the applicant specifically opts out of using electronic communications. New applications will be assigned from a single process queue as examiners request new work, responses will be automatically route d to examiners for appropriate action, and examiners will be responsible for the a ccuracy and completeness of the electronic record for every application they approve for registration. Electronic communication and transactions will facilitate reduced cycle times and result in substantial increases in quality of products without corresp onding investments in quality control activities. In FY 2004, Trademarks will designate the electronic file wrapper as the official record for all records maintained in the Trademark Operation. In FY 2004, the goal is to maximize the use of electronic communications for fil ing applications for the registration of trademarks and for the maintenance of feder ally registered trademarks. Success is dependent on a high level of adoption of elect ronic communications by applicants and registrants, and by employees. The goal is to h ave

80% or more of all communications being conducted electronically in 2004. 4 T-02 UNITED STATES PATENT AND TRADEMARK OFFICE Risks: Tight delivery schedules and complex development effort Availability of fiscal year 2003 funding for development work Return on Investment: Estimated benefits: First Action on Merits in 2 months instead of 3 months Disposal by registration, Issue of Notice of Allowance or abandonment in 12 months instead of 13 months Improved quality of information in electronic data bases electronic submissions will be entered as received No lost files or papers Prompt access to new applications and registrations by applicants and registrants Minimize need to increase or decrease contractors and/or government employees to handle variations in workload 5 T-02 PRE-EXAM PRE -EX AM ? TM TM COMM COMM UNITED STATES PATENT AND TRADEMARK OFFICE TTAB TTAB POST REG POST REG Inbound information is assigned an event number, associated with a serial number and placed in an event driven queue in the unit the serial number is assigned to. Paper vs. Digital Processing Paper P rocess PUB & ISSUE PUB & ISSUE EXAM EXAM Co n fused ap p licant? O r, c o n fusin g p rocesses? TIS Process Outer membrane maintains applicant information including preferences for communications Stores incoming and outgoing information/events directly in TICRS Communications Membrane TTAB TTAB ASSIGNMENTS ASSIGNMENTS PRE-EXAM; EXAM; ITU; PUB & ISSUE Incoming events are accepted in multiple forms (eTEAS, paper, email) and translated to a consistent format for use in the Office. A S S I G N M E N T S A S

S IG N M E N T S ITU ITU Outgoing events are translated in the format the applicant prefers (as noted on record) T-02 POST REG PO ST R EG Help! TAC/CRM TAC/CRM TAC TAC O ffice o f O ffice o f Comm issione r Com m issioner 6 UNITED STATES PATENT AND TRADEMARK OFFICE TRADEMARK PROCESS REENGINEERING2 Change alone is unchanging. Heraclitus (c. 535 c. 475 BC). Change is not made without inconvenience, even from worse to better. Richard Hooker (1554 1600). Most of us are about as eager to be changed as we were to be born, and go through our changes in a similar state of shock. James Baldwin (1924 87). Change and Trademarks: Perhaps the first question that might be asked regarding making changes in Trademarks is: Why change at all? My response is that we cannot continue to do business as we have in the past and continue to provide high quality services to our customers. Put quite simply, the office is drowning in paper. Between 1989, when the Trademark Law Revision Act was implemented, and the end of Fiscal 1996, the numb er of new applications filed in the office increased by 141% (from 83,200 to over 2 00,600), the number of pending files increased by 254% from just under 100,000 to over 35 0,000, and our work force, including contractors, only increased by 87% from 272 to 509 . Faced with increasing numbers of applications, and restrictions on adding employ ees, we began the initial planning for changing how we do business in Trademarks in 1993 . A reengineered concept of operations for processing applications for the registration of trademarks is described in this document. It is an iteration of a To-Be Trademark process model that has evolved over the past three years. The model is based on input from teams of Trademark employees who currently perform the various tas ks related to the processing of applications, and on information gathered in focus groups held around the United States with applicants and their representatives. This do cument outlines the process that an application will follow in the future from receipt by the

Patent and Trademark Office (PTO) to registration. This new concept of operation s combines information technology (IT) and process restructuring as the primary performance improvement drivers. The To-Be model proposes that, fully implemente d, the pendency to first action goal of three (3) months would be reduced to one (1 ) month or less. The Trademark To-Be design assumes that electronic filing; electronic data interchange between applicants, registrants and the PTO; and electronic file wra ppers with a fully integrated electronic file management system will be implemented in Trademarks shortly after the turn of the 21st century. Essentially, the hardware and software supporting Trademark business processes will manage and maintain an electronic version of all information currently contained in paper file wrappers. For 2 First edition 1993; second edition 1996. T-02 7 UNITED STATES PATENT AND TRADEMARK OFFICE most processes, a number of different alternatives or options were proposed and one was adopted to establish a direction for managing change. This paper provides a summ ary of the options that are currently providing direction for process changes in the Trad emark business. Accept New Application: Using available networks, applicants will directly transmit completed applicatio ns for the registration of trademarks, and other filings, directly to PTO file serv er addresses. The filing(s), using PTO standard formats, will clear various edit, validation, an d viruses checks and immediately be routed for further processing. Applicants will receive an immediate electronic acknowledgment of the receipt of the filing. Fees will b e paid electronically. All applicants will be encouraged to file applications for the registration of trademarks and all other materials, including responses to office actions, filin gs under Sections 7, 8, 9 and 15, intent-to-use filings, etc., using electronic mail (e-m ail) over available communications networks, e.g., the Internet/World Wide Web, using a mo dem over telephone lines, etc. The PTO will also accept applications on paper forms that use structured formats. To encourage electronic filing over networks, applicants may receive a discount on fees associated with the filing and/or priority processing. For in stance, an electronic application received by midnight Eastern Standard Time (EST) on a par ticular day will receive that filing date and the PTO will immediately acknowledge recei pt of the application by return e-mail. All paper applications will be submitted using mandatory, standard formats. The formats will be based on tags that identify all information in the application and

enhance the ability of the PTO to accurately capture the information for its aut omated systems. Data contained in the applications will be captured using scanning (ima ging) and optical character recognition (OCR)/intelligent character recognition (ICR) technology. The PTO will maintain both an electronic image of the paper and use OCR/ICR technology to extract data from the papers that will be used to support character-based electronic data bases required for publication of the mark for o pposition and file management. Drawings containing figurative or design elements, foreign registration certificates and similar evidence may only exist on paper. If submitted to the P TO as a paper document, they will be captured electronically as an image and indexed to other electronic data related to the application. If the PTO continues to require sign atures on trademark applications, a process for submitting electronic signatures to the PT O will be adopted. All specimens will be scanned as an image or digitally photographed and submitted with the electronic application. The submission may be in color or bla ck and white. The only exception will be for sound and scent mark specimens. If the ima ge of the specimen is not legible, the applicant will be notified during examination. Bulky specimens will only be accepted in the form of a digital photograph in electroni c applications and as photographs in applications submitted on paper. Unless the a pplicant is responding to a specific request by the examiner, if the PTO receives a bulky specimen it will be disposed of upon receipt in the Agency. 8 T-02 UNITED STATES PATENT AND TRADEMARK OFFICE The PTO will accept color drawings. However, a statement clearly describing the color or colors contained in the mark must accompany them. Any specimens submitt ed to support registration of the mark shown in color must also be in color. It is anticipated that a small number of applications will still be submitted on paper and, of those, a smaller number, such as those that are handwritten or on damaged forms, will not be readable using OCR/ICR. The paper will still be captured as a n image, but the information needed to support internal systems will be key-entered into the system by an exception processing team in the Trademark Intake Section. These employees will also verify that paper applications and other filings are entered in the PTO s electronic systems without changes or errors in the application data. All documents or materials received by the PTO, including lengthy, free-form attachments to applications or other papers, will be scanned as an image and att ached electronically to the application file. Filers will be able to determine the pro cessing status of their applications through an electronic bulletin board and/or automated tele phone service. An electronic copy of all incoming communications will be archived by t he

electronic system to provide a historical record. Paper filings will be retained after input into the system until the information can be verified as correctly entered into the system during Intake processing. At that point, the materials will be identified as app ropriate for recycling or continued storage. Process Fee Payment: Applicants filing applications and papers using electronic transmission will be required to pay fees using Electronic Funds Transfer (EFT), credit card, or depo sit account authorizations. The applicant will be required to indicate the method of payment on the application form. There will be immediate funds verification for filings transmitted electronically. A control number will be assigned to each new applic ation for matching the application with corresponding payments in the PTO s Revenue Accounti ng Management (RAM) system. When the payment arrives for an application or paper that is not using EDI, the payment will be documented with the corresponding application control number and the fees will be processed in the Intake Section. For applications filed on paper fo rms, the following forms of payment will be accepted: electronic fund transfers (EFT), de posit account authorizations, checks, money orders, cash, debit cards, and credit card s. Electronic forms of payment and deposit account authorizations will be processed into the RAM system at the time the underlying application is processed by the PTO. W alk-in payments submitted with applications will be accepted at designated PTO areas. Prepare New Application: Once an application is available in the electronic system, it will undergo the following automated processing: 1) Primary formalities check for minimum statutory requirements and fees to determine if the applicant receives a filing date; Assignment of a serial number/control number; 2) 9 T-02 UNITED STATES PATENT AND TRADEMARK OFFICE 3) 4) Presumptive classification of goods and services and determination that the correct number of fees have been submitted; and, Expert system review, including: secondary formalities review, descriptive search using various dictionaries or encyclopedias (standard dictionaries, computer dictionaries, geographic dictionaries, specialized dictionaries, etc.), atlas with description of the area and products for which the area is known, surname search using telephone listings, foreign translation search with word limit (e.g., French, Spanish, German, Italian), co-pending search: Same applicant plus: a) same mark, or, b) goods and services with at least one match, likelihood of confusion dead-on search ("dead-on" for entire mark using syllable and phonetic searches), search of data base for disclaimers of the same word(s) in other marks, search of database for abandoned applications with the same mark and

goods/services. Applications not meeting minimum filing date requirements will be flagged, and a computer-generated deficiency letter will be sent to the applicant. To meet mini mum filing requirements, the application must arrive using the PTO s required applicat ion formats/forms, with: a) fees for at least one class, b) a drawing of the mark, a nd, c) a listing of the goods and/or services. If the application does not meet the minim al requirements for a filing date, the original application record will be retained in the system until the applicant fulfills the minimum requirements or until a designat ed time limit expires. For applications meeting the minimum statutory requirements, the computer will build a new application record, presumptively classify the goods or services in the record, and generate the expert systems review (automatic computer review) of information contained in the record. This review will flag any inconsistencies in the record that require correction and perform searches in various electronic databases for info rmation that may affect registrability of the mark. The results of the research and info rmalities review will be attached electronically to the application for review by an exami ner. If the computer is not able to make an initial classification of the goods and services, the application will be flagged by the system for on-line review of th e goods and/or services in the record by an employee who will determine the internationa l class or classes. Employees in the Intake Section will also handle any other problems tha t cause the computer to flag an application as needing exception processing during the ini tial review. Intake employees will assign design search descriptions to marks contain ing 10 T-02 UNITED STATES PATENT AND TRADEMARK OFFICE figurative elements. Design search codes will be based on descriptive words that identify the significant features of the mark. For all marks containing figurative elemen ts, the applicant will be asked to provide a description of the mark in the application. Assign New Application: The electronic system will manage all applications in the system and will route new applications to appropriate locations based on the status of the application. The electronic system will match a new trademark application's market sector (i.e., a market sector is the general marketing channel in which the goods and services move) wi th the examination team designated to handle such applications. Applications will be as signed for examination based on a demand-pull concept (i.e., cases will not be placed in a particular team's queue until a request for a new file is made). However, confli cting, copending,

and amended cases will be immediately assigned to the examination team member who originally examined the case, with suspense dates or deadlines indica ted in the record. The goal for performing all of the pre-examination activities on a n ew application is two (2) days. After that time, the record would be available for examination. Examination: Law offices or examination offices will consist of groups of comprehensively trained, cross-functional examination teams with broad responsibilities for exam ination and processing of applications. Each team will consist of an optimum mix of atto rney advisors (Trademarks) and legal assistants. The offices and teams will be organi zed by market sector with each market sector containing the classes of goods and servic es that have commonalties in terms of the way or manner in which they are marketed and/o r the marketing channels in which they commonly move. One or more examination teams will be organized in each examination office and trained with a focus on providing high quality customer service, high quality examination, and a first action within one month of the filing date of the appli cation. There will be a focus on processing new applications from receipt to completion of the first action without creating processing queues or backlogs. A member of the examination team who is trained and has authority to handle most of the front-end processing of an application will initially retrieve a new case. The expert systems' formalities review, search results, search strategy, and researc h results will be electronically linked to the application and accessible to the examinati on team member. The examination team member will correct any information in the record n ot requiring applicant approval (e.g., obvious spelling errors, notes to file), and identify and propose corrections for those items requiring notification to the applicant. Att orney advisors on the team may forward cases that do not require substantive refusals to legal assistants. Response forms tailored to the specific nature of the office action will be included with all office actions sent to an applicant. If the applicant approves a change or examiner amendment that is indicated on the response form, and if the interactio n between the applicant and the office is over a network, the system will immediat ely update the electronic record to reflect the change. 11 T-02 UNITED STATES PATENT AND TRADEMARK OFFICE An attorney advisor on the team will examine the search strategy, determine which parts of the search results to review, and conduct any additional searches that are necessary. Searches of commercial databases (e.g., Lexis/Nexis, etc.), a search of a goods and services database, any additional 2(d) searches, and/or searches of ev identiary research existing in electronic form (e.g., TTAB decisions, CFR, USPQ) will be

performed as required. In the future, a substantial amount of evidence used to support statutory refusa ls of registration will be accessed using on-line, electronic databases or on CD-RO Ms. These research resources will be continually expanded to include new technical a nd legal documents as they become available. PTO staff will be able to request access to new materials as they are identified and will have access to both no cost and commer cial online databases. When needed evidence is identified by an examination team member (in the electronic system), it will be "tagged" if it is in an internal data base, o r copied and pasted into the application record if it is a commercial data base, to enable th e system to attach it to the office action at the time of mailing or transmission to the app licant. The system will send an update or reminder to team members regarding the due dates of cases in the team s docket. The message will flash on the screen and will not disappear until it is acknowledged. New applications will be sent to the team on a demand basis. The system will give team examiners the option to set up a calenda r or personal docket to list various types of cases in their caseload. This calendar feature will include status information for the record and date range, the ability to determi ne how many cases have been assigned and are awaiting action, and how many of all the t ypes of cases are due on a particular day. Additionally, the system will allow any team member to set his or her own parameters and create a specialized list. Attorney advisors on the teams will examine each case to make an initial determination regarding needed statutory refusals of registration and prepare an d sign the office action. When a first action refusal is forwarded to the applicant, the current informati on in the database that will be contained in the publication for opposition and reg istration certificate will be attached to the action as an appendix. Under current law, th e applicant will have six months to respond to the action. The above activities, from assign ment of a new application to a particular team to assignment of a publication for oppositi on date or forwarding of a first action refusal, are targeted to be performed within one mo nth after the filing date. Signatures will not be required on outgoing, electronic office actions but the action will contain the examiner s name and an indication that the action was authorized by the person named. When a decision is made to issue an office action, the examination team member will press a key and enter a password or PIN number to s ignal formal approval and mailing of the action. Any responses or changes received from the applicant will be reviewed and processed by the examination team. If the applicant approves changes to a typewri

tten drawing, the examination team will have the ability to make the appropriate chan ges to the drawing in the system. The original mark will also be maintained in the syst em. If a new drawing for a mark that contains figurative elements is received from the ap plicant, 12 T-02 UNITED STATES PATENT AND TRADEMARK OFFICE it will be attached to the application record and flagged by the examination tea m as the appropriate drawing for use in the OG. All exchanges with the customer will be completed, if possible, via computer rather than telephone, fax, or mail. Publish Marks for Opposition: When an application is approved for publication for opposition, the member of the examining team who is responsible for the application will make a final review of the record and approve it for publication. The computer will then perform a fina l review of the application to ensure that all information needed for publication is pres ent. This includes spell checking, final edits and validations, verification of fee paymen ts, and so forth. After the application passes this final review and is accepted for publicat ion, the computer will assign a publication date and generate a Notice of Publication tha t will contain: a) the publication date, b) all publication and registration informatio n as it will be shown in the OG and on the certificate of registration, and, c) any changes m ade to information during examination. If fee payments cannot be verified for an application ready for publication, the application will be held until verification is received by the system. At this poi nt the computer will proceed to process the application for publication for opposition by assigning it to the next available OG issue. When an application is accepted for publication, the computer will format the application data for publication in the Official Gazette. The formatted OG pages , with images incorporated, will then be electronically transmitted for printing. Infor mation in the OG will also be available in an electronic format. Hard copy and electronic versions of the OG will be released on the same day and be identical in content. Color drawings will be published in the OG in a section for color marks. To facilitate dissemination of trademark products, the OG, as well as other printed trademark products, will be made available in electronic format to customers Register the mark: If a use-based application is published in the OG and no opposition is filed wit hin the thirty-day opposition period, the system will automatically assign a registr ation date and registration number to the application ten working days after the opposition period expires. The following week, the registration information will be published in t he OG, and a registration certificate will be printed and forwarded to the new registra

nt. Trademark Trial and Appeal Board (TTAB) actions and petitions will be filed using standard forms. Actions at the TTAB may be filed electronically or on pape r. Print Trademark Registration Certificate: Registration certificates will be formatted and printed on-site. The system will be able to print both black and white and color marks. After an application has bee n approved for registration, the registration certificate will be formatted, printed , and mailed within seven calendar days. All applicants will receive an official paper certificate when their mark registers but will also be able to download an elect ronic copy of the certificate. 13 T-02 UNITED STATES PATENT AND TRADEMARK OFFICE Issue Notice of Allowance: After an ITU application is published in the OG and the opposition period ends without an opposition filed against the mark, the computer will automatically ge nerate a NOA ten working days after the opposition period expires. The applicant will hav e six months from the date of the NOA to file an Allegation of Use to register the mar k or request an extension of time. The applicant may request that the NOA be forwarde d electronically or by regular mail. For those applicants not making an election a t the time the application was filed, the NOA will be forwarded using the same method used when the application was filed. Note: The current Allegation to Allege Use (AAU) filed before the mark is published for opposition and the Statement of Use (SOU), filed after the Notice of Allowance (NOA) issues, will be combined into a single type of filing known as the Allegation of Use that may be filed at any time after the applicant has made use of the mark in commerce. If a NOA is issued incorrectly (e.g., two bases, delete l(b), error discovered, wrong data used), the case will be flagged as a priority case and forwarded for correction to the examination team member who approved the case for publication. An office action, if necessary, or a notification of the correction will be sent to the applicant. Examine Allegation of Use or Extension of Time: If the applicant files an Allegation of Use within the designated time period, t he computer will perform edits and validations on the data and assign the file to t he examination team member who initially examined the application. If approved by t he attorney, the system will assign the case a registration date and generate the r egistration certificate within ten workdays. The PTO will forward the certificate of registr ation to the applicant concurrently with publication of the record in the OG as a registe red intenttouse mark. If informalities or other problems exist with the Allegation of Use, t he examination team will prepare an office action, and processing will continue sim ilarly to that for a new trademark application.

If a request for an extension of time is filed and it is the first extension fil ed, the computer will perform edits and validations on the data and review the file for requirements, including a statement of a continued bona fide intent-to-use the m ark in commerce and payment of the appropriate fees. If all requirements are met, the c omputer will automatically generate a notice of acceptance of the extension request. At this point the applicant has an additional six months to file an Allegation of Use or a sec ond request for an extension of time. If a second request is filed, the request will undergo a computer check for appropriate information but the request will be forwarded to the team member handling the application to allow them to review the just cause statement to justi fy the additional extension that is required in second and subsequent requests. Based o n the examiner s decision, the computer will generate a notice of acceptance or the exam iner will generate a notice denying the request. 14 T-02 UNITED STATES PATENT AND TRADEMARK OFFICE If the Allegation of Use is filed before the case is published for opposition, i t will be matched with the application and the application will be reviewed as if it ha d been filed as a use-based application. If an Allegation of Use is filed after the cas e is approved for publication, it will be matched with application record and set for review a fter the opposition period is completed. If an Allegation of Use or extension of time is not filed within the six-month time period, the computer will automatically generate a noti ce to the applicant two weeks after the response period has ended indicating that the application is considered to be abandoned. Amendments: Amendments to information in applications will be forwarded to the examiner and team who originally examined the case. The amendment will either be accepted or rejected. An applicant wishing to change the goods and services for an applicati on will be required to submit a complete new goods and services statement. The computer wi ll highlight the differences between the original and new versions within each clas s. If the examination team member recommends an amendment to the application to correct an informality, the amendment will be written in a standard format and f orwarded to the applicant. The applicant may accept the suggested language as it exists b y checking the appropriate box or provide an alternative amendment. If the applica nt accepts the amendment as it exists, the computer will make the appropriate chang es and designate the case as ready for publication, if there are no other outstanding i ssues. If the applicant suggests an alternate amendment, the case will be forwarded to the exa mination team member who originally examined the case.

Abandonment: The computer will automatically generate notices of abandonment. Express abandonments received from the applicant will be entered into the system and att ached to the appropriate file. The system will automatically abandon cases for which no r equest for extension of time or Allegation Of Use is filed and cases for which no respo nse to an office action is received within six months. The system will notify the assigned examination team of abandonments that affect other cases. The system will also n otify the examiner when a suspended case is related to an abandonment. Quality Review: No officially organized quality organization will exist. Quality will be based o n the ownership of a case or action by the work team (the attorney advisors and le gal assistants) and the owners of the case will be held responsible for the quality of the end product. System checks designed for quality and team performance will ensure the high quality of Trademark products. Quality measures will be assessed based on custom er feedback to the Customer Service Center and through tracking of petition and opp osition results. Provide Customer Support: Applicants will be able to determine the status of any filing through an electro nic bulletin board or automated telephone service. Because all applications will be available over internal networks, Trademark staff will have access to application data and will be able to provide applicants with requested information ranging from the status of the 15 T-02 UNITED STATES PATENT AND TRADEMARK OFFICE application to copies of notices that have been generated regarding the applicat ion. A staff member receiving such a request will be able to retrieve the file (as read -only) and forward selected notices to the applicant electronically or on paper. The applic ant will still be required to submit a formal request for a change of correspondence addres s. However, if the applicant has a PIN number he will be allowed change his address electronically without filing a request to have the PTO effect the change. Applicants and other parties will be able to file electronic orders and purchase copies of materials related to applications and registrations not automatically disseminated during normal processing. This will reduce the processing cost incu rred by the PTO and encourage electronic information dissemination. Fax-on-demand will b e offered for a fee to applicants who request information through fax transmission . Customer support will include a wide variety of services and capabilities, focus ed on meeting customer desires and determining future needs. These will include:

A Help Desk staffed by personnel able to meet Trademark internal and external customer requirements. An "Attorney of the Day" program to assist customers in solving Trademark issues other than case-specific issues. An electronic bulletin board accessible through commercially available networks that will provide a full range of on-line capabilities. These may be offered on a fee for service basis. A Customer Service Center that will consist of a Help Desk and a retail operation for the direct sale of trademark material to the public. The availability of trademark informational materials to meet customer needs and future requirements (i.e., pamphlets, brochures, diskettes, CD-ROMs). An automated telephone help line to obtain information or status on trademark filings or other activities and programs. The capability to provide seminar, symposium, and exposition programs to promote the Trademark mission. Public relations-related events and information. Review Registrability: Petitions to the Commissioner and all Trademark Trial and Appeal Board (TTAB) matters (ex parte appeals, oppositions, requests for extensions of time to oppos e, cancellations, interferences, and concurrent use filings) will be scanned and OC R processed. Large, voluminous evidentiary materials may not be scanned, but may b e forwarded to the appropriate law office or TTAB docket area for temporary storag e during any proceedings. Law office and TTAB personnel will determine which mater ials are to be scanned and electronically tagged to the case. Requests to Reinstate and Petitions to Revive (abandoned for failure to respond) will be processed by the examination teams. 16 T-02 UNITED STATES PATENT AND TRADEMARK OFFICE Letters of Protest will also be routed to the teams, but only managers, supervis ors, or subject matter experts will complete these actions. All other types of petiti ons will continue to be routed to the staff of the Assistant Commissioner. Management: Managers in the PTO will have on-line access to all management information related to applications and processes. Day-to-day workload and work team capabil ities can be viewed, and parameters changed to distribute any application backlogs. Pl anning will be enhanced through the use of easily understood statistical tools and will focus on long-range requirements and budget issues. Summary of Impact on Applicants: Applicants having the capability will be asked to do all or most of their busine ss with the PTO s Trademark Operation using electronic data interchanges. This will r ange from filing new applications using electronic formats that follow standards esta blished by the PTO, to corresponding with the attorney advisor handling the case using e-ma il, to filing all supplemental materials electronically. For applicants using paper, th ere will be

a requirement that they use standard formats for filing applications and other m aterials that enhance the PTO s ability to capture pertinent information for use in the PTO s automated systems. In exchange applicants will receive substantially improved cu stomer service and quality. For instance, filings will not be lost, applications will a lways be available for review, copying, and certification, and the entire process will wo rk more quickly. Finally, the PTO should be able to handle the rapidly increasing number of trademark applications with minimal increases in cost to future applicants and r egistrants. 17 T-02 Task Name T-02 - Technology Electronic Government CFR changes to encourage electronic filing (T-02) TEAS XML forms (T-02) TICRS stores complete electronic application file (T-02) Examiners begin examination of electronic new application files (T-02) TIS prototyping and releases start (T-02) TEAS SOAP XML (T-02) TIS and e-Government implemented (T-02) TICRS "scanning on demand" for all pending paper files (T-02) Duration 337 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days Finish Wed 10/1/03 FY 2003 Resources $13,575,000 Contact C. Lutz Start Fri 5/31/02 Fri 5/31/02 Fri 5/31/02 Fri 8/30/02 Fri 8/30/02 Tue 10/1/02 Tue 10/1/02 Tue 10/1/02 Tue 10/1/02 Tue 10/1/02 Tue 10/1/02 Tue 9/30/03 Tue 9/30/03 Wed 10/1/03 Wed 10/1/03 Wed 10/1/03 Wed 10/1/03 UNITED STATES PATENT AND TRADEMARK OFFICE

PATENT E-GOVERNMENT Action: The USPTO should modify its Patent e-Government automation plans to deliver an operating pipeline to process patent applications electronically by the end of f iscal year 2004 including electronic capture of all incoming and outgoing paper documents. The USPTO should collaborate with its Trilateral partners (European Patent Offic e and Japanese Patent Office) to support e-filing and processing. Background Summary: USPTO currently plans to deploy a Patent e-Government initiative in fiscal year 2006. The USPTO operates within a global community of intellectual property offices an d practitioners. We have worked extensively with the Trilateral Offices (European Patent Office (EPO), Japanese Patent Office (JPO), and USPTO) to achieve common goals. By leveraging common automation program objectives, the Trilateral Offices have an opportunity to identify and pursue collaborative information technology developm ent. Options Considered: 1. Status quo. Follow the current TEAM 5-Year Deployment Plan (version 1.0). Include the Patent e-Government initiative in the fiscal year 2004 budget reques t. Plan to deliver the new system in fiscal year 2006. Make no additional effort to collaborate with Trilateral Offices. 2. Modify the TEAM 5-Year Deployment Plan, assuming additional funding is made available in fiscal year 2002 and fiscal year 2003, to: a) Deliver an operational end-to-end electronic patent application processing pipeline for all applications by the end of fiscal year 2004, including electronic capture of all incoming and outgoing paper documents; and b) Deliver the electronic pipeline capability in phases, with a goal of not moving pending paper application files and documents to the new USPTO Carlyle facility. Work with Trilateral partners to identify technical opportunities to collaborate on e-filing and processing and develop an action plan for such collaboration. USPTO Recommended Course of Action: Pursue Option 2. 1 P-26 UNITED STATES PATENT AND TRADEMARK OFFICE Discussion: USPTO s fiscal year 2003 budget submission included funding for a Patent e-Government initiative. With this funding USPTO planned to deploy a system to process patent applications electronically in fiscal year 2004. The President s budget did not include funding for this initiative. The current plan is to deplo y the new system in fiscal year 2006. The continued growth in our workload cannot be effectively managed in our curren t paper-based environment. Implementing an e-Government strategy that includes electronic receipt, processing, reporting, and publication will enable us to mig rate to a more efficient operating environment that supports our business goals to provide quality services and products in a timely manner to our customers and stakeholders. The USPTO will take delivery of the first portion of its new Alexandria campus i n the

first quarter of fiscal year 2004. As USPTO operations are split between two cam puses the movement of papers and application files will become increasingly more diffi cult to manage and the cost associated with paper handling will increase dramatically. I n order to meet and overcome these operational challenges, the USPTO should move forward with an option to provide an electronic (image based) file wrapper prior to the start of the move. It is critical that we move toward doing business in a complete electronic envir onment. In order to increase the number of applications filed electronically, and obtain a high-user acceptability, we have to enhance our current Electronic Filing System. We also have to accelerate the electronic processing of patent applications as envisioned by the TEAM development plan. At the same time, the USPTO operates within a global community of intellectual p roperty offices and practitioners. We have worked extensively with the Trilateral Office s (European Patent Office (EPO), Japanese Patent Office (JPO), and USPTO) to achie ve common goals. By leveraging common automation program objectives, the Trilateral Offices have an opportunity to identify and pursue collaborative information tec hnology development. USPTO continues to work extensively with the Trilateral Offices (European Patent Office (EPO), Japanese Patent Office (JPO) and USPTO) to achieve common goals. By leveraging common automation program objectives, the Trilateral Offices have an opportunity to identify and pursue collaborative information technology developm ent. Along these lines, the USPTO through the current TEAM 5 year plan, and EPO and J PO, are pursuing character coded text document technology using the extensible marku p Language (XML) for managing and prosecuting patent applications filed electronic ally based on internationally defined Document Type Definitions (DTDs). Concurrently, EPO has replaced its paper-based processes and workflow documents as images through the deployment of their Phoenix System. Current USPTO systems 2 P-26 UNITED STATES PATENT AND TRADEMARK OFFICE provide the foundation for delivering a system similar to the Phoenix system use d by the EPO. USPTO currently uses the Patent Application Capture and Review (PACR) syste m to capture images of all new applications as filed and provide limited indexing of the new applications. The PACR system also provides the ability to rescan, correct and p rint images from the PACR database. However, the resulting electronic files are not u sed in the examination process except for classification purposes through the pre-grant

publication classification subsystem of the Patent Application Location and Mana gement (PALM) system, in part because PACR currently does not capture or manage electronically captured incoming or outgoing paper communications. In an effort to capitalize on the recent standardization and harmonization effor ts, we began preliminary discussions with our Trilateral partners about integrating dev elopment efforts based on a proven industry standard, Unified Modeling Language (UML). The modeling process would identify common information technology components and interfaces operating on common data. Once these components are identified, the O ffices can collaborate on development efforts and adapt the components to their infrast ructure. Fundamental to this collaboration, is the ongoing effort to standardize the appl ication data items, structure, submission protocols, and follow-on correspondence with o ur joint customers. We have taken a major step toward implementing this plan by developin g an electronic filing system that enables the authoring of patent applications as XM L documents and the secure submission of the documents to the Office via the Inter net. Proposed Plan: At the center of our e-Government initiative is the Tools for Electronic Applica tion Management (TEAM) project. TEAM is a document management and workflow system that will provide the capability to electronically process a patent application. It will integrate and capitalize on features from a variety of information technology sy stems currently in use. TEAM will in part rely on the input of electronically submitte d applications that comply with the World Intellectual Property Organization s elect ronic filing standard1 and continue the processing of patent applications in electroni c format. TEAM will be deployed in phased releases, building functionality incrementally t o better manage implementation risk and increase chances of project success. The major functional elements include: electronic filing partnerships, document management system, workflow capability, and integration with six major legacy systems using enterprise application integration technology. Key changes to be incorporated include a phased implementation approach comprisi ng 15 releases; each designed to deliver significant business value. Another key ch ange to be incorporated is the addition of an imaging system to accelerate the transitio n to a completely electronic environment for Patent Examiners to review applications an d to manage their dockets. This change is likely to increase the return on investment and the net present value from the previous approach. This change also reduces the depen dency

on increasing electronic filing rates in the short-term, since all applications (even those 1 Annex F to the PCT Administrative Instructions, Part 7, entitled Electronic Fi ling and Processing of International Applications. 3 P-26 E-filing Client: UNITED STATES PATENT AND TRADEMARK OFFICE submitted in paper format) will be converted to electronic format for the Patent Examiner to review. Working with our Trilateral partners (European Patent Office, Japanese Patent Of fice, and USPTO), we will develop a plan for technical collaboration on e-filing and processing. Certain critical technical areas have been identified and objectives for collaboration for each area have been created. The following list summarizes the se technical areas and objectives for each. E-filing Server: o Identify components that can be shared by Trilateral Offices, up to and including an entire server implementation. o Ensure interoperability among the Trilateral Offices. o Agree on a common legal and technical response to imperfect submissions. o Identify potential for reuse of submission software o Agree on a common set of requirements for vendors, common support policy, and documentation for vendors. Extensible Markup Language (XML) Authoring: o Explore and identify potential areas of collaboration for XML authoring tools Public Key Infrastructure (PKI): Examination Automation Support: o Achieve mutual recognition of digital certificates and certification authorities among the Trilateral Offices o Achieve common proactive in the use of low-level certificates o Harmonize office-applicant communications at the document type definition (DTD) level o Synchronize implementation schedules for Annex F,2 where possible, to ensure global implementation of each component, avoiding confusion and inconvenience for applicants. Document Management: o Develop a strategy for dealing with residual paper filings, including image capture and management TEAM will be based on the creation of an electronic file wrapper. All of the ind ividual paper documents involved in the communications between the USPTO and patent applicants will be captured electronically in the electronic file wrapper. TEAM will provide new electronic workflow tracking and document management capabilities th at will improve application processing and provide increased information to externa l customers. TEAM will ultimately result in an electronic record being our officia l legal record of patent application processing. A preliminary benefit cost assessment i ndicates 2 Annex F to the PCT Administrative Instructions, Part 7, entitled Electronic Fi ling and Processing of International Applications. 4 P-26 UNITED STATES PATENT AND TRADEMARK OFFICE

that the TEAM project will more than pay for itself through publication, space, and contract labor cost avoidance3. Our management strategy for this major e-government project incorporates lessons learned from Abramson and Means4. Business processes, both internal and external , will be transformed. Thoughtful plans have been and will be developed. Top-quali ty, innovative staff and adequate resources must be available. Thorough test with in ternal users and external customers is planned. Partnerships with both private sector c ompanies and other intellectual property offices will be established. Privacy and confide ntiality will be safeguarded. Our development strategy is based upon the development of modules related to specific functional areas. This modular approach will generate separate but rela ted development efforts that will implement complete electronic patent application processing. The approach also builds on previous and planned accomplishments in several efforts. For example, the Electronic Filing System, the Electronic Ma ilroom System, the Patent Application Capture and Review system, the Patent Application Location and Management system, the Patent Cooperation Treaty automated system, the new electronic file wrapper with document management and workflow systems, the various search systems, and the Office Action Capture System are all critica l systems that must work together smoothly for TEAM to be successful. Key functionality of a final end-to-end process will include sending electronica lly application data to the Patent Application Capture and Review system for securit y screening and licensing review, pre-populating the Patent Application Location a nd Management system with bibliographic and pre-grant publication data, sending pay ment information to the Revenue Accounting and Management system for processing, and capturing relevant parts of the application in the electronic file wrapper and d ocument management system. To enable multiple third party authoring and submission tools to interact with TEAM, we will provide document type definitions that comply with t he World Intellectual Property Organization electronic filing standards. The electronic file wrapper user interface will in due course display an examine r s docket, incorporate follow-on papers and amendments generated during the course of examination, and serve as the official copy of the application. Ultimately, the system will facilitate the photocomposition process, the creation of publication-ready docum ents in electronic form, and the preparation of published data in the appropriate medium for public dissemination. The TEAM program will integrate the individual automated information systems referenced above and achieve the appropriate legal requirements of the transform ed

patent business process. The electronic patent application process must support statutory 3 TEAM Business Case, September 2001. 4 Abramson, M. A. and Means, G. E. The Challenge of E-Government: Initial Lessons Learned from the Early Days in Mark A. Abramson and Grady E. Means (editors), E-Government 2001, (La nham: Rowan & Littlefield Publishers, Inc., 2001). 5 P-26 UNITED STATES PATENT AND TRADEMARK OFFICE regulations promulgated by Congress, as codified under Title 35 of the United St ates Code (35 U.S.C.), both as they presently exist and as they may become enacted in the future. Additionally, the electronic patent application process must be commensu rate with USPTO s rules and interpretations of the statutory regulations, as published within Title 37 of the Code of Federal Regulations (37 C.F.R.). By implementing TEAM, the Office will be able to reduce contractor costs, improv e workflow tracking, and automate many support functions to yield a better quality product. In a fully electronic environment, customers will be able to communicat e electronically with the Office 24 hours a day and be empowered to perform many o f the file maintenance functions at their end, resulting in reduced workload for the O ffice and more satisfied customers. For more detailed information on TEAM, please see supporting documents such as TEAM Deployment Plan with milestones and explanation of functionality, TEAM Business Case, TEAM Concept of Operations, and TEAM System Boundary Document. Key Fiscal Year 2004 Functionality and Assumptions: Accept international DTD-compliant, routine, non-provisional utility applications through the authoring and submission tool Provide electronic end-to-end application processing pipeline for all application processing. Fiscal year 2004 functionality will likely be image-based electronic processing Send electronic application data to the Patent Application Capture and Review sys tem for security screening and licensing review Pre-populate the Patent Application Location and Management system with bibliographic and pre-grant publication data Send payment information to the Revenue Accounting and Management system for processing Capture all application papers in the electronic file wrapper, including follow-o n papers, amendments and USPTO correspondence generated during the course of examination Back-file capture will not include OCR Patent applications containing color or photographic content will remain in paper at least until the end of fiscal year 2004 The existence of physical artifacts such as videotapes will be noted in the elect ronic file Incoming US and foreign patent documents will not be scanned

US patent documents will not be sent to applicants Incoming paper scanning will be centralized; outgoing paper scanning may remain distributed in the Patent Technology Centers Patent applications transferred to the Carlyle site will be scanned Patent applications transferred to the Crystal City site will remain in electroni c form The electronic file wrapper will serve as the official copy/legal record of the application 6 P-26 UNITED STATES PATENT AND TRADEMARK OFFICE Patent Examiners will have the capability to print the necessary components of an EFW The EFW will have the capability for the examiner to enter formal notes and other information that are now part of the official paper file wrapper Provide electronic file to hand off to the patent publishing contractor Provide official contents of the file wrapper electronically to applicants and to the Order Entry Management System (OEMS) for order fulfillment All correspondence to and from the USPTO, both electronic and paper, will be centralized Patent applications may consist of a mixed mode of electronic text and images, complicating processing Pre- grant publication files may be used to populate TEAM, with ensuing electroni c processing Applicants will be able to access at least the image of all application papers vi a PAIR Risks: Availability of fiscal year 2002 and fiscal year 2003 funding for the development work Complexity of coordination with Trilateral partners Maintaining operational capability of automated systems in two locations during t he Carlyle move Increased OIPE space needed for increased scanning operations Delay in implementing a system backup/disaster recovery system will extend the schedule Current TEAM Return on Investment projections are based on receiving a substantia l percentage of application filings via electronic filing by fiscal year 2004 Changes in current Patent application business processes will impact TEAM development in both development costs and system complexities Return on Investment: The current TEAM business case represents the USPTO plan as of 9 months ago. Within 4 to 6 weeks, our plan is to update the business case to reflect the late st changes to the USPTO strategy and business plan, once these changes have been finalized. The business case identified about $119 million in cost avoidance with an associa ted net present value of $24 million on a six year planning horizon. The return on investment was estimated to be 31 percent. The key assumption is the percentage of applications that are submitted by custom ers electronically. The USPTO is working towards a new strategy in the area of electronic filing and will soon announce a partnership with multiple private sec tor software companies for the development of electronic filing tools.

7 P-26 UNITED STATES PATENT AND TRADEMARK OFFICE Intangible benefits: Improved quality of bibliographic information in electronic databases electronic bibliographic data submissions will be entered as received Eliminates lost papers or files for those papers filed or captured electronically Prompt access to new applications by applicants and examiners Reduced need to increase or decrease contractors and/or government employees to handle variations in workload Reduced paper handling costs Reduced movement of paper between USPTO campuses Reduced dependence on applicant e-filing acceptance to provide USPTO benefits Leverages existing USPTO automation infrastructure and systems 8 P-26 Task Name P-26 - Patent E-Government Develop an accelerated project plan that delivers an operational end-to-end electronic patent application (P-26) Revise the TEAM business case to reflect the new plan (P-26) Develop a plan for the technical approach for Trilateral collaboration (P-26) Perform a lab assessment of the EPO components with TEAM (P-26) Develop a project plan for enhancing PACR (P-26) Develop a plan for electronically capturing the backfile of application (P-26) Develop a plan for making the EFW the official legal record (P-26) Provide EFW user interface, V1.0, proof of concept (P-26) Develop a plan for a robust system backup and disaster recovery capability (P-26) Install EPO's epoline PCT server and begin testing interoperability w/USPTO systems (P-26) Analyze EPO's Phoenix and interoperability w/USPTO systems (P-26) Provide enterprise application integration (EAI) (P-26) Test EPO's epoline PatXML authoring tool with USPTO's e-PAVE submission package (P-26) Duration 1614 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days FY 2003 Resources $29,500,000 Contact R. Porter Start Finish Fri 6/28/02 Tue 9/30/08 Fri 6/28/02 Fri 6/28/02 Mon

9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 Mon 9/30/02 12/31/02 12/31/02 Mon 9/30/02 Tue 12/31/02 Tue 12/31/02 Tue Tue Task Name Implement EAI (P-26) Provide EFW user interface, V1.1, integrated with EAI (P-26) Provide support for new EFS partnerships and international e-filing standards (P-26) Design and develop US national epoline plug-in, test with limited set of applicants, make available to e-filing contractor partners (P-26) Demonstrate available functionality for users (P-26) Provide EFW user interface, V2 (P-26) Provide scanning capability to capture application papers (P-26) Process selected follow-on papers through EFS (P-26)

Provide EFW user interface, v2.1 (P-26) Provide preliminary classification routing for preexam (P-26) Process selected follow on papers (EFS/RAM) (P-26) Patent Electronic Application Processing Pipeline Operational (P-26) Provide amendment processing proof of concept (P-26) Process selected outgoing correspondence (P-26) Provide EFW user interface V3.0 (P-26) Duration 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days 0 days Finish Mon 3/31/03 Mon Start Mon 3/31/03 Mon FY 2003 Resources Contact 3/31/03 3/31/03 Tue 9/30/03 Tue 9/30/03 Wed 12/31/03 Wed 12/31/03 Tue 12/31/02 Wed 12/31/03 Wed 12/31/03 Wed 3/31/04 Wed 6/30/04 Tue 12/31/02 Wed 12/31/03 Wed 12/31/03 Wed 3/31/04 Wed 6/30/04 Thu 9/30/04 Thu 9/30/04

Thu 9/30/04 Thu 9/30/04 Thu 9/30/04 Thu 9/30/04 Thu 9/30/04 Thu 9/30/04 Thu 6/30/05 Thu 6/30/05 Thu 6/30/05 Thu 6/30/05 Task Name Process outing correspondence (PAIR) (P-26) Provide support for processing follow-on papers and outgoing correspondence (P-26) Provide EFW user interface version 4.0 proof of concept (P-26) Deploy EFW user interface. V. 4.0 production (P-26) Provide support for business processes beyond the Examining Corps (P-26) Provide capability to order official copies of the EFW (P-26) Follow-on TEAM capabilities (P-26) Duration 0 days 0 days 0 days 0 days 0 days 0 days 0 days Start Finish Fri 9/30/05 Fri 9/30/05 FY 2003 Resources Contact Fri 3/31/06 Fri 3/31/06 Fri 3/31/06 Fri 3/31/06 Fri 9/29/06 Fri 9/29/06 Fri 6/29/07 Fri 6/29/07 Fri 6/29/07 Fri 6/29/07 Tue 9/30/08 Tue 9/30/08 UNITED STATES PATENT AND TRADEMARK OFFICE POST GRANT PATENT REVIEW E-PROCESSING Action: If the USPTO adopts the Post Grant Patent Review process, it needs to provide fo r e-filing and handling of the request. Background Information: Under the proposed plan, the Board of Patent Appeals and Interferences will be c harged with conducting patent review proceedings. The current proposal calls on the Boa rd to decide such cases in one year; it is expected that the availability of such an o ption will generate demand for inter partes proceedings substantially beyond that now exper ienced in interferences. Handling such cases without e-filing and handling will pose substantial costs an d make expedited proceedings more difficult. The Board s past experience in inter partes proceedings shows that files in such proceedings can be very voluminous and, thu s, require contracting personnel to move the files due to their substantial size, a s well as substantial storage space. However, with the creation of an electronic filing sy stem, the office space rental costs for storing paper files can be minimized. In addition, the

Board s flexi-place program is an essential part of its strategy for retaining a s enior cadre of Administrative Patent Judges; an integrated electronic system would allow suc h cases to be handled effectively by APJs on that program. A similar system has been designed for ex parte and inter partes proceedings in the Trademark Trial and Appeal Board and a similar system for inter partes proceedin gs in the BPAI could be installed independently of the e-filing program for patent app lications. Such a system would provide automated support and internal controls while enabli ng the BPAI to: (1) Institute patent review proceedings* (2) Process patent review proceedings* (3) Enable expeditious document text search and retrieval for USPTO users across multiple proceedings* (4) Allow on demand optical character recognition, annotation capability highlighting and marking of documents* (5) Enable storage of multimedia exhibits and records (6) Provide online access of proceedings to the parties involved in a proceeding * (7) Support, provide and promote online work at home capability for board personnel and access to all electronic records in a proceeding (8) Provide online collaboration of administrative patent judges (9) Enable submission and collection of payments by interfacing with existing USPTO financial systems* P-05-03 1 UNITED STATES PATENT AND TRADEMARK OFFICE Minimal requirements for any functional system are identified by asterisk. Item (4) may in large be available through currently installed systems. Options Considered: Option 1: No e-processing/filing (no BPAIIS system) Option 2: Develop e-processing/filing system (BPAIIS) that already meets minimal requirements Option 3: Develop e-processing/filing system (BPAIIS) that accommodates home access USPTO Recommended Course of Action: The Board is currently handling interferences under Option 1. Thus, it is feasib le to continue with paper operations. That approach, however, will add to paper handli ng and storage costs and will make it less likely that the Board will meet an expedited goal for handling these cases. Showing from the outset that the Office is able to handle these matters more quickly than the courts would be an important aspect of establishin g reviews proceedings as a preferred route for deciding issues concerning validity of claims. Adopting Option 2 is in keeping with OMB s direction that the patent side of opera tions should look to gain the benefits of investment in trademark e-government. Althou gh the TTAB s e-filing system does not provide a complete model for a similar BPAI system , the lessons learned from that installation may be more readily transferable to a

BPAI system than are lessons learned in application e-filing. An e-filing system that did not allow full home access would diminish the return in investment of the BPAI s flexi -place program particularly as an inducement to retain senior staff. Option 3, on the other hand incorporates the benefits of Option 2 and provides f or full home access. This option makes the USPTO s flexi-place more efficient as a mode of work, contributes to its efficacy as a retention program for the Board, allows m anagement maximum flexibility in assigning APJs to these new proceedings, and furthers the Office's telecommuting initiative. We recommend Option 3. As an action plan, development should commence immediately to permit adequate resources to be allocated to this endeavor. Testing and implementation should ta ke place before October 2004, when we would now expect review legislation to become effec tive. Details: The new system would provide an electronic file from which APJs can retrieve documents and all related documentation to perform adjudication functions in pat ent review proceedings. The system will enable the BPAI to receive, store and retrie ve electronic, text-searchable records; receive and file multimedia records; and st ore and transmit USPTO correspondence to the parties involved in a proceeding. P-05-03 2 Specifically, the system would provide the following automated functionalities: Mail and Form Management - Generate and record mail and required forms. The system would increase accuracy and enhance system security through access management and desktop availability of application data and support documentatio n. Timing: An e-filing system at the Board is part of the Office s e-government strategy. The prospect that review proceedings may be implemented in FY2004 makes it preferabl e to implement the system concurrently with that new jurisdiction. This is an e-gover nment initiative that can be pursued on a different track than the TEAM initiative, si nce unlike appeals and (to a lesser extent, interferences) e-filing for a review proceeding need not depend on receiving an electronic file wrapper during patent prosecution. Instal ling efiling to contemporaneously with beginning review proceedings would reduce the need to plan for storage facilities in the new building and the burdens of developing bo th a work flow system and paper files that would thereafter become outmoded. Risks: The risks associated with not having an electronic filing system are significant . Lack of such system jeopardizes the Board s ability to meet a one-year goal for concluding a review proceeding in one year. Meeting the one-year goal will be crucial to maki ng the P-05-03 3

UNITED STATES PATENT AND TRADEMARK OFFICE File uploading processing - Insert electronically submitted documentary and evidentiary files; index supporting documents in a centralized document repository; link these files to the corresponding proceeding record in a database. Bibliographic data collection- Collect and store data inserted by involved parties to a proceeding regarding contact information and related files. Generate file receipt notification-Generate a filing receipt notification of receipts of a document by the system. Search Application - Query and print proceeding information based on search criteria. Search document- Text search and retrieve documents within database. Proceeding Management - Prepare correspondence and merge bibliographic data, provide online collaboration between judges involved in a proceeding. Access Control Management - Controlling access to the system and to privileged functions based on the user role (identified by his user id cross referenced to his password) and workstation. review proceeding a credible institution worthy of support and use by the patent bar. Further, failing to have such a system in place creates burdens for the agency b y: Requiring recruitment of additional personnel to perform clerical tasks. The principal risks that we identify with adopting such a system on the proposed schedule are that (1) adopting an e-filing system for a new proceeding before we have exp erience with the proceeding may lead to the need to make some adjustments in the system later; and (2) Board personnel, including APJs, would be learning both a new adjudicati on process and a new e-filing system at the same time. We regard the former risk as less costly than the other risks and the latter risk as potentially also being a bene fit. Estimated Benefits: Most of the benefits associated with implementing such a system are automated su pport, instant availability of documents to administrative patent judges whether from t he USPTO or a flexi place location, eliminating the need for storage of paper files and the costs associated with locating lost files, repairing damaged files and reconstru cting files. The capability of text searching documents across multiple proceedings will enab le administrative patent judges to increase their efficiency since text searches re duce the amount of time needed to locate a particular document. The ability to mark a doc ument for further reference would further increase judicial efficiency. This project w ill enable the USPTO and the patent bar to interact electronically. Using the Internet from anywhere in the world, counsel will be able to file documents with the USPTO electronically. The following are detailed benefits for BPAIIS to USPTO, the public and the lega l community: P-05-03 4 UNITED STATES PATENT AND TRADEMARK OFFICE

Requiring office space for such personnel. Requiring space to store the files. Requiring the move of the files upon relocation of USPTO to its new site. Requiring reconstruction of lost or damaged files and Placing additional burdens on employees ability to work at home. Accessibility - The ability to view, file and retrieve documents 24/7, every day of the year, 24 hours a day for USPTO users and the public. Instant notification - The ability to receive immediate notice of new filings with the USPTO. P-05-03 5 UNITED STATES PATENT AND TRADEMARK OFFICE Low cost to users - Use of standard Internet software would minimize out-ofpocket expenses, attorney travel time, postage costs, and the expense of maintaining and storing paper files. Information - The information concerning the filing of cases would be timely and accurate and will enable the Chief Judge, managers and administrators of the BPAI to make effective business decisions. APJs would also be able to access information relating to their proceedings in a highly expeditious manner. Bibliographic data about the parties will be collected via public user input into the system and will thus enhance data collection and management. Storage space The system, by creating a paperless electronic environment, would eliminate the need for storage space for paper files. Potential expandability - The system would potentially be expanded to provide generation of statistical reports, workflow functions, and online collaboration within the Board of Patent Appeals and Interferences. Human Resources and their required office space - The system would eliminate the need to hire additional personnel to find and locate paper files, to match papers with files, to reconstruct and repair files and the office space th at would be required for such employees. Task Name P-05-03 - Post-Grant Patent Review E-Processing Develop concept (P-05-03) Negotiate examination process for case returned (P-05-03) Determine how electronic files will be handled (P-05-03) Baseline AIS Project - Planning Task (P-05-03) Define AIS Requirements (P-05-03) Acquire Hardware and Software & Installation (P-05-03) Design, Build and Test AIS (P-05-03) Certification & User Acceptance Testing (P-05-03) Define EFS Requirements (P-05-03) Baseline EFS Project (P-05-03) Enhance EFS (P-05-03) Define PALM Requirements (P-05-03) Baseline PALM Project (P-05-03) Enhance PALM (P-05-03) Duration 606 days 10 days 30 days 10 days 19 days 59 days 58 days 173 days 20 days 64 days 20 days

121 days 64 days 20 days 121 days Finish Thu 10/21/04 Contact J. Toupin Start Mon 6/3/02 FY 2003 Resources $0 Mon 6/3/02 Fri 6/14/02 Mon 7/15/02 Mon 6/3/02 Fri 6/14/02 Mon 6/3/02 Tue 10/28/03 Tue 1/27/04 Wed 10/1/03 Wed 10/29/03 Wed 10/29/03 Mon 1/26/04 Tue 1/27/04 Thu 9/23/04 Thu 10/21/04 Fri 1/2/04 Thu 4/1/04 Fri 9/24/04 Fri 4/2/04 Thu 4/29/04 Fri 10/15/04 Fri 1/2/04 Thu 4/1/04 Fri 4/30/04 Fri 4/2/04 Thu 4/29/04 Fri 10/15/04 Fri 4/30/04 UNITED STATES PATENT AND TRADEMARK OFFICE INFORMATION TECHNOLOGY SECURITY PROGRAM Action: The USPTO requires a funded, effective information technology (IT) security prog ram that is compliant with the Government Information Security Reform Act (GISRA). Background Information: Due to the USPTO s non-compliance with GISRA, it has been the subject of numerous audits by the Office of the Inspector General (OIG) within the past year: (1) Independent Evaluation of the Department s Information Security Program Under the Government Information Security Reform Act, September 2001 (2) Network Vulnerability Assessment: Improvements Needed in the General Controls Associated with USPTO s Financial Management Systems, March 2002 (3) Additional Senior Management Attention Needed to Strengthen USPTO s Information Security Program, March 2002 In addition, the OIG is preparing to finalize its report on the Patent Applicati

on Capture and Review System (PACR) that also promises to be a negative report (OIG meeting with OCIO security managers, Thursday, May 16, 2002). All three reports attest to the fact that: The USPTO is not in compliance with the law. IT security has not yet become an integral part of USPTO s business operations and, therefore, fundamental responsibilities are frequently not carried out. Implications are: Neither internal nor external customers can trust the USPTO s automated information systems. The USPTO is not credible. As a first step, an interim IT security program manager has been named. The prog ram manager is leading efforts to establish an IT security program. However, a progr am cannot be established without supporting funding. A very significant effort in the next two years and on a continuing basis is the certification and accreditation effort. The major costs for this effort is for c ontractor support to provide expertise and required resources lacking in the USPTO. 1 CIO-01 UNITED STATES PATENT AND TRADEMARK OFFICE Projects requiring funding in FY03 and in the out-years are the following: (1) Certification and Accreditation of USPTO Automated Information Systems; (2) Compliance Testing; (3) NIST Self-Assessment; (4) Infrastructure Protection; (5) Operations and Maintenance; and (6) IT Security Training. Certification and Accreditation of USPTO Automated Information Systems The Office of Management and Budget (OMB) Circular A-130 Appendix III defines requirements for certifying and accrediting the security of USPTO automated info rmation systems for processing sensitive information. All operational systems must be ce rtified and accredited with reviews of security controls every three years. The USPTO ha s developed a program for the certification and accreditation of all USPTO operati onal systems for compliance with OMB Circular A-130 and the estimated cost. In additi on, the USPTO is required to recertify and reaccredit operational systems every 3 ye ars. Base funding to support this activity will be required. Compliance Testing Compliance testing is conducted to provide evidence of compliance with IT Securi ty laws, directives, and policies. The Department of Commerce, under the direction of OMB, GAO, and Congress, is instituting a program for compliance testing of major systems in each Department agency. The USPTO must, therefore, develop a plan for compliance testing for USPTO systems and obtain funding support. NIST Self-Assessment Self-assessments provide a method for Department of Commerce and other agency officials to determine the current status of USPTO information security programs and, where necessary, establish a target for improvement. This self-assessment guide

utilizes a very lengthy questionnaire containing specific control objectives and techniqu es against which each automated information system is to be tested and measured. The contro l objectives and techniques are abstracted from requirements found in statute, pol icy, and guidance on security. Infrastructure Protection Included in this project are systems critical for the protection of the USPTO lo cal area network and the operational systems on the network. This includes the firewalls, intrusion detection systems (both network and host-based), public key infrastruc ture, virus-protection, and single sign-on. In one of its March 2002 reports, the OIG recommended that the USPTO procure, install, and maintain intrusion detection sy stems. 2 CIO-01 UNITED STATES PATENT AND TRADEMARK OFFICE The USPTO immediately funded a network intrusion detection system, but a host-ba sed intrusion detection system requires more funding. Operations and Maintenance This project includes developing and implementing procedures for regularly updat ing server software with security patches. This maintenance function will be perform ed by contractor support. Operating and maintaining computers in a secure environment is essential. IT Security Training There are three basic types of IT Security Training: Management, Technical, and User Awareness. Managers are required to be knowledgeable of their security responsib ilities and principles of effective risk management. Personnel in jobs administering and maintaining operational systems are required to be knowledgeable of IT security vulnerabilities, how to correct these vulnerabilities, and what technical proced ures should be implemented for maintaining secure operational systems and their infrastructu res. OMB Circular A-130 Appendix III requires that all government employees and contractors take user awareness training once a year. This training requires sup porting funding. Options Considered: Do not establish and maintain an IT security program Conduct IT security program without contractor staff support Conduct IT security program using only contractor staff support Conduct IT security program using government and contractor staff support Option 1 Impact, Do not establish and maintain IT security program: The USPTO s current status of non-compliance will continue for a minimum of 5 years due to lack of resources to establish an effective IT security program. The USPTO will continue to be scrutinized by the OIG and the subject of additional negative reports. o Requires use of resources to respond to reports instead of establishing program (which could reduce scrutiny). o Requires burdensome extra reporting to OIG. The Department of Commerce, e.g., the Deputy Secretary and the CIO will

continue to scrutinize the USPTO s IT security program. The USPTO s customers will continue to question the reliability of automated information systems. OMB and Congress will eventually use budget constraints to force compliance. Funding and resources can be allocated to other priorities. 3 CIO-01 UNITED STATES PATENT AND TRADEMARK OFFICE This option is not recommended because it does not allow for us to address the O IG s and Department s IT security concerns in a reasonable timeframe. Option 2 Impact, Conduct IT security program without contractor staff support: The USPTO s current status of non-compliance will continue for a minimum of 3 years due to lack of internal resources to establish an effective program. The USPTO will fall into past patterns of failure due to lack of resources and expertise. Funding must be allocated to training government employees and may not be cost effective. Less funding will be expended than for Options 3 and 4. This option is not recommended since we do not have all the expertise required f or day-to-day operations in an effective IT security program. Option 3 Impact, Conduct IT Security Program using only contractor staff support : The USPTO s current status of non-compliance will continue for a minimum of 3 years due to lack of funding for contractor support and internal expertise in program management to establish an effective program. The USPTO is at the mercy of a contractor. The USPTO will not be able to provide adequate guidance to contractor staff. Without knowledgeable oversight, the USPTO can fall into the trap of spending more money than necessary. Less funding will be expended than for Option 4. This option is not recommended because skilled government employees are required to guide and monitor contractors activities and respond to government oversight organizations. Option 4 Impact, Conduct IT security program using government and contractor sta ff support: The USPTO will be able to develop and maintain an IT security program compliant with GISRA and DOC guidelines using selected expertise. The OIG can direct its attention to other agencies. The Department s executives can direct their attention to other agencies and activities. More funding will be expended than other options. This option is recommended. 4 CIO-01 UNITED STATES PATENT AND TRADEMARK OFFICE USPTO Recommended Course of Action: Option 4, conduct an IT security program using government and contractor staff s upport, is recommended. The USPTO must comply with IT security laws, policies, and guidance. Because of OMB, GAO, OIG, and DOC oversight, the criticality of establishing an IT security program has greatly increased. The Office of the Chief Information Officer does not have the staff or expertise to establish and maintain an IT security program in compliance with government law, policies, and guidance. All USPTO employees must be trained to the degree that their job responsibilities relate to using, managing, administering, and maintaining IT systems. Risks:

Without adequate protection of the integrity and availability of USPTO automated information systems, the USPTO is at risk of the following: Financial loss Disruption of service of automated information systems Damage to automated information systems and infrastructure Data loss or alteration Information loss or alteration Property loss Loss of personal safety Embarrassment and loss of trust and goodwill Return on Investment: Intrusion attempts occur many times daily. Without proper protection, any number of these intrusions can lead to many dollars spent to recover from damage inflicted during these intrusions and recovery. Destruction, loss, or misuse of sensitive data/in formation can lead to immeasurable costs. Also, system unavailability means business losse s and expenses. Lack of protection of USPTO IT operational systems and their infrastru cture is not an option at this point. 5 CIO-01 Task Name CIO-01 - IT Security Program Pilot C&A of first five AISs (CIO-01) Perform C&A for Remainder of FY02 Target Group of AISs (CIO-01) Perform C&A for FY03 Target Group of AISs (CIO-01) Perform C&A for FY04 Target Group of AISs (CIO-01) Purchase H/W for Lab for FY04 C&A Vulnerability Testing (CIO-01) Perform NIST Self-Assessments of All Level 1 AISs (CIO-01) Perform NIST Self-Assessments of All Non-Level 1 AISs (CIO-01) Perform NIST Self-Assessments of All USPTO AISs Each Year (CIO-01) Develop Compliance Testing Plan and Procedures (CIO-01) Perform Compliance Testing of Identified AISs Per FY (CIO-01) Develop Procedures for Regular Update of Server Security S/W (CIO-01) Develop Contractor Tasking for Security S/W Maintenance (CIO-01) Award Contract and Implement Security S/W Maintenance (CIO-01) Design Host-Based Intrusion Detection System (IDS) (CIO-01) Purchase H/W for Host-Based IDS (CIO-01) Duration 635 days 61 days 44 days 251 days 255 days 42 days 64 days 250 days 40 days 55 days

40 days 79 days 99 days 18 days 121 days 99 days FY 2003 Resources $4,700,000 Contact W. Gewehr Start Finish Mon 4/1/02 Thu 9/30/04 Thu 4/4/02 Fri 6/28/02 Wed Mon 7/31/02 9/30/02 Tue 10/1/02 Tue 9/30/03 Thu 9/30/04 Wed 10/1/03 Tue 9/2/03 Thu 10/30/03 Mon 9/30/02 Mon 9/29/03 Mon 12/1/03 Mon 9/30/02 Mon 12/1/03 Mon 9/30/02 Fri 12/27/02 Fri 1/24/03 Tue 7/2/02 Tue 10/1/02 Wed 10/1/03 Tue 7/16/02 Wed 10/1/03 Tue 6/11/02 Wed 8/7/02 Mon 12/30/02 Wed 10/2/02 Mon 11/4/02 Fri 3/28/03 Fri 3/28/03 Task Name Purchase S/W for Host-Based IDS (CIO-01) Perform Testing of Host-Based IDS (CIO-01) Deploy Host-Based IDS on all Servers (CIO-01) Develop IT Security Training Plan (CIO-01) Distribute IT Security Training Plan to OCIO Managers (CIO-01) Distribute IT Security Training Plan to non-OCIO Managers

(CIO-01) Complete Minimum Yearly Requirements Training of Managers (CIO-01) Complete Minimum Yearly Requirements Training of Technical Personnel (CIO-01) Complete Yearly IT User Awareness Training of all USPTO Employees and Contractors (CIO-01) Duration 99 days 85 days 64 days 108 days 1 day 21 days 229 days 229 days 229 days Start Mon 11/4/02 Finish Fri 3/28/03 FY 2003 Resources Contact Mon 3/3/03 Mon 6/30/03 Mon 6/30/03 Tue 4/1/03 Mon 4/1/02 Fri 8/30/02 Mon 9/30/02 Wed 10/30/02 Wed 10/1/03 Wed 10/1/03 Wed 10/1/03 Mon 9/30/02 Tue 10/1/02 Mon 11/4/02 Mon 11/4/02 Mon 11/4/02 UNITED STATES PATENT AND TRADEMARK OFFICE DATA REPLICATION FOR DISASTER RECOVERY Action: The USPTO should establish a disaster recovery system for mission critical autom ated information systems. Background Information: The Office of the Chief Information Officer Disaster Recovery (OCIODR) System wi ll establish data redundancy for the USPTO s mission critical systems. The objective of OCIODR is to guarantee the availability of patent and trademark data to patent

examiners, trademark attorneys, the general public and foreign patent and tradem ark offices in the event of a disaster resulting in the complete or partial destruct ion of the USPTO s single data center. The USPTO is proposing a mirrored data storage solution that will duplicate our production storage environment on a physically separate set of storage devices (secondary storage), transparent to users, applications, databases, and host pro cessors, located at a remote site outside of the Metropolitan DC area. If disk hardware f ails within the data center, a fast switchover to the secondary storage occurs so tha t critical information is again available in minutes. Once the primary storage unit becomes operational again, data will be resynchronized from the secondary storage, there by ensuring information and database consistency. The automatic replication of data and applications between USPTO and the designa ted remote site will be achieved via secured redundant circuits. The communications link will facilitate bi-directional transmission of data. As such, the primary and re mote storage facilities will act as both the source and target for each other. Synchr onous mode transmission will also be in effect. This ensures that a second copy of the data , accurate up to the last transaction, is immediately available for use. The USPTO s most critical asset is its patent and trademark data. Secured data, av ailable for use in the resumption of critical information technology operations is of pa ramount importance to the USPTO, the Department of Commerce, and to the United States Government. The events of September 11th have caused us to not only reassess information tec hnology security in general, but to pay particular attention to our automated informatio n systems and supporting infrastructure to identify, and put in place, plans to address al l vulnerabilities that if exploited would seriously prevent the USPTO from deliver ing timely and high quality information technology products and services to our inte rnal and external customers. One of our most significant exposures is the fact that all o f our information technology hardware and software assets are located in a single data center within walking distance of the Pentagon and Reagan National Airport. 1 CIO-02 UNITED STATES PATENT AND TRADEMARK OFFICE A significant lesson learned from September 11th is that an organization s ability to recover from a similar disaster is primarily based upon the availability of its data. According to the Economic Analysis of Dual On-Site Data Centers for Information Technology Disaster Recovery, January 28, 1999, USPTO estimates a cost of almost $550 million to work off the 47-month production backlog that would develop for Patents

as a result of a disaster resulting in the loss of operations in the data center . Therefore, it is incumbent upon the USPTO to make sure that it has protected its data in such a way that it can be used to restore operations vital to its patent examiners, tradema rk attorneys, and the general public as quickly as possible. This document is an explanation o f and requirements justification for the funding of an information technology data rep lication capability for the USPTO. The $550 million estimate assumes a total destruction of the data center and includes recurring costs (e.g., labor, rent, other operations co sts during 122 day outage prior to re-establishment of the data center), data center costs (eg establishment of interim data center, offsite staging of equipment, deinstall/re install/ transport to new data center, re-establishment of communications, and reloading of data and applications), lost revenue from sales of patent and trademark data products , copying costs to revert to paper processing, and labor to work off application backlog o ver a 47month period. This does not include the cost of purchasing the new hardware. To meet the challenges of the future, the USPTO has developed an ambitious strat egic agenda to help position the agency to operate more successfully and efficiently in the 21st century. An important component of the USPTO's agenda is "leveraging information technology." This corporate strategic response enables the USPTO to maintain cur rent business production, meet the requirements of Public Law 106-113, American Inven tors Protection Act (AIPA), improve and enhance the current business through electron ic commerce, and add new capability by migrating automated information systems to operate on an open system information technology infrastructure. This results in reductions in patent and trademark pendency times, elimination of paper-based processing, and evolution of the businesses to electronic commerce and an electr onic workplace. Our vision has been to develop an information technology environment for the USP TO, its international partners, and the public where patent and trademark informatio n is created once, managed effectively, and used often. Our concept of operations is predicated upon the fact that most internal and external transactions are perfor med electronically and that employees and external customers can access needed infor mation through the Internet. USPTO Recommended Course of Action: As all of the various projects and initiatives are implemented, it becomes appar ent that the USPTO has to provide an information technology capability to a wide range of local and international customers on a 24-hour-a-day, seven-day-a-week basis without r egard

to local weather conditions or holidays. It is clear that USPTO s highly integrate d patent and trademark automated information systems will be deemed essential and be interconnected, and there will be minimum paper backup. The higher the level of 2 CIO-02 UNITED STATES PATENT AND TRADEMARK OFFICE dependency the USPTO has on automation, the greater the impact a future informat ion technology disaster will have. The USPTO has just a single data center. There are approximately 283 NT servers, 137 UNIX servers, and 200 terabytes of high-speed storage supporting the USPTO s production environment via a very highly sophisticated network (PTONet). The Economic Analysis of Dual On-Site Data Centers for Information Technology Disast er Recovery, January 28, 1999, indicates that a disaster striking the single data c enter would have a catastrophic effect on the USPTO both financially and from a production standpoint. USPTO revenue loss associated with the loss of information technolog y support amounts to about $7 million per day. Since USPTO s most critical asset is its patent and trademark data, this proposal is to establish redundancy that will guarantee the availability of patent and trademar k data in the event of a disaster resulting in the complete or partial destruction of the USPTO s single data center. We are currently transitioning to a mirrored state for our data storage. Approxi mately 100 terabytes are presently in a mirrored state with the remaining 100 terabytes in a raid-S configuration. However, in the event of a disaster destroying the data ce nter, this would offer no protection. The Veritas Tape Backup System is currently backing up automated information sys tem applications and data. In the event of a complete disaster it could take several weeks to restore some of our larger application data files. In the event that we could no t successfully recover these files from tape, it would be a huge undertaking to re store patent and trademark automated information systems data files from the paper cop ies stored at our Boyers, Pennsylvania, remote site. In addition, we would have to r equest a resubmission of all patent and trademark applications that were in process at th e time of the disaster that could not be located in paper form. Therefore, data replicatio n would greatly simplify data restoration in the event of a complete disaster. Recovery tapes of the operating systems on our HP UNIX servers are being perform ed on a quarterly basis or as needed basis (following updates). Plans are under way to place a copy of these tapes offsite. Since NT does not provide a similar capability, we are required to rebuild NT servers from our standard baseline configurations. Although the focus of this proposal is data replication, it must be understood t hat in the

event of a disaster, servers used to host the programs that access the data and the supporting communications infrastructure supporting our most critical automated information systems would have to be replaced prior to the data being available for access. USPTO has approximately 48 UNIX servers on hand that are used for automa ted information systems development and testing purposes. These servers would be immediately used to restore production services for some of our mission critical systems. Contracts would also be initiated to acquire replacement servers from Hewlett-Pa ckard and from several of their third party server providers. Additionally, services w ould be 3 CIO-02 UNITED STATES PATENT AND TRADEMARK OFFICE acquired from disaster recovery services (SunGard, Comdisco, IBM, etc.) until th e full complement of servers were in place to completely restore USPTO s full production capability. Other Options Considered: The alternative to electronic data replication is to continue with our current p ractice of periodic backups to tape, which will be stored off-site. In this case and in the event of a major disaster, a facility would have to be identified, servers obtained, storag e and communication resources procured and installed, and a significant effort underta ken to recover the data from tape. If this alternative were chosen, the recovery time i n terms of patent backlog would be 47 months at a relative cost of $550 million. If data re plication is implemented at a cost of $56 million (over 3 years), it is estimated that the restoration of USPTO s systems could be accomplished within 6 to 9 months at a relative cost o f $70 to $105 million. This represents a savings of $389 to $424 million. 4 CIO-02 Task Name CIO-02 - Data Replication Proposal Identify and lease needed space (CIO-02) Begin purchase of circuits, storage, and related software for mission-critical systems (CIO-02) Perform data replication of Mission Critical Systems (CIO-02) Purchase of circuits, storage, and related software for non-mission critical systems (CIO-02) Perform data replication of non-mission critical systems (CIO-02) Duration 599 days 86 days 81 days 150 days 87 days 195 days Contact T. Kenton Start Finish Tue 4/1/03 Fri 7/29/05 FY 2003 Resources $0

Tue 4/1/03 Thu 7/31/03 Wed 11/26/03 Wed 6/30/04 Fri 10/29/04 Fri 7/29/05 Fri 8/1/03 Mon 12/1/03 Thu 7/1/04 Mon 11/1/04 Agility Work-at-Home TRADEMARK WORK-AT-HOME Actions UNITED STATES PATENT AND TRADEMARK OFFICE TRADEMARK WORK-AT-HOME Action: The Trademark Work-at-Home program should be restructured to better support office goals. Background Information: The Trademark Work-at-Home program began as a pilot in March of 1997. It has sin ce expanded to approximately 110 examining attorneys. Each examining attorney in th e program works at home three days per week and shares an office at the official w ork site with another attorney who works at home. In November of 2001, a hoteling pilot w as initiated. Currently twenty-one of the Work-at-Home participants spend 90 per ce nt of their workweek at home and are at the official work site four hours per week. Ho teling participants are not assigned a personal office, but they may reserve an office to use when they come in to the official work site. There are currently five offices reserve d for the use of the twenty-one attorneys. Organizations and agencies outside the USPTO have recognized the Trademark Work-at-Home program for its promotion of telecommuting and its innovative use o f technology. The Metropolitan Washington Council of Government awarded the progra m the 2001 Telework Award; and the International Telework Association & Council awarded the USPTO the 2001 Government Agency Excellence in Telework Award for the development and implementation of Trademark Work-at-Home program. Meeting Congressional Mandates: The Trademark Work-at-Home program helps the agency satisfy PL 106-346. That law requires each executive agency to establish a policy under which eligible employees of the agency may participate in telecommu ting to the maximum extent possible without diminished employee performance. No later th an 6 months after the date of the enactment of the Act, the Director of the Office of Personnel Management must provide that the requirements of this section are appl ied to 25 percent of the Federal workforce, and to an additional 25 percent of such wor kforce

each year thereafter. The act demonstrates Congressional commitment to telecommu ting as a response to increased traffic congestion and environmental concerns. Business Results: Our experience over the last five years has proven our Work-at -Home program to be beneficial to meeting office goals. Work-at-Home participants have contributed to lower pendency numbers because they are more productive and spend more time examining trademark applications than examining attorneys in the offic e. The quality of work has been as good if not better than the general work force a nd their customer service has been excellent. Customer satisfaction has remained high; th e Work-at-Home program is generally transparent to the customer. Employee Satisfaction: Surveys and focus groups have indicated improved employee satisfaction for Work-at-Home participants. Participants report a better ability to balance T-09 1 UNITED STATES PATENT AND TRADEMARK OFFICE work and family issues because of the time saved commuting. They also enjoy pers onal cost savings for work related commuting expenses. Employee Retention: Work-at-Home participants have a higher retention rate than other employees. For each employee retained, the organization saves the expense of hir ing and training a new employee. There are a number of highly experienced employees who would have left the USPTO were it not for their ability to Work-at-Home. Partici pants report that they would have considered leaving the USPTO because of family conce rns, spouses leaving the area for other jobs, or simply, need for a change in work environment; however, because of the ability to Work-at-Home, these highly exper ienced employees decided to remain with the USPTO. Office Space: While the Trademark Work-at-Home program as initially conceived sa ved some office space by doubling employees, the new hoteling program has proven the potential for enormous space savings resulting in large cost reductions related to the rental of office space. Trademarks proposes to convert its Work-at-Home program to hoteling. Technology: The Trademark operation is well on its way to doing business in a paperless environment. All examination functions including search and research databases, manuals, etc. are accessible on line to examining attorneys. In addit ion, initial examination may be done completely electronically. Complete electronic f ile wrappers and examination should occur by October 1, 2003. Obviously the Trademar k Work-at-Home participant s success and efficiency is totally dependent on computer systems and technical support. USPTO Recommended Course of Action: The Agency should proceed with development of the Trademark Work-at-Home, hotel model where employees will Work-at-Home at least 90 percent of their workweek.

The full potential of the program in the area of improved productivity and cost avoidance related to a reduced need for office space has not yet been met. For substantial cost avoidance, all Trademark Work-at-Home participants will work in the hotel model. If the USPTO is going to take full advantage of this model, the Agency will need to adjust priorities to fully incorporate remote workplace concepts into its operat ions. To be fully successful, the Work-at-Home program must become as much of a second nature to the Agency as electronic searching and other successful electronic too ls. Preparing to incorporate Work-at-Home structures into the fabric of the Agency s concept of workplace are of the utmost importance as we move into the 21st Century and attempt to develop concepts related to creating a flexible workforce and wor k processes. A robust Work-at-Home program would allow the Agency to retain employees regardl ess of where they live and has a strong potential to assist in the recruiting and re tention of employees who find alternatives to a traditional office environment attractive. T-09 2 Task Name T-09 - Trademark Work at Home Define requirements (T-09) Baseline project (T-09) Implement plan (T-09) Duration 315 days 30 days 15 days 270 days Start Finish Tue 10/1/02 Tue 1/6/04 Wed 11/13/02 Thu 12/5/02 Tue 10/1/02 Thu 11/14/02 Fri 12/6/02 Tue 1/6/04 Contact D. Cohn FY 2003 Resources $135,000 Agility Flexibility 1 Flexibility 2 Flexibility 3 Flexibility 4 Actions INITIAL AND PG-PUB CLASSIFICATION OF NEWLY RECEIVED APPLICATIONS SUPPORT FOR PATENT COOPERATION TREATY (PCT) SEARCH ACTIVITY COMPETITIVE SOURCING OF RECLASSIFICATION FUNCTIONS AND TRANSITION TO INTERNATIONAL

PATENT CLASSIFICATION SYSTEM COMPETITIVE SOURCING OF PRE-EXAMINATION PROCESSING RELATED TO PAPER APPLICATIONS UNITED STATES PATENT AND TRADEMARK OFFI CE INITIAL AND PG-PUB CLASSIFICATION OF NEWLY RECEIVED APPLICATIONS Action: Competitively source assigning initial (routing) and PGPub classifications to ne wly received patent applications. Background Information: Technology Center resources required to support the assignment of PGPub classifications could be better utilized for other activities supporting the tra ining of new examiners and reducing the backlog of pending applications. The increasing number of new patent applications and the reduction in initial classification staff because of employee retirements has resulted in the need to hire additional staff if some other means of performing this function is not institut ed. Contracting out of both the initial and PGPub classification functions may result in a significant process improvement by consolidating the two functions into one. Options Considered: Hire additional staff to perform these functions. Hire retirees to perform these functions. Competitively source these functions. USPTO Recommended Course of Action: Details: Competitively source these functions. Estimated benefits: Timely performance of work and the ability to shift current USPTO classification resources to other substantive examination-related activities. P-27 1 Task Name P-27 - Initial and PGPub Classification Develop requirements (P-27) Develop and publish synopsis (P-27) Solicitation issued and open for response (P-27) Evaluate proposals (P-27) Negotiate and award contract (P-27) Address labor relations implications (P-27) Develop training programs for outplaced employees (P-27) Address labor realations implications (P-27) Develop quality review process (P-27) Begin contract phase-in (P-27) Identify automation support (P-27) Implement automation requirements (P-27) Duration 249 days 48 days 15 days 31 days 33 days 12 days 31 days 78 days 90 days 115 days 109 days 134 days

59 days Finish Wed 4/30/03 FY 2003 Resources $5,500,000 Contact H. Smith/H. Goldberg Start Mon 5/6/02 Mon 5/6/02 Fri 7/12/02 Mon 7/15/02 Mon 8/5/02 Fri 8/2/02 Mon 9/16/02 Tue 9/17/02 Fri 11/1/02 Fri 11/22/02 Fri 8/2/02 Fri 9/13/02 Tue 11/5/02 Fri 11/22/02 Mon 6/3/02 Tue 10/8/02 Fri 8/2/02 Tue 6/18/02 Fri 11/29/02 Wed 4/30/03 Fri 11/29/02 Mon 3/31/03 Mon 11/25/02 Tue 5/21/02 Mon 1/6/03 UNITED STATES PATENT AND TRADEMARK OFFICE SUPPORT FOR PATENT COOPERATION TREATY (PCT) SEARCH ACTIVITY Action: In order to maximize examining resources available to support examination of U.S . applications, another means of performing the PCT search activity needs to be in stituted. Background Information: As an International Searching Authority under Chapter I of the PCT, the USPTO re ceives international applications that require the performance of an international sear ch to discover relevant prior art. This international search is made on the basis of t he application s claims and results in the preparation of an international search rep ort. The substance of the search report consists of the most pertinent prior art cited ag ainst the claims of the Chapter I application according to PCT convention. Chapter I applications filed with the USPTO are initially reviewed and processed in PCT

Operations. Following completion of the initial processing, each application is forwarded to the appropriate Tech Center (TC) where its contents are reviewed and analyzed and the appropriate action is taken. For a Chapter I application, a complete and compreh ensive search of pertinent art is conducted, and a search report is prepared. The searc h report is reviewed for completeness and quality after which it, along with the application file, is returned to PCT Operations where staff mails the report and the file is sent to the PCT file room for storage. Options Considered: The Office recognizes that as a signatory to the Patent Cooperation Treaty, perf ormance of Chapter I activity is mandatory. Performance of this work requires technical knowledge sufficient to understand and analyze the technical patent application, knowledge and understanding of the U.S. and International Patent Classification (IPC) Systems, and the ability to conduct in-depth searches using a variety of electro nic databases. Additionally, this work requires the ability to generally associate p rior art with claims and identify if the prior art is related to the novelty, inventive s tep, or merely the general state-of-the-art of the claims. Option 1: Employ retired Patent Examiners and Supervisory Patent Examiners to pe rform the work. Option 2: Hire more examiners. Option 3: Competitively source the work. P-28 1 UNITED STATES PATENT AND TRADEMARK OFFICE USPTO Recommended Course of Action: After reviewing the results of the recently issued Request for Information, deve lop and issue a Request for Proposal (RFP) and award one or more contracts to provide the requ ired search services. Identify minimum search requirements and develop a process for final U SPTO review and approval of search reports. Insure the selected contractor(s) impleme nt required confidentiality measures. Return on Investment: Availability of examiner time otherwise spent on PCT search activities for subst antive examination-related activities. 2 P-28 Task Name P-28 - Support for PCT Search Analyze RFI responses (P-28) Develop requirements (P-28) Develop and publish synopsis (P-28) Issue solicitation (P-28) Evaluate proposals (P-28) Negotiate and award contract (P-28) Address labor relations implications (P-28) Develop training programs for contractors (P-28) Address labor relations implications (P-28)

Develop quality review process (P-28) Begin contract phase-in w/EPO or other contractors (P-28) Identify automation support (P-28) Implement automation requirements (P-28) Duration 483 days 5 days 44 days 15 days 43 days 45 days 19 days 43 days 107 days 90 days 152 days 103 days 103 days 9 mons Contact H. Goldberg Start Finish Mon 6/3/02 Mon 5/3/04 FY 2003 Resources $0 Mon 6/3/02 Fri 6/7/02 Fri 8/9/02 Mon 6/10/02 Mon 8/12/02 Fri 8/30/02 Tue 9/3/02 Fri 11/1/02 Tue 11/5/02 Fri 1/10/03 Mon 1/13/03 Tue 9/3/02 Fri 11/1/02 Fri 2/7/03 Wed 9/4/02 Fri 2/7/03 Mon 6/3/02 Tue 10/8/02 Fri 2/14/03 Wed 7/10/02 Mon 2/10/03 Mon 2/10/03 Mon 7/7/03 Mon 7/7/03 Tue 7/8/03 Mon 5/3/04 UNITED STATES PATENT AND TRADEMARK OFFICE COMPETITIVELY SOURCE RECLASSIFICATION FUNCTIONS AND TRANSITION TO INTERNATIONAL PATENT CLASSIFICATION SYSTEM Action: Competitively source reclassification functions and transfer application dispute resolution function to Patent Corps management. Background Information: Dedicated staff resources devoted to classification activities has declined since 1995: 140 FTE + about 12 examiner staff years in 1995 to 90 FTE + about 4 examiner staff years.

Reclassification effort has declined since 1995 while other classification worklo ads (application classification, application disputes) have increased. Classification staff is increasingly called upon to provide direct support for ot her organizations, including Office of Initial Patent Examination (OIPE), classifica tion Application assignment disputes workload now absorbs 17 staff years, or about 45 and docketing in art units, and Patent Cooperation Treaty (PCT). percent of classifiers time annually. The U.S. led reform of IPC is scheduled for implementation in January 2005. Also, Trilateral Offices have agreed to work toward harmonizing their classification systems. Substantial progress has recently been made in the IPC Reform process towards th e establishment of objective standards for what to classify within a patent document and where to classify that material with a classification schedule. This is a marked improvement over the old IPC subjective standards of best fit which required significant expertise in a particular art as well as a great amount of guesswork a s to where to search a particular invention. Options Considered: All options have in common the competitive sourcing the reclassification of docu ments into new classification schemes. This constitutes about 60-70 percent of time sp ent on professional reclassification. It is also assumed that PGPubs and initial applic ation classification for assignment will be contracted out as planned, which will free about 27 staff years of classifier and technician time currently spent on these functions . Option 1: Competitively source reclassification of documents into new schemes. Transfer classifiers to examining art units under existing hybrid classifier/exa miner position to examine patent applications (30% of time), handle application disput es (45% of time), and create new classification schemes (25% of time). Three classifiers remain full time to maintain classification standards. Supervisory Patent Classifiers ( 5) P-29 1 UNITED STATES PATENT AND TRADEMARK OFFICE coordinate reclass work in Technology Centers (TCs) serve as appeal panel to fin ally resolve application assignment disputes. Classification technicians and Tech Sup port staff continue classification work. The Supervisory Patent Classifiers (5) would coordinate reclass work in TCs and continue to serve as appeal panel in TCs to r esolve assignment disputes between TCs. Classification technicians and half of Tech Sup port staff continue classification work. This option would result in transfer of fewest (11) classifier FTE to patent exa mining. Classification Technicians would continue to reclassify documents in selected technologies, which would avoid the need for reassigning them to other mid level (GS-11) positions, and fewer contractor resources would be needed for reclassifi

cation of documents. By assigning classifiers to the classifier/examiner hybrid position, this option provides more staffing flexibility for the TCs. Option 2: Competitively source functions as in option 1, and additionally transf er application dispute resolution function to Patent Corps management (i.e., Superv isory Patent Examiners). Transfer classifiers to examining art units under hybrid classifier/examiner position to examine patent applications (75% of time), and c reate new classification schemes (25% of time). Three classifiers remain full time in Cent ral Classification to maintain standards. The Supervisory Patent Classifiers (5) wou ld coordinate reclass work in TCs and continue to serve as appeal panel to resolve assignment disputes between TCs. Classification technicians and half of Tech Sup port staff continue classification work. This option would result in transfer of 28 classifier FTE to patent examining. A ll benefits listed under Option 1 would also apply. Positions would have to be identified for reassigning 5 Documentation Project Assistants (GS-6). Option 3: Competitively source and transfer classification functions as in Optio n 2, and additionally the development of new classification schemes. All but 6-8 classifi ers and the SPCs would be assigned to examining functions full time. All Classification Technicians and Tech support staff in the Classification Unit s would be reassigned to other duties to be determined. This option would result in the largest amount of work outsourced to the private sector and the greatest number of classifier (37) FTE that could be reprogrammed to pat ent examining functions. P-29 2 UNITED STATES PATENT AND TRADEMARK OFFICE USPTO Recommended Course of Action: Option 3 has been selected because it would result in the greatest number of gov ernment FTE savings that could be reprogrammed to patent examining functions. Also, in t he near future the transition will be made to the reformed IPC which will provide a robu st and efficient IPC-extended system. P-29 3 Task Name P-29 - Contract out Reclassification Functions and Transition to Global Patent Classification System OGC Determinations (P-29) Develop and publish RFI (P-29) Analyze RFI responses (P-29) Develop requirements (P-29) Develop and publish synopsis (P-29) Solicitation issued and open for response (P-29) Evaluate proposals (P-29) Negotiate and award contract (P-29) Address labor relations implications (P-29) Develop training program for contractor (P-29)

Address labor relations implications (P-29) Select ILS/OPC core staff (P-29) Develop quality review program (P-29) Begin contract phase-in (P-29) Identify automation support (P-29) Duration 397 days 24 days 30 days 5 days 61 days 14 days 37 days 43 days 20 days 37 days 101 days 90 days 37 days 140 days 107 days 167 days Finish Wed 12/31/03 FY 2003 Resources $13,890,000 Contact H. Goldberg/R. Saifer/H. Smith Start Mon 6/3/02 Mon 6/3/02 Fri 7/5/02 Mon 7/8/02 Fri 8/16/02 Fri 8/23/02 Mon 8/19/02 Tue 8/27/02 Fri 11/22/02 Fri 12/6/02 Mon 11/18/02 Mon 12/9/02 Fri 1/31/03 Tue 2/4/03 Fri 4/4/03 Mon 4/7/03 Fri 5/2/03 Fri 1/31/03 Mon 12/9/02 Mon 12/9/02 Fri 5/2/03 Mon 6/3/02 Tue 10/8/02 Fri 1/31/03 Mon 12/9/02 Mon 10/21/02 Mon 5/12/03 Mon 5/5/03 Fri 10/3/03 Tue 9/10/02 Fri 5/9/03 Task Name Implement automation requirements (P-29)

Develop, pilot, and implement plan to transfer dispute resolution functions to TCs (P-29) Move classifiers under examiner/classifier hybrid PD/PAP and assign to art units (P-29) Determine reassignments for classification technicians and effect (P-29) Develop new PDs for and reassign documentation project assistants (P-29) Transfer classifiers to full-time examining positions (P-29) Start Mon 12/2/02 Fri Duration 271 days 178 days 11/15/02 Tue 8/27/02 47 days Tue 8/27/02 47 days Tue 8/27/02 47 days Mon 5/5/03 165 days Finish Wed 12/31/03 Thu 7/31/03 FY 2003 Resources Contact Thu Thu Thu 10/31/02 10/31/02 10/31/02 Wed 12/31/03 UNITED STATES PATENT AND TRADEMARK OFFICE COMPETITIVE SOURCING OF PRE-EXAMINATION PROCESSING RELATED TO PAPER APPLICATIONS Action: Activities supporting the preparation, classification and coding of materials in paper-filed applications be performed using competitive sourcing. Background: Currently the initial processing of trademark application data in applications f iled on paper and the capture of paper-filed documents into electronic systems so they m ay be accessed on-line is performed primarily by contract employees. There are two dis tinct activities related to the capture of information in newly filed paper applicatio ns: (1) Classifying the goods and services associated with the mark in the new appli cation, assigning mark drawing codes to all marks, assigning design search codes to mark s containing designs or figurative elements for the purpose of searching the mark (approximately 20% of the marks filed) and applying pseudo-marks related to corrupted or intentionally misspelled word marks to permit a retrieval of marks fr om trademark search systems; and (2) Scanning and OCR capture of paper-filed applic ations

and related documents to create an electronic file in the Trademark Image Captur e System (TICRS). Contractors currently perform some or all these activities. For several years, Trademark Operations has been contracting support activities and tasks that the organization believes will be rendered obsolete as technology comes int o wider use in the organization. Options Considered: Use a mix of Government and contract employees. Competitive sourcing of all activities. USPTO Recommended Course of Action: The USPTO continue to outsource all activities that support the preparation and capture of trademark application data in paper applications because it: 1. Supports the President s Management Agenda and the FAIR Act to outsource commercial activities; 2. Allows more flexibility for managing one-time projects and changes in workloads; 3. Minimizes the impact on Government employees as applicants move to electronic filing and communication; and, 4. Defers the need to take permanent action to reduce displaced positions. T-06 1 UNITED STATES PATENT AND TRADEMARK OFFICE Timing: A services contract covering identified support activities will be awarded by October 1, 2002. Additional tasks or work that fits within the scope of the contract may be added as needed. Benefits: Consistent with a strategy to competitively source activities that will be eliminated or substantially reduced in a fully electronic environment. Controls costs because fewer resources will be needed as more applications are filed electronically and the pending paper inventory is reduced. Competition will create incentives for improving the quality of products. T-06 2 Task Name T-06 Outsourcing classification of goods/services Draft and solicit proposals for the recompetition of the TM services contract (T-06) Determine level of work and fund contract task order for QC function (T-06) Establish gov't position to assist the COTR in monitoring the contractor performance (T-06) Address labor relations implications (T-06) Determine positions/job assignments (T-06) Provide on-the-job training (contractors and gov't employees) (T-06) Monitor contract performance, data quality (T-06) Duration 1372 days 87 days 44 days 87 days 1 wk 2 wks 2 wks 56.7 mons FY 2003 Resources

$888,000 Contact B. Anderson Start Finish Mon 6/3/02 Sun 9/30/07 Wed 10/2/02 Thu 8/1/02 Tue 10/1/02 Mon 6/3/02 Wed 10/2/02 Mon 6/3/02 Fri 6/7/02 Mon 6/3/02 Mon 6/3/02 Fri 6/14/02 Tue 10/15/02 Fri 9/6/02 Sun 9/30/07 Tue 10/1/02 Agility Global Development 1 PURSUIT OF SUBSTANTIVE PATENT LAW Global Development 2 Global Development 3 Global Development 4 Actions HARMONIZATION OTHER BILATERAL/MULTILATERAL AGREEMENTS PATENT COOPERATION TREATY REFORM INTERNATIONAL COOPERATION: E-FILING AND CLASSIFICATION OF GOODS/SERVICES UNITED STATES PATENT AND TRADEMARK OFFICE PURSUIT OF SUBSTANTIVE PATENT LAW HARMONIZATION Action: Promote harmonization in the framework of the World Intellectual Property Organi zation and its Standing Committee on the Law of Patents; resolve major issues in a broa der context and pursue substantive harmonization goals that will strengthen the righ ts of American intellectual property holders by making it easier to obtain internation al protection for their inventions and creations. Details: The details of this action paper are by their nature sensitive and confidential, and therefore not appropriate for publication. I-01 UNITED STATES PATENT AND TRADEMARK OFFICE OTHER BILATERAL/MULTILATERAL AGREEMENTS Action: Negotiate bilateral and multilateral agreements to facilitate global convergence of patent standards. Details: The details of this action paper are by their nature sensitive and confidential, and therefore not appropriate for publication. I-02 UNITED STATES PATENT AND TRADEMARK OFFICE PATENT COOPERATION TREATY REFORM Action: Accelerate Patent Cooperation Treaty reform efforts, focusing on the USPTO s propo sal for simplified processing.

Details: The details of this action paper are by their nature sensitive and confidential, and therefore not appropriate for publication. I-03 1 UNITED STATES PATENT AND TRADEMARK OFFICE INTERNATIONAL COOPERATION: E-FILING AND CLASSIFICATION OF GOODS/SERVICES Action: The USPTO should establish a universal trademark registration system. Background Information: Currently, all countries and territories maintain independent trademark registra tion systems. Trademarks are viewed as territorial rights, even if that territory is composed of sovereigns (e.g., the European Communities). It is possible for mark owners in d ifferent countries legitimately to own rights in the identical mark for the identical goo ds. Further, a mark may be considered eligible subject matter in one jurisdiction but not so in another (e.g., a term considered to be generic in the United States may be an arbitrary term for identical goods in another country). Much work remains to be done at the international level with respect to harmoniz ation of views on substantive legal issues for trademarks. More progress has been made wi th respect to procedural reform of trademark systems worldwide, most notably regard ing maximum filing-date requirements as memorialized in the Trademark Law Treaty (1994). Although identifications of goods and recitations of services seem ministerial, they have substantive effect, both with respect to initial grant of a trademark right and the scope of that right. A uniform database of internationally acceptable identifications of goods/recitations of services currently does not exist. Options Considered: Retain the current system of independent registration systems around the world. Move to establish a universal trademark registration system, based on e-filing. USPTO Recommended Course of Action: It is recommended that the USPTO leverage its considerable experience with elect ronic filing of trademark applications and other trademark-related communication to ex port its views with respect to the substantive aspects of rights in trademarks. One impor tant component of a universal trademark registration bridges the gap between substance and procedure, i.e., identifications of goods and recitations of services. Therefore , work on a uniform database of internationally acceptable identifications of goods/recitati ons of services, expanding on those noted in the Nice Agreement, is a concrete step tow ard a universal trademark registration. Timing: May 2002 - Approach Trademark Trilateral Cooperation partners (European Trademark and Design Office and the Japan Patent Office) with proposal for a Trilateral Trademark web site ("gateway") and uniform identifications, available

T-04 UNITED STATES PATENT AND TRADEMARK OFFICE via an on-line manual. Gateway would provide information on filings, international agreements, and contacts at ETDO, JPO and USPTO. May 2002 - Discuss gateway on margins of WIPO SCT-8 July 2002 - Raise e-filing gateway at July APEC/IPEG Meeting, hosted by USG November 2002 - Continue dialog on margins of WIPO SCT-9 2003 - Approach other e-filing offices to join gateway site: Australia Canada New Zealand 2004 - Work with interested countries to develop a universal electronic application, based on the USPTO s format and program. Risks: Gaining buy-in from Trademark Trilateral Cooperation partners and other e-filing offices, and eventually all trademark offices around the world. Benefits: Universal trademark registration system would provide Ease of maintenance for customers Ease of enforcement of right E-filing gateway would provide Universally accessible, uniform application Universally accessible registration Universally accessible, uniform file history (at all phases of prosecution and maintenance) 2 T-04 Task Name T-04 International Cooperation: e-filing Approach TTC partners with proposal for Trilateral website (T-04) Discuss gateway on margins of WIPO SCT-8 (T-04) Raise e-filing gateway at July APEC/IPEG meeting (T-04) Continue dialog on margins of WIPO SCT-9 (T-04) Approach other e-filing offices to join gateway site (T-04) Work with interested countries to develop a "universal" electronic application (T-04) Duration 711 days 30 days 10 days 1 wk 1 wk 30 days 120 days Contact B. Anderson Start Finish Mon 6/3/02 Thu 3/17/05 FY 2003 Resources $0 Mon 7/15/02 Mon 6/3/02 Fri 6/14/02 Mon 6/3/02 Mon 7/1/02 Mon 7/8/02 Fri 11/1/02 Thu 11/7/02 Wed Thu 10/1/03 11/13/03 Fri 10/1/04 Thu 3/17/05 Agility

Work Sharing Actions PROPOSED PROCEDURES TO IMPLEMENT MUTUAL RELIANCE OF SEARCH RESULTS PROGRAM UNITED STATES PATENT AND TRADEMARK OFFICE PROPOSED PROCEDURES TO IMPLEMENT MUTUAL RELIANCE OF SEARCH RESULTS PROGRAM Action: Pursue through bilateral and/or multilateral agreements with other IP Offices to share search results, as a first step. The results of the first step should be analyze d within a set period of time after implementation. If the results of the first step are positi ve, the Office should then begin to explore the feasibility of mutual reliance on the positive examination results from other IP Offices with whom we have bilateral and/or multilateral agreements. Background Information: The mutual reliance of search/examination results program is based on the reliance of work performed by another IP Office to the maximum extent practicable so as to reduce duplication of efforts and to decrease workload. These bilateral and/or multilateral agreements would be done in parallel with other initiatives such as substantive patent law harmonization, and patent cooperation treaty reform discussions within the World Intellectual Property Organization. The mutual reliance program is part of an overall strategic program to promote global patent protection. Issues of timely delivery and high quality of the shared work product are to be considered. Option Considered: Exploit the work product of other IP Offices in a stepwise approach by first sharing the prior art discovered by the Office of first filing. USPTO Recommended Course of Action: The Office should move forward with procedures to share the search results of other IP Offices. After a review of the first step of shared search results, review of other work sharing options should be considered. P-36 1 Timing: Risks: Return on Investment: Estimated investment - continue/expand negotiations/discussions. Estimated benefits - maximize leveraging of work product from other countries/of fices in up to 45% of applications filed per year. Details: The procedures set forth below are to implement a mutual reliance of search resu lts program. The timing of search performed by the first IP Office is critical under this program since if the USPTO is going to be the Office of the second filing, when the U.S. examiner picks up the U.S. application for examination, the search results of th e first IP Office must be available to the U.S. examiner. In order to ensure that the timin g factor is met and that foreign applicants are not being favored, the mutual reliance of se arch results program should be based on a bilateral agreement between IP Offices on a reciprocal basis. Request to participate in the mutual reliance of search result

s program must be initiated by applicant. For purposes of the most-favored-nation treatment, the program should not be lim ited to the nationals of the two IP Offices with the bilateral agreement. Any foreign na tionals who want to participate in the program may do so by filing the appropriate corre sponding applications in the two IP Offices with the bilateral agreement. For example, if there is such a bilateral agreement between the USPTO and JPO and a German national wants to participate in the mutual reliance program, the German national may do so by fil ing an P-36 UNITED STATES PATENT AND TRADEMARK OFFICE Agreement with JPO on mutual search exploitation implemented by mid2003. Agreements with other offices by end of 2003. Sovereignty-type political issues on mutual recognition; this risk is minimized if control on grant decision is clearly maintained in the USPTO. Timing issues in terms of delivery of useable search/examination results in mutual recognition procedures. Perceived patent quality issues. Isolation of developing countries could cause international backlash 2 UNITED STATES PATENT AND TRADEMARK OFFICE application in the JPO and a corresponding application in the USPTO and request that the USPTO rely on the search/examination results of the JPO. In order to participate in the program, an IP Office must: Meet the minimum requirements of an International Searching Authority (ISA) as set forth in PCT Rule 36; Have in its possession, or have access to, at least the minimum documentation as set forth in PCT Rule 34; Adhere to PCT search guidelines; Be able to exchange results in electronic form; and Be able to meet other criteria such as quality, timing, language, and same claime d subject matter as noted below. The mutual reliance of search results program focuses on the prior art results f ound by another IP Office. Patentability determinations must be made by each IP Office b ased on its own patent law. Issues such as subject matter eligibility should be addresse d based on the patent law of each respective IP Office. In order to give mutual reliance to the search results performed by another IP O ffice, the claims searched in corresponding applications must be directed to the same inven tion. Where applicant files multiple applications in the Office of the 1st filing and subsequently files a single application in the Office of the 2nd filing based on those multip le priority applications, the Office of the 2nd filing will only give reliance to the search results performed by the Office of the 1st filing on subject matter which are common bet ween the application filed in the Office of the 2nd filing and the multiple priority appl ications.

Quality Assurances: Recognizing that each IP Office may use different tools to p erform a search, and may search different databases for non-patent literature, each IP Office needs to implement an independent quality mechanism to evaluate the field of sea rch and search logics performed by the IP Office of the first filing. Sharing of these r esults may make the exchange of the search/examination results more effective. The procedures noted below could apply to any IP Offices with a bilateral agreem ent with the USPTO. For illustration purposes, we will assume that there is a bilate ral agreement between the USPTO and the JPO and applicant filed an application (a na tional application or a PCT application) in the JPO and a corresponding application in the USPTO. Part I: Application of the mutual reliance of search results program under the c urrent U.S. system with no reduction in fees. Applicant must have requested expedited examination in the JPO if a national application was filed in the JPO. Applicant files a corresponding application in the USPTO with an appropriate petition requesting participation in the mutual reliance of search results progr am. The P-36 3 UNITED STATES PATENT AND TRADEMARK OFFICE petition will be treated as a petition to suspend action by the Office under 37 CFR 1.103 (to avoid any patent term adjustment issues) until receipt of one of the following: If applicant submits to the USPTO a copy of the claims in the JP application wit h a copy of a first action on the merits (FAOM) (decision not favorable to patentabi lity) from the JPO along with copies of the prior art documents cited by the JPO, or a copy of the claims in a PCT application with an international search report (ISR) und er PCT Chapter I along with copies of the prior art documents cited in the ISR (Eng lish translation of all the non-English language documents should preferably be submi tted by applicant or maybe obtained from the JPO) - U.S. examiner will rely on the work performed by the JPO to a maximum extent practicable. - U.S. examiner will check the accuracy of the field of search, and search queri es made by the JPO and update the search, where appropriate, for 35 U.S.C. 102(e) prior art and other areas of non-patent literature. - If the claims in the U.S. application are different than the claims in the application filed in the JPO, there will be less reliance by the U.S. examiner o f the work performed by the JPO. Part II: Application of the mutual reliance of search results program under the four-track examination process. The USPTO agrees to seek legislation to provide for separat e filing and examination fees. Applicants will pay a minimal filing fee for pre-examinati on

processing and then pay the examination fee upon request for examination. The am ount of the examination fee will depend on which examination track applicants choose to take. Applicant must have requested expedited examination in the JPO if a national application was filed in the JPO. Applicant files a corresponding application in the USPTO requesting participation in the mutual reliance of search results program. Applicant will have up to 24 mont hs from filing to request examination. Applicant submits to the USPTO a copy of the claims in the JP application with a copy of a first action on the merits (decision not favorable to patentability) f rom the JPO along with copies of the prior art documents cited by the JPO or a copy of t he claims in a PCT application with an international search report (ISR) under PCT Chapter I (English translation of all the non-English language documents should preferably be submitted by applicant or maybe obtained from the JPO). Applicant under this scheme would fall within either track 1 or track 3 of the 4-tracks examination process. - U.S. examiner will rely on the work performed by the JPO to a maximum extent practicable. P-36 4 Info from Off of 1st filing ISR or FAOM ISR or FAOM IPER Final action - U.S. examiner will check the accuracy of the field of search, and search queri es made by the JPO and update the search, where appropriate, for 35 U.S.C. 102(e) prior art and other areas of non-patent literature. - If the claims in the U.S. application are different than the claims in the application filed in the JPO, there will be less reliance by the U.S. examiner o f the work performed by the JPO. Table showing types of information exchanged and degree of reliance: UNITED STATES PATENT AND TRADEMARK OFFICE Deter. by Off of 1st filing positive negative Mutual Reliance Given no yes if the claims in 2nd appln are the same as those in 1st appln. low level of reliance given if claims in 2nd appln are diff than those in 1st ap pln. Supp. search by applicant or examiner. greater reliance if claims are same. low level of reliance if claims are diff. Supp. search by applicant or examiner needed. greater level of reliance if claims are the same. low level of reliance if claims are diff. Supp. search by applicant or examiner needed. P-36 negative negative 5 Task Name

P-36 - Proposed Procedures to Implement Mutual Exploitation of Search/Examination Results Program Finalize bilateral agreement (P-36) Sign bilateral agreement (P-36) Publish procedures in OG (P-36) Effective date of first step (P-36) Evaluate results of first step to determine feasibility of mutual exploitation of positive examination results (P-36) Perform TEAM, RAM, and PALM Analysis (P-36) Plan and budget for implementation (P-36) Baseline Plan (P-36) Duration 545 days 15 days 15 days 30 days 0 days 90 days 106 days 64 days 20 days Contact M. Greenlief Start Finish Thu 8/1/02 Fri 9/24/04 FY 2003 Resources $0 Wed 8/21/02 Mon Thu 8/1/02 Tue 9/3/02 9/23/02 Wed 11/13/02 Tue 10/1/02 Tue 10/1/02 Tue 10/1/02 Mon 12/1/03 Wed 4/7/04 Mon 5/31/04 Tue 6/1/04 Fri 8/27/04 Fri 1/2/04 Mon 8/30/04 Fri 9/24/04 Capability Transformation 1 Transformation 2 Transformation 2a Transformation 3 Transformation 4 Transformation 5 Transformation 6 Transformation 6a Transformation 7 Transformation 8 Transformation 9 Actions

ENTERPRISE TRAINING STRATEGY COMPETITIVE COMPENSATION PACKAGES FOR SUPERVISORY PATENT EXAMINERS AND MANAGERS EXAMINING ATTORNEY PERFORMANCE APPRAISAL PLAN TRANSFORM THE WORKFORCE BY EXPLORING ALTERNATIVE ORGANIZATIONAL CONCEPTS AND STRUCTURES C ERTIFICATION OF KNOWLEDGE, SKILLS AND ABILITY IN PATENT PROCESS TO ENSURE PROPER HIRING, RETENTION, AND PROMOTION OF PATENT EXAMINERS C ERTIFICATION OF KNOWLEDGE, SKILLS AND ABILITY IN TRADEMARK PROCESS IMPLEMENTATION OF PRE-EMPLOYMENT TESTING FOR PATENT EXAMINERS INTERIM IMPLEMENTATION OF PRE-EMPLOYMENT TESTING OF PATENT EXAMINERS RE-CERTIFICATION OF KNOWLEDGE, SKILLS, AND ABILITY OF PRIMARY EXAMINERS, INCLUDING LEGAL AND AUTOMATION TRAINING OF PRIMARY EXAMINERS CERTIFICATION OF KNOWLEDGE, SKILLS, AND ABILITIES OF EXAMINERS BEFORE PROMOTION TO GS-13 IMPROVE THE SELECTION AND TRAINING OF SUPERVISORY PATENT EXAMINERS UNITED STATES PATENT AND TRADEMARK OFFICE ENTERPRISE TRAINING STRATEGY Action: The USPTO should establish an enterprise-wide training strategy. Background: Prior to 2001, responsibility for training USPTO employees was a decentralized a ctivity. In January 2001, the USPTO realigned and centralized all training resources unde r the enhanced Office of Quality Management and Training (QMT). This action was designed to: Ensure consistent training policies and practices Establish a linkage between training and performance measurement results Encourage best practice sharing across technologies and functions Eliminate duplication of efforts In fiscal year 2001, Patent, Trademark and Office of Human Resources (HR) traini ng responsibilities (including staff and dollars) were transferred to QMT. In fisca l year 2002, the training resources from all of the other programs were transferred to QMT, and all training requests were funneled through QMT for tracking purposes. Centralized training also supported the requirement in the American Inventors Pro tection Act of 1999 to report to the Congress on an annual basis regarding the nature of training provided to examiners . 1 In December 2001, the Administrator for QMT proposed the establishment of a Trai ning Steering Committee that responded to business units requests that QMT: Assume a strategic leadership role by establishing strategy, direction and policy

for training and quality. Where possible and appropriate to provide innovative solutions that support resolving business unit quality and timeliness issues. Improve communication about what QMT has to offer and the value of training. Options Considered 1. Continue to maintain the current organizational structure where training is centralized. 2. Totally decentralize training, so that each entity would be responsible for e nsuring its employees are trained consistent with business needs. 3. Establish an enterprise training strategy where core mission business-related training would be the responsibility of Patents and Trademarks, HR would be 1 Section 4718, Annual Report of Director. A-14 1 UNITED STATES PATENT AND TRADEMARK OFFICE responsible for administrative and other agency-wide training, and coordinating agency-wide training policy would be the responsibility of the Training Steering Committee reporting to the Deputy Director. USPTO Recommended Course of Action: Option #3 is recommended. There is under consideration a proposed new paradigm f or the USPTO where quality, which currently centers on end-product review, will be refocused to in-process review. It therefore follows that training responsibilit ies should be closer to the examination process. This will enable the managers being held responsible for achieving USPTO quality metrics to manage training resources nee ded to ensure that their employees receive the most appropriate and timely training to meet quality objectives. The strategic approach taken by the Administrator for QMT would be continued in that responsibility for an agency-wide training strategy and policy would rest with a reconstituted Training Steering Committee. The Training Steering Committee would be reconstituted to provide for senior executive participation with a primary focus on enterprise-wide training policy issues. Agency-wide general training would be consolidated within OHR. OHR will be responsible for ensuring that general training would be refocused to meet new bu siness needs articulated in the 2003-2007 strategic plan. Course offerings and certific ate/degree programs would be evaluated and redesigned for the purpose of training and upskil ling USPTO employees to meet the new competency requirements of the Agency s evolving workforce. The USPTO has the capability through its financial systems to track training at the program and individual level, thereby, enabling the USPTO to meet its reporting requirements to the Congress. Cost Implications: There should be no increased cost as a result of this proposed change. Timeline: The realignment of funds and resources could take place October 1, 2002. A-14 2

Task Name A-14 - Enterprise-wide Training Strategy Complete reorganiztion and reallocation of resources Start Mon 6/3/02 Duration 85 days Finish Mon 9/30/02 Mon 9/30/02 Mon 6/3/02 85 days Contact S. Rose FY 2003 Resources $0 UNITED STATES PATENT AND TRADEMARK OFFICE COMPETITIVE COMPENSATION PACKAGES FOR SUPERVISORY PATENT EXAMINERS AND MANAGERS Action: The USPTO should create a competitive compensation package for Supervisory Paten t Examiners (SPEs) and other managers to encourage the best candidates to apply fo r the positions and simultaneously reward the current managers. Background Information: One of the most important characteristics of a successful SPE and manager is the ability to train, manage, lead and mentor employees. The very nature of the managing wor k requires a myriad of skills, which are not always necessary or needed as a prima ry examiner. These characteristics along with excellent interpersonal skills and co mpetent knowledge of the art and patent laws and procedures are fundamental to successfu lly manage our workforce. A well-trained workforce is perhaps the most significant contributing factor in ensuring the quality of our products. Therefore, in an ef fort to attract as many competent employees as possible, with the needed skills, a compe titive compensation package, which would include the opportunity to earn awards competi tive to those of examiners would assist in enticing candidates to apply for the posit ions. USPTO Recommended Course of Action: Implement an awards package of up to 10% for SPEs and managers. In recognizing the need to attract the best possible employees to become SPEs an d managers, a compensation package that includes an enhanced award package of up t o 10 percent would encourage a larger pool of applicants to apply for these positions . Additionally, a higher award would encourage behaviors necessary for excellence in existing SPEs and managers. The awards would be based on the performance of those skills necessary for each position for example, mentoring, training, motivating and leading. Specific meas ures

tailored to encourage specific behaviors would be rewarded. Details: Will require notification to all managers and Technology Centers Will require monitoring and measuring of the elements identified for rewarding P-25-02 1 UNITED STATES PATENT AND TRADEMARK OFFICE Return on Investment: Estimated investment Cost of awards. Estimated benefit Increases the pool of candidates for management positions Encourages behaviors needed to be an excellent supervisor P-25-02 2 Task Name P-25-02 - Award Packages for SPEs and other Patent Managers Develop award criteria (P-25-02) Align criteria with PAP and goal requirements (P-25-02) Solicit feedback from Group Directors, SPECO and managers (P-25-02) Finalize the award criteria and approval (P-25-02) Modify SPE PAPs (P-25-02) Disseminate award criteria compliance with organizational goals (P-25-02) Implement award process (P-25-02) Duration 316 days 90 days 90 days 15 days 30 days 30 days 60 days 0 days Finish Wed 10/1/03 Contact M. Nuzzolillo Start Mon 7/1/02 FY 2003 Resources $0 Mon 7/1/02 Tue 11/5/02 Wed Wed 3/19/03 11/6/02 Thu 3/20/03 Wed 4/9/03 Thu 4/10/03 Wed 5/21/03 Wed 5/21/03 Wed 9/24/03 Wed 10/1/03 Thu 4/10/03 Tue 7/1/03 Wed 10/1/03 UNITED STATES PATENT AND TRADEMARK OFFICE EXAMINING ATTORNEY PERFORMANCE APPRAISAL PLAN

Action: The Trademark Operation will issue a new performance appraisal plan (PAP) for examining attorneys incorporating changes required to implement an e-government work place. Background Information: The current PAP for examining attorneys in the Trademark Operation was negotiate d and implemented in 1997. It did not contemplate any of the changes to the duties of an examining attorney that would come about in an e-government work place. The curr ent PAP envisions an examining process in which examining attorneys examine using pa per file wrappers and communicate using letters or using the telephone. In the curre nt process, electronic systems are primarily used for searching, tracking files and production and for drafting correspondence to be mailed to the applicant. Furthermore, the PAP does not take into account the current goals of the Office nor of the increased tools that would be available to management in measuring and monitoring the performance of employees. Managers must typically use cumbersome and inefficient methods, entai ling physically locating and inspecting large numbers of files. Managers have also be lieved that the current PAP is not an effective instrument for measuring quality or doc ket management. Given the new process demands that will arise with the increasing us e of automated systems to assist in examination and to provide electronic application s to the examiner, and the need to improve measures of examiner performance, it is time t o implement a new PAP for examining attorneys. Options Considered: Option 1 The Trademark Operation will propose an amended performance appraisal plan (PAP) for examining attorneys that incorporates a number of changes and improvements regarding e-government work place issues, as well as improvements to the monitor ing and measuring of productivity, pendency and quality. Option 2 Do not propose a new PAP. USPTO Recommended Course of Action: The Trademark Operation should address labor relations issues related to impleme ntation of a new PAP to incorporate as many changes and improvements as can be reasonabl y foreseen concerning e-government work place issues, as well as improvements to t he monitoring and measuring of productivity, pendency and quality. T-10 1 UNITED STATES PATENT AND TRADEMARK OFFICE A revised PAP has been developed which incorporates the most necessary changes. The new PAP would include many of the known aspects of working in an e-government environment. Within the Major Activities of the elements of the PAP, it would be made clear to the examining attorneys that their job duties include the electron

ic processing of applications: 1. The attorney advisor examines applications in all international classes. 2. For all responses received electronically, the attorney advisor reviews the response and approves or disapproves the entry of proposed amendments. 3. The attorney advisor makes available in electronic form copies of all Office actions issued. 4. For all applications approved for publication, the attorney advisor reviews t he electronic record of the application for the accuracy and completeness of all da ta, including discrepancies between the electronic and paper records, and corrects, or provides instruction for correction of, all errors and discrepancies. 5. For all applications in which the applicant has properly authorized the Offic e to communicate via e-mail, the attorney advisor sends Office actions using e-mail. 6. The attorney advisor informs internal and external customers of the attorney advisor s availability in voicemail and e-mail messages. 7. The attorney advisor provides in all written correspondence e-mail addresses, fax numbers and a phone number for formal and informal communications. Additionally, changes have been drafted to the monitoring and measurement of examining attorney performance. While the changes to the monitoring and measurement of performance are beneficia l, the e-government related changes are the most crucial ones. Their inclusion in the P AP is crucial so that the e-government initiatives (T-01 and T-02) will be effectively implemented within the Trademark Examining Operation. Including them in the PAP will make it unnecessary to negotiate these issues in a separate format, speedin g up the implementation of the e-government initiatives. If any of the other proposed cha nges in the PAP would significantly delay implementation, those proposals could be dropp ed in favor of quick resolution of the PAP containing the electronic processing duties of the examining attorneys. Timing: The PAP should be proposed no later than June 1, 2002, with an implementation ta rget of October 1, 2002. Risks: Development of electronic tools and systems to make the PAP effective; Training of the employees in their new responsibilities; Return on Investment: PAP would be consistent with the current and future working environment, resulting in increase efficiency, productivity, quality and customer satisfactio n. T-10 2 Task Name T-10 - Examining Attorney PAP Propose PAP (T-10) Address labor relations implications (T-10) Implement (T-10) Duration 30 days 10 days

10 days 10 days Finish Mon 7/15/02 Contact B. Anderson Start Mon 6/3/02 FY 2003 Resources $0 Mon 6/3/02 Fri 6/14/02 Mon 6/17/02 Mon 7/1/02 Fri 6/28/02 Mon 7/15/02 UNITED STATES PATENT AND TRADEMARK OFFICE TRANSFORM THE WORKFORCE BY EXPLORING ALTERNATIVE ORGANIZATIONAL CONCEPTS AND STRUCTURES Action: Transform the workforce by exploring alternative organizational concepts and str uctures. Details: The details of this action paper are by their nature sensitive and confidential, and therefore not appropriate for publication. Transformation 3 1 UNITED STATES PATENT AND TRADEMARK OFFICE PART 1. CERTIFICATION OF KNOWLEDGE, SKILLS AND ABILITY IN PATENT PROCESS TO ENSURE PROPER HIRING, RETENTION, AND PROMOTION OF PATENT EXAMINERS Action: The USPTO should implement examinations or other means to ensure that patent examiners possess the requisite knowledge, skills and abilities in selection, re tention, and promotion decisions. Background Information: Poor hires cost the Office a tremendous amount of time and resources. Further, t he IG issued an audit report on March 29th of this year advising the Office to improve its hiring process on two fronts; one, to better inform candidates of the work culture, i.e . productivity requirements, and secondly, to better identify those candidates mos t suited, and those not suited for the examiner position. Instituting a carefully designed and legally defensible suitability testing program would help ensure that only compa tible employees with appropriate skills, motivation and correct attitude are hired. Th is process will reduce non-productive and unsuitable hires. Currently, the Office certifies the formal training of individuals prior to empl oyment with the Office. No pre-employment test is performed. Once a patent examiner is hired , the individual receives initial training. Thereafter, on-the-job training and then m ore

advanced training is provided. However, patent examiners are not tested to ensur e that they understand and are able to apply the training. The patent examiner is again certified during the signatory program prior to becoming a primary examiner. Once an indiv idual becomes a primary examiner, there is no periodic testing/training to ensure that the individual maintains an expected level of competency in law, regulations and pra ctice and procedures. Subsequent training is only given as a result of changes to the patent law and/or regulatory changes. Portions of the patent examination process have changed significantly in recent years and are likely to continue changing. Therefore, we need to formalize a certification program in order to ensure that all examiners keep up-to-date with the necessary skills and knowledge to perform well. It is unlikely that a successfully performing employee will not be able to pass the recertification program. However, in those instances where the employee does not pass initial recertification, the USPTO intends to provide refresher training opportu nities, as appropriate, to return the employee to an acceptable level of job competency. Em ployees demonstrating performance deficiencies will be handled no differently than at pr esent. P-07A 1 UNITED STATES PATENT AND TRADEMARK OFFICE Options Considered: Option 1: Enlist the Office of Personnel Management (OPM) to design a suitabilit y test that will accurately predict which employment candidates are most likely to succ eed as a patent examiner. Implement this screening as a component of the hiring process. OPM staff, including a Personnel Research Psychologist, would study current, suc cessful examiners and develop a testing tool that targets applicants with characteristic s similar to successful examiners to aid the selection process, and spotlight applicants who behave in ways that potentially undermine the mission of the organization, thus eliminatin g them from the applicant pool. Key Features of the assessment program: Matches characteristics of successful patent examiners so that we can select employees with similar characteristics and maximize the potential for successful hiring, including considerations of those who will have successful, lengthy care ers at the USPTO. Intended to reduce the prevalence of counterproductive behaviors such as theft, sexual harassment, offensiveness to customers, personality conflicts with cowork ers, and disclosure of confidential material; Thoroughly backed by job analysis and extensive information gathering; and Objectively developed and scored using procedures that are widely accepted. Return on Investment

Estimated benefits Typically increases overall accuracy in choosing desired workers when used in combination with traditional means of assessing ability to do a particular job ( for the Office this includes writing sample; school transcripts; resume and personal references); Usually decreases the negative impact of assessment measures against minority groups; Is less costly than interview, polygraph, or other procedures typically used to d etect unsuitability; Is legally defensible; Addresses the Agency s need to reduce costs associated with unsuitable hires; Provides a higher level of customer satisfaction based on the ability of an exami ner to perform well; Provides a pool of qualified and suitable applicants with the requisite skills/competency to perform duties; Reduces the time needed to rate and rank candidates by providing clear and concis e instructions on what characteristics a candidate must possess in order to receiv e additional consideration beyond the initial application level. Option 2: Educate employment candidates as to the skill sets required to be a su ccessful examiner and to the production/pendency/quality environment of the Examining Cor ps. P-07A 2 UNITED STATES PATENT AND TRADEMARK OFFICE Key Features of better educating employment candidates Supplement recruiting literature with pronounced information on examiner performance and promotion requirements. Supplement electronic media (recruiting CD, USPTO web site) with the same Supplement recruiter training material and provide supplemental training Option 3: Establish a two-year probationary period for all patent examiners thro ugh OPM. Frequently, Supervisory Patent Examiners (SPEs) must make a decision to retain o r release examiners with insufficient information on which to make a sound judgmen t. Because of the difficulty with terminating employees after completion of the probationary period, the Office of Human Resources usually recommends that probationary employees be terminated unless the SPE is comfortable with the empl oyee. This option would lengthen the period to two years. Key Features of Extending the Probationary Period OPM must approve any extension to the probationary period. A two-year period would afford the Office an opportunity to evaluate patent examiners after they have completed all initial training. Examiners would be evaluated in a true production mode. Estimated benefits The Office would be able to make more accurate retention decisions and therefore retain a greater percentage of successful employees. The Office could release employees who were unable to sustain acceptable performance or conduct during the second year of employment a time when problems often arise. Provides new examiners additional time and incentive to perform well. Option 4: Establish a Training Art Unit for new examiners in high volume hiring areas where examiners will spend their first year.

Training Art Units (TAU) would be designed specifically to facilitate the traini ng of new employees. Skilled primary examiners would be rotated through the art unit on on e to two year details and would be asked to mentor/train/oversee a small group of new ly hired examiners during their first year. Key Features of Training Art Unit(s) Will require a supervisory patent examiner to manage the Art Unit and four primar y patent examiners (trainer examiners) to train and oversee the progression of the new examiners. This structure would allow for the training and the work product review/signature of up to 28 new examiners at a time. Primary examiners would be reassigned as trainer examiners. P-07A 3 UNITED STATES PATENT AND TRADEMARK OFFICE Trainer examiners would be asked to sign office actions for the 5 to 7 employees assigned to work with them, and would discuss the progress of each examiner with the SPE, including comments on performance. Trainer examiners would be expected to administer test for new examiner competencies May not be effective in technology with very little hiring. Estimated benefits Save costs associated with the inefficiency of the current practice of using prim aries to train new examiners in an Art Unit setting. Save other SPEs time by relieving them of initial training responsibilities. Consistency in training. No new positions required. Can be expanded and contracted based on projected hiring. Good training ground for primaries to become SPEs. Would reduce IPP training needs in the Corps as training would be incorporated in the training art unit Could adopt bull penning of new examiners in abandoned search rooms to both relieve space concerns and promote group training and adhesion. Option 5: Develop and implement a testing process used in conjunction with the T raining Art Unit (TAU) that will determine whether an examiner can be certified for thei r initial promotion after either six or twelve months. As a further means of ensuring that newly hired employees possess the knowledge, skills and abilities to succeed in the Art Units, test each examiner before promoting t hem to the next grade and/or before they are released from the TAU. Key Features of the Test for Probationary Employees Establish a uniform evaluation tool that measures whether a new examiner is ready for their initial promotion and can be certified as having the potential t o be successful once promoted. May need to be art specific, but should test understanding of basic examining functions as outlined in the position description. May also want a separate test that would be taken by examiners depending on their grade. For example, the test for a GS-5 should not be as rigorous as the t est for a GS-9, even though they have been in the office for the same period. Return on Investment: Estimated investment

Costs associated with developing the test. Costs associated with training the TAU SPE on use of the test. Costs associated with administering the test to each new examiner. P-07A 4 UNITED STATES PATENT AND TRADEMARK OFFICE Estimated benefits Consistency/fairness in promotion determination process. Employees will not be promoted before they possess basic skills and are prepared to perform successfully at the next grade level. Can be used to identify weaknesses of the training program so that the program ca n be continually revised to provide the best possible training. Option 6: Develop and implement an examination procedure that will determine whe ther an examiner is ready for promotion subsequent to the initial promotion. Examiners must pass a test in order to be promoted throughout the career ladder. Although the tests would almost certainly need to be art specific, they could be used to test for the same skills at each grade level. Would require periodic testing by way of certification and re-certification of Office employees who participate in the pa tent application examining process to assure a level of quality. Key Features of testing prior to promotion throughout the career ladder Successful completion of the test would be required for promotion to the next gra de level. Although the art would vary, would test for the same skills at each level. Would require that an examiner be otherwise qualified for promotion, i.e. that th ey are fully successful and have demonstrated the ability to perform at the next hi gher level through performance before the examiner can take the test. Return on Investment: Estimated investment Costs associated with developing evaluation tools. Costs associated with training management on use of the test. Cost to train examiners so that they can stay current on job requirements. Costs associated with administering the test to each new examiner. Estimated benefits Improved quality Reduced rework Consistency/fairness in promotion determination process. Employees will not be promoted before they are prepared to be successful at the n ext grade level. Option 7: Develop and implement an examination that must be successfully complet ed before promotion to the GS-13 level. Rather than testing at all levels, the USPTO would administer a test prior to pr omotion to the GS-13 level. P-07A 5 UNITED STATES PATENT AND TRADEMARK OFFICE Key Features of testing prior to promotion to the GS-13. Test basic, advanced and legal examination skills prior to promotion to GS-13, wh ich entitles the examiner to a certificate of legal competency and formal negotiatio ns authority.

Skills tested would need to be applicable to the specific art of the examiner. Fo r example, some different legal principals apply, or are found more or less common depending on the art involved. Eliminates some of the difficulties with testing at all levels. Timing: Time required to develop and validate the evaluation tool for each needed art. Estimated benefits Builds confidence of customers before examiners work independently with only rare and cursory review of work. Ensures at least a minimal level of legal competence before Agency issues certifi cate. Test can include customer service component to promote effective interaction with customers as part of formal negotiation authority. Option 8: Require Technology Center Directors to review a randomly selected samp le of the examiner s work product to ensure that the examiner has demonstrated the abili ty to successfully perform the job at the next grade level. Generally, the decision to promote examiners has been left to the discretion of the SPE, with only a cursory review by the Technology Center Director. If Directors revie w work prior to approving promotions, they may catch potential issues requiring further discussion, and SPEs may exercise more caution knowing that their decisions will be scrutinized more closely. A Quality Assurance Specialist (QAS) or other manageme nt official could perform this function, but it would reduce the effectiveness unle ss the Director took ownership of the review. Key Features of the review process Need for random review of work, which may be difficult at some grade levels because drafts are reviewed and changed before being placed in the file. Would need some consistency, at least in each TC, about standards to show suffici ent skills and effort to warrant promotion. Estimated Benefits Added check of quality before promotions Added confidence of customers Better quality of work Contributes to formation of culture of quality P-07A 6 UNITED STATES PATENT AND TRADEMARK OFFICE Option 9: Develop and implement a structured review process for all examiner promotions to GS-9 to GS-13 (excludes examiner s first promotion). Examiners must pass a structured review in order to be promoted throughout the c areer ladder. Although the review would almost certainly need to be art specific, they could be used to confirm the candidate s competency for the same skills at each grade level . Key Features of a competency review prior to promotion throughout the career lad der Successful completion of the review would be required for promotion to the next grade level. Although the art varies on each examiner docket, would confirm the candidate s

competency for the same skills at each level. Would require that an examiner be otherwise qualified for promotion. Estimated benefits Improved quality Reduced rework Consistency/fairness in promotion determination process. Employees will not be promoted before they are prepared to be successful at the n ext grade level. USPTO Recommended Course of Action: 1 through 5, 7, and (8 or 9) for patent examiners. We have been engaged in an ongoing dialog with the Office of Personnel Managemen t (OPM), and we are in the process of working with OPM to design a competency-base d assessment instrument, thoroughly backed by job analysis and extensive informati on gathering, to increase the overall accuracy of selecting future patent examiners . P-07A 7 UNITED STATES PATENT AND TRADEMARK OFFICE PART 2 - CERTIFICATION OF KNOWLEDGE, SKILL AND ABILITY IN PATENT PROCESS FOR TECHNICAL SUPPORT STAFF Action: The USPTO should implement examinations or other means to ensure that technical support staff employees involved in the patent process possess the requisite kno wledge, skills and abilities needed to perform current and future roles involved in pate nt prosecution. Background Information: The USPTO conducted an initial assessment of the technical support staff in the Technology Sector to determine what knowledge, skills and abilities (KSAs) were needed by the support staff to be successful in performing patent prosecution support r oles. An outgrowth of that study was the identification of critical knowledge, skills and abilities needed by the support staff. The technical support staff is a vital link to pate nt prosecution and without their assistance, the patent process would be severely handicapped. When evaluating current employees for future roles or positions wit hin the USPTO as well as potential new hires, it is essential that proper evaluation of individual skill-sets are made to prevent poor or costly hiring decisions. Currently, newly hired support staff receive initial training on specific functions within their area o f responsibility upon reporting for duty. Thereafter, employees are provided on-th e-job training only to the extent that there are changes in the way the job is perform ed based on changes in the law, rules, regulation or procedures. The Agency also created the USPTO University to assist the technical and professional staff in acquiring additiona l knowledge needed to facilitate the patent prosecution process. Despite these efforts, perc eptions of poor quality lead to decreased customer satisfaction and confidence.

Part of the overall effort to conduct certification of the technical support sta ff would address the following: A review of the knowledge, skills and abilities required to perform future techni cal support roles within the USPTO; An assessment of the current staff s knowledge, skills and abilities to determine t he skills gap , if any, between what employees currently possess and those that are needed; Curricula needs to be developed to fill identified gap(s); The most effective method of delivering the training; The approach to be used to deploy or disseminate this training, and When will the agency know the impact of the training or if the skill gap has been closed? P-07A 8 UNITED STATES PATENT AND TRADEMARK OFFICE Options Considered: Option 1: Enlist OPM to design a suitability test that will accurately predict w hich employment candidates are most likely to succeed as a member of the technical su pport staff. Implement this profile screening as a component of the hiring process. OPM staff, including a Personnel Research Psychologist would study current succe ssful technical support staff and develop a testing tool that targets applicants with characteristics similar to successful support staff to aid the selection process , and spotlight applicants who behave in ways that potentially undermine the mission o f the organization, thus eliminating them from the applicant pool. Key Features of the assessment program: Matches characteristics of successful support staff so that we can select employe es with similar characteristics and maximize the potential for successful hiring, including considerations of those who will have successful lengthy careers at th e USPTO. Intended to reduce the prevalence of counterproductive behaviors such as theft, sexual harassment, offensiveness to customers, personality conflicts with cowork ers, and disclosure of confidential material; Thoroughly backed by job analysis and extensive information gathering; Would determine what knowledge, skills and abilities are required to perform futu re technical support roles, Objectively developed and scored using procedures that are widely accepted Option 2: Develop and implement a testing process that will determine whether a support staff member can be certified for their initial promotion prior to the 52 weeks time in grade. As a further means of ensuring that newly hired employees possess the knowledge, skills and abilities to succeed in the Technology Centers or other areas of the Patent Corps, test each employee before promoting them to the next grade. This would be part of the Kirkpatrick training assessment (a formally recognized pre- and post-training effectiveness instrument) to determine where employees were prior to receiving a

ny training and where they were after receiving pre- and post-training. Key Features of Testing for Probationary Employees Establishes a uniform evaluation tool that measures whether a new support staff employee is ready for his/her initial promotion and can be certified as having t he potential to be successful once promoted. The assessment will measure whether the employee has improved his/her knowledge, skills and abilities subsequent to any training received. This assessment should test understanding of basic patent processing and initial functions as outlined in th e employees position description. P-07A 9 UNITED STATES PATENT AND TRADEMARK OFFICE These assessments should be tailored to the grade of the employee - tests for Gra des GS-5 should not be as rigorous as the test for a GS-9, even though the employees may have been in the office for the same period of time. Estimated benefits Consistency/fairness in promotion determination process Employees will not be promoted before they possess basic skills and are prepared to perform successfully at the next grade level. Can be used to identify weaknesses of the employees training program so that the program can be continually revised to provide the best possible training Option 3: Require second level supervisors (e.g. Head SLIE s) to review a randomly selected sample of the employees work product to ensure that the employee has demonstrated the ability to successfully perform the job at the next higher grad e level. Generally, the decision to promote support staff has been left to the discretion of the supervisor, with only a cursory review by the second level supervisor. If the se cond level supervisor reviews work prior to approving promotions, they may catch potential issues requiring further discussion and supervisors may exercise more caution in making recommendations for promotions knowing their decisions will be scrutinized more closely. An Administrative Officer above the grade of the employee or other management official could perform this function, but it would reduce the effecti veness unless the Director took ownership of the review. Key Features of the review process: Need for random review of work Would require consistency, at least in each TC as it relates to standards to show sufficient skills and effort to warrant promotions. Estimated Benefits Additional check of quality before promotions Better quality of work Increased customer confidence in the work of the employee Contributes to formation of a culture of quality USPTO Recommended Course of Action: 2 and 3 P-07A 10 Task Name P-07A Certification of KSA for Patent Examiners Design promotion/review process for Examiners (P-07A) Address labor relations implications (P-07A) Enlist OPM to design a suitability test (P-07A)

Receive OCR/HR approval on proposed test (P-07A) Test approved by patents (P-07A) Implement test as screen for hiring (P-07A) Perform testing with JARS (P-07A) Include KSA on JARS application (P-07A) Educate employment candidates as to required skills (P-07A) Establish a two-year probationary period (P-07A) Establish a training art unit for new examiners (P-07A) Create new performance plans for examiner trainers (P-07A) Develop selection process for examiner trainers (P-07A) Advertise for examiner trainers (P-07A) Combine panel to determine best qualified list (P-07A) Duration 249 days 10 days 90 days 30 days 30 days 15 days 30 days 69 days 69 days 30 days 90 days 118 days 60 days 10 days 21 days 21 days Finish Wed 5/28/03 FY 2003 Resources $889,000 Contact J. Ng Start Mon 6/3/02 Mon 6/3/02 Fri 6/14/02 Mon 6/17/02 Mon 6/3/02 Tue 10/22/02 Mon 7/15/02 Mon 8/26/02 Mon 9/16/02 Tue 7/16/02 Tue 8/27/02 Tue 10/29/02 Mon 2/10/03 Mon 2/10/03 Tue 9/17/02 Wed

10/30/02 Wed 10/30/02 Tue 2/11/03 Tue 3/25/03 Mon 6/3/02 Tue 10/8/02 Tue 8/27/02 Fri 2/14/03 Thu Wed 10/24/02 1/22/03 Thu 1/23/03 Wed 2/5/03 Thu 2/6/03 Fri 3/7/03 Mon 3/10/03 Mon 4/7/03 Task Name Interview and select examiner trainers (P-07A) Train new examiner trainers (P-07A) Develop testing criteria for initial promotion (P-07A) Implement testing program for first promotions (P-07A) Implement testing program (P-07A) TC Directors review cases before approving promotions (P-07A) Develop structured SPE review process for all examiner promotions (P-07A) Implement review process (P-07A) Duration 21 days 15 days 60 days 60 days 60 days 10 days 60 days 40 days Start Finish Tue 4/8/03 Tue 5/6/03 FY 2003 Resources Contact Wed 5/7/03 Wed 5/28/03 Mon 8/26/02 Wed 11/20/02 Mon 8/26/02 Mon 6/3/02 Tue 8/27/02 Mon 6/3/02 Mon 6/3/02 Fri 6/14/02 Mon 8/26/02 Tue Mon 6/3/02 Tue 8/27/02 10/22/02 UNITED STATES PATENT AND TRADEMARK OFFICE CERTIFICATION OF KNOWLEDGE, SKILLS AND ABILITY IN TRADEMARK PROCESS Action: The Trademark Operation should revise its procedures to require routine certific ation and

re-certification of employees who are employed in the Trademark Operation (e.g., preexamination, examination, and post examination), to assure a level knowledge, skills and ability that are consistent with quality goals. Background Information: Currently, the Office certifies the formal training of individuals prior to empl oyment with the Office. No pre-employment testing is performed. Once an individual is hired, in the case of a trademark examiner, the individual receives initial training and there after is assigned a mentor for on-the-job-training. Examining attorneys are certified regar ding their competence to examine as part of the signatory program prior to promotion to GS-13 and again prior to promotion to GS-14. Once an individual becomes a GS-13, or GS-14 examiner, there is no further periodic testing/training to ensure that the individual maintains an expected level of competency in law, regulations and pra ctice and procedures. Subsequent training is only given as a result of changes to the trademark law and/or regulatory changes. The technical support staff receives similar trai ning but no formal certification programs are in place to measure on-the-job competencies. The trademark examining processes have changed significantly in recent years bot h because of changes in the Lanham Act and because of ongoing developments in case law. Accordingly, some employees may not have the knowledge, skills or ability necess ary to perform at the levels expected by applicants and registrants. Options Considered: In order to maintain the core competency and the proficiency of the trademark professionals, the Office should create a series of tests that enable individual s to demonstrate their competencies related to the examination process and their abil ity to work independently throughout their career at the USPTO. Upon passing a test, th e individual will be promoted. The test content and difficulty will be based on th e individual s grade and the job that the individual is performing. For trademark examiners, at the GS-11 and GS-12 level, we would test for legal competencies. A fter the examiner has achieved full signatory authority, periodic testing would be re quired to maintain the level of authority and grade. Re-certification should be a requirem ent for all GS-13 and GS-14 examiners, including GS-14/15 Senior Attorneys and GS-15 Managin g Attorneys. By requiring a re-certification on a regular basis, we ensure that th e Office has a well-trained and highly skilled staff. Appropriate re-certification proces s would also apply to the technical support staff and their supervisors with respect to their ability to process trademark applications. T-13 1

UNITED STATES PATENT AND TRADEMARK OFFICE USPTO Recommended Course of Action: Implement a re-certification program in Trademarks. Details and Timing: 1. Determine current knowledge, skills and ability required for each position in the trademark process (two months). 2. Establish criteria for periodic testing to re-certify individuals (e.g., thre e years) 3. The certification program will be administered using a web-based training and testing system. Risks: 1. Ensuring that required level of knowledge, skills and ability is consistent w ith quality requirements. 2. Ensuring that the level of testing is not so low that the quality of our work products is not acceptable to applicants and our stakeholders. Return on Investment: 1. Improved quality 2. Reduced rework 3. Higher level of applicant satisfaction with examination and registration proc ess T-13 2 Task Name T-13 - Certification of KSA in Trademark Process Address labor relations implications (T-13) Create a working group of managers and senior attys (T-13) Determine what types of tests will be needed to measure KSA (T-13) Develop web-based training and testing modules (T-13) Implement program (T-13) Duration 218 days 1 wk 14 days 5 days 196 days 10 days Finish Mon 4/14/03 Contact B. Anderson Start Mon 6/3/02 FY 2003 Resources $0 Mon 6/3/02 Fri 6/7/02 Mon 6/3/02 Thu 6/20/02 Fri 6/21/02 Mon 6/17/02 Wed 6/19/02 Tue 4/1/03 Mon 3/31/03 Mon 4/14/03

UNITED STATES PATENT AND TRADEMARK OFFICE IMPLEMENTATION OF PRE-EMPLOYMENT TESTING FOR PATENT EXAMINERS Action: The USPTO should implement pre-employment testing of oral and written communication skills of applicants for patent examiner positions in order to ens ure a high quality workforce producing the highest quality patent. Background Information: One of the most important characteristics of a successful patent examiner is the ability to communicate effectively in the English language, orally and in writing. In fact, this skill is fundamental to successful on-the job performance. The very nature of the work requires extensive written and occasional oral communication with the applicant (patent practitioners). Unfortunately, the USPTO has received negative feedback from the Intellectual Property community regarding the communication skills of some of it s recent hires. Therefore, in an effort to address these concerns and improve the overall effici ency of communication during the patent examination process, English language competency must become a formal prerequisite for employment as a patent examiner with the USPTO. Options Considered: 1. Modify all patent examiner vacancy announcements to include oral and written communication skills as a selective placement factor (applicants can be screened -out of the evaluation process based on lack of demonstrated English competency) 2. Modify the Job Application Rating System (JARS) to include a English competen cy component 3. Mandate face-to-face interviews where a proctored writing exercise is given t o determine an applicants language competency 4. Explore alternatives to face-to-face interviews USPTO Recommended Course of Action: Implement all options. Option 1: Modify all patent examiner vacancy announcements to include oral and w ritten communication skills as a selective placement factor (applicants can be screened -out of the evaluation process based on lack of demonstrated English competency). The process of modifying patent examiner vacancy announcements is a fairly simpl e process. However, we must insure all applicants in the current Job Application R ating 1 P-19 UNITED STATES PATENT AND TRADEMARK OFFICE System (JARS) database are aware of the new requirement. Current vacancy announcements are published in January of each year and are open continuously throughout the year. The vacancy announcements are open to all minimally qualifi ed applicants. Details: Requires insertion of specific language in the vacancy announcement and the gener ic

patent examiner position description to address the bonafide occupational requirement for competency in oral and written English. Provide notice to all candidates in the current JARS applicant pool to afford the m the opportunity to update their JARS applications for equitable consideration. Amend and reprint current vacancy announcements or wait and release the modified document. Update JARS to accept the modifications to the vacancy announcement. Design a structured interview assessment and writing sample tool. Develop a method of equitably scoring both written and oral English assessment tools. Safeguard the oral English assessment tool to avoid the potential for compromise. Engage the services of the OPM to rate and rank candidates based on the new crite ria. Continue utilizing the Delegated Examining Unit (DEU) and JARS to rate and rank candidates based on responses from writing samples and feedback from structured interviews. Since the English competency would become a selective factor, either the candidate would or would not possess the factor. If the candidate does not posse ss the competency the DEU would eliminate the candidate from further consideration. Apply the selective factor consistently for all candidates without exception to a void the perception of inequitable treatment in the hiring process. Determine who will rate and rank candidates based on the new criteria. (i.e. Supervisory Patent Examiners, Human Resources Specialist, consultants, Office of Personnel Management (OPM), etc.). There will be a learning curve for current and new hiring officials as well as Hu man Resources Specialist involved in the hiring and selection process. Training must be conducted in the application of the selective factor in the rating and ranking p rocess. Return on Investment: Indirect estimated benefits Provides a higher level of customer satisfaction based on the ability of an exami ner to communicate effectively with our customers. Direct estimated benefits Provides a consistent and equitable instrument to quickly evaluate candidate s English competency. Provides a pool of qualified applicants with the requisite skills/competency to respond to the general public orally and in writing. 2 P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Reduces the time needed to rate and rank candidates by providing clear and concis e instructions on what level of competency a candidate must possess in order to re ceive additional consideration beyond the initial application level. Provides an explanation for candidates who may not qualify for the position based on the need for proficiency in English communication both oral and written. Attachment: See attachment A for proposed vacancy announcement language regardin g communication skills. Option 2: Modify the Job Application Rating System (JARS) to include an English competency component.

The process of modifying the JARS on line application is complex, however not impossible. Fundamentally, JARS is designed as an individual self-assessment too l. Applicants rate their level of knowledge and expertise in science and engineerin g for specific technical disciplines required by the agency. While we currently have a writing component incorporated in JARS, there is a concern by Supervisory Patent Examine rs (SPE s), hiring officials and the Office of Human Resources regarding the validity and identity of the applicant who completes the written component of the application . Furthermore, as mentioned previously, there is a need to assess the candidate s En glish proficiency as discussed in the background portion of this document. Presently, there is no method of evaluating both oral and written communications skills in the on-li neapplication. If the Agency is to improve the caliber of the examiner we must immediately address the oral as well as the written English capability of all po tential examiners. Much of the examiners communication with applicants and the general public is done over the telephone; it is, therefore, vitally important that the potential examiners English proficiency be assessed. Feedback from the customer satisfactio n survey shows that that there is a deficiency in many examiners grasp of the Engli sh language. The degree to which an examiner possesses the language skills necessar y to communicate effectively is not only vital to their overall success, but also cri tical to the ability of the agency to meet its mandated mission. Details: Under the Uniform Guidelines on Employee Selection Procedures, USPTO must establish a uniform set of principles for using any testing or evaluation tool f or English proficiency. There must be a direct correlation between the occupational qualification needed for such testing and that such testing is fair, consistent, and applied to all perspective applicants. The evaluation instrument must be validated to ensure the instrument is an accura te predictor of successful job performance and measures what it was intended to measure. Any challenges to the validity of the test must be addressed/defended b y the USPTO. The current JARS database must be shut down. In shutting down JARS, the inventory of available candidates would not be available should the hiring goal change and require immediate access to the applicant pool. Since the application s 3 P-19 UNITED STATES PATENT AND TRADEMARK OFFICE previously received would no longer be considered, the DEU would reevaluate all candidates. As part of this reevaluation, the DEU will retrieve all previously submitted information and merge it with the new application. The applicant would not be required to resubmit items such as college transcripts, resumes, or simil ar

items unless they have been updated subsequent to the original application. Note : all current applications expire after six months and are no longer considered for examiner positions. The data, however, is stored for two years for historical purposes. The writing samples by necessity would most appropriately be evaluated manually. The subjectivity of the written evaluation process makes it difficult if not imp ossible to automate. The on-line question could also ask the applicant to describe extracurricular act ivities (i.e. Editor of the School Yearbook, member of the drama club, member of Toastmasters, etc.) to show written and oral English communication abilities. Timing: To insure equitable treatment of all applicants, the modification to JARS must be made simultaneously with modifications to the current patent examiner vacancy announcements. The modified vacancy announcement would require oral and written communication as a condition of employment. The oral and written communication proficiency assessment would become a component of the rating and ranking process, the results of which become a part of the overall score to determine the best-qualified candidate for further consider ation and hiring decision. The USPTO will use oral and written communication as a selective factor. The nature of the examination process requires on-going writte n and spoken dialogue with the general public and is, therefore, essential to successf ul job performance. For patent examiner positions, these skills are as critical to job qualifications and performance as is the positive education requirements. The current JARS database must be shut down to update the application process and procedures. Applicants in the current inventory must be notified of changes to t he application process to be afforded the opportunity to update their JARS applicat ions for equitable consideration. Currently, applicants cannot update their on-line application electronically without reapplying through JARS but may do so by submitting hard copies of documents to the DEU. There are currently approximatel y 5683 applicants in the JARS database. If the database is shut down, the Delegate d Examining Unit (DEU) must send notice to all 5683 applicants. Typically, applica nts are afforded a minimum of two weeks to respond to such notices. During this twow eek period, the system will not permit any selections of applicants even if they respond with an updated application prior to the expiration of the two-week noti ce period. No certificates of eligibles can be issued until the two-week notice/res ponse period has expired. Once the system is shut down, all applications in the curren t database would be considered invalid and will receive no further consideration u nless the applicant reapplies for the position based on the new criteria. In shutting down JARS, the inventory of available candidates would not be availab le should the hiring goal change and require immediate access to the applicant pool

. 4 P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Since the applications previously received would no longer be considered, the DE U would reevaluate all candidates. As part of this reevaluation, the DEU will retr ieve all previously submitted information and merge it with the new application. The applicant would not be required to resubmit items such as college transcripts, resumes, or similar items unless they have been updated subsequent to the origin al application. Note: all current applications expire after six months and are no l onger considered for examiner positions. The data, however, is stored for two years fo r historical purposes. We must design the evaluation instrument and have it validated. We our canvassing other agencies such as Customs and NASA to explore the feasibility of adopting t heir assessment instrument. The OPM can validate the instrument for a fee. Risks: Possible inaccessibility of the evaluation instrument to all potential applicants nationwide if automation creates a challenge. Currently there is no such instrum ent available electronically. Perception of Title VII violations if the instrument is not universally used/appl ied. The testing instrument is not intended to exclude or be a barrier to employment of any underrepresented groups. Anytime the human element is introduced into the evaluation process, there is alw ays the perception that the instrument is biased in some way. Potential litigation based on the perception that introduction of a new or clearl y essential requirement to perform the job may have an adverse impact on segments of the overall population. Viable candidates may be lost if they perceive the test as inconvenient, invasive , demeaning, offensive or otherwise degrading given the level of education and experience most of the candidates possess. There is still a risk of another party completing the writing sample for the cand idate if administered on-line. In allowing an applicant to describe involvement in extracurricular activities th ey may have been involved in such activities but there is no guarantee that it was in English. The applicant could have participated in such programs using other languages. The current JARS database must be shut down to update the application process and procedures. Applicants in the current inventory must be notified of changes to t he application process to be afforded the opportunity to update their JARS applicat ions for equitable consideration. This will be labor-intensive and may frustrate some

applicants who may believe they have met all previous application requirements. It is likely we will lose some highly qualified applicants due to sheer frustrati on of having to reapply after having waited some time for job consideration. 5 P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Return on Investment: Estimated investment Cost of developing the modified JARS application to include the English proficien cy assessment. Cost of modifying JARS database as well as clearance through the Life Cycle Management process. Cost of DEU man-hours to notify applicants of the change, reevaluate applications , manually prepare mailing labels and respond to inquiries from applicants concern ed about the status of their applications. Indirect estimated benefits Reduction in man-hours expended by SPEs to correct errors associated with written documents or miscommunication with the general public. Reduction in potential litigation due to errors in office actions or oral communi cation associated with responding to the general public. Direct estimated benefits Reduction in cost per student to attend internally sponsored ESL training courses . Better quality applicant pool. An established structured interview process, which promotes consistency in the preliminary interview process. Option 3: Mandate face-to-face interviews where a proctored writing exercise is given to determine an applicant s English competency. The requirement for a face-to-face interview should be mandated by USPTO management and deemed as a precondition of employment or preliminary evaluation of candidates. This requirement would allow the agency to not only evaluate candida tes written English competency but also their ability to communicate orally given a variety of structured interview scenarios. Currently, face-to-face interviews are only c onducted at the decision point (selection/non-selection) by the hiring official who would be evaluating the candidate based on their technical proficiency not the mastery of the English language. Face-to-face interviews would afford the Agency the first real opportunity to assess a candidate s ability to function effectively in an intellec tual property arena. Details: Management would mandate face-to-face interviews by a cadre of internally trained interviewers. As an alternative, a cadre of professionally trained SPE s could be assigned the so le responsibility of recruiting, evaluating and assessing the technical and English 6 P-19 UNITED STATES PATENT AND TRADEMARK OFFICE

proficiency skill level of potential examiners in the preliminary stages of the hiring process. Trained interviewers employed by the agency could conduct structured personal interviews for English proficiency, and a first screening of potential applicant s Develop a diverse team of trained interviewers whose primary purpose would be to conduct structured interviews for the entire USPTO not just specific technology sectors. These individuals could consist of SPEs, hiring official and Human Resources Specialist or a combination of all three. Explore the feasibility of conducting second round face-to-face interviews during recruitment and outreach efforts and assign an additional member to the recruitm ent team whose primary responsibility would be to conduct the structured interview during the recruitment event and make recommendations to the hiring official bas ed on the interview. Explore the feasibility of engaging the services of colleges or universities care er placement centers to administer the proctored writing exercise on behalf of the Agency. Engage the services of the Office of Personnel Management field offices to administer proctored writing samples on behalf of the Agency. Explore the feasibility of using the Patent Depository Libraries (PTDLs) as resou rce centers for administering the proctored writing samples. As part of the ongoing campus recruitment and outreach efforts require the recrui ters to administer/proctor the writing samples as part of the recruitment event. In t his context you would send an individual who would be exclusively dedicated to administering proctored writing activities; this would minimize the integrity is sue associated with electronic submission of writing samples. Explore the possibility of establishing an electronic link to the JARS database b y the interviewer during recruitment and outreach events so they can evaluate the cand idate on the spot and perhaps make a tentative job offer to those candidates who exhib it a high level of competency in English as well as technical proficiency. Explore the possibility of engaging the services of a professional recruitment se rvice to conduct the preliminary interviews but retain the services of the hiring offi cial to conduct the final (selection) interview. Evaluate candidates using structured interview questions and techniques. Develop structured interview questions, which would be used consistently througho ut the USPTO to provide equitable treatment to all candidates. The instrument would not be used to bar or otherwise limit consideration of otherwise qualified candi dates. Benchmark structured interview questions used by other agencies or private indust ry to more effectively use interviewers time. This would allow the USPTO to structu re questions specifically tailored to the needs of the agency and evaluate the cand idate s

likelihood of success in performing examination functions. Use structured interview questions developed by OPM to evaluate candidate s English competency and assess candidate s scores using OPM models. Consider holding regional recruitment/outreach events at Patent and Trademark Depository Libraries (PTDLs) and conduct structured interviews at these sites. During these events, candidates can produce writing samples at the facilities an d PTDL employees can proctor them. 7 P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Timing: Structured interviews could only begin after the structured interview questions h ave been developed, validated and reviewed by competent authority. May require a diverse panel of individuals to conduct the structured interviews. Must develop a diverse pool of trained structured interviewers to maintain the integrity of the process, provide equitable treatment to all candidates and redu ce the potential for abuse. If face-to-face interviews are conducted during recruitment and outreach events, it may necessitate providing additional days to the scheduled recruitment event/outreach effort. If face-to-face interviews and evaluations were conducted during recruitment and outreach events, it could expedite the recruitment process and allow the Agency to immediately avail itself of a potential examiner. Hold PTDL recruitment/outreach events on a quarterly basis. Return on Investment Indirect estimated benefits Reduce expense and man-hours expended to train examiners in oral and written communication once hired. Reduce SPE time spent communicating with the general public to address concerns raised by our customers and minimize time spent correcting office actions prepar ed by examiners who lack the requisite English proficiency to perform assigned duti es. Direct estimated benefits Agency benefits from a cadre of skilled interviewers for all positions within Pat ents, thus allowing consistency to the recruitment process. Agency could quickly evaluate the English competency of all potential examiners. Attachment: See attachment B for structured interview questions. Option 4: Explore alternatives when face-to-face interviews are not practical. Currently there is no mechanism to conduct alternatives to face-to-face- intervi ews. Some options could include videoconferencing, videotapes, audio recordings, or D igital Video Disks. This option, if implemented would provide the Agency alternatives t o facetoface interviews. Such efforts would clearly show the agency is forward-thinking and is utilizing technology currently available in the information age. Videoconfere ncing provides the applicant and the Agency considerable flexibility in conducting req uisite interviews at a time when the candidate or Agency may be unable to make 8 P-19 UNITED STATES PATENT AND TRADEMARK OFFICE accommodations to hold face-to-face sessions. A recent article in Federal Comput er

World Embracing online recruiting provides a glimpse of the direction federal agen cies are moving to streamline the recruitment and hiring process through the use of technology. Not only is this practice cost-effective but it also reduces the tim e-delays associated with paper processing. Details: Conduct benchmarking studies with Federal agencies that currently own, lease or otherwise use videoconferencing such as the Administrative Office of the United States Courts to determine the feasibility of using this technology. Determine available sources to obtain any equipment needed both at the USPTO and at any off-site location for videoconferencing Consider engaging the services of PTDLs as a potential site for candidates to use the facilities as part of the videoconferencing network established by the Agency. Negotiate any costs associated with PTDLs securing equipment needed as well as t he cost of allowing non-employees to use the facilities and equipment. Look into the possibility of providing mobile videoconferencing services using motor homes, large vans or other similar vehicles. This would allow the Agency t o go to sites throughout the United States without being limited to specific facil ities, added costs or other restrictions that could be eliminated. Additionally, the mo bile videoconferencing vehicle could also be used as a recruitment/outreach tool, lea rning lab and interview site. This would be a take the Agency on the road and exhibit th e power of advertising. Determine the feasibility of engaging the services of private contractors/vendors to provide the videoconferencing equipment/facilities to minimize Agency costs. It may be necessary to use the services of several private contractors/vendors to provi de nationwide access to all potential candidates. Determine the cost of satellite, phone lines, security apparatus, and associated costs to obtain, use and maintain videoconferencing capabilities. We must ensure there are sufficient videoconferencing capabilities throughout the country prior to embracing this option. Conduct cost-benefit analysis to determine true workability/feasibility of using videoconferencing as a viable option. Timing: When using videoconferencing, companies are allotted certain times to use satelli tes deployed to provide connectivity between videoconference centers. We must determine exactly how much time we will need and what our potential time-periods would be. Parties on both ends of the videoconference must be available at the designated t ime; thus, little flexibility exists based on satellite time and the cost of using su ch services. To efficiently use videoconferencing, it is critical that structured interview qu estions be developed which solicit usable responses from candidates to make the system c ost

effective. Equipment and security issues must be addressed prior to obtaining any needed equipment. 9 P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Video patent prosecution in action as well as the USPTO campus to provide candidates insight as to what may be involved in patent examination prior to accepting jobs. Additionally, once hired, the Agency could use newly hired examiners in videoconferencing sessions to recruit other potential candidates fr om their previous jobs, college, university or hometown as patent examiners. (The connection factor) Establish a point of contact for scheduling/coordinating interview schedules betw een the Agency and the candidates. Scheduling could be accomplished via e-mail; however, some individuals or an office would be assigned the task of coordinatio n such activities. This could become a labor-intensive task in the absence of cooperation of all parties. Consider using the diverse trained cadre of interviewers, as the individuals who would conduct videoconference interviews as they are already trained in structur ed interviewing techniques and this would be a logical extension of their recruitment/outreach responsibilities. Permit the applicant to submit a video or audiotape in lieu of videoconferencing or face-to-face interviews. Applicants could also create a DVD and send it to the Agency for consideration. This would permit the applicant to create such instrum ents whenever and wherever was convenient to them and make for a more user-friendly option. Risks: Potential loss of satellite feed during videoconferencing All parties may not be available at the scheduled times. Indirect estimated benefits Reduces delays associated with conducting extensive face-to-face interviews. Direct estimated benefits Provide the Agency mobility and flexibility in reaching candidates who may not otherwise be readily available to hold face-to-face interviews. Reduction in travel costs incurred by the Agency and the candidate to conduct fac etoface interviews. Attachment: See attachment B for structured interview questions, which would be used in conj unction with the videoconference session. P-19 10 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment A SAMPLE PHRASES WHICH COULD BE USED IN THE MODIFIED VACANCY ANNOUNCEMENT AS SELECTIVE FACTORS Oral and written communication: Demonstrated proficiency in oral and written communications skills required to explain complex issues of a technical or policy nature to attorney s, inventors, a nd the general public. Ability to communicate effectively both orally and in writing, to deal tactfully with others, and to analyze and organize ideas and relevant facts in an objective man ner. Mastery of communication principles, methods, practices and techniques for handli ng

request for benefits, entitlements, licenses, patent protection or similar reque st that must prepare and disseminate information to individuals and audiences with varyi ng degrees of comprehension, opposition, indifference, or erroneous understanding o f the information being presented. Written communication: Ability to express facts and ideas in writing in a succinct and organized manner. Describe the types of documents you have written. Demonstrated ability to understand legal provisions and administrative procedures and apply them to specific situations using oral and written communication techniques. Demonstrated ability to recognize and properly use grammar, syntax, punctuation, spelling, and vocabulary. Demonstrated ability to organize ideas, and present facts in a clear, concise and coherent manner to a varied audience. Oral communication: Ability to express facts and ideas to individuals or groups effectively and make clear convincing presentations. Describe a situation where you had to defend or explai n an idea or proposal. Who was the audience, what was the issue and what was the outcome? Demonstrated ability to make oral presentation of complex issues, ideas or concep ts to varied audiences in a tactful and persuasive manner. Demonstrated ability to prepare and verbally present highly technical or legalist ic information to a diverse audience. The information must be disseminated in a man ner that is clearly understood and would permit the audience to take appropriate act ion based on the oral presentation. P-19 11 Candidate to be assessed: _______________________Date of Interview: ____ ____________________ READING DEFINITION: Understands and interprets written material, including technical mat erial, rules, regulations, instructions, reports, charts, graphs, or tables; applies what is learned from written material to specific situations. LEAD QUESTION: Describe the types of written materials you have read to perform your work. Or, Describe the types of charts, tables, graphs or diagrams you have read to perform your work. PROBES: How have you applied the information to your work? Describe specific behaviors observed/described: 1- Low Reads routine correspondence or materials. Reads simple charts, tables, graphs, or diagrams. Applies information to complete routine or simple tasks. Final Evaluation: P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B

(Write additional behavioral observation son the back of this page and on additi onal pages, as needed) 4 5-Outstanding 2 3-Average Reads moderately complex Reads complex materials that convey scientific, technical, or legal information. Reads documents to obtain specific information. Reads moderately complicated charts, tables, graphs, or highly complicated charts, tables, graphs, or diagrams. Applies information to diagrams. complete complex tasks. Signature: Printed Name: 12 Reads and understands laws, regulations, and manuals on accounting and finance. Reads and understands office memoranda and electronic mail, ledgers or journals, and financial spreadsheets. P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B Reads loan Reads and applies applications and supporting documents to accounting procedures and regulations. determine approval Interprets fiscal/accounting records (i.e. cost or denial. Read and interpret charts and graphs proposals, financial trend analysis, audit which pertain to agency or financial institution status for reports, and fiduciary reports) for trend analysis. the purpose of advising management. Reads a financial report to provide detailed summaries of auditing methodologies, account discrepancies and proposed

recommendations, and corrective actions for an agency management. 13 Reads and interprets new financial/accounting statutes or regulations which impact an agency/corporation's mission. Candidate to be assessed: __________________________Date of Interview: _________ _______________ WRITING DEFINITION: Recognizes or uses correct English grammar, punctuation, and spellin g; communicates information (for example, facts, ideas, or messages) in a succinct and organized manner; produces written information, which may include t echnical material that is appropriate for the intended audience. LEAD QUESTION: Describe the types of documents you have written. What types of i nformation did you present and how did you organize what you wrote? Who was the audience? How did you adapt the writing to meet the audience's level of knowledge? What was the outcome? PROBES: Describe the types of documents you have proofread or edited. What chang es did you suggest? What was the outcome? Describe specific behaviors observed/described: 1- Low Composes documents or correspondence involving simple or routine information. Proofreads own work. Final Evaluation: P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B (Write additional behavioral observation son the back of this page and on additi onal pages, as needed) 4 5-Outstanding 3-Average Composes documents or correspondence involving 2 Composes documents or correspondence involving complex or technical non-technical information. Proofreads or edits brief, nontechnical writing of others. information, and adapts writing to the audience's level of knowledge. Proofreads or edits complex or technical writing of others. Signature: Printed Name: 14 Example 1 Prepares correspondence in response to routine inquiries. Communicates in

writing updates of assignments to management. P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Example 2 Reviews outgoing nontechnical Example 3 Compose audit plan correspondence and recommends changes. individual auditor review assignments. Writes and edits new . Attachment B Example 4 Develops information booklets for financial institution or agency to outline review for the public that convey nontechnical instructions objectives, records and files to be reviewed and about financial information systems. Composes responses to audit findings and recommendations. loan/grant application instructions 15 Example 5 Explains in writing the application of laws, regulations, standards, precedents, and practices covering one or more types of financial or accounting issues. Prepares agency responses to requests from Congress regarding agency programs. Candidate to be assessed: _________________________Date of Interview: __________ ____ ORAL COMMUNICATIONS DEFINITION: Expresses information (for example, ideas or facts) to individuals o r groups effectively, taking into account the audience and nature of the information (for example, technical, sensitive, controversial); makes clear and convincing oral presentations; listens to others, attends to non-verbal cues, an d

responds appropriately. LEAD QUESTION: Describe a situation in which you have made an oral presentation to an individual or a group. What kind of information did you present and how did you organize it into a presentation? Who was the audience? Describe a si tuation in which you orally defended or explained a recommendation or idea. What kind of information did you present and how did you organize your material? PROBES: Who was the audience? What was the outcome? Describe specific behaviors observed/described: 1- Low Communicates basic ideas or information clearly. Thoughts are fairly well organized. Listens to others and responds appropriately. Final Evaluation: P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B (Write additional behavioral observation son the back of this page and on additi onal pages, as needed) 4 5-Outstanding 3-Average Communicates or explains moderately complex ideas or 2 Communicates, explains, or defends complex ideas or information clearly and information clearly. Thoughts are well organized. Adapts to the audience's level of knowledge. Thoughts are Listens to others, and recognizes potential miscommunications. extremely well Organized. Actively listens to others and clarifies communications. Signature: Printed Name: 16 Example 1 Orally explains nontechnical procedures to customers. Verbally provides routine information to the public about a museum's hours of operation, location, or exhibition dates. P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Example 2 Provides oral reports of project status during weekly project team meetings. Attachment B Example 3 Describes the

organization's Example 4 Facilitates focus groups with members of the local community to elicit feedback on the programs and services to individuals or groups plans for a proposed within the community. Orally presents a park. Provides verbal guidance to summary of new regulations affecting individuals on new tax laws. the agency/corporation's mission to the work unit. 17 Example 5 Informs industry of agency/corporation's research programs, goals, and technical achievements by presenting at national conferences. Orally justifies controversial decisions, conclusions, findings, or recommendations to high-level management or policy officials. Candidate to be assessed: ________________________Date of Inte rview: ________________________ INTERPERSONAL SKILLS DEFINITION: Shows understanding, friendliness, courtesy, tact, empathy, concern and politeness to others; develops & maintains relationships; may include effectiveness dealing with individuals who are difficult, hostile, distressed; r elates well to people from varied backgrounds and situations; is sensitive to cu ltural diversity, race gender, disabilities, and other individual differences. LEAD QUESTION: Describe a situation in which you had to deal with individuals wh o were difficult, hostile or distressed. PROBES: What did you think about or want? What events lead up to this situation? Did you provoke it? When did this happen? Did you take the initiative to solve it? Who was involved? What specific actions did you take? What was the out come or result? Describe specific behaviors observed/described: 1- Low Cooperates and works well with management, other employees, or customers during brief interactions. Remains courteous when

discussing information or eliciting nonsensitive or noncontroversial information from people who are willing to give it. Final Evaluation: P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B (Write additional behavioral observation son the back of this page and on additi onal pages, as needed) 4 5-Outstanding 3-Average Cooperates and works well with management, other employees, or customers, on short-term assignments. Remains courteous when discussing information or eliciting moderately sensitive or controversial information from people who are hesitant to give it. 2 Printed Name: Establishe and maintain s s ongoing working relationships with management, other employees, internal or external stakeholders, or customers. Effectively handles situations involving a high degree of tension or discomfort involving people who are demonstrating a high degree of hostility or distress. Signature: 18 Example 1 Familiarizes new employees with administrative procedures of the office. Talks with customers while they are waiting and makes them feel comfortable. P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B Example 2 Courteously informs customers of the Example 3 Establishes cooperative working Example 4 Maintains contact

and rapport with Example 5 Patiently explains the benefits of controversial policy changes to upset individuals at a individuals when counseling them on coping with ongoing relationships with others so they feel free to ask for advice steps needed to resolve discrepancies or complaints. public hearing. work and family and assistance. pressures. 19 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B Candidate to be assessed: ___________________________Date of Interview: ________ ______________ CUSTOMER SERVICE DEFINITION: Works with different clients and customers to assess needs, provide information or assistance, resolve their problems, satisfy their expectations; knows about available products and services; is committed to providing quality p roducts and services. LEAD QUESTION: Tell me about a specific situation in which you dealt with a cust omer or client particularly well or poorly. This situation could have occurred either in your current job, or in volunteer, school-related, or after-s chool experiences. PROBES: What was the outcome? Describe specific behaviors observed/described: (Write additional behavioral observation son the back of this page and on additi onal pages, as needed) 4 5-Outstanding 1- Low Has brief contact with customers with limited needs. Provides routine information about products and services. Provides standard products or routine services to customers. Final Evaluation: 2 3-Average Maintain relationships with s Develops and maintain s customers with diverse needs. relationships with customers with diverse needs. Provides technical or complex information about Provides moderately technical or complex information about products products and services. and services. Printed Name: Signature: 20 P-19 Example 1 Notifies customer of minor changes in project schedule to keep customer informed.

P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Example 2 Answers employee questions about financial procedures, providing them with an explanation of the accounting process. Attachment B Example 3 Conducts customer surveys to gather Example 4 Holds focus groups with prospective customers to solicit input concerning the design of financial information on product quality and customer satisfaction. Responds to accounting systems. customer requests for specific information that is not covered by standard materials. 21 Example 5 Meets with different customer groups to plan program changes that incorporate new developments in the accounting/financial industry. Candidate to be assessed: __________________________Date of Interview: _________ _______________ TEAMWORK DEFINITION: Encourages and facilitates cooperation, pride trust, and group ident ity; fosters commitment and team spirit; works with others to achieve goals. LEAD QUESTION: Describe a situation in which you worked in a team. PROBES: What led up to the situation? What did you think about or want? Who was on the team and how was the team assembled? Were there any particular obstacles to the team s effectiveness either within or outside the team? When did this happen? What was the outcome or result? Describe specific behaviors observed/described: 1- Low Cooperates with others to complete routine tasks. Attends team meetings, and shares information when asked. Final Evaluation: P-19 UNITED STATES PATENT AND TRADEMARK OFFICE

Attachment B (Write additional behavioral observation son the back of this page and on additi onal pages, as needed) 4 5-Outstanding 3-Average Cooperates with others to establish priorities and 2 Coordinates group's work efforts and monitors progress toward attaining team goals. Facilitates or leads group develop work plans. Contributes to group discussions, and information discussions, and information sharing. Printed Name: sharing. Signature: 22 Example 1 Works with project team members to organize financial data in the form of programs. spreadsheets, slides, charts, tables, etc. for Works with project a report or presentation. P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Example 2 Works with project team members to summarize major trends in financial team members to summarize progress in preparation for management or organizational briefing. Attachment B Example 3 Works cooperatively with others on a Example 4 Builds on the ideas of others to foster cooperation. Identifies and emphasizes common financial evaluation in the preparation of financial data, audit reviews, etc. for management. Work with project goals to promote cooperation among project team members from

diverse backgrounds team members to develop implementation plan for new/revised and organizations. accounting system. 23 Example 5 Coordinates assignments for project team members based on their project interests, strengths, and competing workloads. Directs and coordinates project team members in preparing financial/accounting or other community. Candidate to be assessed: _______________________Date of Int erview: ___________________________ DECISION-MAKING DEFINITION: Makes sound, well-informed, and objective decisions, perceives the i mpact and implications of decisions; commits to action even in uncertain situations, to accomplish organizational goals; causes change. LEAD QUESTION: Describe a situation in which you made a decision that impacted y our work and/or the work of others. What were the alternatives that you considered and what did you decide? PROBES: Who was affected by your decision? What was the outcome of your decision ? Describe specific behaviors observed/described: 1- Low Makes sound and timely decisions when a limited number of alternatives are given. Decisions involve simple or routine situations, and impact one's own work. Makes most decisions with supervisory guidance. Final Evaluation: P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B (Write additional behavioral observation son the back of this page and on additi onal pages, as needed) 4 5-Outstanding 3-Average Evaluates alternatives, and makes sound and timely 2 Identifies and evaluates alternatives, and makes sound and timely decisions, even in decisions, when multiple courses of action are possible. Decisions involve moderately

uncertain situations. Decisions involve complex issues, and impact the work complex issues, and impact the work and outcomes of a and outcomes of an Organization. Makes most decisions with work unit. Makes most decisions with supervisory review only at little or no supervisory review. the final stage. Printed Name: Signature: 24 Example 1 Reviews standardized grant application against instructions to ensure completeness. Reviews accounting data to ensure correctness. P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Example 2 Determines if an individual has met loan/grant requirements through a review of application materials. Attachment B Example 3 Applies rarely used policies to arrive at appropriate purchasing decisions. Example 4 Determines what agency/corporation information to release to the media at a press conference. 25 Example 5 Makes decisions whether to halt an operation based on findings discovered during an evaluation or audit. Candidate to be assessed: __________________________Date of Interview: ________________________ REASONING DEFINITION: Identifies rules, principles or relationships that explain facts, da ta or other information; analyzes information and makes correct inferences or draws accurate conclusions LEAD QUESTION: Describe a situation in which you analyzed and interpreted inform ation. What information were you given? Describe any guidelines you used.

PROBES: Explain how you arrived at a conclusion. What was the outcome? Describe specific behaviors observed/described: 1- Low Interprets or analyzes simple information to arrive at answers to problems by applying rules involving a few steps. Final Evaluation: P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B (Write additional behavioral observation son the back of this page and on additi onal pages, as needed) 4 5-Outstanding 3-Average Interprets or analyzes moderately complex 2 Interprets or analyzes highly complex information to discern patterns, trends, and relationships and to draw conclusions by information to make inferences or draw conclusions by applying rules involving a moderate applying rules that involve many steps. number of steps. Printed Name: Signature: 26 Example 1 Determines if loan applications meet specified program requirements. P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B Example 3 Reviews training brochures to evaluate Example 2 Applies guidelines to Example 4 Conducts detailed analysis of fiscal/accounting system to determine determine the classification of a new income/expense benefits and costs of different fiscalrelated courses and organizational compliance with laws and regulations. item based on its to determine which course would best meet the work unit's purpose.

needs. 27 Example 5 Analyzes budget/fiscal data to determine the costeffectiveness of a nationwide program. Determines trends in economic indicators to forecast consumer spending. Candidate to be assessed: _______________________Date of Interview: __ ________________________ PROBLEM SOLVING DEFINITION: Identifies problems; determines accuracy and relevance of informatio n; uses sound judgement to generate and evaluate alternatives, and to make recommendations. LEAD QUESTION: Describe a situation in which you identified a problem, and evalu ated the alternatives to make a recommendation or decision. What was the problem and who was affected? PROBES: How did you generate and evaluate your alternatives? What was the outcom e? Describe specific behaviors observed/described: 1- Low Uses logic to identify alternatives to solve routine problems. Reacts to and solves problems by gathering and applying information from standard materials or sources that provide a limited number of alternatives. Final Evaluation: P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B (Write additional behavioral observation son the back of this page and on additi onal pages, as needed) 4 5-Outstanding 3-Average Uses logic to identify alternatives to solve 2 Uses logic to identify alternatives to solve complex or sensitive problems. Anticipates problems, and identifies and evaluates moderately difficult problems. Identifies and solves problems by gathering and potential sources of information and generates alternatives to solve problems applying information from a variety of materials or sources that provide several where precedents do not exist. alternatives. Printed Name: Signature: 28 Example 1

Resolves simple discrepancies in fiscal documents, such as correcting line entries, debits, credits, etc. P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B Example 2 Takes action by contacting vendor Example 3 Solves fiscal questions by Example 4 Resolves claim by applying obscure Example 5 Provides precedent setting solutions to accounting/fiscal that have not been encountered laws or legal decisions. researching precedent case decisions. concerning goods that arrived damaged. previously. Suggests review process for work reporting procedures to reduce errors due to the use of unauthorized codes. 29 Candidate to be assessed: _________________________ Date of Interview: ______ ______________ PLANNING AND EVALUATING DEFINITION: Organizes work, sets priorities, and determines resource requirement s; determines short or long term goals and strategies to achieve them; coordinates with other organizations or parts of the organization to accomplish goals; monitors progress, and evaluates outcomes. LEAD QUESTION: Describe a situation in which you planned, organized or evaluated a program, project, or assignment. Who was involved? Describe any guidelines you used to determine the steps you needed to take. PROBES: What was the timeframe? What was the outcome? Describe specific behaviors observed/described: 1- Low Organizes work according to established project strategies. Assesses own work products and monitors progress against assigned goals. Coordinates work with other employees on the project team. Final Evaluation:

P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B (Write additional behavioral observation son the back of this page and on additi onal pages, as needed) 4 5-Outstanding 2 3-Average Establishe proj s ect Establishe organization/work s requirements and priorities unit needs and priorities and develops strategies to achieve multiple short-and long-term goals, and develops strategies, including coordinating work requirements and project including directing and monitoring work, and determining and resources, to achieve short- or long-term goals. Monitors and evaluates allocating resources. Monitors and evaluates organization/work unit project activities and outcomes. performance. Signature: Printed Name: 30 Example 1 Prioritizes and schedules own assignments for the upcoming week. P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B Example 2 Develops a plan for collecting financial Example 3 Develops a strategy plan for conducting Example 4 Develops an agencywide Example 5 Develops both immediate and longrange budgets for an /corporationwide an evaluation or review, which includes goals, data in preparation for an evaluation or entire agency/corporation. plan for accounting/fiscal review. systems modernization. objectives, organization of data, interviews, format of

report, etc. 31 Candidate to be assessed: _________________________ Date of Interview: ______ _____________ SELF-MANAGEMENT DEFINITION: Sets well-defined and realistic personal goals; displays a high leve l of initiative, effort, and commitment towards completing assignments in a timely manner; works with minimal supervision; is motivated to achieve; demonstr ates responsible behavior. LEAD QUESTION: Tell me about a situation in which you met a difficult goal to ac hieve or took an initiative to complete a difficult assignment. PROBES: W hat did you do? What obstacles did you encounter? What did you think a bout or want? When did this happen? What was the outcome or result? Describe specific behaviors observed/described: 1- Low Adheres to goals and deadlines set by supervisor. Will take on new or additional responsibilities when asked. Applies limited effort, persistence, and autonomy toward achievement of goals. Final Evaluation: P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B (Write additional behavioral observations on the back of this page and on additi onal pages, as needed) 4 5-Outstanding 3-Average Sets goals and priorities for own work to ensure deadlines 2 Sets goals and priorities for own work and coordinates activities and time lines with are met. Willingly accepts new or additional responsibilities and others to ensure project goals and deadlines are met. Takes initiative and seeks new or challenges. Applies moderate effort, persistence, and autonomy additional responsibilities and challenges. toward achievement of goals. Signature: Printed Name: 32 Example 1 Allocates time appropriately to complete assigned work by given deadline. P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Example 2 Attends word processing class that supervisor has made available to work

group. Attachment B Example 3 Works with supervisor to identify Example 4 Joins professional organization to stay Example 5 Identifies and attends project management course and requests the responsibility of directing a new abreast and to maintain contacts. Solicits feedback ways to enhance skills to improve performance. project. from co-workers on performance to identify needed areas Selects career enhancing activities from a list provided of improvement. by supervisor to improve performance. 33 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment B Individual Overall Evaluation Form Instructions: Translate your individual evaluations for each competency onto thi s form. Then make an overall evaluation of the applicant taking all of the informa tion related to each competency into account. If requested by interview chair, record your overall evaluation on the scale at the bottom of the page. Take any relevant not es as you record individual competency evaluations to further support your overall evaluation. Final Competency Evaluation Competency Customer Service Interpersonal Skills Self-Management Teamwork Decision Making Flexibility Oral Communication TOTAL SCORE Summarize the overall specific behaviors you observed/described: (Write additional behavioral observations on the back of this page and on additi onal pages, as needed.) P-19 34 UNITED STATES PATENT AND TRADEMARK OFFICE 5 - Outstanding Overall Evaluation of the Applicant (Complete overall evaluation only if request ed by interview Chair.)

2 3- Average 4 Overall, this Overall, this applicant demonstrates competency at the level expected for the position. applicant demonstrates competency far exceeding the level expected for the position. 1 - Low Overall, this applicant demonstrates competency lower than the expectation for this position. Final Evaluation Score Signature: Panel Consensus Evaluation Form: Instructions: Translate each Individual Evaluation for each competency onto this form. If all of the individual competency evaluations are within one rating scal e point, enter the average of the evaluations in the column labeled Group Evaluation. If more than one point separates any two raters, a consensus discussion must occur with each party justifying his or her evaluation. The Panel Chair or his/her designee shou ld take notes on the consensus discussion in the space provided. Any changes in evaluati on should be initialed and a final evaluation entered for each competency. Competency Group Evaluation (1) Final Individual Evaluations (2) (3) Customer Service Interpersonal Skills Self-Management Teamwork Decision Making Flexibility Oral Communication Total Score P-19 35 UNITED STATES PATENT AND TRADEMARK OFFICE Consensus Discussion Notes: Signature Panel Member 1: Signature Panel Member 2: Signature Panel Member 3: P-19 36 UNITED STATES PATENT AND TRADEMARK OFFICE Overall Evaluation Decision Form Instructions: When requested for operational use, an overall evaluation based up on the Consensus Discussion and the individual overall evaluations from each interv

iewer must be determined. The Panel Chair should again record the Individual Overall Evaluations of the Candidate in the spaces provided below. If all evaluations are within one rating scale point, enter the average of the e valuations in the column labeled Group Evaluation. If more than one point separates any two raters, a consensus discussion must occur with each party justifying his or her evaluation. The Panel Chair or his/her designee should take notes on the consens us discussion in the space provided. Any changes in evaluation should be initialed and the final overall evaluation entered in the space marked Final Evaluation at the botto m of the page. The Panel chair should enter that evaluation by writing the appropriate score designation at the bottom of the page. All panel members should sign the form in the space provided. The final competency scores and/or the final total score can be used by the selecting officials to select a person for a particular position. Individual Interviewer Evaluations Overall Evaluations Consensus Discussion Notes: 2 1 - Low P-19 37 Panel Evaluation (3) (2) (1) Group Overall Evaluation 5 - Outstanding 4 3 - Average P-19 UNITED STATES PATENT AND TRADEMARK OFFICE Final Evaluation and Recommendation: Signature Panel Member 1: Signature Panel Member 2: Signature Panel Member 3: Justification: 38 Task Name P-19 - Pre-employment Testing for Patent Examiners Draft new requirements (P-19) Modify all vacancy announcements to identify oral and written communication skills required (P-19) Modify JARS to include an English competency component (P-19) Explore alternatives to face-to-face interviews (P-19) Utilize completed interim procedures to screen for oral and written communications skills (P-19) Implement revised "final" procedures for screening (P-19) Baseline JARS Project - Planning Task (P-19) Define JARS requirements (P-19) Enhance JARS and system test (P-19) Certification testing - JARS (P-19) Duration 266 days 15 days 10 days 30 days 20 days 84 days 60 days

19 days 19 days 69 days 10 days FY 2003 Resources $1,703,000 Contact J. Ng Start Finish Mon 6/3/02 Fri 6/20/03 Mon 6/3/02 Fri 6/21/02 Mon 7/8/02 Mon 6/24/02 Mon 6/24/02 Mon 6/24/02 Mon 8/5/02 Mon 7/22/02 Mon 6/3/02 Fri 9/27/02 Mon Thu 9/30/02 12/26/02 Mon 1/6/03 Fri 1/31/03 Mon 2/3/03 Fri 2/28/03 Mon 3/3/03 Fri 6/6/03 Mon 6/9/03 Fri 6/20/03 UNITED STATES PATENT AND TRADEMARK OFFICE INTERIM PRE-EMPLOYMENT TESTING OF PATENT EXAMINERS Action: The USPTO should take immediate steps to implement pre-employment screening of o ral and written communication skills of patent examiner applicants in order to ensur e a high quality workforce producing the highest quality patent. Background: One of the most important characteristics of a successful patent examiner is the ability to communicate effectively in the English language, orally and in writing. In fact, this skill is fundamental to successful on-the job performance. The very nature of the work requires extensive written and occasional oral communication with the applicant (patent practitioners.) Unfortunately, the USPTO has received negative feedback from the Intellectual Property Community regarding the communication skills of some of it s recent hires. Therefore, in an effort to address this skill deficit and improve the overall qu ality of the patent examination process, English language competency must become a formal prerequisite for employment as a patent examiner with the USPTO. USPTO Recommended Course of Action: Implement interim procedures to screen for oral and written communication skills of potential examiners. In recognizing the urgent need to improve the pre-employment screening of the communication skills of future patent examiners, representatives from the Patent

Corps and the Office of Human Resources considered several options, however, many will require further exploration and financial resources to fund the efforts. Therefo re, pending the design and implementation of a more concrete long-term pre-employment testin g mechanism, SPEs and hiring officials can begin utilizing the following procedure s immediately to screen for oral and written communication skills. The interim pro cedures outlined below will identify potential applicants with the requisite skills for patent examiner positions. Details: Will require notification to all SPEs, hiring officials and the Delegated Examini ng Unit (DEU) of requirements to use the interim procedures Will require training of SPEs, hiring officials and the DEU on how to use the guidelines Will require coordination with the DEU on incorporating screening tool in hiring process. Will require a group of trained managers and supervisors to conduct the reviews/assessments. If the JARS writing sample is ambiguous or inconclusive, the candidate will be gi ven P-19-1 1 UNITED STATES PATENT AND TRADEMARK OFFICE a fixed time to provide another written sample or a telephonic interview will be conducted. If the face to face or telephonic interview is inconclusive as to the communicati on skills of the candidate, the candidate will be asked to submit a written answer to the question what skills and abilities the candidate possesses that would be of benef it to the USPTO . The written response would be send to the Office via facsimile, mail or e-mail. Must be applied across the board to all applicants. Will require development of standardized topics for the writing samples to avoid the perception of inequity or inconsistencies. The USPTO will attempt to contact references, faculty members, or other people wi th knowledge of the candidate s ability to communicate. Timing: Can be adopted immediately Training of evaluators must be accomplished prior to implementation of the new process. In the absence of training there will be inconsistencies in the applica tion of the new process and subject to challenge. The additional writing sample will not be required if an interview (either face t o face or telephonic) is conducted. Return on Investment: Estimated investment Minimal. Will require training time for SPEs and hiring coordinators in the use o f the interim procedures.

Man-hours expended to pull and evaluate JARS writing samples. Cost of reproducing hard copies of the writing samples or forwarding the written portion electronically. Man-hours needed to evaluate the writing samples in the absence of electronic capabilities. Man-hours expended to develop consistent test questions/scenarios for all applica nts to provide continuity. Estimated benefit: Indirect Reduces SPE man-hours used to correct office actions Reduces training costs associated with providing ESL on-site. Direct benefits Provides immediate effort to address the English language proficiency problem as noted by our customers Increases the likelihood of hiring examiners with better communication skills 2 P-19-I UNITED STATES PATENT AND TRADEMARK OFFICE Interim Pre-Employment Communication Screening Guidelines 1. All Director signed 52 s for patent examiner recruitment will be routed to desi gnated individuals in the TC or in HR. 2. The candidates JARS submission (writing sample) will be reviewed to determine their written communication aptitude; this will include: a. Correctness of Writing - This is the ability of the candidate to write using reasonably proper grammar and sentence structure of which includes a reasonably varied vocabulary. b. Content of Writing - This is the ability of the candidate to effectively communicate concepts in a reasonably logical manner (Failure to meet the minimum qualifications for the written communication aptitu de as described above, the candidate will be asked to provide a written sample, see d. below) 3. The candidate will be interviewed to determine their oral (and conditionally their written) communication fitness; this will include: a. Clarity of Speech - This is solely the ability of the candidate to communicat e in a manner where words and phrases can be reasonably understood as stated. b. Correctness of Speech - This is the ability of the candidate to speak using reasonably proper grammar and sentence structure of which includes a reasonably varied vocabulary. c. Content of Speech - This is the ability of the candidate to effectively communicate concepts in a reasonably logical manner. This includes the ability to vary the scope of the conveyed concepts from a very detailed script to a summarized version. d. If personal interview and/or JARS writing sample is inconclusive, the candidate will be given a fixed time to write down the answer to the question what skills and abilities the candidate possesses that would be of benefit to the USPTO and provide this to the Office via facsimile, mail, or e-mail. 4. A communication screening certification will accompany the SF-52. This will i nclude the date of interview/review and the hiring officials name and signature. See attachment D 3 P-19-I UNITED STATES PATENT AND TRADEMARK OFFICE EXAMINER CANDIDATE ORAL AND WRITTEN COMMUNICATION SCREENING Candidate s Name: Date of Interview: Type of interview (personal or telephonic): 1. The Candidate s JARS submission (writing sample):

a) Correctness of Writing - This is the ability of the candidate to write using FAIL _____ reasonably proper grammar and sentence structure of which includes a reasonably varied vocabulary. PASS _____ b) Content of Writing - This is the ability of the candidate to effectively communicate concepts in a reasonably logical manner. PASS _____ FAIL _____ 2. The Candidate s oral communication fitness: a) Clarity of Speech - This is solely the ability of the candidate to communicat e in a manner where words and phrases can be reasonably understood as stated PASS _____ FAIL _____ b) Correctness of Speech - This is the ability of the candidate to speak using reasonably proper grammar and sentence structure of which includes a reasonably varied vocabulary. PASS _____ FAIL _____ c) Content of Speech - This is the ability of the candidate to effectively communicate concepts in a reasonably logical manner. This includes the ability t o vary the scope of the conveyed concepts from a very detailed script to a summarized version. PASS _____ FAIL _____ 3. The Candidate s presentation (writing sample)*: a) Correctness of Writing - This is the ability of the candidate to write using PASS _____ reasonably proper grammar and sentence structure of which includes a reasonably varied vocabulary. FAIL _____ PASS _____ b) Content of Writing - This is the ability of the candidate to effectively communicate concepts in a reasonably logical manner. FAIL _____ I certify that the above candidate meets the minimum communication criteria for employment: Hiring Official s Name: TC Signature: *If JARS writing sample is undeterminable of the candidate s writing ability, the candidate will be given a fixed time to write an answer to a specific question a nd provide this second sample to the Office. 4 P-19-I Task Name P-19-01 - Pre-Employment Testing (INTERM) Implement interm pre-employment tests (P-19-01) Start Mon 6/3/02 Duration 85 days Finish Mon 9/30/02 Mon 9/30/02 Mon 6/3/02 85 days Contact J. Ng FY 2003 Resources UNITED STATES PATENT AND TRADEMARK OFFICE RE-CERTIFICATION OFKNOWLEDGE, SKILLS, AND ABILITY OF PRIMARY EXAMINERS, INCLUDING LEGAL AND AUTOMATION TRAINING OF PRIMARY EXAMINERS

Action: Primary examiners should maintain the necessary knowledge, skills, and ability ( KSA) in current patent law, practice, and procedure. Regular training, similar to contin ued legal education (CLE) requirements, should be provided to maintain KSA of primary examiners and they should pass tests to prove that they understand the content o f the training. An expanded review of current work product should evidence the applica tion of KSA necessary to maintain full signatory authority. Background: Primary Examiners are certified as full signatory examiners, only once, as they pass the full signatory review program. However, due to changes in patent law, policy and practice, there would be a benefit for formal confirmation that primary examiner s have maintained the knowledge, skills, and ability (KSA) necessary to enhance the qua lity of current decisions they make as full signatory examiners. Training programs are i n place to bring to the attention of the primary examiners any changes in patent law, pr actices, and procedures. Training is also provided in the automated tools that help the e xaminers convey their decisions on the record. Actions in some patent applications assign ed to a primary examiner in a given fiscal year are reviewed by an SPE. Sometimes, this results in a thorough SPE review of only four allowances per fiscal year for a primary e xaminer. However, this scale of review may not provide evidence that the primary examiner has maintained all necessary current KSAs for full signatory authority, such as by incorporating knowledge from recent training into the current work product. Options Considered: Need to continue to train all primary examiners on the current state of the paten t law, practice and procedure as well as automation tools to maintain necessary KSA for full signatory authority. Need to review an expanded sample of work product signed by primary examiners to ascertain whether current patent law, practice, and procedure (necessary KSA) ar e being applied in current official actions taken by primary examiners. USPTO Recommended Course of Action: A determination of the current, necessary KSA required for the position of Prima ry Examiner should be made on a regular basis at several levels within the USPTO, b oth inside and outside of the Technology Centers. This determination could be aided by cooperation with the patent practitioners and those organizations representing o ur customers. Necessary training needs to be identified to build or reinforce neces sary KSA and tests need to be developed to ensure that the primary examiners taking t he training understand its content. There needs to be an identification of instrume

nts necessary to evaluate the necessary KSA for primary examiners. Such instruments may include an expanded review of work product, such as IPR of actions in stages of prosecution of ongoing work product, second pair of eyes review of final disposa ls of work product--allowances, appeals, and abandonments to evaluate KSA of each prim ary examiner. This may involve the evaluation of about 12 actions per year for each primary 1 P-20/22 UNITED STATES PATENT AND TRADEMARK OFFICE examiner. Employees in the non-bargaining unit GS-15 examiner/trainer positions would also take part in a certification program as part of the appointment process and would be subjected to re-certification with opportunity for quality awards. There should be regular, continued training events for primary patent examiners in patent law, practice, and procedure as well as automation tools necessary for action-ta king on the record and continuous quality initiatives (CQI) in the Technology Centers. T raining could be implemented similar to CLE programs with the expectancy that a certain number of hours of required training are taken every year. Tests should be devel oped to ensure that primary examiners, taking the training, prove that they understand t he content of the training. Those who do not pass tests given after required legal training should have full signatory authority suspended. Subsequently, these examiners need to d evelop an action plan in concert with the SPE to bring them to the current, necessary K SA, such as by retaking the training and passing the test, or taking additional refresher training. Those employees who have had full signatory authority suspended should be permit ted to regain full signatory authority after successfully completing all required train ing. In addition to the training requirements above, there needs to be an expanded re view of the work product of each primary examiner on a yearly basis to ascertain whether the necessary KSA, such as that reinforced by recent training, is applied in the exa mination of the work product. Review teams of QASs, OPQR Integration, or SPEs (who themselves have been recertified) through IPR of actions in stages of prosecutio n of current work product or second pair of eyes review of final disposals of current w ork product-allowances, appeals, and abandonments could be used to evaluate KSA of e ach primary examiner (SEE PAPER P-17). If this review reveals evidence of an unacceptable percentage of unsatisfactory work, this evidence would be reported to the SPE and Director of the involved examiner, who would then make a decision whethe r to review additional work of this examiner before adverse action is taken. The exam iner would be afforded conventional improvement period(s) to evidence the ability to

produce an acceptable percentage of satisfactory work. If a review of the work product d uring the improvement period does not evidence an acceptable percentage of satisfactory wo rk, then signatory authority would be withdrawn. The examiner would be permitted the opportunity to regain full signatory authority by passing another full signatory review program (recertification), which may occur after a certain period of time has pa ssed since withdrawal of that authority. Timing: Determination of KSA necessary for Primary Examiners Development of tests for training courses Increased review of work product of primary examiners Benefits: Increased respect and recognition for those primary examiners retaining full sig natory authority as well as respect and recognition for the quality of their work produ ct. 2 P-20/22 Task Name P-20 - Recertification of KSA of Primary Examiners Draft KSA requirements for Primary Examiners (P-20) Address labor relations implications (P-20) Finalize KSA required for Primary Examiners (P-20) Identify assessment provider and instruments necessary to evaluate KSA (P-20) Establish method for improving/updating their skills (P-20) Establish means for recognizing/rewarding those who pass recertification (P-20) Establish means for suspending full sig for those who do not pass recertification (P-20) Duration 175 days 30 days 90 days 30 days 10 days 15 days 15 days 15 days Contact R. Fisher /J. Rolla Start Finish Mon 6/3/02 Tue 2/11/03 FY 2003 Resources $0 Mon 7/15/02 Wed Mon 6/3/02 Tue 7/16/02 11/20/02 Mon 1/6/03 Fri 11/22/02 Tue 1/7/03 Tue 1/21/03 Tue 2/11/03 Wed 1/22/03 Wed

1/22/03 Wed 1/22/03 Tue 2/11/03 Tue 2/11/03 UNITED STATES PATENT AND TRADEMARK OFFICE CERTIFICATION OF KNOWLEDGE, SKILLS, AND ABILITIES OF EXAMINERS BEFORE PROMOTION TO GS-13 Action: Upon promotion to GS-13, examiners are given acknowledgment of legal competency and a grant of negotiation authority. In order to ensure that these examiners ar e able to produce the quality of work product that will warrant cursory reviews of their a ctions, there should be a certification before this promotion that each examiner has the requisite KSA to perform to the standards of this grade level. Background Information: A GS-13 examiner s work product, including interview summaries, is mostly subject to cursory review, until the examiner enters the temporary partial signatory review program, wherein the work product is subject to a detailed review by SPEs and/or Quality Assurance Staff, who have not directly participated in the training of that exam iner. If questions of legal competency or negotiation authority arise in that signatory r eview and permanent partial signatory authority is denied, the examiner usually remains at the GS13 level, subject to counseling and retraining, before hopefully reentering the temporary partial signatory review program. Due to changes in patent law, policy and pract ice during their training experience up through the GS-12 level, there would be bene fit for examiners to confirm by demonstration that they have indeed achieved the current KSA to merit acknowledgement of legal competency and grant of negotiation authority prior to promotion to GS-13. Options Considered: Several methods could be used alone or in combination to certify necessary legal competence and negotiation authority before an examiner is promoted to GS-13. Before promotion to GS-13, examiners may be expected to successfully complete li sted training courses, such as Patent Law and Evidence. The courses could be successf ully completed as part of an ongoing in-house training program or as part of an accre dited law school curriculum. The current Patent Academy Introduction to Practice and Proce dures (IP&P) program would be modified to include material to prepare examiners for an examination such as the patent agents exam currently given for patent agents and attorneys to practice before the Office by the Office of Enrollment and Discipli ne. Written tests on subjects of patent law, practice, and procedure, including inte rview

practice, could be administered before the GS-13 promotion is approved. These te sts could be developed and administered inside the Technology Center level by a cert ified provider such as: Quality Assurance Specialists or preferably outside the Techno logy Center by OGC, similar to the registration examination given by OED, by OHR or b y a contractor. For example, Patents and OED could collaborate on the development of 1 P-21 UNITED STATES PATENT AND TRADEMARK OFFICE questions or the questions could be the same as those on the registration examin ation, while OHR could administer the test. The tests could be web-based and the result s would be available immediately, so that the results could be reported immediately to t he examiner, the examiner s supervisor, and any other record database. Examiners that were hired after successfully completing the agent s exam while they were on the outsid e could possibly waive out of this requirement to avoid duplication. Since one primary concern is whether the examiner has the KSA necessary to pass the partial signatory review program, a mock signatory review program could take pla ce for each GS-12 examiner at least three months before the due date of the promotion t o ascertain whether the examiner presently exercises the level of legal competency to pass the program. This review by SPEs and Quality Assurance Specialists, who were not directly involved in the training of the examiner, may surface areas of improvem ent necessary before the GS-13 promotion is granted. Prior to the grant of legal competency and negotiation authority, SPEs and/or Qu ality Assurance Specialists (entitled Expansion of Patent Application Work Product Rev iews) could review work product by way of an In-Process Review (IPR) and observe the o ral communication, listening, and negotiation skills evidenced by the examiner in a series of personal and/or telephonic interviews. Further, the adequacy of the written summ ary of selected interviews should be part of the IPR to see if they meet current standa rds. Obviously, if the examiner passes the certification for GS-13 and is otherwise e ligible (e.g., production and work flow expectancies met), the promotion should be grant ed. If an examiner does not pass the GS-13 certification, promotion to that level shoul d be delayed until the requisite improvements are evidenced. Feedback to those traini ng the examiner should be given about the improvements necessary. Thereafter, the exami ner during the period of delay should be counseled as to improvements necessary, a t raining plan should be developed based on deficiencies discovered during the certificati

on process, and after a suitable time has passed, the examiner may proceed to anoth er round of certification for the GS-13 promotion. USPTO Recommended Course of Action: Implement all options. Return On Investment and Benefits: There is a possibility that certified GS-13 examiners may not need a partial sig natory review and may proceed instead to a full signatory review, saving about a year f or the promotion to primary examiner. The program could be set up such that examiners w ould be able to enter the full signatory review process in a reduce period of time su ch as after only three months from passing the partial signatory review. This will result in the granting of signatory authority in a shorter period of time for those examiners along with assurance that the work product is at an acceptable quality standard. In summary , it is 2 P-21 UNITED STATES PATENT AND TRADEMARK OFFICE expected that certified GS-13 examiners will be competent with respect to curren t patent law, practice, and procedure. Once the decision to implement the plan has been m ade, this portion could be deployed relatively early such as in late summer of 2002. 3 P-21 Task Name P-21 - Certification of KSA for Examiners before promotion to GS-13 Develop criteria for testing examiners before GS-13 promotion (P-21) Draft KSA requirements for GS-13 Examiners (P-21) Address labor relations implications (P-21) Finalize KSA required for GS-13 Examiners (P-21) Identify assessment provider and instruments necessary to evaluate KSA (P-21) Begin certification process for examiners pending GS-13 promotion (P-21) Establish method for improving\updating their skills (P-21) Duration 180 days 60 days 30 days 90 days 30 days 10 days 10 days 10 days Start Mon 6/3/02 Mon 6/3/02 Mon 6/3/02 Tue 7/16/02 Fri 11/22/02 Tue 1/7/03 Tue 1/21/03 Wed 1/22/03 Wed 2/5/03

Contact R. Fisher /J. Rolla Finish Wed 2/19/03 Mon 8/26/02 Mon 7/15/02 Wed 11/20/02 Mon 1/6/03 FY 2003 Resources $0 Tue 2/4/03 Wed 2/19/03 UNITED STATES PATENT AND TRADEMARK OFFICE IMPROVE THE SELECTION AND TRAINING OF SUPERVISORY PATENT EXAMINERS Action: Supervisory Patent Examiners (SPE) have the primary responsibilities for trainin g patent examiners in an Art Unit and performing performance management activities with respect to the approval of work for all non-Full Signatory Authority examiners a nd the performance assessments for all examiners. The selection process and training pr ovided to these individuals needs to reflect the unique combinations of skills required to effectively perform in that position. Background Information: SPEs have the primary responsibility for training examiners in an Art Unit and performing performance management activities with respect to the approval of wor k for all non-Full Signatory Authority examiners and the performance assessments for a ll examiners. Although the SPE is a Primary Examiner and, therefore, should be subj ect to the same considerations of the KSAs required for that position, the SPE performs additional duties with respect to training and the review of work products that directly affect the quality of the patent process. In addition to being competent to perf orm all of the examining functions required of a patent examiner, the SPE must be able to effectively train examiners, review work products submitted for approval, make d ecisions on hiring, retention, and promotion of junior examiners, conduct the requisite performance management activities associated with the rating, recognition, and p otential adverse actions, and provide mentoring to ensure the development of the examiner s in the assigned Art Unit. Most of these additional duties are learned through managemen t training for the SPE. However, the attributes that are required of a highly qual ified Primary Examiner do not ensure that an individual will perform successfully as a n SPE. Effective interpersonal skills and other management qualifications are necessary

for an individual to perform effectively as an SPE. The selection process for these uni quely trained and qualified individuals must reflect these prerequisites. Options Considered: Option 1- The Office could employ the same KSA for the Primary Examiner as the l egal and technical KSAs for the SPE position but prepare new KSAs with respect to the management aspects of the SPE position. Option 2- The Office could develop a training program to implement the SPE KSAs and require certification of those elements within the probationary period for the S PE. Option 3- The Office could develop a work product review program, similar to the Signatory Authority Program, to review the quality of the work products signed f or other examiners, as a prerequisite for the SPE position. P23/50 1 UNITED STATES PATENT AND TRADEMARK OFFICE Option 4- The Office could preclude the participation in special projects by new SPEs for the first two years in the position to allow full concentration on the effective transition to the SPE position. Option 5- The Office could include a review of work products signed by the new S PE and external feedback from applicants/attorneys as part of the probationary peri od evaluation of the SPE. Option 6- The Office could develop an SPE interview process that includes person s outside the supervisory chain for the position and mandatory questions with resp ect to supervisory qualifications related to training and employee mentoring and feedba ck. Option 7- The Office could develop a training program for critical job skills di rected to the current SPE population that includes skills building/reinforcement with a ce rtification process. USPTO Recommended Course of Action: Adopt a combination of Options 1 through 7 above to ensure that the best-suited candidates are selected for the SPE position and then given the requisite training to provi de the greatest opportunity for success. Initially there must be a selection and interview process that includes several perspectives on each candidate and interview questions that address their supervisory aptitud e. The selected SPE candidates must then complete a mandatory supervisory training prog ram, which includes a certification process within the probationary period and would last for about one week. The training program must include both skills training to develo p job knowledge and also hands-on training and feedback with respect to the practical performance of the critical job functions. Input from Office of Human Resources,

Labor Relations, and Office of General Counsel would be obtained as to the type and co ntent of classes to be included in any training program. Classes should cover topics such as ethics, reasonable accommodations, performance appraisal and incentive awards, hiring, E EO, labor management relations, and employee relation topics such as, the prevention of sexual harassment. While some of these classes may currently be offered through contrac tors, an internally developed program could more readily address the special knowledge th at USPTO supervisors should have (such as knowledge of collective bargaining agreem ents). Return on Investment: Estimated benefits: Improved supervision of the work of all examiners and result ing improvement in the quality of the work products. 2 P-23/50 Task Name P-23 - Improve the Selection and Training of SPEs and QASs Develop legal and technical KSA requirements (P-23) Develop management KSA requirements (P-23) Establish criteria (KSA) needed for SPE position (P-23) Develop training program to implement the KSA certification (P-23) Train first year SPEs (P-23) Develop\implement recertification program (P-23) Develop remedial program (P-23) Train existing SPES (P-23) Determine who will sign actions if SPE fails program (P-23) Develop SPE interview process (P-23) Duration 60 days 10 days 30 days 30 days 30 days 15 days 30 days 15 days 10 days 10 days 30 days Finish Mon 8/26/02 FY 2003 Resources $1,000,000 Contact J. Rolla Start Mon 6/3/02 Mon 6/3/02 Fri 6/14/02 Mon 6/3/02 Mon 7/15/02 Mon 7/15/02 Mon 7/15/02

Mon 6/3/02 Mon 6/3/02 Tue 7/16/02 Mon 8/5/02 Mon 7/15/02 Tue 7/16/02 Mon 8/5/02 Mon 6/3/02 Mon 8/19/02 Mon 6/3/02 Fri 6/14/02 Tue 8/6/02 Mon 8/26/02 Tue 7/16/02 Capability Quality 1 Quality 2 Quality 3 Quality 3a Quality 4 Quality 4a APPLICATIONS Quality 5 Quality 6 Actions EXPANSION OF PATENT APPLICATION WORK PRODUCT REVIEWS EXPAND REVIEWS OF PRIMARY EXAMINER WORK PATENT QUALITY IMPROVEMENT: IN PROCESS REVIEW AND SECOND-PAIR-OF-EYES TRADEMARK QUALITY IMPROVEMENT: IN PROCESS REVIEW AND SECOND-PAIR-OF-EYES EVALUATION OF SEARCH QUALITY SURVEYING PRACTITIONERS ON SPECIFIC ENHANCE THE REVIEWABLE RECORD CERTIFICATION OF SEARCHING AUTHORITIES UNITED STATES PATENT AND TRADEMARK OFFICE ENHANCE CURRENT QUALITY ASSURANCE PROGRAM BY INTEGRATING REVIEWS TO COVER ALL STAGES OF EXAMINATION Action: In order to enhance patent quality, the USPTO should implement an improved Quali ty Assurance Program. The improved program should integrate the various quality rev iew programs into a single Quality Assurance Program in each Technology Center, expa nd the quality review of work products, and improve the connection between the review s d ata collection and subsequent training development. Background Information: The USPTO recognizes a robust quality assurance program is critical to maintaini ng the public s desired level of patent product quality. The public s interest in quality h as been repeatedly and strongly voiced. Options Considered: Option 1 - Integration of the Allowance Reviews of the Office of Patent Quality Review (OPQR) into the Technology Centers: The USPTO established its OPQR end-checking process more than 25 years ago. In t

hat time the measured error rates have oscillated between three to seven percent. Mo re importantly, there has been no significant quality improvement since the establi shment of OPQR. While the randomly sampled OPQR measures are statistically valid, they hav e proven difficult to use when building training programs. Particularly difficult has been the development of training programs to help individual examiners whose needs do not coincide with the Technology Center averages determined by OPQR statistical meas ures. Further, OPQR is a stand-alone organization at the end of the examination pipeli ne. This has made it difficult to modify the OPQR process to better connect their quality measurements into training program development. The USPTO will integrate the allowance reviews currently performed by OPQR into the Technology Centers by expanding the In-Process Review program to include allowan ce reviews. The allowance reviews will be performed by Quality Assurance Supervisor s (QASs). Option 2 - Expansion of QAS In-Process Review of Work Product in Patent Applicat ions: The USPTO established its current In-Process Review (IPR) of examiners work produ cts using a review standard based upon applicant/attorney feedback. The QASs for eac h Technology Center review a random sample of 380 completed and mailed Office acti ons per fiscal year. A further sample from the reviewed pool is used for follow up w ith applicant s representative to get their judgment of the quality. The results of th e random sample are used to determine general Technology Center-wide training needs from which 1 P-17 UNITED STATES PATENT AND TRADEMARK OFFICE the QASs develop training courses. In addition to random IPRs, Technology Center s can perform focused IPRs directed to specific examiners (e.g., an examiner may reque st a focused IPR to gather feedback in preparation for the signatory authority progra m, or a TC may do focused reviews of all Primary Examiners). In a focused IPR, a group of applications being examined by a single examiner are reviewed. Feedback is then used to determine examiner specific training needs or, alternatively, that the examiner s work product is of high quality and they can help train others. QASs will continue to perform their current duties which comprise application qu ality review, training development, help panels, classroom teaching, one-on-one help s essions, special case review requests, and 2nd pair of eyes reviews. In addition, the Offic e will expand the QAS In-Process Review (IPR) of Work Products within the Technology Centers to cover all stages of examination from first action to allowance. (Also

see Option 5 below on search quality reviews.) QASs will perform IPR quality reviews on twe lve applications per year for every Primary Examiner (six allowances and six other o ffice actions). The reviews will average three hours per application. The results of t he reviews will be used to determine training needs and develop training programs including individualized examiner specific programs. The results of the reviews will be collected and compiled by the QASs. The work group Supervisory Patent Examiners (SPEs) will meet with the QAS once each quarter to discuss the results. The QAS will provide collective feedback about any weak or strong q uality points in the work group. The SPEs will then develop plans to address work group -wide issues. Also, each individual SPE will receive the IPR results and feedback abou t their Primary Examiners. When significant quality concerns are noted for an individual examiner the SPE will select additional applications to be reviewed by the SPE a nd will work with the QAS to address the issue. IPR results will become the basic application quality metric for the USPTO. In a ddition to the IPR program there will continue to be other quality related programs. Howeve r, these programs will serve primarily as triggers for additional IPRs beyond the basic t welve per year per Primary Examiner. These additional programs include: Day-to-day work product reviews; Second pair of eyes reviews (option 4 below); Patent action survey results collected from practitioners (see related paper); Sensitive Application Warning System (SAWS); and Appeal conferences (with certified appeal conferees). Data collected during in-process reviews will flow into numerous processes inclu ding: Training development; Examiner certification and re-certification; Annual performance appraisals; Quality award determination; Selection of Supervisory Patent Examiners, QASs, and Examiner Trainers; Calculation of Technology Center quality measurements such as reopening rate; and Calculation of overall USPTO quality measurements. 2 P-17 UNITED STATES PATENT AND TRADEMARK OFFICE The steps to implement this expanded in-process review of Primary Examiner work products will comprise: Increasing the resources available for examiner-focused IPRs. Performing a focused IPR annually for every Primary examiner. Requiring each Primary examiner to develop an approved individualized training program based on consultation with their supervisor about the results of their focused IPR and feedback from other quality measures. Option 3 Performance of Supervisory Patent Examiner IPR quality reviews: The USPTO established its annual performance appraisal plan for Primary Examiner s several decades ago. A key component of each appraisal is feedback about quality given to the Primary by their SPE. As a basis for the quality feedback, the direct SPE is

required to review at least four applications per year for each of their Primary Examiners. These reviews also serve to keep the SPE directly connected to the work product produc ed in their technology area and attuned to the skills of people working within the area. In 1997, the USPTO restructured Patents into Technology Centers with work groups of related a rts. The SPEs of a work group were expected to work together as a team to recognize a nd address issues within the work group. However, no formal changes were made in th e quality feedback process to aid in the recognition of work group-wide quality is sues. The USPTO will replace the four-per-year direct supervisor review of Primary Exa miner work products with work group-wide Supervisory Patent Examiner IPR quality revie ws. This review process will be overseen by a QAS who will provide annual refresher training about the IPR process to the work group SPEs. The QAS will then designate four applications per Primary to be reviewed. The examiner s applications will be distr ibuted to work group SPEs not in the examiner s direct line of supervision. Each applicat ion will receive an IPR with the goal that each of the examiner s applications is reviewed by a different SPE. The results of the reviews will be collected and compiled by the QAS. The work group SPEs will then meet with the QAS to discuss the results. The QAS will provide collective feedback about any weak or strong quality points in the work group. The SPEs will then develop plans to address work group-wide issues. Also, each individual SPE will receive the IPR results and feedback about their Primary Exa miners. When significant quality concerns are noted for an individual examiner the direc t SPE will select additional applications to be directly reviewed and will work with the QA S to address the issue. These four applications per year reviewed by the work group SPEs, the twelve app lications reviewed by the QASs, and any further reviews by the direct SPE, all will form p art of the basis of the Primary Examiner s annual performance appraisal. More importantly, th ese collective IPR results will be used to develop individualized training programs that are specific to each Primary Examiner. 3 P-17 UNITED STATES PATENT AND TRADEMARK OFFICE Option 4 - Expansion of Universal Second Pair of Eyes Review of Work Products: In March 2000, the USPTO established the second pair of eyes review for business method patents in Class 705. It is a universal review of all allowances in Class 7 05 with each allowance taking about one hour. The purpose of this review is for the revi ewer to quickly flag issues that need further consideration by the examiner and/or the e xaminer s

supervisor. In fiscal year 2001, the second pair of eyes review in Class 705 resulted in a red uction of the Class 705 reopening percentage by the Office of Patent Quality Review (OPQR) to zero percent. For FY 2002, only one 705 application was reopened as a result of revie w by the OPQR. The results of the second pair of eyes reviews are used to develop training in Class 705. The USPTO will expand universal second pair of eyes reviews beyond allowances in Class 705 to other art areas with unacceptably high reopening rates. Also, the e ffectiveness of second pair of eyes reviews at earlier stages of the examination process will b e evaluated. The results of these early stage reviews will be used to check the qu ality of work products during examination and to determine examiner-training needs. Option 5 - Evaluation of Search Quality of Search: The adequacy of prior art searches performed by USPTO examiners is evaluated as part of the various quality reviews performed at the USPTO. These reviews include allowa nce reviews by the OPQR, second pair of eyes reviews performed by QASs, In-process reviews performed in each Technology Center, and day-to-day monitoring of examin er s work product. It is being proposed that searches be performed by other parties in addition to examiners. It will be necessary to evaluate the adequacy of searches of all parties providing this work product. The monitoring of search quality will be integrated into the regular Qu ality Assurance Program. Data collection on search quality would occur at two data col lection points as part of the standard review process: 1) Day-to-day review of searches by examiners as they begin examination; and 2) In-process review of applications (see options 2 and 3). This option addresses only measurement of search quality. The establishing of th e search criteria and actions to be taken after search evaluations are completed are both addressed in other papers. The criteria for the review of search quality at data collection p oints 1 and 2 will be based on the search criteria that is established (see related papers). Option 6 QAS Review: Under option 2, 14,400 reviews of Primary Examiner work will be performed by the QASs. This will be supplemented by 4,400 QAS reviews of non-primary work (current IPRs 4 P-17 UNITED STATES PATENT AND TRADEMARK OFFICE refocused to non-primaries) and option 3 adds another 4,800 SPE reviews of Prima ry Examiner work. Evaluation will be done by the QASs and others (such as reviewing SPEs) who will feed results to the QASs for addition to the Quality databases. Measurement will be o ngoing. QASs and reviewers will be measuring all year, with the data available for obser vation at

any time. Data will be formally reported on a quarterly basis to specific design ees (home SPE, work group SPEs, Directors, Commissioner, etc). Measurements (pass/fail or numeric, such as 1 to 5) will be loaded into databases on a regular basis by a p rogram analyst as the reviews are completed. The QASs will be trained to do root cause analysis to make best use of the data. During allowance reviews, measurements will be made of the following conventiona l item: Reopenings when reviewer finds an unpatentable claim (replaces OPQR reopenings). This measurement will be made in accordance with current OPQR guidelines. This w ill allow baselines and benchmarks to be set early in the process using past perform ance. Additionally, the quality of the search will be evaluated during each allowance review (see option 5). During reviews of other actions, measurements will be made of the following conv entional items: Was the rejection clearly wrong? (35 USC 101, 102, 103) Were claim limitations correctly matched to the prior art? (35 USC 102, 103) Was the examiners position properly supported? (35 USC 101) Were the differences stated? (35 USC 103) Was the modification stated/explained? (35 USC 103) Was the motivation stated? (35 USC 103) These measurements are identical or minor variations to current IPR measures. Th is will allow baselines and benchmarks to be set early in the process using past perform ance. Additionally, the quality of the search will be evaluated during each allowance review (see option 5). During reviews of all actions, measurements will be made of the following new it em: Is the file wrapper complete? As this is a new item to be measured, benchmarks and baselines will be hard to e stablish quickly. However, a few sub-portions of this will be continuations of portions o f the current OPQR allowance review, such as completeness of Reasons for Allowance and use of Proper Motivation Statements . Also, file wrapper completeness review guidel ines will need to be established. USPTO Recommended Course of Action: Details: Fully implement an integrated Quality Assurance Program (Options 1-6): Integrate OPQR functions into the Technology Centers, 5 P-17 UNITED STATES PATENT AND TRADEMARK OFFICE Expand the In-Process Review of work products to cover all stages of examination, Replace annual direct supervisor review of Primary Examiner work products with wo rk group SPE-IPR quality reviews, and Selectively expand the Second Pair of Eyes Review of work products. Incorporate an evaluation of search quality into the work product review process. Establish quality metrics for the expanded Quality Assurance Program. Return on Investment:

Currently, the QAS s duties comprise application quality review, training developm ent, help panels, classroom teaching, one-on-one help sessions, special case review r equests, and second pair of eyes reviews. To perform these functions one QAS per every oneh undred examiners is deemed appropriate, but staffing is below this number. Current shortages of QASs are covered by SPEs both full and part-time. Currently, Qualit y Review Examiners (OPQR Allowance Review) duties also require one OPQR reviewer per oneh undred examiners. Collectively, all current quality reviews and follow-up training requires about one reviewer per fifty examiners. Fully implementing the expanded review of Options 1-5 (heavily focused on Primary Examiners) and continuing current QAS duties (heavily focused on non-primary examiners) would require similar resources. In addition to Review QASs and Training QASs , each Technology Center s Quality Assurance Shop will assorb the Technology Center s current Special Programs Shop. The current Special Programs Examiners (SPREs) will move to Special Programs QAS positions in the QAS shop. Each Technology Center will have Special Programs QASs equal in numbers to their current allocation of Special Programs Examiners (SPREs) . Estimated Benefits: Quality: Quality of substantive examination will be enhanced since examiners wil l have better training programs based on improved feedback to examiners. Cost-effectiveness: In the new 4-track process there will be a significant need to make sure all examiners are ready for re-certification. The Quality Assurance Program is a relatively low cost way to assess general and individualized examiner training needs and to maintain assurance of the desired Knowledge, Skills, and Abilities for all examiners. Implementation Plan: The expansion of patent application work product reviews will yield a Quality As surance Shop in each Technology Center that will comprise three distinct types of Qualit y Assurance Supervisors. The numbers of each type will differ among Technology Cen ters based on workloads (no. of primaries, hires, etc). 1) Review QASs to perform (see options 2, 4, and 5): A) Primary Examiner allowance reviews and in-process reviews, B) Non-primary allowance reviews and in-process reviews, C) Second pair of eyes reviews , 6 P-17 UNITED STATES PATENT AND TRADEMARK OFFICE D) The in-process review of the quality of prior art searches, and E) Reexamination and Reissue final quality reviews. 2) Training QASs to perform: A) Primary Examiner training (including one-on-one help sessions), B) Non-primary training and new hire Academy follow-up, C) Special case reviews (e.g. SAWS cases, help panels), and D) Oversight of SPE-based in-process reviews (see option 3). 3) Special Program QASs (replaces SPREs) to perform: A) Reexamination preliminary reviews, B) Reissue preliminary reviews, C) Interference reviews, and D) Petition processing.

Additionally each discipline (electrical, chemical, mechanical) will have: -one Discipline Quality Lead (DQL) [or Senior Review QAS]; and -one program analyst (two for electrical as this = 1/2 of corps). The three Discipline Quality Leads (DQL) will be selected by and will report to the head of Patent Operations. To preserve the independence of quality reviews and measureme nts, each DQLs will select and serve as the rating official for the Review QASs in thei r discipline and for the program analyst(s). Additionally, each DQL will perform Re view QAS application reviews in each Technology Center within their discipline. The DQ Ls will be responsible for maintaining uniformity in the review processes. Each program analyst (two for the electrical discipline) will perform the functi ons of data collection, management, and reporting for their discipline. The program analysts will deliver reports to the DQL every two weeks and quarterly to the head of Patent O perations. Such reporting of quality data will be based on a simple error or no error determina tion as is currently done. Additionally, as is done with current in-process reviews, Technology Centers may request that the data and reports for certain metrics be internally reported with a 1-5 level of quality rating (levels 3-5 equal no error, with 5 being the best work possible). Alternatively, the Technology Center may request a level of quality rating based on the presence of indicia of commendable and outstanding quality as set forth in the exa miner performance appraisal plan . The mechanism to determine, report, and correct errors will largely parallel the current process. Reviews by the Review QASs will be performed and errors determined based on a clear standard, such as compliance with the published examination policies in effect at the time of the allowance or office action being reviewed. As in the current pro cess, when the reviewer alleges an error, the application is returned to the SPE. If the SP E agrees, then the error is entered into the Quality Database by the program analyst. If no agr eement is reached, then a conference will be held with the QAS, SPE, DQL, and Group Direct or. If no agreement is reached at this point, then prior art questions are appealed to the head of Patent Operations for a final decision and policy questions are appealed to the head of 7 P-17 UNITED STATES PATENT AND TRADEMARK OFFICE Patent Examination Policy for a final decision. Appeal success ratios for each D QL will be tracked. A new mechanism will be added to streamline examination policy changes where an published examination policy and case-law conflict is detected by a Review QAS. Wh en a Review QAS determines that an office action or allowance should have reach a different result than stated in the published examination policies, the applicat ion will be

forwarded to the DQL. The DQL will review the application and if they agree, it will be forwarded to the head of Patent Examination Policy for a decision. In the event of a determination that the published examination policies should be changed, the ins tant application and all other applications known to contain the same issue will be r eprocessed by the Technology Center(s) to make needed changes in accordance with the new po licy. These reprocessed applications will not be deemed to contain errors for the purp ose of Technology Center quality tracking. When appropriate, the Training QASs will follo wup with examiner training on the new examination policies. To preserve the Tech Center management s responsibility for enhancing quality, mak ing petition decisions, etc. the selecting and rating official for Training QASs and S pecial Program QASs will continue to be a Group Director within each Technology Center. The oversight of SPE based in-process reviews will be performed by the Training QASs because this is as much an SPE training function as it is an application review function. The SPE-IPR allows the Training QAS to determine how the SPE s are reviewing applications, teach the SPEs how they should perform reviews, and establish what they should report back to their examiners about all types of SPE and Review QAS review s. In-process reviews performed by the SPEs will be tracked by the program analyst in a database separate from the Review QAS database as will Special Program QAS reviews. The organizational chart for rating purposes of the Quality Assurance Shop perso nnel within the chemical discipline is shown on the next page. A similar organizational structure is present in the electrical and mechanical disciplines. 8 P-17 UNITED STATES PATENT AND TRADEMARK OFFICE Chemical (TC 1600 & TC 1700) Quality Assurance Organization Chart Deputy Commissioner for Patent Operations TC 1600 Group Director TC 1600 Training QASs TC 1600 Special Programs QASs TC 1700 Group Director TC 1700 Training QASs TC 1700 Special Programs QASs

Chemical Discipline Quality Lead Chemical Program Analyst TC 1600 Review QASs TC 1700 Review QASs P-17 9 Task Name P-17 - Enhance Current Quality Assurance Program Develop Discipline Quality Lead (DQL) position description (P-17) Announce DQL positions (P-17) Panel the DQL positions (P-17) Interview and fill the DQL positions (P-17) Determine if new program analysts are contract or FTE positions (P-17) If FTEs - Announce program analyst positions (P-17) If FTEs - Panel the program analyst positions (P-17) If FTEs - Interview and fill the analyst positions (P-17) If outsourced, current or new contract (P-17) Announce OPQR functions will be integrated into the TC (P-17) Address labor relations implications (P-17) Announce new "Review QAS" positions (P-17) Panel the "Review QAS" positions (P-17) Interview and fill the "Review QAS" positions (P-17) Move OPQR personnel to examining - abolish OPQR (P-17) Duration 464 days 2 wks 2 wks 3 wks 1 wk 20 days 2 wks 4 wks 1 wk 30 days 1 wk 15 wks 2 wks 4 wks 1 wk 10 days FY 2003 Resources $6,439,000 Contact A. MacDonald Start Finish Fri 5/31/02 Mon 4/5/04 Fri 5/31/02 Thu 6/13/02 Fri 6/14/02 Thu 6/27/02 Mon 7/1/02 Mon 7/22/02 Mon 7/29/02

Tue 7/23/02 Mon 6/3/02 Fri 6/28/02 Mon 7/1/02 Mon 7/15/02 Mon 8/12/02 Mon 8/19/02 Mon 8/12/02 Tue 7/16/02 Tue 7/16/02 Tue 8/13/02 Mon 7/1/02 Wed 7/10/02 Wed Wed 10/30/02 Mon 7/15/02 Fri 8/16/02 7/17/02 Mon 7/1/02 Mon 7/22/02 Mon Fri 8/23/02 8/19/02 Tue 10/1/02 Tue 10/15/02 Task Name Announce additional "Training QAS" positions (P-17) Panel added "Training QAS" positions (P-17) Interview and fill added "Training QAS" positions (P-17) Transfer current SPREs to new "Special Programs QAS" positions (P-17) Establish Quality Metrics (P-17) Train all QASs on Metrics (P-17) Expand review QAS IPRs (P-17) Expand 2nd pair of eyes reviews (P-17) Begin SPE-IPR with Training QAS Oversight (P-17) Begin reviews of search quality (P-17) Obtain business requirements (P-17) Define PALM requirements (P-17) Baseline PALM Project (P-17) Enhance PALM (P-17) Obtain business requirements (P-17) Develop project plan in CAT for development of OPQR (P-17) Duration 2 wks 3 wks 1 wk 7 days 6 wks 6 wks 90 days 90 days 90 days 12 mons 10 days

64 days 20 days 121 days 10 days 29 days Finish Mon 7/15/02 Start Mon 7/1/02 FY 2003 Resources Contact Mon 7/22/02 Mon Fri 8/9/02 Fri 8/16/02 8/12/02 Mon 8/5/02 Tue 8/13/02 Mon 8/12/02 Fri 9/27/02 Mon 7/1/02 Mon 8/19/02 Tue 10/1/02 Tue 2/11/03 Tue 10/1/02 Tue 2/11/03 Tue 10/1/02 Tue 2/11/03 Mon 3/3/03 Mon 4/5/04 Mon 6/3/02 Fri 6/14/02 Fri 9/13/02 Mon 6/17/02 Mon 9/16/02 Tue 10/15/02 Mon 10/14/02 Wed 4/9/03 Fri 8/30/02 Thu 9/12/02 Tue 11/12/02 Tue 10/1/02 Task Name Develop requirements - OPQR (P-17) Design, code, unit test and integration test - OPQR (P-17) Beta and FQT Testing - OPQR (P-17) Deploy - OPQR (P-17) Duration 59 days 157 days 38 days 13 days Finish Mon 2/10/03 Start Thu 11/14/02 FY 2003 Resources Contact Tue 2/11/03 Tue 9/23/03

Tue 11/18/03 Tue 12/9/03 Wed 9/24/03 Wed 11/19/03 UNITED STATES PATENT AND TRADEMARK OFFICE EXPAND REVIEWS OF PRIMARY EXAMINERWORK Action: Primary examiners should maintain the necessary knowledge, skills, and ability ( KSA) in current patent law, practice, and procedure. Regular training, similar to contin ued legal education (CLE) requirements, should be provided to maintain KSA of primary examiners and they should pass tests to prove that they understand the content o f the training. An expanded review of current work product should evidence the applica tion of KSA necessary to maintain full signatory authority. Background: Primary Examiners are certified as full signatory examiners, only once, as they pass the full signatory review program. However, due to changes in patent law, policy and practice, there would be a benefit for formal confirmation that primary examiner s have maintained the knowledge, skills, and ability (KSA) necessary to enhance the qua lity of current decisions they make as full signatory examiners. Training programs are i n place to bring to the attention of the primary examiners any changes in patent law, pr actices, and procedures. Training is also provided in the automated tools that help the e xaminers convey their decisions on the record. Actions in some patent applications assign ed to a primary examiner in a given fiscal year are reviewed by an SPE. Sometimes, this results in a thorough SPE review of only four allowances per fiscal year for a primary e xaminer. However, this scale of review may not provide evidence that the primary examiner has maintained all necessary current KSAs for full signatory authority, such as by incorporating knowledge from recent training into the current work product. Options Considered: Need to continue to train all primary examiners on the current state of the paten t law, practice and procedure as well as automation tools to maintain necessary KSA for full signatory authority. Need to review an expanded sample of work product signed by primary examiners to ascertain whether current patent law, practice, and procedure (necessary KSA) ar e being applied in current official actions taken by primary examiners. USPTO Recommended Course of Action: A determination of the current, necessary KSA required for the position of Prima ry Examiner should be made on a regular basis at several levels within the USPTO, b oth

inside and outside of the Technology Centers. This determination could be aided by cooperation with the patent practitioners and those organizations representing o ur customers. Necessary training needs to be identified to build or reinforce neces sary KSA and tests need to be developed to ensure that the primary examiners taking t he training understand its content. There needs to be an identification of instrume nts necessary to evaluate the necessary KSA for primary examiners. Such instruments may include an expanded review of work product, such as IPR of actions in stages of prosecution of ongoing work product, second pair of eyes review of final disposa ls of work product--allowances, appeals, and abandonments to evaluate KSA of each prim ary examiner. This may involve the evaluation of about 12 actions per year for each primary examiner. Employees in the non-bargaining unit GS-15 examiner/trainer positions would 1 P-20/22-Q UNITED STATES PATENT AND TRADEMARK OFFICE also take part in a certification program as part of the appointment process and would be subjected to re-certification with opportunity for quality awards. There should be regular, continued training events for primary patent examiners in patent law, practice, and procedure as well as automation tools necessary for action-ta king on the record and continuous quality initiatives (CQI) in the Technology Centers. T raining could be implemented similar to CLE programs with the expectancy that a certain number of hours of required training are taken every year. Tests should be devel oped to ensure that primary examiners, taking the training, prove that they understand t he content of the training. Those who do not pass tests given after required legal training should have full signatory authority suspended. Subsequently, these examiners need to d evelop an action plan in concert with the SPE to bring them to the current, necessary K SA, such as by retaking the training and passing the test, or taking additional refresher training. Those employees who have had full signatory authority suspended should be permit ted to regain full signatory authority after successfully completing all required train ing. In addition to the training requirements above, there needs to be an expanded re view of the work product of each primary examiner on a yearly basis to ascertain whether the necessary KSA, such as that reinforced by recent training, is applied in the exa mination of the work product. Review teams of QASs, OPQR Integration, or SPEs (who themselves have been recertified) through IPR of actions in stages of prosecutio n of current work product or second pair of eyes review of final disposals of current w ork product-allowances, appeals, and abandonments could be used to evaluate KSA of e

ach primary examiner (SEE PAPER P-17). If this review reveals evidence of an unacceptable percentage of unsatisfactory work, this evidence would be reported to the SPE and Director of the involved examiner, who would then make a decision whethe r to review additional work of this examiner before adverse action is taken. The exam iner would be afforded conventional improvement period(s) to evidence the ability to produce an acceptable percentage of satisfactory work. If a review of the work product d uring the improvement period does not evidence an acceptable percentage of satisfactory wo rk, then signatory authority would be withdrawn. The examiner would be permitted the opportunity to regain full signatory authority by passing another full signatory review program (recertification), which may occur after a certain period of time has pa ssed since withdrawal of that authority. Timing: Determination of KSA necessary for Primary Examiners Development of tests for training courses Increased review of work product of primary examiners Benefits: Increased respect and recognition for those primary examiners retaining full sig natory authority as well as respect and recognition for the quality of their work produ ct. 2 P-20/22-Q Task Name P-20 - Recertification of KSA of Primary Examiners Draft KSA requirements for Primary Examiners (P-20) Address labor relations implications (P-20) Finalize KSA required for Primary Examiners (P-20) Identify assessment provider and instruments necessary to evaluate KSA (P-20) Establish method for improving/updating their skills (P-20) Establish means for recognizing/rewarding those who pass recertification (P-20) Establish means for suspending full sig for those who do not pass recertification (P-20) Duration 175 days 30 days 90 days 30 days 10 days 15 days 15 days 15 days Contact R. Fisher /J. Rolla Start Finish Mon 6/3/02 Tue 2/11/03 FY 2003 Resources $0 Mon 7/15/02 Wed

Mon 6/3/02 Tue 7/16/02 11/20/02 Mon 1/6/03 Fri 11/22/02 Tue 1/7/03 Tue 1/21/03 Tue 2/11/03 Wed 1/22/03 Wed 1/22/03 Wed 1/22/03 Tue 2/11/03 Tue 2/11/03 UNITED STATES PATENT AND TRADEMARK OFFICE PATENT QUALITY IMPROVEMENT: EXPANSION OF THE SECOND-PAIR-OF-EYES REVIEW Action: In order to enhance patent quality, the USPTO should implement an improved Quali ty Assurance Program. One important component of the improved program is expanding the quality review of work products, through a second-pair-of-eyes program in such advanced fields of technology as semiconductors, telecommunications, and biotech nology. Background Information: The USPTO recognizes a robust quality assurance program is critical to maintaini ng the public s desired level of patent product quality. The public s interest in quality h as been repeatedly and strongly voiced. Options Considered: Option 1 - Expansion of Universal Second Pair of Eyes Review of Work Products: In March 2000, the USPTO established the second pair of eyes review for business method patents in Class 705. It is a universal review of all allowances in Class 7 05 with each allowance taking about one hour. The purpose of this review is for the revi ewer to quickly flag issues that need further consideration by the examiner and/or the e xaminer s supervisor. In fiscal year 2001, the second pair of eyes review in Class 705 resulted in a red uction of the Class 705 reopening percentage by the Office of Patent Quality Review (OPQR) to zero percent. For FY 2002, only one 705 application was reopened as a result of revie w by the OPQR. The results of the second pair of eyes reviews are used to develop training in Class 705. The USPTO will expand universal second pair of eyes reviews beyond allowances in Class 705 to such advanced fields of technology as semiconductors, telecommunica tions, and biotechnology. Option 2 - The USPTO will expand universal second pair of eyes reviews beyond allowances in Class 705 to other art areas with unacceptably high reopening rate s. Also, the effectiveness of second pair of eyes reviews at earlier stages of the examinat ion process will be evaluated. The results of these early stage reviews will be used

to check the quality of work products during examination and to determine examiner-training n eeds. 1 P-17a UNITED STATES PATENT AND TRADEMARK OFFICE USPTO Recommended Course of Action: Adopt Options 1 and 2 with a goal of implementing both by February 2002. Expected Benefits: Quality: Quality of substantive examination will be enhanced since examiners wil l have better training programs based on improved feedback to examiners. Cost-effectiveness: In the new 4-track process there will be a significant need to make sure all examiners are ready for re-certification. The Quality Assurance Program is a relatively low cost way to assess general and individualized examiner training needs and to maintain assurance of the desired Knowledge, Skills, and Abilities for all examiners. 2 P-17a Task Name P-17A - Expand 2nd Pair of Eyes Reviews Select Discipline Quality Lead Select Review QASs Establish Quality Metrics for Searches (P-17) Identify Technology Areas for 2nd Pair of Eyes Reviews Train Reviewers and Examiners on Quality Metrics (P-17) Begin Deployment - OPQR (P-17) Duration 169 days 3.4 wks 1 wk 14.6 wks 13 days 3.13 mons 14 days Contact A. MacDonald Start Finish Mon 6/3/02 Mon 2/3/03 FY 2003 Resources Mon 7/29/02 Fri 8/23/02 Fri 7/5/02 Mon 8/19/02 Mon 6/3/02 Thu 9/12/02 Fri 9/13/02 Tue 10/1/02 Wed 1/15/03 Tue 1/14/03 Mon 2/3/03 Tue 10/1/02 UNITED STATES PATENT AND TRADEMARK OFFICE TRADEMARK QUALITY IMPROVEMENT: IN PROCESS REVIEW AND SECOND-PAIR-OF-EYES Action: The Trademark Operation will incorporate in-process review and/or second pair of eyes into its examination and review process to improve the quality of examinatio n. Background Information: Examining attorneys examining applications for the registration of trademarks in the

Trademark Operation are moved through a series of training courses and certifica tion procedures until they are authorized to work independently and are solely respon sible for decisions to refuse marks or approve for publication. The authority to work independently is known as full signatory authority. Currently, the only review of work of full signatory examiners is done by the Office of Trademark Quality Review (OTQR) and their managing attorney under the performance appraisal plan. Both re view processes only include a small percentage of actions taken by the examining atto rney. However, the Trademark Operation currently receives a fairly large number of complaints regarding first office actions taken by examining attorneys related t o the need for the action and/or the consistency of the office action. The Trademark Operation recently initiated a pilot project focused on the monito ring of the quality of first actions. This pilot in-process review activity regarding fi rst actions indicates that improvements in quality of office actions taken by examining atto rneys, regardless of their experience in the Office, is needed. Options Considered: Option 1 Create an internal in-process review for first actions where a statistically sig nificant sample of first actions is reviewed for quality and correctness. Information wil l be collected in a database and used to identify training needs either for individua l examining attorneys or for the organization if the problem appears to be endemic. Advantages: 1. Results would lead to targeted training for examiners or on specific issues, which should allow the Trademark Operation to address real time quality issues and substantially improve the quality of office actions. Disadvantages: 1. Cost T-05 1 UNITED STATES PATENT AND TRADEMARK OFFICE Option 2 Create second pair of eyes review with a focus on statutory refusals for expedited examination options. Review would not encompass reexamination, but would focus o n necessity of refusal and on the quality of the office action with a requirement for rework if the office action did not meet standards. Advantages: 1. Eliminate unnecessary refusals; 2. Encourage use of e-filing and expedited examination process 3. Addresses concerns of applicants regarding consistency and quality Disadvantages: 1. Increased cost and/or lower production (if review is done by examining attorn eys) Option 3 No change to current system Advantages: 1. Lowest cost Disadvantages:

1. Quality issues will not be effectively addressed USPTO Recommended Course of Action: Adopt Options 1 and 2 with a goal of implementing Option 1 on October 1, 2002, a nd Option 2 on October 1, 2003, in conjunction with implementation of the Trademark Information System (TIS) and expedited examination. T-05 2 Task Name T-05 Enhance In-process Review & 2nd Pair of Eyes Complete evaluation of in-process review pilot (T-05) Determine workload and staffing for in-process review (T-05) Draft in-process review position descriptions and vacancy or detail announcements; advertise and fill positions (T-05) Implement in-process review system (T-05) Plan and structure 2nd pair of eyes review in law offices (T-05) Address labor relations implications (T-05) Conduct pilot review process in 2 or more e-commerce law offices; evaluate data (T-05) Implement second pair of eyes program in all law offices for fast track examination process (T-05) Make changes to internal accounting systems and documentation to reflect changes in fees (T-05) Publish the revised fee schedule and distribute info prior to effective date of changes (T-05) Duration 432 days 68 days 1 mon 65 days 12 mons 68 days 68 days 191 days 7 days 7 days 67 days FY 2003 Resources $706,000 Contact B. Anderson Start Finish Mon 6/3/02 Fri 2/20/04 Mon 6/3/02 Thu 9/5/02 Wed 10/9/02 Tue 1/14/03 Fri 9/6/02 Thu 10/10/02 Wed 1/15/03 Mon 6/3/02 Thu 9/5/02 Fri 2/20/04 Tue 9/24/02 Thu 1/2/03 Tue 1/7/03 Tue 10/7/03 Wed 10/8/03 Tue 9/23/03

Fri 10/17/03 Wed 10/1/03 Wed 10/1/03 Fri 6/27/03 UNITED STATES PATENT AND TRADEMARK OFFICE EVALUATION OF SEARCH QUALITY Action: In order to enhance patent quality, the USPTO should implement an improved Quali ty Assurance Program. One important component of the improved program is enhancing the evaluation for the quality of the search product. Background Information: The USPTO recognizes a robust quality assurance program is critical to maintaini ng the public s desired level of patent product quality. The public s interest in quality h as been repeatedly and strongly voiced. Options Considered: The adequacy of prior art searches performed by USPTO examiners is evaluated as part of the various quality reviews performed at the USPTO. These reviews include allowa nce reviews by the OPQR, second pair of eyes reviews performed by QASs, In-process reviews performed in each Technology Center, and day-to-day monitoring of examin er s work product. It is being proposed that searches be performed by other parties in addition to examiners. It will be necessary to evaluate the adequacy of searches of all parties providing this work product. The monitoring of search quality will be integrated into the regular Qu ality Assurance Program. Data collection on search quality would occur at two data col lection points as part of the standard review process: 1) Day-to-day review of searches by examiners as they begin examination; and 2) In-process review of applications. This option addresses only measurement of search quality. The establishing of th e search criteria and actions to be taken after search evaluations are completed are both addressed in other papers. The criteria for the review of search quality at data collection p oints 1 and 2 will be based on the search criteria established. USPTO Recommended Course of Action: Incorporate an evaluation of search quality into the work product review process . 1 P-17b UNITED STATES PATENT AND TRADEMARK OFFICE Estimated Benefits: Quality: Quality of substantive examination will be enhanced since examiners wil l have better training programs based on improved feedback to examiners, as well and ce rtified search services once the 4-track examination process is implemented. Cost-effectiveness: In the new 4-track process there will be a significant need to make sure

all examiners are ready for re-certification. The Quality Assurance Program is a relatively low cost way to assess general and individualized examiner training needs and to maintain assurance of the desired Knowledge, Skills, and Abilities for all examiners. 2 P-17b Task Name P-17B - Review of Search Quality Select Discipline Quality Leads Select Review QASs Select Training QASs Identify Components of a Quality Search Establish Quality Metrics for Searching Train Reviewers and Examiners on Quality Metrics and Requirements Begin Deployment - OPQR (P-17) Duration 205 days? 3 wks 3.8 wks 5.6 wks 2.7 mons 49 days? 18 days? 9 days Contact A. MacDonald Start Tue 7/9/02 Finish Wed 4/30/03 Mon 7/29/02 FY 2003 Resources Tue 7/9/02 Tue 7/30/02 Fri 8/23/02 Fri 8/23/02 Tue 10/1/02 Tue 12/31/02 Thu 1/2/03 Thu 3/13/03 Tue 10/1/02 Tue 3/25/03 Thu 4/17/03 Wed 4/30/03 Fri 4/18/03 Action: Survey practitioners on specific applications. Background Information: Transactional surveys are surveys that are conducted in the immediate aftermath of a transaction with an individual/organization. The idea is to measure customer sat isfaction with the transaction while the experience is still fresh. Patents has conducted several transactional surveys over the last decade including: decisions in April of 2001 to receive feedback from customers. The USPTO has historically experienced low response rates with transactional sur veys for two primary reasons: most were done as mail surveys with no advanced notificatio n or

follow-up; secondly, there appears to be some reluctance on the part of the cust omer to comment on an office action while the patent application is still pending. USPTO currently conducts an annual comprehensive survey that measures customer satisfaction with performance against specific customer service standards and ge neral process and customer issues. P-39 UNITED STATES PATENT AND TRADEMARK OFFICE SURVEYING PRACTITIONERS ON SPECIFIC APPLICATIONS Patent Action Surveys - conducted in the early 1990s to measure customer satisfaction with specific Office actions. Customer Feedback Cards for the Patent Assistance Center (PAC) and for Office Actions in the Semiconductor area - conducted in the mid-1990s and measured customer satisfaction with interactions with the PAC as well as with specific Of fice actions in the Semiconductor area. In Process Reviews began in late 1990s and continues except for the customer part of the process. A three-pronged approach to assessing the quality of certain key Office actions. Quality Assurance Specialists (QASs) review 380 cases per year i n each Technology Center (TC) and the Office of Patent Quality Review (OPQR) reviewers validate a small sample of those same cases (80-120). A telephone interview was conducted with the attorneys in the same cases that are reviewed b y OPQR. Office of Petitions Survey A survey that was mailed out with Office of Petition 1 Options Considered: Option 1: Conduct both the annual comprehensive survey and a new transactional s urvey. Option 2: Eliminate the annual comprehensive survey and conduct only a transacti onal survey. USPTO Recommended Course of Action: Option 1: Conduct the Annual Patent Customer Satisfaction Survey every other yea r supplemented by the use of transactional surveys on the off years that focus on key drivers and information about specific office actions. The rationale for this recommenda tion is as follows: Estimated Benefits: More TC specific issues will be identified and incorporated into training opportunities for examiners. P-39 UNITED STATES PATENT AND TRADEMARK OFFICE 1. There are over a hundred questions on the annual survey that address a multit ude of issues relating to patent policy and procedure. Transactional surveys would focu s on only one or two key issues on which to receive feedback. The questions on the transactional survey could vary based on specific issues for that TC for that pe riod of time. Example: A TC may conduct a transactional survey that measures satisfactio n with the examiners ability to clearly explain the motivation behind a 103 reject ion. Additionally, the transactional surveys could contain a set of consistent questi

ons across TCs that are asked each time. 2. One reason for completing the comprehensive patent survey is that it is impor tant to isolate the key drivers of customer satisfaction in order to develop improvement plans that focus on providing the biggest return on investment. Attempting to develop key drivers with data from transactional surveys that address only a few issues is n ot recommended. 3. A baseline for customer satisfaction has been established that goes back to 1 995. Starting over with a new approach makes validating change over the last 5-7 year s and into the future virtually impossible. 4. Transactional surveys can be worthwhile for getting feedback at a level lower than the TC level (work group, art unit) and for obtaining information about a specif ic part of the patent process (e.g. first actions). 5. Explore methods for improving response rates with transactional surveys inclu ding advanced publicity and alternative methods for conducting surveys such as electr onic surveying. 2 Task Name P-39 - Surveying Practitioners on Specific Applications Create transactional customer survey (P-39) Distribute survey, provide two-month response time to customers (P-39) Collect surveys; analyze data at Patents, Workgroup, Art Unit levels (P-39) Compare results; identify trends and key drivers in comment with most recent yearly customer survey (P-39) Communicate results to employees (P-39) Duration 488 days 30 days 60 days 60 days 30 days 10 days Start Wed 2/19/03 Wed Contact J. Stone Finish Fri 1/14/05 FY 2003 Resources $0 Tue 4/1/03 2/19/03 Thu 5/1/03 Fri 7/25/03 Mon 10/27/03 Wed

Fri 8/1/03 Mon 11/3/03 12/17/03 Mon 1/3/05 Fri 1/14/05 UNITED STATES PATENT AND TRADEMARK OFFICE ENHANCE THE REVIEWABLE RECORD Action: There is a need to improve the quality of the file wrapper record generated duri ng prosecution with a goal of improving the overall quality of the resulting patent grant. The completeness of the file wrapper record has become increasingly important in det ermining the scope of the patent rights granted to a patentee and the quality of the exam ination process. Although the current processes produce a file wrapper record that addre sses most of the major issues with respect to rejections for failure to meet the conditions f or patentability, many of the assumptions made by the examiner and applicant and reasons for vario us actions taken during the prosecution are left unaddressed in the written record. This go al of enhancing the reviewable record is best addressed through the creation of additi onal statements in the record that provide an explanation of the reasons for the vari ous actions that resulted in the patent grant. Background Information: When an examiner takes an application up for examination for the first time, the application is reviewed and the examiner formulates numerous assumptions with respect to the disclosed and claimed inventions. These assumptions are carried forward into the examinati on process in evaluating the prior art and formulating rejections and requirements. If the examiner makes an erroneous assumption with respect to the invention, the resulting Offic e communication may become a totally wasted application of resources by the examin er and result in a response from that applicant that corrects the erroneous assumptions but does little if anything to advance the prosecution of the application. Further, numerous ass umptions made by the examiner may be absent from the file wrapper record, leaving others to only surmise what these might have been; leaving a vague and uncertain record. Some e xamples of these assumptions are the scope of various claim limitations, why a claimed i nvention meets the utility requirements, the content of an interview between the examiner and the applicant, the reasons for the withdrawal of a rejection by the examiner, and th e reasons for allowance of a claim. A process to clarify these issues on the record may freque ntly result in a better application of the office resources, a better prosecution, and the crea tion of a more complete file history. All business before the Office with respect to the patent

prosecution process is required to be conducted on the written record. See 37 CFR Section 1. 2. However, frequently a number of assumptions are made in that process which are n ot fully documented in the file wrapper. The lack of documentation of the assumptions mad e by the applicant and the examiner during the prosecution lead to ambiguities as to the prosecution and the reasons for various actions that are taken in the process. These ambigui ties frequently result in questions as to the propriety of the examination process. 1 P- 40 UNITED STATES PATENT AND TRADEMARK OFFICE Options Considered: Option 1 - The Office could increase the amount of substance included in the int erview summary to provide a more detailed record in the file wrapper. The MPEP 713.04 a lready required the content of interviews to be made of record, including proposed amen dments and the general thrust of the applicant s and examiner s arguments, but these summaries are sometimes not as detailed as desired for a more complete reviewable record. Option 2 - The Office could require the applicant to more fully summarize the co ntent of an interview with the examiner in the next communication with the Office to more fu lly clarify the positions of both parties. This would eliminate the ability of the examiner to check the box on the interview summary form saying that no response from applicant is requ ired (e.g., with limited exceptions for allowance requiring the applicant to provide an inte rview summary). This is a requirement in the MPEP 713.04 but apparently is not being e nforced. Option 3 - The Office could require the examiner to provide an explanation for a ctions taken during the prosecution; e.g. reasons for dropping a rejection, to provide a one or two sentence explanation to identify what prompted the change in his/her position. The examin er could point to that part of the argument that was convincing. This would merely requir e the examiner to set forth in writing a few brief remarks to capture his/her thinking during the decision-making process of examination. By requiring an explanation, the record would more clearly show the reasons for changes in patentability determinations. USPTO Recommended Course of Action: Details: Adopt options 1, 2, and 3 above to provide an enhanced file wrapper record. Return on Investment: Estimated benefits: Presumed to be high in providing a more complete reviewable record of the prosecution history of applications. 2 P- 40 Task Name P-40 - Enhance the Reviewable Record Establish items to be included in the mechanism(s) for file wrapper (P-40) Develop a training model for file wrapper review (P-40)

Train examiners on file wrapper model (P-40) Duration 60 days 15 days 30 days 15 days Finish Mon 8/26/02 Contact J. Rolla Start Mon 6/3/02 FY 2003 Resources $0 Mon 6/3/02 Fri 6/21/02 Mon 6/24/02 Tue 8/6/02 Mon 8/5/02 Mon 8/26/02 UNITED STATES PATENT AND TRADEMARK OFFICE CERTIFICATION OF SEARCHING AUTHORITIES Action: The USPTO needs to ensure that patent searches provided by the private sector an d/or by foreign patent offices are complete and high quality. Background Information: Given the current challenges in the patent system, putting the prior art search in the hands of private industry would have substantial benefits for the USPTO. Much of our overhead expense lies in the development and maintenance of search tools for our examiners. Substantial savings in automation development and maintenance costs f or EAST, WEST, ABSS, CDB access, etc., potentially could be realized in addition to the savings resulting from the reduced upkeep and maintenance of the classification systems for both International Patent Classification (IPC) and United States Patent Clas sification (USPC). Looking at this strategically, the USPTO would be able to concentrate resources on the development of TEAM in the short term and could then reassess t he maintenance and enhancement of search systems once TEAM is successfully deployed A substantial saving in examiner resources should result from our examiners concentrating on patentability determinations rather than spending a substantial amount of time searching. The quality of searches should also improve, particularly in emerging technologies, where certified searching authorities will be able to devote more resources to discovering non-patent literature sources of prior art. Thus, the quality of both search and examination should improve. Options Considered: 1. Certified Private Search Firms Applicants would provide a certified search wi th each application filed. The search would have to have been performed by a privat

e search firm that had been certified by the USPTO. These searches may have been performed by a competent foreign patent office. 2. Searches Outsourced to Government Contractors The USPTO simply forwards all applications to a Government search contractor to provide the examiner with a complete search of the prior art. 3. Hybrid of 1 and 2 Some applicants choose to supply a certified search with th eir application and some applicants choose to have the USPTO outsource the search to an external search service. USPTO Recommended Course of Action Option 1: Details: Applicants would use an external search service (ESS) in order to prepa re a search report. The ESS may be a private or commercial search entity, or a foreig n office that has expertise and demonstrated search skills. The search process and prepar ation of 1 P-07-01 UNITED STATES PATENT AND TRADEMARK OFFICE the search report are activities between the applicant and the ESS. The applican t would initially prepare a proposed technical search abstract for guiding the search. The ESS would review and improve on the abstract; prepare a search strategy, including t he field of search, search logic (e.g., where to search, including Non-Patent Literature Resources) and terms; and send it back to the applicant for confirmation before proceeding further. Using the abstract and discussions with the applicant, the ESS would carry out t he search and prepare a report similar to the international search report (ISR) using PCT guidelines and USPTO search guidelines (see attachment) for NPL. The applicant would submit this information to the Office with a request for examination. The examiner would then review the search report and prior art cited. If the sea rch were inadequate, the examiner would contact the applicant and explain the deficiency and seek supplemental information (using Rule 105) from the applicant. If the examiner is personally aware of other prior art, he or she is permitted to locate the art in the same way under the current MPEP. The USPTO would maintain the authority to certify that a private search firm, in dividual, or a foreign patent office was capable of providing a valid, thorough and comple te search of the prior art for patent examination processes. Certification would be done at the USPTO by an oversight board or by an internat ional certification board made up by representatives from various patent offices. Cert ification could be given to firms or individuals or a combination thereof. Certification w ould be based on industry specific criteria (ISO 9000), and must be given on an individu al basis based on the firm s or individual s qualifications. Similar to the Primary Examiner at the

USPTO, a senior (certified) member of the firm could sign off on an assistant s sear ch. Thus, while there are multiple options available, a preferred one would be to ce rtify the firm which, in turn, would be responsible for certifying their individual searcher s. The authority would have to prove that it has ready access to the appropriate in dustry specific search tools. Much of the work in developing industry specific search t ools is either in the process of being done or has already been published on the USPTO i ntranet in the form of Search Guidelines (see Attachment I). These guidelines were devel oped by the Quality Action Team and represent a listing of appropriate search tools a nd databases for each technology. These include PCT Minimum Document requirements; appropriate text search systems; as well as the pertinent commercially available databases. Additionally, a classified search of the USPC, if appropriate, would also need to be performed as awareness of such a listing as well as ready access to all th e tools contained therein would be one of the requirements in order to obtain certificat ion for a given technology. Another requirement would be the technical qualifications of the applicant for certification. Just as in examining, varying levels of technical expertise are r equired for searching different technologies. 2 P-07-01 UNITED STATES PATENT AND TRADEMARK OFFICE The third requirement would be proof that the applicant for certification has a thorough understanding of the patent examining procedure. This is essential since the sea rcher must be able to read and analyze claims and broadly apply the prior art thereto in order to produce a PCT-type search report which would be submitted to USPTO. Applicants f or certification would need to be aware of patent law and practice and be able to u nderstand such concepts as motivation for example. This could be ensured by requiring that applicants for certification be tested. A certified search submission would be expected to include, at a minimum, a list ing for every search including: - text search systems, - commercial data bases, - USPC classified search, if appropriate, - the complete search statement and logic, - a statement regarding the teachings and applicability of each reference. The question arose as to whether a patent applicant could be his own search autho rity . The answer seems to be yes, as long as that person meets the requirements as sta ted above and attests to the fact (as all authorities would have to do) that a thoro ugh and complete search has been conducted. The USPTO would also have to maintain a search quality review board in order to sample the quality of searches submitted by the certified search authorities. A

component of the In-Process Review is to evaluate the quality of the search resu lts for each ESS. A statistically valid sample of cases would be reviewed using criteria such as whether the search was based on what is claimed and reasonably expected to be cl aimed. The Office must retain the ability to de-certify authorities that submit a number of poor searches from either the test sample or from other sources such as examiner repo rts, requests for reexam or post-grant opposition that show clear errors. Legislation many be needed to enable the USPTO to de-certify a poorly performing ESS. It is thought that contractor support will be needed to set up, implement and ma intain the necessary certification procedures, along with a dedicated staff of search and e xamination experts. Requiring applicants to supply certified translations or English language equiva lents, with valid dates, for any non-English language prior art references cited would also eliminate the need for examiners requesting certified translations, partial tran slations and/or on-the-spot translations of non-English documents. This would significant ly reduce the overhead expense of maintaining a bank of on-site translators or a me chanical translation system. 3 P-07-01 NPL Virtual Library > EIC2800 > Class/Subclass > Class 257 > Databases UNITED STATES PATENT AND TRADEMARK OFFICE Attachment Patent and Non-Patent Literature (NPL) Resources for Class 257: Active Solid-State Devices (e.g. Transistors, Solid-State Diodes) P-07-01 Patents Home Site Feedback 4 UNITED STATES PATENT AND TRADEMARK OFFICE P-07-01 5 UNITED STATES PATENT AND TRADEMARK OFFICE 6 P-07-01 UNITED STATES PATENT AND TRADEMARK OFFICE 7 P-07-01 UNITED STATES PATENT AND TRADEMARK OFFICE 8 P-07-01 UNITED STATES PATENT AND TRADEMARK OFFICE 9 P-07-01 Task Name P-07-01 - Certification of Searching Authorities Develop industry specific criteria for certification and recertification of searching agencies (P-07-01) Establish oversight board to conduct certification (P-07-01) Develop search quality check standards and process (P-07-01) Develop evaluations and feedback tools (P-07-01) Announce certification process (P-07-01) Review applications (P-07-01) Grant certification (P-07-01) Duration 265 days 90 days 10 days 15 days 30 days 30 days

60 days 30 days FY 2003 Resources $2,875,000 Contact H. Goldberg Start Finish Mon 6/3/02 Thu 6/19/03 Mon 6/3/02 Tue 10/8/02 Tue 10/22/02 Wed Wed 10/9/02 Wed 10/23/02 Thu 11/14/02 Mon 12/30/02 Wed 2/12/03 11/13/02 Fri 12/27/02 Tue 2/11/03 Wed 5/7/03 Thu 5/8/03 Thu 6/19/03 Capability Legislation/Rules 1 Legislation/Rules 1a Legislation/Rules 1b Legislation/Rules 1c Legislation/Rules 1d Legislation/Rules 1e Legislation/Rules 1f Legislation/Rules 1g Legislation/Rules 1h Legislation/Rules 1i Legislation/Rules 1j Legislation/Rules 1k Actions RESTRICTION PRACTICE FOR MARKUSH AND SEQUENCE CLAIMS MANDATORY INFORMATION DISCLOSURE STATEMENTS (IDS) SIMPLIFICATION OF PATENT TERM ADJUSTMENT ALLOW ASSIGNEE TO MAKE THE ASSIGNEE FILING APPLICATION AND SIGN THE OATH DUTY TO DISCLOSE PROCEEDINGS WITH CONFLICTING CLAIMS MONITOR PRACTITIONER ADHERENCE TO RULES OF PRACTICE: PERIODIC CERTIFICATION FOR REGISTERED PRACTITIONERS AND MONITOR PRACTITIONER ADHERENCE TO RULES OF PATENT PRACTICE: DISCIPLINARY INITIATIVES E LIMINATION OF THE INTERFERENCE BAR CREATED BY APPLICATION PUBLICATIONS TECHNICAL CORRECTION IN 35 U.S.C. 119(e)(1)

PERMIT ASSIGNEES TO FILE BROADENING REISSUE DELETE REQUIREMENT FOR PHYSICAL SURRENDER OF THE PATENT EIGHTEEN-MONTH PUBLICATION ELIMINATION OF NON-PUBLICATION AND REDACTION EXCEPTIONS AND EXCLUSIONS OF PLANT APPLICATIONS LEGISLATIVE AND RULEMAKING ISSUES TRADEMARKS UNITED STATES PATENT AND TRADEMARK OFFICE RESTRICTION PRACTICE FOR MARKUSH AND SEQUENCE CLAIMS Action: Markush claims and sequence claims present huge search and examination challenge s when the number of species or sequences claimed in one application, and many tim es in one claim, exceed hundreds, thousands or even gazillions of compounds and sequen ces. Current restriction practice under 37 CFR 1.142 needs to be clarified to specifi cally address the restriction to a single independent and distinct invention within a Markush claim and the restriction to a single and distinct polypeptide or DNA sequence. Background Information: Applications in organic chemistry frequently claim a myriad of chemical species in a single Markush1 type claim. Even though these compounds have a common utility an d one of ordinary skill in the art would know how to make and use any of them, the se claims pose a tremendous challenge in doing a complete search and examination. T hey encompass numerous classes and subclasses and structurally divergent chemical compounds. Applications in biotechnology frequently claim tens, hundreds or thousands of nu cleotide and/or amino acid sequences in a single application and many times in a single c laim. Each and every nucleotide and/or amino acid sequence, even if they are all isola ted from the same source, are independent and distinct for restriction purposes. Regardless of the restriction requirement within a Markush claim or between biol ogic sequences, rejoinder of process claims that are commensurate in scope and includ e all the limitations of the elected product claim would be permissible under In re Ochiai , 71 F.3d 1565, 37 USPQ2d 1127 (Fed. Cir. 1995). Options Considered: Option 1 - Constructive Restriction/Election: Amend 37 CFR 1.142 to permit the restriction and constructive election of the first claimed independent and disti nct species in a Markush claim or first claimed independent and distinct sequence in a biolo gic claim encompassing numerous sequences. Advantages: Significantly reduces patent pendency by eliminating the time lost i n telephonic or written restrictions before the actual examination on the merits o f the application begins. A majority of organic chemistry and biotechnology applicatio ns have restriction requirements made before actual examination begins.

1 Ex parte Markush, 1925 Dec. Comm r Pat. 126 (1924). P-08 UNITED STATES PATENT AND TRADEMARK OFFICE Improves the quality of examination by reducing the number of inventions searche d and examined, increases the time available to search and examine each invention, and focuses the prosecution on one inventive concept. Option 2 Written or Telephonic Restriction/Election: Amend 37 CFR 1.142 to codif y the restriction and election of a single independent and distinct species within a Markush claim or a single independent and distinct sequence in a biologic claim encompas sing numerous sequences. Advantages: Codifies the current restriction practice and simplifies the search and examination procedures. Improves the quality of examination by reducing the number of inventions searche d and examined, increases the time available to search and examine each invention, and focuses the prosecution on one inventive concept. USPTO Recommended Course of Action: Option 1 - Constructive Restriction/Election in Markush and Sequence Claims. Details: Applicants original presentation of claims would determine the first claimed inv ention to be searched and examined. Rather than allowing the examiner to determine the fir st claimed invention by the claim construction, applicant (anticipating a restricti on requirement) could also provisionally elect an independent and distinct species at the time of filing the application. An application not only claiming products but also claiming processes of making and processes of using the products may also be restricted to the one independent an d distinct product with the process claims being withdrawn from consideration. Rejoinder of any withdrawn process claims that are commensurate in scope and include all the limi tations of the allowable elected product claim would be considered under In re Ochiai. Timing: Both options require Rule Making. P-08 2 UNITED STATES PATENT AND TRADEMARK OFFICE MANDATORY INFORMATION DISCLOSURE STATEMENTS (IDS) Action: In order to provide the best art to the examiner at the onset of prosecution and to address the problem with prior art flooding where the applicant provides an unreasonably l arge volume of prior art information for review, the USPTO can implement the mandator y submission of IDS including a statement of relevancy by amending the rule(s) in advance of the legislative changes to implement the four-tracks examination process, whi ch would

take no less than three years to implement. The options outlined below range fro m imposing an affirmative duty to perform a prior art search to a duty of inquiry into the information in the possession of the parties defined in 37 CFR 1.56(c). For all applications that are pending as of the effective date of the amended rule(s) an d are filed prior to the effective date of the legislation to implement the four-tracks exam ination process, applicant will be required to submit an IDS, along with a relevancy sta tement for citations over twenty, as to how the prior art information relates to at least t he broadest claim in the application. See proposed changes to 37 CFR 1.98. Background Information: The USPTO recognizes the importance of obtaining and analyzing relevant prior ar t to the proper prosecution of a patent application and to the validity of an issued patent. Locating relevant prior art is one of the most important aspects of the patent e xamining process. USPTO and the applicants share the responsibility of ensuring that pert inent prior art is being considered during examination of a patent application. Applic ants are generally in the best position to identify the most pertinent prior art related to their invention(s). The current disclosure requirements under 37 CFR 1.56 only necessi tate applicants disclose material information that they are aware of to the Office. Furthermore, the current rule relating to the content of an IDS (37 CFR 1.98) on ly requires applicants to provide a concise explanation of the relevance of a docum ent that is not in the English language. There is no duty to submit a mandatory IDS or to in clude a relevancy statement as to how each of the prior art information (both English an d nonEnglish language) documents listed in the IDS relate to the claims in the applic ation. Options Considered: The public s concern with the issue of inequitable conduct can be addressed by ame nding 37 CFR 1.56 accordingly. As noted by the court in Burlington Industries Inc. v. Dayco Corp., 849 F.2d 1418, 7 USPQ2d 1158 (Fed. Cir. 1988), [t]his court will not hold unenforceable a patent once granted in the absence of an intent to mislead, alth ough the nondisclosure of facts of which the applicant should have known the materiality may justify an inference of intent to mislead in appropriate cases and the court shoul d find inequitable conduct only if shown by clear and convincing evidence. So long as th ere is a clear absence of an intent to mislead, a search performed, a search result sub mitted, and P-09 UNITED STATES PATENT AND TRADEMARK OFFICE a relevancy statement identified by an applicant would be considered to have bee n done in good faith.

Requiring applicants to submit a meaningful IDS, including a statement of releva ncy, would address the current problem with prior art flooding where the applicant prov ides an unreasonably large volume of prior art information for review. This proposal would require applicants to identify those references listed in an IDS which are of pa rticular significance by relating them to specific claims or to the issues identified by the examiner. Examiners will be given the authority to obtain more information from the applicants where the examiners are unable to ascertain the pertinence of an appl icantsubmitted reference. The following options are proposed: Option 1: USPTO will set search criteria, and applicant or any commercial servic es that applicant chooses may perform the prior art search following the search criteria . Applicant will be required to submit to the USPTO the results of the search in t he form of an IDS along with a statement of relevancy for each of the prior art documents f or consideration by the examiner during examination. U.S. patents and U.S. patent application publications may be submitted via electronic IDS. Option 2: USPTO will set search criteria and certify commercial services to perf orm the search. The certification process could possibly be one that is similar to the I nternational Organization for Standardization (ISO) 9000 certification process. Once the USPT O established the criteria for getting certified, any organizations or commercial services can apply to become an authorized search organization. Applicants may choose any of the certified commercial services/search organizations to perform the search. Applic ant will be required to submit to the USPTO the results of the search in the form of an I DS along with a statement of relevancy for each of the prior art documents for considerat ion by the examiner during examination. U.S. patents and U.S. patent application publicatio ns may be submitted via electronic IDS. Option 3: Applicant may choose to have a counterpart Intellectual Property (IP) Office perform the search on a corresponding application and submit the search results of the counterpart IP Office to the USPTO. Timing of the search and examination perform ed by the counterpart IP Office (the Office of the first filing) is critical since if the USPTO is going to be the Office of the second filing, we want the search to be performed by the Office of the first filing when we pick up the U.S. application for examination in the USPTO. It is anticipated that a bilateral agreement between the USPTO and an IP Office such as the Japan Patent Office, the European Patent Office, the German Patent O ffice,

the United Kingdom Patent Office, the Canadian Patent Office, and the Australian Patent Office will be necessary in order to ensure that the timing factor is met. If ap plicant chooses this option, applicant must request expedited examination in the Office of the first filing and may request delayed examination in the Office of the second fil ing, the USPTO, of up to 24 months. Note that if the search results from the Office of th e first filing are not completed by 24 months, applicant may request suspension of exami nation in the USPTO pursuant to 37 CFR 1.103. 2 P-09 UNITED STATES PATENT AND TRADEMARK OFFICE Option 4: All parties listed in 37 CFR 1.56(c) will have a limited duty of inqui ry as to documents within their possession, and will have to submit pertinent information t o the USPTO. The focus of the information submitted will be non-patent literature that is related to the claimed invention, including information used to draft the applic ation, information used in the inventive process and information concerning improvement s and state-of-the-art. Applicants must submit the required information in the form on an IDS compliant with 37 CFR 1.98, which is proposed to require an explanation of relev ancy for citations of patents over twenty and citations of non-patent literature over twenty. The explanation of relevancy must compare the reference to at least the broadest claim in the application. See proposed changes to 37 CFR 1.98 for more details. USPTO Recommended Course of Action: Details: Implement Option 4 by amending the rule(s) in advance of the implementation of t he four-tracks examination process to require a limited duty of inquiry and a manda tory IDS along with a relevancy statement as to how the prior art information relates to the claims in the application for citations over the threshold of twenty. The amended rule( s) would apply to all applications pending as of the effective date of the amended rule(s ) and all IDS s filed on or after the effective date of the rule change. This rule change wo uld apply to all applications filed prior to the legislation to implement the four-t racks examination process. For those applications that are affected by the amended rul e(s), if the application has not been examined on the merits (e.g., no first action on th e merits (FAOM) has been issued in the application), a notice may be sent by the Office r equiring applicant to submit an IDS along with a relevancy statement as to how the prior art information relates to the claims in the application for citations over the thre shold of twenty. If an FAOM has been mailed in an application affected by the amended rul

e(s), approval and authorization by a supervisory patent examiner (SPE) will be needed before such a notice may be sent to the applicant. Seek statutory change and amend the rule, 37 CFR 1.56, to indicate that so long as there is a clear absence of an intent to mislead, a search performed, a search result submitted, and a relevancy statement identified by an applicant would be considered to have been done in good faith. Amend 37 CFR 1.97 and 1.98 to require a patentability report by applicant, that is, the mandatory IDS submitted by applicant must include a rele vancy discussion of the prior art relative to the claims submitted by applicant. Appli cant will be required to amend or cancel any claims that are not patentable over the prior ar t. Estimated Benefits: Quality: Quality of substantive examination will be enhanced since examiners wil l be able to spend more time with the substantive examination that will be based on t he most pertinent prior art submitted by the applicant (options 1-3) or will have more r elevant prior art before them prior to the first Office action on the merits (option 4). Examiners will be able to focus on the significance of each prior art cited by the applica nt and how each prior art piece relates to the claims in the application by reviewing the s tatement of 3 P-09 UNITED STATES PATENT AND TRADEMARK OFFICE relevancy submitted by the applicant for citations over twenty for both patents and nonpatent literature. Cost-effectiveness: For options 1-3 where the search is being performed by appli cants, the Office s search systems will not be required to handle the large volumes of se arches conducted today and the USPTO will be able to shift the funds for maintaining an d improving the automated search systems for other uses such as staffing, training , etc. For option 4, the search time for examiners may be reduced and the quality of examination increased because applicants must submit pertinent prior art that is within their possession. 4 P-09 UNITED STATES PATENT AND TRADEMARK OFFICE SIMPLIFICATION OF PATENT TERM ADJUSTMENT Action: Patent term adjustment should be simplified by providing that an applicant is no t entitled to patent term adjustment unless the USPTO fails to issue the patent within thre e years from the date the applicant requested examination. Background Information: The patent term adjustment (PTA) provisions of the American Inventors Protective Act (AIPA) allow for term adjustment: (1) if the USPTO fails to initially act on an application within fourteen months of its filing date; (2) if the USPTO fails to

respond to a reply or appeal by applicant within four months of the reply or appeal; (3) if the USPTO fails to act on an application within four months of a BPAI or court decision in an application containing allowable claims; (4) if the USPTO fails to issue a paten t within four months of the date the issue fee was paid; (5) if the USPTO fails to issue a patent within three years of its filing date; (6) if issue of a patent was delayed due to imposition of a secrecy order; (7) if issue of a patent was delayed due to an interference proceeding; or (8) if the issue of a patent was delayed due to successful appellate review. This PTA smorgasbord requires the USPTO and applicants to monitor numerous events during the prosecution of the application to determine the appropriate term adjustment, and often results in applicants obtaining patent term adjustment despite the fact that the patent has an unadjusted term of longer than seventeen years from grant. The purpose of the patent term adjustment provision in the AIPA was to guarantee that diligent applicants would still have a patent term of at least seventeen years f rom grant under the twenty-year patent term system. If the USPTO issues the application wi thin three years from its filing date, any patent term adjustment operates to overcom pensate the patentee. PTA should be limited to the situations in which the USPTO delayed processing or examination of the patent and this delay resulted in the applicati on pending before the USPTO for more than three years. Under the requested examination process (currently under consideration as part o f the 4-Track initiative), the applicant is allowed to delay requesting examination an d paying the examination fee. Since an applicant may request examination and pay the examination fee when the application is filed, and is delaying examination of th e application (and cannot be considered diligent ) until the applicant requests exami nation and pays the examination fee, PTA periods currently measured from the filing dat e of an application must be measured from the date the applicant requests examination an d pays the examination fee to avoid applicant-created PTA. 1 P-11/12 UNITED STATES PATENT AND TRADEMARK OFFICE Options considered: Option 1: The USPTO would limit the grounds for receiving patent term adjustment to the USPTO s failure to issue the application within three years from the date the applicant requested examination (under a deferred examination system). The term of the pat ent would be adjusted one day for each day after the end of the three-year period un til the patent is issued. The period of adjustment under 35 U.S.C. 154(b) would be reduc

ed by any period of further examination pursuant to 35 U.S.C. 132(b) (RCE filing) and any period of appellate review by the Board of Patent Appeals and Interferences or b y a Federal court, except if the patent was issued under a decision reversing an adv erse determination of patentability. Advantages: By removing some of the mandates of 35 U.S.C. 154(b), the USPTO could eliminate some of the PTA calculations that presently are necessary. Moreover, by limiting patent term adjustment to guarantees of issuing the applic ation within three years (subject to exceptions for RCE and unsuccessful appellate rev iew) the USPTO would remain consistent with Congressional intent to guarantee diligent applicants a seventeen-year term (from grant) if they are not claiming priority to an earlier filed application. Option 2: The USPTO would eliminate patent term adjustment (except for applicati ons raising national security concerns) and provide that if an application has been pending three years from the date the applicant requested examination (under a deferred examination system), the applicant may request that the USPTO immediately issue a patent that contains all of the claims pending at the time of such request. The USPTO would provide further examination of such patents that track the examination proce ss, except that the scope of the claims could not be enlarged through the process. T he patentee would have to pay for further examination and when the examination proc ess is excluded, the USPTO would issue a reexamination-like certificate at which time t he patent would be entitled to a presumption of validity. Moreover, reexamination w ould be unavailable to a patent undergoing further examination before a certificate is iss ued and the patent will be considered surrendered by operation of law and further examin ation terminated if the application files a reissue patent (e.g., to enlarge the claim s) before a certificate is issued (to avoid complex proceedings). Draft legislation to imple ment option 2 is included in the Appendix. Advantages: By providing applicants with an option to have the patent issued three years after the date the applicant requested examination, applicants are p roviding industries who would not be concerned with an adjustment at the end of the paten t term an option to enforce the patent earlier in the process. By issuing the patent, i ndustries could seek to enforce the claims at the time of the request (albeit without the presumption of validity) and in addition, continue the examination process to conclude with the issuance of a reexamination-like certificate, and if the certificate indicates g ranted claims,

a patent that is presumed valid. The USPTO in return would be removing many of t he administrative burdens of the AIPA concerning patent term adjustment. P11/12 2 UNITED STATES PATENT AND TRADEMARK OFFICE Option 3: The USPTO would only amend the existing patent term adjustment provisi ons to: (1) make the changes to the fourteen-month and three-year time frames necess ary to accommodate a deferred examination system; and (2) make patent term adjustment determinations a post grant activity. Draft legislation to implement option 3 is included in the Appendix. Advantages: This option makes changes that would be necessary to implement a deferred examination system (part of the 4-Track initiative), and to make patent term adjustment determination a workable process. USPTO Recommended Course of Action: Explore a number of options to address this issue with the small business commun ity and other key stakeholders. P11/12 3 UNITED STATES PATENT AND TRADEMARK OFFICE ALLOW ASSIGNEE TO MAKE THE ASSIGNEE FILING APPLICATION AND SIGN THE OATH Action: Propose amendments to 35 U.S.C. 115 to permit an assignee of the entire interest to file a patent application and sign the oath. Background Information: Currently, the inventor(s) must make the application for patent and the inventor (s) must sign the oath or declaration. The assignee cannot file a patent application and sign the oath or declaration except where all of the inventors refuse to execute the appl ication or cannot be found or reached after diligent effort (and the requirements under 37 CFR 1.47(b) are met) or where the application is a reissue application which does no t seek to enlarge the scope of the claims of the original patent (a requirement in reissue that we are seeking to change in another initiative, but which statutory change is provided with the change to 35 U.S.C. 115 below). Once the inventors of an invention have been identified, and the inventors have provided information that may be material to the examiner s decision of patentability, and have assigned their rights in the invent ion to an assignee, there is no need to require the inventors to participate in the proces s by signing the oath or declaration or any supplemental oath or declaration that may be requ ired. If the assignee of the entire interest were permitted to sign the oath or declarati on, there would be greater flexibility for applicants. The proposed change would also simp lify Office processing and eliminate delays. The requirement for an oath or declarati

on should still be maintained since it provides some assurance that the appropriate degree of consideration is given to the determination as to who are the inventors. Option Considered: Option #1: Amend 35 U.S.C. 115 to provide that the application may be made by th e assignee of the entire interest. USPTO Recommended Course of Action: Pursue option 1. Details: Amend 35 U.S.C. 115 by adding [t]he application may be made by the assignee of the entire interest upon compliance with requirements and under such terms and conditions as prescribed by the Director. Amend 35 U.S.C. 251 by deleting except that application for reissue may be made and sworn to by the assignee of t he entire interest if the application does not seek to enlarge the scope of the cla ims of the original patent. Attachment: 35 U.S.C. 115 and 251 with proposed changes. P-13/58 1 UNITED STATES PATENT AND TRADEMARK OFFICE The applicant shall make oath that he believes himself to be the original and fi rst Proposed changes shown with underlining and strikeouts 115 Oath of applicant. inventor of the process, machine, manufacture, or composition of matter, or impr ovement thereof, for which he solicits a patent; and shall state of what country he is a citizen. Such oath may be made before any person within the United States authorized by l aw to administer oaths, or, when made in a foreign country, before any diplomatic or c onsular officer of the United States authorized to administer oaths, or before any offic er having an official seal and authorized to administer oaths in the foreign country in wh ich the applicant may be, whose authority is proved by certificate of a diplomatic or co nsular officer of the United States, or apostille of an official designated by a foreig n country which, by treaty or convention, accords like effect to apostilles of designated officials in the United States. Such oath is valid if it complies with the laws of the state or country where made. The application may be made by the assignee of the entire interest u pon compliance with requirements and under such terms and conditions as prescribed b y the Director. When the application is made as provided in this title by a person oth er than the inventor, the oath may be so varied in form that it can be made by him. For purp oses of this section, a consular officer shall include any United States citizen serving overseas, authorized to perform notarial functions pursuant to section 1750 of the Revised Statutes, as amended (22 U.S.C. 4221). 251 Reissue of defective patents. Whenever any patent is, through error without any deceptive intention, deemed

wholly or partly inoperative or invalid, by reason of a defective specification or drawing, or by reason of the patentee claiming more or less then he had a right to claim in the patent, the Director shall, on the surrender of such patent and the payment of t he fee required by law, reissue the patent for the invention disclosed in the original patent, and in accordance with a new and amended application, for the unexpired part of the term of the original patent. No new matter shall be introduced into the application for reissue. The Director may issue several reissued patents for distinct and separate parts of the thing patented, upon demand of the applicant, and upon payment of the requir ed fee for a reissue for each of such reissued patents. The provisions of this title relating to applications for patent shall be applic able to applications for reissue of a patent, except that application for reissue may be made and sworn to by the assignee of the entire interest if the application does not seek to enlarge the scope of the claims of the original patent. P-13/58 2 UNITED STATES PATENT AND TRADEMARK OFFICE DUTY TO DISCLOSE PROCEEDINGS WITH CONFLICTING CLAIMS Action: Require by rule that an applicant must inform the Office in a subject pending ap plication about any other application, patent or reexamination of a patent that contains c laims conflicting with the subject application, where the other application, patent or reexamination of a patent have at least one common inventor, or are owned by the same party. Background Information: Patent examination today includes the review of pending applications to determine whether patentably indistinct claims are presented in more than one application, and to impose rejections for double patenting where appropriate. Because of the increasing large numbers of applications and examiners, this burden is becoming more difficult. This change would increase the efficiency of examination by highlighting the related applications for the examiner. Options Considered: By rule impose a requirement to identify applications including conflicting claims. Seek a legislative change to eliminate the need to impose obviousness double patenting rejections of commonly owned applications. USPTO Recommended Course of Action: Impose a requirement to identify applications and other proceedings including co nflicting claims in order continue to provide the public of the certainty provided by cont inuing to review for conflicting claims and to determine the appropriate patent term for w hich the applicant is entitled. Similarly changes to reexamination practice are also reco mmended. Timing: Rule making that generally takes six months to one year.

Risks: The rule making will likely be opposed on the basis that applicants already disc lose material applications under the duty imposed by rule 1.56 and that it imposes a new risk of non-disclosure and failure to comply with a formal matter on applicants. P-43 1 UNITED STATES PATENT AND TRADEMARK OFFICE Return on Investment: Estimated investment nominal cost of promulgation of rules and costs of training and internal implementation. Estimated benefits issue of double patenting would be treated more efficiently a nd docketing of related applications would be more effective. Details: Claims, in this context, are understood to conflict where claim(s) in the subject pending application are not patentably distinct from claim(s) in any other application, patent or reexamination of a patent. In other words, a conflicting claim occurs when it is appropriate to make a double patenting rejection, or a rejection under 35 U.S.C. 102(a), (e), (f), or (g), of a claim in the subject pending application over a claim in any other application, patent or reexamination of a patent. See Charts I-A, I-B, II-A, IIB, III-A, and III-B of the Manuel of Patent Examining Procedure (MPEP) 804, which provide an overview of the treatment of proceedings having conflicting claims. In particular, double patenting issues need to be considered by the examiner in most circumstances involving conflicting claims. The doctrine of double patenting see ks to prevent the unjustified extension of patent exclusivity beyond the term of a pat ent. The public policy behind this doctrine is that: The public should . . . be able to act on the assumption that upon the expiration of the patent it will be free to use not only the invention claimed in the patent but also modifications or variants which would have been obvious to those of ordinary skill in the art at the time the invention was made, taking into account the skill in the art and prior art other than the invention claimed in the issued patent. In re Zickendraht, 319 F.2d 225, 232, 138 USPQ 22, 27 (CCPA 1963) (Rich, J., concurring). Double patenting results when the right to exclude granted by a fir st patent is unjustly extended by the grant of a later issued patent or patents. See In re Van Ornum, 686 F.2d 937, 214 USPQ 761 (CCPA 1982). Although the notification of conflicting claims to the Office is required by secti on 1.56, section 1.78(b)(1) imposes additional requirements including: (1) the notificatio n must be made early in the prosecution of a subject pending application, and (2) the notification must explicitly identify the conflicting claims between the subject p ending application and the other application(s), patent(s) or reexamination(s) of a pat ent. Therefore, a bare claim of benefit under 35 U.S.C. 120 in the subject pending

application to other application(s) that contain conflicting claims would not be compliant with this section. Such early, and more explicit, notification about conflicting claims is deemed necessary to reduce the burden on the Office because of the rising number of applications filed by same inventors, or owned by the same party, many of which are not P-43 2 UNITED STATES PATENT AND TRADEMARK OFFICE referenced to one another by way of a priority claim. During the examination, th e patent examiner has a responsibility to evaluate pending applications for double patent ing concerns. Identification by applicants of other applications, patents or reexami nations of a patent, where they have: (1) at least one common inventor, or are commonly own ed, and (2) conflicting claims with the subject pending application, would greatly a ssist the Office in making a more complete and accurate analysis of double patenting issue s early in the prosecution of the subject pending application. Section 1.78(b)(1)(i)(A) sets forth alternative formats for making the required notification, which results in a flexible standard in that applicants can inform t he Office of any other application, patent, or reexamination of a patent containing confli cting claims with a subject pending application in either: (1) the background section of the subject pending application; (2) a separate letter which would have an appropria te heading (e.g., Notification of Conflicting Claims Pursuant to 37 CFR 1.78(b)(1) ) s o that the examiner can recognize the listing as being filed under 37 CFR 1.78(b)( 1); (3) an information disclosure statement complying with 37 CFR 1.97 and 1.98; or (4) in a terminal disclaimer complying with 37 CFR 1.321. The notification must, pursuant to section 1.78(b)(1)(i)(B), identify each other application, patent, or reexamination of a patent by: (1) the application number , patent number, or reexamination control number, respectively, (2) the first named inven tor, and (3) the filing date of the application or reexamination proceeding or the issue date of the patent. The notification must also, pursuant to section 1.78(b)(1)(i)(C), explicitly ident ify which claims in the subject pending application conflict with which claims in th e other application(s), patent(s), or reexaminations of a patent. For example, claim 1 i n the subject pending application conflicts with claim 4 in application number 99/999, 999 and claim 2 in U.S. Patent 9,999,999. Pursuant to section 1.78(b)(1)(i)(D), applicant must also provide a legible copy of all conflicting claims in the other application(s), patent(s), or reexamination(s) o f a patent.

In addition, section 1.78(b)(1)(ii) states that applicants must provide the noti fication of such other application(s), patent(s), or reexamination(s) of a patent upon filin g but must provide the notification not later than three months from the subject pending ap plication s filing date, if any such other application(s), patent(s), or reexamination(s) wi th conflicting claims exist at the time of filing of the subject pending application. Section 1.78(b)(1)(iii)(A) states that applicants are also under a continuing du ty to identify conflicting claims between the subject pending application and any othe r application and request for reexamination of a patent where the subject pending application is commonly owned or there is at least one common inventor with the other application(s) or request(s) for reexamination of a patent for: (1) any newly fi led other application and request for reexamination of a patent containing conflicting cla ims; (2) any new claim(s) or amended claim(s) filed in the subject pending application th at now P-43 3 UNITED STATES PATENT AND TRADEMARK OFFICE conflict with any other application or request for reexamination of a patent; an d/or (3) amended or new claims submitted in any other application or reexamination of a p atent that come in conflict with the claims in the subject pending application. This duty on applicant, pursuant to section 1.78(b)(1)(iii)(B), is continuing an d runs until such time that the issue fee is paid for the subject pending application. In addition, pursuant to section 1.78(b)(1)(iii)(C), updated notifications shoul d be filed in the subject pending application as soon as possible, but must not be filed later than: (1) two months from the filing date of a new application or within two months of the date of the order to reexamine, or (2) the date of the amendment in the subject pending application or in any other application, patent or reexamination proceeding that created the new conflicting claims, whichever is latest. Section 1.78(b)(1)(iii)(D) states that applicants must also state that the updat ed notification of conflicting claims is being filed pursuant to section 1.78(b)(1) (iii)(A) and identify the applicable paragraph within (b)(1)(iii)(A) of this section that app lies ((b)(1)(iii)(A)(1)-(3) of this section), and the filing date of the new applicat ion(s) or request(s) for reexamination, or the filing date of the amendment(s), which caus ed the updated notification to be filed. For example, The updated notification is made p ursuant to section 1.78(b)(1)(iii)(A) and the applicable paragraph is (b)(1)(iii)(A)(2) of this section. The amendment in application 99/999,999 was filed on 12/01/02. If applicants fail to file the notification of conflicting claims within the tim e periods set in sections 1.78(b)(1)(ii) and (iii)(C), as applicable, the notification may be con

sidered, pursuant to section 1.78(b)(1)(iv), if the notification, fully complying with se ction 1.78(b)(1)(i), is filed with a grantable petition to accept an unintentionally d elayed notification of conflicting claims. The petition to accept an unintentionally de layed notification of conflicting claims must be accompanied by: (1) the surcharge set forth in section 1.17(h); and (2) a statement that the entire delay between the date the notification of conflicting claims was due under paragraphs (b)(1)(ii) or (b)(1)(iii)(C) of t his section and the date the notification of conflicting claims was filed was unintentional. The Director may require additional information where there is a question whether th e delay was unintentional. In addition, failure to file the notification of conflicting claims within the t ime periods set in sections 1.78(b)(1)(ii) and (iii)(C), and failure to provide the statement as to the reason for the updated notification, as required by section 1.78(b)(1)(iii)(D), will pe rmit the next Office action to be made final where a double patenting rejection is made based on at least one of the other applications, patents or reexaminations of patents identi fied in the untimely, or incomplete, notification. This is an exception to the practice set forth in the Manual of Patent Examining Procedures (MPEP) 706.07(a). For example, an examiner can make the next Office action final, even if there is no amendment to the clai ms, if the only new ground of rejection is an obvious double patenting rejection based on o ne of other applications, patents or reexaminations of patents identified in the untim ely, or incomplete, notification. Any Office action that includes a new rejection not ba sed on at P-43 4 UNITED STATES PATENT AND TRADEMARK OFFICE least one of the other applications, patents or reexaminations of patents identi fied in the untimely, or incomplete, notification cannot be made final, unless the new rejec tion was necessitated by an amendment or based on information submitted in an information disclosure statement pursuant to section 1.97(c). Furthermore, pursuant to section 1.78(b)(1)(v), notifications filed after prosec ution is closed (e.g. the application is under appeal, or that the last Office action is a final action, a notice of allowance ( 1.311), or an action that otherwise closes prosecution in the application) will not be considered, as a matter of right, unless accompanied wi th a Request for Continued Examination in compliance with section 1.114. Section 1.78(b)(1)(vi) reminds applicants to submit the listing in a format that would

allow compliance with 1.59 to support any future petition that might be filed to expunge information that is on the listing. Section 1.78(b)(2) provides that deletion of conflicting claims may be required from all but one pending application, ongoing reexamination, or patent (via disclaimer), which provision was previously contained in 1.78(b). In addition, 1.78(b)(2) affirmati vely states that such conflicting claims may be subjected to a rejection under the do ctrine of double patenting. Section 1.78(c) is amended to clarify that the prior art exception under 35 U.S. C. 103(c) does not apply to double patenting rejections. P-43 5 UNITED STATES PATENT AND TRADEMARK OFFICE Proposed rule change: 37 CFR 1.78: (b)(1) Conflict of Claims in Different Files: Where a subject pending applicatio n contains claims conflicting with any other application, patent, or reexamination of a pat ent, and the other application(s), patent(s), or reexamination(s) of a patent have at lea st one common inventor, or are owned by the same party as the subject application, the applicant must inform the Office of each such other application, patent, or reex amination of a patent. (i)(A) Applicant may provide a notification of such other application(s), patent (s), or reexamination(s) of a patent in the background section of the subject pending application, in a separate letter, in an information disclosure statement comply ing with 1.97 and 1.98 or in a terminal disclaimer complying with 1.321. (B) Applicant must identify each other application, patent, or reexamination of patent by the application number, patent number, or reexamination control number , respectively, the first named inventor, and the filing date of the application o r reexamination proceeding or the issue date of the patent. (C) For each claim in the subject pending application, the notification must explicitly identify the conflicting claims (if any) in each other application, p atent, or reexamination proceeding listed. (D) Applicant must also provide a legible copy of all conflicting claims. (ii) Applicant must provide the notification of such other application(s), paten t(s), or reexamination(s) of a patent in subject pending application upon filing there of but must provide the notification not later than three months from the subject pendi ng application s filing date if any such other application(s), patent(s), or reexamin ation(s) with conflicting claims exist at the time of filing of the subject pending appli cation. (iii)(A) Applicant has a continuing duty to identify conflicting claims between the subject pending application and all other applications and requests for reexamin

ation of a patent where the subject pending application is commonly owned or there is at le ast one common inventor with the other application(s) or request(s) for reexamination of a patent for: (1) any newly filed other application(s) and request(s) for reexamination of a patent containing conflicting claims; (2) any new claim(s) or amended claim(s) filed in the subject pending application that now conflict with any other application(s) or request(s) for re examination of a patent; and/or (3) amended or new claims submitted in any other application or reexamination of a patent that come in conflict with the claims in the subject p ending application. (B) The continuing duty runs until such time that the issue fee is paid for the subject pending application. P-43 6 UNITED STATES PATENT AND TRADEMARK OFFICE (C) Applicant should provide such an updated notification, pursuant to applicant s continuing duty, as soon as possible, but must provide the updated notification not later than two months from the filing date of a new application or within two months o f the date of the order to reexamine or the date of the amendment that created the new conflicting claims, whichever is latest. (D) The updated notification must clearly state that the updated notification of conflicting claims is being filed pursuant to paragraph (b)(1)(iii)(A) of this s ection, identify the applicable paragraph within (b)(1)(iii)(A) of this section that app lies ((b)(1)(iii)(A)(1)-(3) of this section), and identify the filing date of the new applications or requests for reexamination, or the filing date of the amendments, which cause d the updated notification to be filed. (iv) If the notification of conflicting claims is presented after the applicable time periods provided in paragraphs (b)(1)(ii) or (b)(1)(iii)(C) of this section, the notification of conflicting claims may be considered if the notification fully complying with paragraph (b)(1)(i) of this section was unintentionally delayed. A petition to a ccept a delayed notification of conflicting claims must be accompanied by: (A) The surcharge set forth in 1.17(h); and (B) A statement that the entire delay between the date the notification of conflicting claims was due under paragraphs (b)(1)(ii) or (b)(1)(iii)(C) of this section and the date the notification of conflicting claims was filed was unintentional. The Director may require additional information where there is a question whether the delay w as unintentional. (v) No notification of conflicting claims will be considered, as a matter of rig ht, if

filed after the prosecution is closed, as defined in 1.114(b), in the subject pe nding application, unless accompanied with a Request for Continued Examination in compliance with 1.114. (vi) Applicant should file the notification of such other application(s), patent (s) or reexamination(s) of a patent in a form that will allow for compliance with 1.59 should applicant later decide to file a petition to expunge the information. (b)(2) Any claims in a subject pending application that conflict with the claims of any other application, patent, or reexamination of patents, where there is at least one common inventor, or ownership by the same party, may be rejected under the doctrine of double patenting and/or the elimination of such claims from all but one application, pa tent, or reexamination of a patent may be required in the absence of good and sufficient reason for their retention during pendency in more than one application or ongoing reexamination. (c) If an application and at least one other application or patent undergoing re examination name different inventors, are owned by the same party, and contain conflicting c laims, and there is no statement of record indicating that the claimed inventions were commonly owned or subject to an obligation of assignment to the same party at the time th e later invention was made, the Office may require the assignee to state whether the cla imed P-43 7 UNITED STATES PATENT AND TRADEMARK OFFICE inventions were commonly owned or subject to an obligation of assignment to the same party at the time the later invention was made, and, if not, then indicate which named inventor is the prior inventor. Even if the claimed inventions were commonly own ed, or subject to an obligation of assignment to the same party, at the time the later invention was made, the conflicting claims may be rejected under the doctrine of double pa tenting in view of such commonly owned or assigned applications or patents undergoing reexaminations. P-43 8 UNITED STATES PATENT AND TRADEMARK OFFICE Section 1.556: In the examination of claims of a reexamination proceeding, it is important for the examiner to be aware of conflicting claims that are present in other pending pro ceedings or in existing patents. In this context, claims are understood to conflict where a claim in the ongoing reexamination proceeding is not patentably distinct from a claim in a patent or another pending proceeding. Charts I-A, I-B, II-A, II-B, III-A, and III-B of MPEP 804 provide an overview of the treatment of proceedings having conflicting claims. To help bring about an early awareness on the part of the examiner of the existe

nce of conflicting claims, it is proposed that new section 1.556 be added. New section 1.556 would require (pursuant to subsection 1.556(a)(1)) that the Patent Owner in a su bject ongoing reexamination notify the Office of any and all pending applications, pat ents or other ongoing reexaminations that (1) contain claims conflicting with the subjec t ongoing reexamination, where (2) the subject ongoing reexamination and the other applica tions, patents or reexaminations have at least one common inventor, and/or are owned by the same party. This notification will (a) be made within a set time period, (b) ide ntify the conflicting claims and (c) provide a legible copy of all conflicting claims. A s imilar requirement for applications is contained in section 1.78. Although the notification of such information to the Office is currently required by sections 1.555 and 1.56, proposed subsection 1.556(a)(1) would impose additional requirements including: (1) that the notification should be made as early as is po ssible in the prosecution of a subject ongoing reexamination, and (2) that the notificat ion should explicitly identify the conflicting claims between the subject ongoing reexamination and the applications, patents and/or other ongoing reexaminations. Such early and explicit notification is deemed necessary to reduce the burden on the Office because of the rising number of applications being filed by same inventors, or o wned by the same party, many of which are not referenced to one another by way of a prio rity claim, or otherwise. During the examination, the patent examiner has a responsib ility to evaluate ongoing reexaminations for the existence of potential rejections based on another proceeding (application or reexamination) or patent having conflicting c laims (e.g., 35 U.S.C. 102(a),(e),(f) and (g), and double patenting). Identification o f applications, patents or other ongoing reexaminations, where the applications or patents have (1) at least one common inventor, or are commonly owned, and (2) conflictin g claims with the subject ongoing reexamination, would greatly assist the Office i n making a more complete and accurate analysis of these issues early on in the prosecution of the subject ongoing reexamination. Section 1.556(a)(1)(i)(A) sets forth alternative formats for making the required notification, which results in a flexible standard in that Patent Owners can infor m the Office of applications, patents, or reexaminations containing conflicting claims with a subject ongoing reexamination. Patent owner may do so by way of any of (1) inclu sion of

the information in an information disclosure statement (IDS) complying with 37 CFR 1.555; (2) submitting the information in a separate notification letter whic h would have an appropriate heading (e.g., a Notification of Conflicting Claims Pursuant to 37 CFR 1.556(a)(1) ) so that the examiner can easily recognize the listing as being f iled P-43 9 UNITED STATES PATENT AND TRADEMARK OFFICE under 37 CFR1.556(a) (1); (3) providing the information in a (newly added) backg round section of the patent undergoing reexamination or amending an existing backgroun d section to contain the information; or (4) in a terminal disclaimer complying wi th 37 CFR 1.321 (e.g., which addresses an obvious type double patenting rejection of the c laims based on a conflicting patent). The notification should, pursuant to section 1.556(a) (1)(i)(B), identify each application, patent, or ongoing reexamination by (1) the application number, pat ent number, or reexamination control number, respectively, (2) the first named inven tor, and (3) the filing date of the application or reexamination proceeding, or the issue date of the patent. The notification should also, pursuant to section 1.556(a)(1)(i)(C), explicitly id entify which claims in the subject ongoing reexamination conflict with which claims in the application(s), patent(s), or other ongoing reexamination(s). For example, claim 1 in the subject ongoing reexamination conflicts with claim 4 in application number 99/99 9,999 and claim 2 in the ongoing reexamination of U.S. Patent 9,999,999 in reexaminati on control number 90/999,999. Pursuant to section 1.556(a)(1)(i)(D), Patent Owner should also provide a legibl e copy of all conflicting claims in the applications, patents, or other ongoing reexaminat ions. The source of the conflicting claims, i.e., the specific pending application or reex amination, or the patent, should be identified on each copy. In addition, section 1.556(a)(1)(ii) states that Patent Owners should provide th e notification of such applications, patents, or ongoing reexaminations within two months of the date of the order to reexamine, where there exists, at the time of the re examination request, any such applications, patents, or reexaminations with conflicting clai ms. Section 1.556(a)(1)(iii)(A) states that Patent Owners are also under a continuin g duty to identify conflicting claims between the subject ongoing reexamination and pendin g applications and reexaminations, where the subject ongoing reexamination is comm only owned, or there is at least one common inventor, with the pending applications o r the

patent being reexamined for: (1) newly filed applications and requests for reexa mination containing conflicting claims; (2) any new claim(s) or amended claim(s) filed in the subject ongoing reexamination that now conflict with the pending applications or reexaminations; and/or (3) amended or new claims submitted in pending applicatio ns or reexaminations that come in conflict with the claims in the subject ongoing reexamination. This duty on Patent Owner, pursuant to 1.556(a)(1)(iii)(B), is continuing, and it runs until such time that the notification of intent to issue a reexamination certifi cate pursuant to 1.570 is mailed in the subject ongoing reexamination. In addition, pursuant to section 1.556(a)(1)(iii)(C), an updating notification s hould be filed in the subject ongoing reexamination as soon as possible. The Patent Owner s P-43 10 UNITED STATES PATENT AND TRADEMARK OFFICE notification is not be filed later than (1) two months from the date of the orde r to reexamine, or (2) one month from the date of the amendment that created the new conflicting claims, whichever is the later of the two. It is to be noted that ba re notification of the information within 2 months of the order is not a Patent Owner s statement under 1.530 and, as such, it will not give rise to the right of a requester reply under 1.535 . If, however, the notification goes beyond bare notification as to the existence of the information, then the notification will be construed as a Patent Owner s statement under 1.530 it will give rise to the right of a requester reply under 1.535. Section 1.556(a)(1)(iii)(D) states that Patent Owners are to also state that the updating notification of conflicting claims is being filed pursuant to section 1.556(a)(1 )(iii)(A) and are to identify the appropriate subparagraph(s) (1)-(3) of paragraph (a)(1)(iii) (A) that apply to the updating notification. For example, The updating notification is mad e pursuant to 37 CFR 1.556(a)(1)(iii)(A) and the applicable subparagraph is (a)(1)(iii)(A)(2) of this section. Section 1.556(a)(1)(iv)(A) provides that failure to file the notification of con flicting claims within the time periods set in 1.556(a)(1)(ii) and (iii)(A) will permit th e next Office action (in the reexamination proceeding) to be made final where a rejecti on is newly made based on at least one of the applications, patents or ongoing reexami nations identified in the untimely notification. For example, an examiner can make the n ext Office action final, even if there is no amendment to the claims, if the only ne w ground of rejection is an obvious double patenting rejection based on a patent identified in the untimely notification. Likewise, where a notification is timely, but incomplete

as to any provision of 1.556, if the notification is subsequently completed after the time periods set in subsections (a)(1)(ii) and (iii)(A), then the next Office action may be m ade final where the rejection is newly made based on at least one of the applications, pat ents or ongoing reexaminations identified in the notification as completed. Furthermore, pursuant to section 1.556(a)(1)(iv)(B), a notification filed after prosecution on the merits is closed in the proceeding (e.g. the proceeding is under appeal, the last Office action is a final action, a notice of intent to issue reexamination certi ficate is issued, or an Action Closing Prosecution under 1.949 has been issued) will not b e considered as a matter of right unless a petition under 1.182 is granted. Section 1.556(a)(1)(v) provides that Patent Owners should submit the listing in a format that would permit compliance with 1.59 to support any future petition tha t might be filed to expunge information that is contained in the listing of the notifica tion. Section 1.556(a)(2) provides that deletion of conflicting claims may be required from all but one pending application, ongoing reexamination, or patent (via disc laimer). This provision was previously contained in 1.78(b), and applied to both subject pending applications and ongoing reexaminations. In addition, 1.556(a)(2) affirmatively states that such conflicting claims may be rejected (e.g., under 35 U.S.C. 102(a), (e), (f) and (g), and as double patenting) based upon the conflicting claims where such is appropr iate. P-43 11 UNITED STATES PATENT AND TRADEMARK OFFICE Section 1.556(b) is to clarify that the prior art exception under 35 U.S.C. 103( c) does not apply to double patenting rejections. See the change proposed for 1.78( c) in this rule package. P-43 12 UNITED STATES PATENT AND TRADEMARK OFFICE Proposed new rule: 37 CFR 1.556. Notification of proceedings containing claims conflicting with cla ims of ongoing ex parte or inter partes reexaminations (a)(1) Conflict of Claims in Different Files: Where a subject ongoing reexaminat ion of a patent contains claims conflicting with pending applications, patents, or other ongoing reexaminations of a patent, and the applications or patents have at least one co mmon inventor with, or are owned by the same party as, the patent being reexamined, t he patent owner has a duty to notify the Office of all such applications, patents, or reex aminations. (i)(A) Patent owner may provide a notification of such other applications, paten ts,

or reexaminations in an information disclosure statement complying with 1.555, in a separate notification letter, by amending the background section of the patent b eing reexamined, or by way of a terminal disclaimer complying with 1.321 which addres ses the conflicting claims. (B) Patent owner should identify each pending application, patent, or ongoing reexamination by (1) the application number, patent number, or reexamination con trol number, respectively, (2) the first named inventor, and (3) the filing date of t he application or reexamination proceeding or the issue date of the patent. (C) For each claim in the subject ongoing reexamination , the notification should explicitly identify the conflicting claims (if any) in each application, patent, or reexamination listed. (D) Patent owner should also provide a legible copy of all conflicting claims. (ii) Patent owner should submit, in the subject ongoing reexamination, the notification of all such applications, patents, or other ongoing reexaminations within two months of the date of the order to reexamine if any such other applications, pat ents, or reexaminations with conflicting claims exist at the time of the reexamination re quest. (iii)(A) Updating Notification: Patent owner has a continuing duty to identify t o the Office conflicting claims between the subject ongoing reexamination and pend ing applications and other ongoing reexaminations in any instance(s) where the paten t being reexamined via the ongoing reexamination is commonly owned with the pending applications or patents being reexamined, or there is at least one common invent or for both. This duty applies for: (1) newly filed applications and newly requested reexaminations containing conflicting claims; (2) any new claim(s) or amended claim(s) newly submitted in the subject ongoing reexamination that now conflict with other applications or requests for reexamination of a patent; and/or (3) any new claim(s) or amended claim(s) newly submitted in other applications or reexamination of a patent that come in conflict with the claims in the subject ongoing reexamination. (B) The continuing duty in paragraph (a)(1) (iii)(A) of this section runs until such time that the notification of intent to issue a reexamination certificate pursua nt to 1.570 is mailed in the subject ongoing reexamination. P-43 13 UNITED STATES PATENT AND TRADEMARK OFFICE (C) Where the requirement for an updating notification is triggered pursuant to patent owner s continuing duty under paragraph (a)(1) (iii)(A), patent owner shoul d submit the updating notification as soon as possible, but not later than (1) two months of the date of the order to reexamine, or (2) 1 month from the date of the amendmen t that created the new conflicting claims, whichever is the later of the two. (D) The updating notification should clearly state that the updating notificatio

n of conflicting claims is being filed pursuant to paragraph (a)(1)(iii)(A) of this s ection and should identify the appropriate subparagraph(s) (1)-(3) of paragraph (a)(1)(iii) (A) that apply to the notification. (iv) Failure to file the notification of conflicting claims within the time peri ods set in subsections (a)(1)(ii) and (iii)(A) of this section will permit the next Offi ce action to be made final where a rejection is newly made based on at least one of the applicat ions, patents or ongoing reexaminations identified in the untimely notification. Where a timely filed notification is incomplete as to any provision of this section, and the no tification is subsequently completed after the time periods set in subsections (a)(1)(ii) and (iii)(A) of this section, the next Office action may be made final where a rejection is newl y made based on at least one of the applications, patents or ongoing reexaminations ide ntified in the notification as completed. (A) If an updating notification is being filed prior to prosecution being closed, patent owner should clearly state that the an updating notification is b eing made in accordance with subsection (a)(1)(iii) of this section and that none of the information provided could have been submitted in the time limit set in subsecti on (a)(1)(ii). (B) If an updating notification is being filed after prosecution is closed, patent owner shall file the updating notification with petition under 1.182 with the required petition fee. Patent owner should clearly state that an updating notification is being made in accordance with subsection 1.78(a)(1)(iii) of this section and that none of the information provided could have been submitted in the time limit set in subsection (a)(1)(ii). (v) Patent Owner should file the notification of such other applications, patent s or reexaminations in a form that will allow for compliance with 1.59 should Patent Owner later decide to file a petition to expunge the information. (a)(2) Claims in a subject ongoing reexamination that conflict with the claims o f applications, patents, or other reexaminations, where there is at least one comm on inventor, or ownership by the same party, may be rejected based upon the conflic ting claims where appropriate and/or the elimination of such claims from all but one application, patent, or ongoing reexamination may be required in the absence of good and sufficient reason for their retention in more than one of the proceeding during the pendency of the more than one proceeding. P-43 14 UNITED STATES PATENT AND TRADEMARK OFFICE (b) If an ongoing reexamination and at least one application or other ongoing reexamination name different inventors, are owned by the same party, and contain

conflicting claims, and there is no statement of record indicating that the clai med inventions were commonly owned, or subject to an obligation of assignment to the same party at the time the later invention was made, then the Office may require the assignee to state whether the claimed inventions were commonly owned or subject to an obliga tion of assignment to the same party at the time the later invention was made, and, i f not, then state which named inventor is the prior inventor. Even if the claimed inventions were commonly owned, or subject to an obligation of assignment to the same party, at the time the later invention was made, the conflicting claims may be rejected under the d octrine of double patenting in view of such commonly owned or assigned applications or pate nts undergoing reexamination. P-43 15 UNITED STATES PATENT AND TRADEMARK OFFICE MONITOR PRACTITIONER ADHERENCE TO RULES OF PRACTICE: PERIODIC CERTIFICATION FOR REGISTERED PRACTITIONERS. Action: Require periodic testing by way of re-certification of registered practitioners for continued authorization to participate in the patent application examining proce ss to assure a level of quality. Background Information: Currently, most registered attorneys and agents are registered upon passing the registration examination. Upon becoming registered, there is no requirement for periodic training/testing to ensure that the practitioner maintains an expected level of competency in law, regulations, and practices and procedures. Any further training received may be on the job, continuing legal education for the attorney s, adverse decisions on petitions, etc. Portions of the patent application process have changed significantly in recent years and are likely to continue changing. Though practitioners are ethically prohibited from handling a legal matter witho ut preparation adequate in the circumstances, this has not prevented members of the public from criticizing the competence of practitioners. Moreover, the ethics rules have not compelled practitioners to promptly become and remain familiar with changes to patent application practices and procedures. Also currently, the registration examination is waived for former patent examiner s who actively served for at least four years in the patent examining corps for fo ur and separate from the Office without an legal competence issue. For some, the more advanced training given to patent examiners is the last formal training the y received. There is no periodic testing/training that ensures that the examiners maintained an expected level of competency in law before the registration examination is waived. Moreover, there is no requirement for periodic training/testing to ensure that these former examiners, after becoming registere d practitioners, maintain an expected level of competency in law, regulations, and

practices and procedures. Also currently, foreign patent agents are registered on the basis of reciprocity with their foreign patent office. By long-standing custom, they are not required to t ake and pass the registration examination. Moreover, there is no requirement for periodic training/testing to ensure that these foreign patent agents, after beco ming registered practitioners, maintain an expected level of competency in law, regulations, and practices and procedures. Experience with practitioners who are removed from the roster for failure to repl y to a letter addressed to them by OED shows that many continue to practice before the Office despite the removal of their name. Options Considered: To assure the public and malpractice insurers that registered practitioners main tain their competence and proficiency, the Office should create a series of one or more tes ts that enable practitioners to demonstrate their legal competencies related to the exam ination process. The test would be pushed over the Internet, and consist of multiple cho ice P-51 1 UNITED STATES PATENT AND TRADEMARK OFFICE and/or true/false questions. Links would be provided to locations where the answ ers to each question, e.g., the MPEP, OG notices, etc. can be found. The test would be designed to confirm knowledge of new practice and procedures practitioners must know, as well as those that examiners must also know. A group of questions could be ba sed upon a narrative containing new information that the USPTO wants to deliver. To pass the test, all questions must be correctly answered. A registered practitioner wo uld have one year in which to pass the test. The practitioner could take the test repeate dly and as often as desired until the test is passed during the one-year period. Practition ers failing to take or pass the test would be administratively suspended from practice before t he Office. It is estimated that up to 1%, (260) of registered practitioners may not take or pass the test. The questions may be developed in-house, by a contractor, or a combination thereof. The attorney filling the one new FTE position to coordinate and update the development of questions for examiner certification/recertification would perfor m the same functions regarding the test for practitioners. Some questions posed to reg istered practitioners would be the same as those used to certify or re-certify patent ex aminers at grades 13 or higher. The test would be vetted by Office personnel, and administe red by the Office of Enrollment and Discipline (OED). The results from the web-based te st

would be instantly available, and electronically record in OED. Option 1: To maintain registration, Office would require periodic testing of all registered practitioners, regardless of how they became registered, or whether they are registered as an agent or attorney. The registered practitioners must p ass the test, which addresses their expected level of competency in law, regulations , and practices and procedures. The test could include frequently encountered problems, recent case law, new Office policies and procedures, etc. Option 2: To provide registered practitioners with an opportunity to be certified the Office as having current expertise in patent practice, Office would provide, but not require the practitioners to take, a periodic test covering, in greater detail, expected level(s) of competency in law, regulations, and practices and procedure s. Costs for the test would be borne by the practitioners taking the test. Option 3: A combination of Options 1 and 2. Option 1 could be a basic test required of all registered practitioners. Registered practitioners could take additional tests addressing more issues in greater detail to obtain additional certification of expertise. Costs for the tests would be borne by the practition ers taking the tests. Option 4: The test(s) would be made available on paper for those registered practitioners unable or unwilling to take the test at a Web site. All additional labor and material costs incurred for administering a paper test would be borne by the practitioners taking the test in that manner. It is estimated that as many a s 3000 practitioners (approximately 10.5 percent of registered practitioners) may have to take the test by paper. Option 5: Administratively suspended practitioners would be precluded from practicing before the Office. A rule should be adopted specifying that administratively suspended practitioners cannot practice before the Office, and the rule should be enforced. A rule should be adopted providing that practitioners would be reinstated upon passing the examination, and paying any required fees. P-51 2 UNITED STATES PATENT AND TRADEMARK OFFICE USPTO Recommended Course of Action: Option 2 would be recommended if insurance carriers would provide an economic incentive to both attorneys and agents. At this time, no communication has occur red with the insurance carriers. If there is a decision to proceed with this initiat ive, communication with insurance carriers will occur. If the carriers will not provi de an economic incentive for both attorneys and agents, then Option 3 is recommended. Option 3, by combining Options 1 and 2, would provide basic assurance to the ent ire public regarding the competencies of all registered practitioners, and provide t he practitioners with an opportunity to demonstrate refined legal skills to their malpractice carriers. Option 4 would enable the Office to reach registered practitioners lacking acces s to the Internet. Option 5 would be a necessary to make the need to pass the test effective.

Timing: 1 to 2 years. Risks: Opposition from registered practitioners. Return on investment: Estimated investment: $200,000 cost to develop questions and test the program. Other investments include three additional FTE positions in OED for attorneys to investigate misconduct by many of the estimated 260 administratively suspended practitioners who fail to pass or refrain from taking the test, and three new FT E positions in the Solicitor s Office to enforce the suspension through disciplinary action. Further, it is anticipated that two FTE positions for support personnel must be added to administer the tests for examiners and practitioners, and conduct writt en communication with practitioners taking paper tests. A new FTE position for an attorney to coordinate and update the development of questions from within the Office and from any contractor(s) could be satisfied by the same attorney provid ing the same functions regarding the test for patent examiners. Additionally, attorn eys from several organizations in the Office, including OED, would be used to vet th e questions. Estimated benefits: Practitioners must become aware of and competent in new practices and procedures, learn which old procedures are no longer followed, and possibly reduce both the number of petitions filed and the pendency of applicati ons. The Office would receive fees charged to take the test(s) P-51 3 UNITED STATES PATENT AND TRADEMARK OFFICE MONITOR PRACTITIONER ADHERENCE TO RULES OF PATENT PRACTICE: DISCIPLINARY INITIATIVES Action: Establish procedures for referring to the Office of Enrollment and Discipline re gistered attorneys and agents found to have engaged in inequitable conduct, who continue to practice before the Office despite being administratively suspended, or who allegedly pro vide frivolous replies to Office actions. Background Information: Inequitable conduct The current Disciplinary Rules prohibit a practitioner from knowingly violating o r causing to be violated the requirements of 37 CFR 1.56. Final decisions by court s that a practitioner has engaged in inequitable conduct in obtaining a patent, e.g., b y withholding material information, usually occur more than five years after the c onduct first occurred. By statute, 28 U.S.C. 2462, a disciplinary action cannot be brou ght against such practitioners unless the action is taken within five years from the date when the event first occurred. See Johnson v. SEC, 87 F.3d 484 (D.C. Cir. 1996); 3M Company v. Browner, 17 F.3rd 1453 (D.C. Cir. 1994).

A new section for the Patent Statute has been drafted to codify the doctrine of inequitable conduct and narrow the scope of conduct constituting inequitable con duct by requiring intent. The number of cases involving inequitable conduct by regist ered practitioners is expected to be few. However, those few cases should be subject to investigation and, where appropriate, disciplinary action. The draft provides an opportunity to set a new statute of limitations for addressing court decisions containing a factual finding that a practitioner engaged in inequitable conduct in obtaining a patent. Unless named as an owner of the patent, practitioners often are not named as part ies to the civil actions in which a patent is alleged and found to have been obtaine d by inequitable conduct. Accordingly, most court decisions contain only factual find ings regarding the conduct of the practitioner, but do not enter finding as a matter of law against the practitioner. Only in suits naming the practitioner as a party would a finding of inequitable conduct as to the practitioner be a conclusion of law. Ongoing practice by administratively suspended practitioners. Currently, there is no rule specifically proscribing practice before the Office b y administratively suspended practitioners. Names of administratively suspended practitioners could be issued to the patent examining corps, and examiners could monitor and report to OED those practitione rs continuing to practice before the Office. Frivolous filings Currently, it is being proposed that applicants provide search reports to be used by examiners to examine patent applications. To the extent that the report indicate s references cited therein anticipates or renders obvious the claimed invention, a filing addressing the report would be required to advance the examination of the applic ation. P-51a 1 UNITED STATES PATENT AND TRADEMARK OFFICE A practitioner fs frivolous filing addressing the report, however, would not advan ce the case. Currently, there is no disciplinary rule defining a frivolous argument , or proscribing filing of only frivolous arguments. Also, current disciplinary rules address frivolous actions in an inter partes, as opposed to ex parte context. There are currently seven technology examining centers, which absorbed about 20 examining groups. It is estimated that each technology examining center would ha ve about six practitioners per year who repeatedly submit frivolous filings to the Office. Examiners could monitor and report, though their supervisors, to OED those practitioners filing frivolous replies. Options Considered: To assure the public, Congress, and the Office that procedures are in place to a ddress

inequitable conduct by practitioners, continued practice by administratively sus pended practitioners, and practitioners filing frivolous replies, the Office should ado pt rules setting out necessary procedures and definitions for appropriate investigations and disc iplinary action. Inequitable conduct Option 1: Provide in the new statutory section that final decisions containing fi ndings that a practitioner engaged in inequitable conduct be referred to the Office of Enrollment and Discipline. Further provide in the statutory section that no disciplinary action can be brought against a practitioner unless the action is t aken with in five years from the date of when a final decision is entered by a court of record, and the decision holds a patent unenforceable for inequitable conduct an d contains a factual finding of inequitable conduct by the practitioner. Option 2: In matters where the practitioner was not a named party to the suit, an d there was a factual finding that the practitioner engaged in inequitable conduct , provide by rule for investigation and opportunity to show or come into complianc e with disciplinary rules. Further provide that where appropriate, disciplinary ac tion may follow the investigation. Option 3: In matters where the practitioner is a named party to the suit, and the re is a conclusion of law that the practitioner engaged in inequitable conduct, provide by rule for entry of an order suspending the practitioner in the interim, and entry of an order to show cause why the practitioner should not be suspended or excluded. Ongoing practice by administratively suspended practitioners. Option 4: Adopt a rule specifically proscribing practice before the Office in any patent case by an administratively suspended practitioner. Option 5: Enforce the rule through investigation, and any necessary follow-up, including warning or disciplinary action. Frivolous replies Option 6: Introduce into the newly proposed Rules of Professional Conduct a rule defining a frivolous reply, e.g., knowingly advancing an argument that is unwarr anted under existing law, or that is not supported by good faith argument for an exten sion, modification, or reversal of existing law; and adopt a disciplinary rule proscri bing filing a frivolous reply. Option 7: Enforce the rule through investigation, and any necessary follow-up, including warning or disciplinary action. P-51a 2 UNITED STATES PATENT AND TRADEMARK OFFICE Option 8: Introduce into the newly proposed Rules of Professional Conduct a rule specifically prohibiting the filing of a frivolous reply. USPTO Recommended Course of Action: Options 1-3 would provide a means for identifying and acting upon court decision s containing a finding that a registered practitioner engaged in inequitable condu

ct. Options 4-5 would provide a means for addressing and impeding unauthorized pract ice of law before the Office by administratively suspended practitioners. Options 6-8 w ould provide procedures that will cause a practitioner to cease filing of frivolous r eplies. Timing: Options 1 - 3 depend on the adoption of the statutory provision. Options 4 - 7 could take 6 C12 months. Risks: Opposition from registered practitioners. Return on investment: Estimated investment: The investments would include three additional FTE positio ns in OED for attorneys to investigate misconduct. This includes investigations of practitioners found by a court to have engaged in inequitable conduct, practitio ners among the estimated 260 administratively suspended practitioners who continue to practice before the Office, and practitioners who file frivolous replies. It als o includes three additional attorneys needed in the Solicitors Office to conduct disciplinary proceedings. The three attorneys for OED and three attorneys for the Solicitors Of fice are the same new positions that were previously referenced in the initiative sty led Continuing certification for registered practitioners. Beyond inflationary costs, no additional cost is expected for an investigation and disciplinary proceeding. Estimated benefits: Public confidence in the patent system and practitioners may increase by conducting investigations and, where appropriate, taking disciplinar y action against practitioners engaging in inequitable conduct. The number of occasions involving continued practice before the Office in patent matters by an administr atively suspended practitioner and the filing of frivolous replies by registered practit ioners may be decrease inasmuch as the practitioners can be reasonably expected to reconsid er whether they willing to risk loss or suspension of their license to practice bef ore the Office. Investigating, and where necessary, taking disciplinary action for filin g frivolous replies should reduce the number of such replies, leading to reduced pendency of applications in examination. P-51a 3 UNITED STATES PATENT AND TRADEMARK OFFICE Frivolous Inventions Action: The Office should seek legislation requiring that the Director order at his own initiative reexamination of patents claiming frivolous inventions, and empowering and requi ring the Director to collect certain funds from the patent owner as a sanction for pa tenting or acquiring a frivolous invention. Background Information:

Currently, 35 U.S.C. 303(a) provides the Director with the option of ordering gon his own initiative h reexamination of patents where there is a substantial new questio n of patentability raised by patents and publications. There is no provision compelli ng a patent owner to pay the reexamination fee where the Director initiates reexamina tion. A patent may claim both frivolous and non-frivolous inventions. This addresses patents only claiming frivolous inventions. The determination that a patented invention is frivolous is confirmed only if no patentable claim is present in th e patent at the end of the reexamination proceeding. Absent embarrassment arising from criticism, there is little to motivate a person or party patenting a frivolous invention to submit the patent to reexamination or d edicate the patent to the public. A third party cannot reasonably be expected to pay the fees required to obtain reexamination of another patent for a frivolous invention. Pe rhaps only a corporation, concerned with its public image, may dedicate to the public a patent it obtains on a frivolous invention. Patents for frivolous inventions detract from public confidence in the patent sys tem. The examiner who issues the patent probably could not be disciplined if the qual ity of work represented by the patent is an isolated instance in the examiner fs work. Us e of the disciplinary system by OED to discourage practitioners from patenting frivol ous inventions would require the Office to first take disciplinary action against th e examiner. The latter is unlikely inasmuch as OED must bring disciplinary action within five years of the occurrence of the misconduct, i.e., granting of the pat ent. A disciplinary action against the examiner, including appeals and suits, may not b e resolved in sufficient time to permit OED to conduct an investigation and initia te a disciplinary proceeding. The patent owner, as opposed to the practitioner representing the patent owner, i s the appropriate party to be sanctioned by the Office. The patent owner/patentee is t he principal, whereas practitioner was the owner/patentee fs agent. The patent owner may resolve displeasure with the practitioner by resort to legal remedies. Options Considered: To assure the public and Congress that patents claiming only frivolous invention s do not remain in effect, 35 U.S.C. 303 should be amended to include a new subsection (b ) that requires the Director to initiate reexamination and impose financial sanctions w here a frivolous invention was patented, and no patentable claim remained in the patent at the end of the reexamination proceeding. Current (b) and (c) should be redesignated (c) and (d), and reference in current subsections (b) and (c) to gsubsection (a) h should b

e changed P-51a 4 P-51a UNITED STATES PATENT AND TRADEMARK OFFICE to gsubsections (a) or (b). h Review of the Director fs action and imposed sanction m ay be had by way of suit in a United States District Court. Option 1: (b) The Director, on his own initiative, and at any time, may determine that a patent appears to claim a frivolous invention whether or not a substantial new question of patentability is raised by patents and publications discovered by hi m or cited under the provisions of section 301 of this title. When the Director finds that the patent appears to have been obtained on grounds the applicant knew or should have known were frivolous, the Director shall order reexamination of the patent, and direct the patent owner of record to deposit with the Office a sum equal to the reexamination fee established pursuant to section 41 of this title, and the appl ication fee established pursuant to section 41 had the patent been filed as an applicati on on the day the reexamination was ordered. The patent owner shall deposit the sum within days of the date of the order. If, at the conclusion of the reexamination ordered by the Director, no patentable claim remains in the patent, the sum depo sited with the Office shall be forfeited as a sanction. If any claim is found patentab le, the Director shall refund the sum deposited with the Office with interest. Option 2: Adopt a rule defining frivolous invention, e.g., an article of manufact ure, composition, or method that is well known or widely known for which there may or may not be a description in a printed publication. USPTO Recommended Course of Action: Providing statutory authority to reexamine frivolous inventions and impose a fin ancial sanction provides means for removing patents that should not have been issued, a nd sanctions to discourage efforts to patent frivolous inventions. Timing: Depends on the adoption of a statutory provision. Return on investment: Estimated investment: Costs not otherwise available when the Director initiates reexamination are recovered. Also, the application fee is again collected. Addit ional costs may be incurred in defending any civil action brought following a determin ation or final decision in a reexamination proceeding. Estimated benefits: Filing applications for frivolous inventions may decrease du e to the imposed financial sanctions if one succeeds in obtaining a patent on a frivo lous invention. Also, faced with malpractice actions following adverse reexamination and payment of sanctions may give practitioners reason to pause and advise clients b efore continuing to represent applicants seeking to patent frivolous inventions.

5 UNITED STATES PATENT AND TRADEMARK OFFICE ELIMINATION OF THE INTERFERENCE BAR CREATED BY APPLICATION PUBLICATIONS Action: The Office should delete 35 U.S.C. 135(b)(2), which creates a bar to claims that are not copied within one year of the claims being published in a U.S. application publi cation or in a WIPO publication of an International Application. Background Information: The American Inventors Protection Act of 1999 (AIPA) added a new provision, 135( b)(2), that requires applicants to copy a claim within one year of the claim being publ ished in a U.S. patent application publication or an international application publication by WIPO in any language. This bar only applies to applications filed after the date of publ ication. A publication may not include patentable claims or claims supported by an enabling disclosure in the patent application because the publication includes claims which have not been examined. A later applicant should not be forced to copy these claims within a y ear of publication of the application, but should be allowed to wait until the claims a re found to be patentable and are included in a granted patent. In addition, the requirement to copy claims within one year of an international application not published in English is unfa ir and creates a heavy burden on applicants to translate claims of all international applications published in a language other than English. Furthermore, this provision is difficult to adminis ter as the bar only applies to applications filed after the date of publication. Therefore, the bar might apply to a continuing application where it did not apply to the parent application. To protect against future possible bars under 135(b)(2), it is anticipated that applicants will file applications with a large number of claims, thus further draining the Office s sca rce resources. Without revision, applicants would be required to review each application prior to issue to determine if additional claims must be presented to avoid a bar being created ba sed on a publication that occurred after filing of the application and prior to patenting of the application. This is because a divisional, continuation or reissue filing could be subject to a 135(b)(2) bar based on such publications but the identical claims would not be s ubject to the bar if pursued via a request for continued examination. Thus, the law today places a premium on procedure over substance from the point of view of applicants and pla ces a large burden on the Office with little (if any) benefit. The Office and the public have not yet been significantly impacted by the creati

on of 135(b)(2) as no WIPO publications of International Applications filed after Nove mber 29, 2000, have been in existence for more than a year and less than 10,000 U.S. pate nt application publications are more than one year old. The negative impacts on the system will increase dramatically within the next few months. P-52 1 UNITED STATES PATENT AND TRADEMARK OFFICE Options Considered: Option #1: Delete 35 U.S.C. 135(b)(2). Description of Option: Introduce legislation to delete 35 U.S.C. 135(b)(2). Advantages: By deletion of 135(b)(2), the workload of the Office would be reduced in the following ways: (1) elimination of the need to administer and enf orce a complex provision; (2) avoidance of future increases in the number of interferen ces declared; (3) elimination of the need for extensive training on this provision; and (4) el imination of the strong incentive for applicants to file applications with a greater number of cl aims to avoid future bars. In addition, applicants would be relieved of the heavy burdens of t ranslating the claims of all International Applications not published in English, the need for extensive use of continued examination filings, and the need to review publication claims in a ddition to patented claims. Advantages: This option would greatly simplify the administration of 135(b)(2) f or Option #2: Modify 35 U.S.C. 135(b)(2) to exclude the requirement that the applic ation be filed after the publication date of the application publication in order for the bar to apply, and include the requirements that (1) the International Applications must be publish ed in English or an English language translation must be provided, and (2) an application publ ication must comply with 35 U.S.C. 112, first and second paragraphs, in order for the bar to attach. the Office by eliminating the requirement that the application must be filed aft er the publication in order for the bar to apply. The elimination of this requirement p uts all pending applications on the same footing in that all applications, no matter when filed, have one year to make the interference claim from the publication date of the application publ ication. The additional requirement that the International Application must be published in E nglish, or provide an English language translation, eliminates the need for the public and for examiners to get a translation of the claims in order to see if the bar is applicable. The additional requirement that the bar would only apply if the application publication complie d with 35 U.S.C. 112 would prevent claims that are not enabled, or not definite, from barr ing other applicants to that claimed subject matter, and would assist in limiting the numb

er of claims originally filed in patent applications. The 112 requirement could also be imple mented through examination policy procedures instead of seeking a legislative change (s ee Option #3), but it would leave the Office exposed to a court challenge on such procedur es. Option #3: Make no change to 35 U.S.C. 135(b)(2), discourage the filing of more claims by reform of the Office s fee structure (see the proposal to limit the number of c laims) and require, via policy implementation, compliance with 35 U.S.C. 112, first and sec ond paragraphs, for application publications in order for the bar under 135(b)(2) to apply. Advantages: If the fees are set at a high enough level (not cost-recovery, but e nough to modify applicant behavior), this should cause applicant to file applications containing only a reasonable number of claims. Creating this new fee structure for claims, stric tly speaking, 2 P-52 UNITED STATES PATENT AND TRADEMARK OFFICE does not limit the number of claims that an applicant may submit for examination . It simply requires those whose applications place an inordinate burden on the Office s exami nation resources to pay inordinately high fees to have the application examined. In add ition, the policy that the bar would only apply if the application publication complied wit h 35 U.S.C. 112 would prevent claims that are not enabled, or not definite, from barring oth er applicants to that claimed subject matter, and would assist in limiting the number of claim s originally filed in patent applications. USPTO Recommended Course of Action: Pursue option 1. Details: The USPTO should seek deletion of 35 U.S.C. 135(b)(2). Return on Investment: Estimated benefits: Implementing this initiative would permit the Office to not further increase its workload by administrating such a complex provision of the law. Sec tion 135(b)(1) will still be retained to provide some relief to patent owners from th eir competitors declaring interferences after one year from the issue date of the patent. The pr otection provided by 135(b)(2) to owners of application publications is flawed in that th ere are easy ways to avoid the application of that bar (e.g., by filing applications with man y claims), and it will force applicants to file applications even earlier, which may be before their inventions are truly enabled, in order to avoid losing possible patent rights. In turn, thi s could result in lower quality patent applications being filed and prosecuted. 3 P-52 UNITED STATES PATENT AND TRADEMARK OFFICE TECHNICAL CORRECTION IN 35 U.S.C. 119(e)(1) Action:

The requirement that an unintentionally delayed priority claim to an earlier fil ed provisional application under 35 U.S.C. 119(e) only be accepted by the Office during the pen dency of the nonprovisional application should be eliminated. Background Information: Currently, the practice under 119(e) for accepting an unintentionally delayed pr iority claim to an earlier filed provisional application is inconsistent with the practices u nder 119(a)-(d) and 120. The Office cannot accept unintentionally delayed priority cla ims under 119(e) if the application that is claiming the benefit is no longer pendin g. On the other hand, the Office may accept unintentionally delayed priority/continuity cl aims under 119(a)-(d) and 120 even if the application that is claiming the benefit of an ear lier filed application is no longer pending. Thus, the inconsistency causes a trap for appl icants that cannot be remedied under the current statute. The proposed amendment to 119(e)(1) would provide consistent procedures for acce pting unintentionally delayed priority/continuity claims. Applicants would avoid losin g the right to claim an earlier filed provisional application. For example, if the nonprovisona l application has been issued as a patent, applicants may correct the patent by submitting a r equest for a certification, or an amendment to the specification made via a reissue applicati on, accompanied by a petition to accept an unintentionally delayed priority claim. USPTO Recommended Course of Action: Delete during the pendency of the application in the last sentence of 119(e)(1), a s proposed. Details: See attachment for statutory changes. Attachment: See attachment for statutory changes. P-54 1 UNITED STATES PATENT AND TRADEMARK OFFICE TECHNICAL CORRECTION IN 35 U.S.C. 119(e)(1) Attachment: Proposed Changes to 35 U.S.C. 119(e)(1) Section 119(e)(1) is proposed to be amended to read as follows: 35 U.S.C. 119 Benefit of earlier filing date; right of priority ***** (e)(1) An application for patent filed under section 111(a) or section 363 of th is title for an invention disclosed in the manner provided by the first paragraph of sect ion 112 of this title in a provisional application filed under section 111(b) of this title, by an inventor or inventors named in the provisional application, shall have the same effect, as t o such invention, as though filed on the date of the provisional application filed unde r section 111(b) of this title, if the application for patent filed under section 111(a) or secti on 363 of this title is filed not later than 12 months after the date on which the provisional applic

ation was filed and if it contains or is amended to contain a specific reference to the provisio nal application. No application shall be entitled to the benefit of an earlier filed provisional application under this subsection unless an amendment containing the specific reference to the ear lier filed provisional application is submitted at such time during the pendency of the app lication as required by the Director. The Director may consider the failure to submit such a n amendment within that time period as a waiver of any benefit under this subsection. The Di rector may establish procedures, including the payment of a surcharge, to accept an uninten tionally delayed submission of an amendment under this subsection during the pendency of the application ***** 2 P-54 UNITED STATES PATENT AND TRADEMARK OFFICE PERMIT ASSIGNEES TO FILE BROADENING REISSUE Action: The assignee of the patent rights should be permitted to broaden the scope of pa tent claims in a reissue, without requiring signatures of inventors. Background Information: At present, the inventors signatures are required in order to seek broadened clai ms in a reissue application. As such, patent rights are frequently placed in jeopardy wh en a patent owner (assignee) wishes to broaden a patent (e.g., in order to encompass activit y by a competitor and preclude that activity), yet, the patent owner is unable to obtai n the inventors signatures. Inventors periodically leave employers (assignees) or become otherwi se unavailable for participation in the reissue process, and, in some instances bec ome hostile to the assignee. While there are procedures in place to circumvent the statutory re quirement for the inventors signatures (e.g., 37 CFR 1.47), they are complex and difficult to c omply with. Compliance with these procedures often has the potential to delay the filing of the broadening reissue, sometimes beyond a critical date needed for dealing with an infringer, and sometimes beyond the two-year statutory time limit on broadening. Thus, a st rong need exists to simplify the process of filing without the inventors signatures in the interest of protecting assignee property rights. Option Considered: Revise 35 U.S.C. 251 to explicitly permit the assignee to make a broadening reis sue application in absence of the inventors signatures. The third paragraph of 35 U.S.C. 251 would be changed to eliminate the prohibiti on against assignee broadening in a reissue application. This would permit the filing of br oadened reissue applications without the currently required inventors signatures.

Advantages: Assignees who are unable to acquire inventors signatures would no lon ger have to use the complex procedures of 37 CFR 1.47 to broaden the claims of a pat ent, with the result being a savings of time and resources in the Office in processing rei ssue applications under this rule. USPTO Recommended Course of Action: Pursue the option. Details: Amend the third paragraph of 35 U.S.C. 251 to eliminate the prohibition against assignee broadening as per attachment A. P-55 1 UNITED STATES PATENT AND TRADEMARK OFFICE The provisions of this title relating to applications for patent shall be applic able to applications for reissue of a patent, except that application for reissue may be made and sworn to by the assignee of the entire interest [if the application does not seek to enlarge the scope of the claims of the original patent]. Revise 37 CFR 1.172(a) as per the attachment, and make conforming changes in the rules. Comment- Adoption of this proposed legislative change amounts to a means to simp lify the broadening process for both assignees and the Office. Estimated benefits: A reduction in the number of reissue filings under 37 CFR 1. 47 would ease the burden on the petitions process. Further, there would be good public re lations for the Office s efforts to simplify reissue and ease the burden on the public. Attachments: Attachment A Statutory Change Attachment B Corresponding Regulatory Change P-55 2 Amend the third paragraph of 35 U.S.C. 251 to eliminate the prohibition against assignee broadening as follows: P-55 UNITED STATES PATENT AND TRADEMARK OFFICE PERMIT ASSIGNEES TO FILE BROADENING REISSUES -- Attachment A 251 Reissue of defective patents Whenever any patent is, through error without any deceptive intention, deemed wholly or partly inoperative or invalid, by reason of a defective specification or drawing, or by reason of the patentee claiming more or less than he had a right to claim in the patent, the Director shall, on the surrender of such patent and the payment of the fee required by law, reissue the patent for the invention disclos ed in the original patent, and in accordance with a new and amended application, for t he unexpired part of the term of the original patent. No new matter shall be introd uced into the application for reissue. The Director may issue several reissued patents for distinct and separate parts of the thing patented, upon demand of the applicant, and upon payment of the required f ee

for a reissue for each of such reissued patents. The provisions of this title relating to applications for patent shall be applic able to applications for reissue of a patent, except that application for reissue may be made and sworn to by the assignee of the entire interest [if the application does not seek to enlarge the scope of the claims of the original patent]. No reissued patent shall be granted enlarging the scope of the claims of the ori ginal patent unless applied for within two years from the grant of the original patent . 3 UNITED STATES PATENT AND TRADEMARK OFFICE PERMIT ASSIGNEES TO FILE BROADENING REISSUES -- Attachment B In conjunction with a statutory change to 35 U.S.C. 251, a change to 37 CFR 1.17 2(a) would also be required as follows: 1.172 Applicants, assignees. (a) A reissue oath must be signed and sworn to or declaration made by the invent or or inventors except as otherwise provided (see 1.42, 1.43, 1.47), and must be accomp anied by the written consent of all assignees, if any, owning an undivided interest in the patent, but a reissue oath may be made and sworn to or declaration made by the assignee of t he entire interest[if the application does not seek to enlarge the scope of the claims of the original patent]. All assignees consenting to the reissue must establish their ownership interest in the patent by filing in the reissue application a submission in accordance with the provisions of 3.73(b) of this chapter. P-55 4 UNITED STATES PATENT AND TRADEMARK OFFICE DELETE REQUIREMENT FOR PHYSICAL SURRENDER OF THE PATENT Action: 37 CFR 1.178 should be amended to eliminate the requirement for physical surrend er of the original letters patent (i.e., the ribbon copy of the original patent) in a reissue applica tion, and to make surrender of the original patent automatic upon the grant of the reissue patent. Background Information: The reissue statute, 35 U.S.C. 251, requires the surrender of the patent as a co ndition for reissue. Section 251 does not, however, require a physical surrender of the actual letter s patent, nor even a statement that the patent owner surrenders the patent. Physical surrender by sub mission of the letters patent (i.e., the copy of the original patent grant) is currently required by ru le via 1.178; however, such submission is only symbolic, since the patent right exists independently of the letters patent. It is the right to the original patent that must be surrendered upon grant of th e reissue patent, rather than any physical document. Thus, where the letters patent is not submitted duri ng the prosecution of the reissue application because the letters patent is lost or inaccessible, ther

e is no evidence that any stigma is attached to the resulting reissue patent by the public. Further, there is no case law treating such a reissue patent adversely due to the failure to submit the letters patent. In fact, there is no legal reason to retain the requirement for physical surrender of the letters patent. O n the other hand, there is much benefit for eliminating the requirement for physical surrender of the le tters patent. The requirement for physical surrender is an anachronism which provides an unnecessa ry drain on Office processing and storage resources. Further, it requires the patent owner to locat e and file the letters patent or provide a statement of loss, and causes a delay in the prosecution. Th us, it would be beneficial to both the Office and the public to eliminate the requirement for ph ysical surrender, i.e., physical submission, of the letters patent. Additionally, to further streamline the reissue process, it would be advisable t o provide by rule that the surrender of the original patent is automatic upon the grant of the reissue patent, to thereby eliminate even the need for filing a paper stating surrender of the original pat ent. This would eliminate any need for submission of a surrender statement by applicant after an indication of allowance of the claims, so that the Office would not need to delay prosecution while waiting for such a surrender statement. Note that by automatic, it is meant that surrender of the o riginal patent upon issuance of the reissue application would be an intrinsic result of the filing o f the reissue application, requiring no action by the patent owner (after the filing of the reissue applica tion) directed to surrender. The mere filing of the reissue application would constitute a consent of the patent owner to surrender of the original patent at the time the reissue patent is granted. Finally, it is to be noted that there is no requirement for physical surrender, or for a surrender statement, for the other post patent proceedings in the Office of reexamination, disclaimer of some/all claims, dedication to public, term disclaimer of a patent, nor certificate of co rrection. Thus, reissue practice stands alone in requirement of a physical surrender as a condition to m aking a change to the patent. 1 P-56 UNITED STATES PATENT AND TRADEMARK OFFICE Options Considered: Option # 1: Surrender statement: To permit a statement of surrender to be made ( by the patent owner) in the reissue application, in place of physical submission of letters pa tent. Option # 2: Automatic surrender: To not require even a statement of surrender to be made in the reissue application, but rather to have the issuance of the reissue patent autom atically void the original patent. Advantages of deleting the physical surrender option by way of either Option #1 or Option #1: Office burdens obviated: At present, the Office often must delay prosecution whi

le waiting for the letters patent. Often, the patent owner will not submit the patent until the cla ims have been stated to be allowable in order to avoid the need for a request for the return of the surr endered patent, in the event the reissue will not be granted. Thus, the Office must issue an extra action , which extends the prosecution by one complete iteration. Once the letters patent is obtained, the Office must process it and store it in the application file. The Office then has responsibility for retaining the document; yet, the document and could become separated from the file and lost. If reissue will not be granted and return of t he letters patent document is requested, the Office must expend resources to return the document prior to t he abandonment of the application. By way of the present initiative, the Office would be spared these expenditures of resources and the responsibility for the letters patent. Public burdens obviated: As to the public, the current requirement for physical surrender requires the patent owner (seeking reissue) to try to obtain the letters patent copy of the p atent. If the document was lost or misplaced, the patent owner must search for it. If it is in the hand s of a former employee, the patent owner must make efforts to secure it from that employee (who might no t be on friendly terms with the patentee). If the letters patent can be obtained, it must then be physically submitted without losing or destroying it. If the letters patent cannot be obtained, the p atent owner must make a statement of loss, or explain that the document cannot be obtained from the part y having physical possession of it. The present initiative would eliminate these burdens on the pu blic. Disadvantages of deleting the physical surrender option: The initiative will require rule making. This will consume some degree of Office resources. Option #1 v. Option #2: Option 1 requires an affirmative statement by patent owner that the patent is be ing surrendered. This provides explicit evidence of the acknowledgment of surrender by patent owner. T he public may be more comfortable with this than having the surrender operate automatically with the implied acknowledgment of surrender by patent owner by virtue of paying the issue fee an d accepting the reissue patent. Option 1 also retains at least some vestige of traditional surre nder, for those uncomfortable with doing away with it altogether. Option 2 does away with any possibility of a potential extra step in the event p atent owner has not yet made the required surrender statement when the case is otherwise ready for issue . It further does away with any other delay which may be incident to the required surrender statement, e.g., where the 2 P-56 UNITED STATES PATENT AND TRADEMARK OFFICE statement is not made by the entirety of the ownership interest in the patent, a nd such must be obtained. Option 2 completely eliminates an entire procedure compliance that the

Office will no longer need to administer. Even further, option 2 eliminates the need for the pa tent owner to make a statement withdrawing surrender in the event the reissue patent is not granted, i.e., the reissue application is abandoned. Finally, the complete elimination of the requirement f or affirmative action by patent owner puts reissue law in step with the other post patent proceedings in the Office for change of a patent, which other proceedings have no requirement for even a state ment of surrender. Thus, an inconstancy in practice would be eliminated. USPTO Recommended Course of Action: Delete the requirement for physical surrender, and replace it with Option 2. While the initiative will require rule making, it would involve only a minor exp enditure of Office resources, while providing a substantial benefit to both the public (which shoul d thus be receptive to the rule change) and the Office. The initiative would eliminate a requirement th at can be burdensome, while there is no real down side to instituting the initiative. As to any possible negative publicity, see the discussion of this in the risk section below. Option 2 is recommended in view of the fact that it does away with all public an d Office burden of dealing with the surrender requirement. The surrender of the original patent wil l be automatic upon receipt of the reissue patent that replaces it, and everyone will be legally on notice of it. This will be no different than other post patent proceedings for changing patents which have no requirement for a statement of surrender. The Office will look good in putting reissue practice in step with the other Office post patent proceedings for changing patents, which other proceedings hav e no requirement for even a statement of surrender. Details: Requires minor rule making. Paragraph (a) of 37 CFR 1.178: Section 1.178(a) would be rewritten to eliminate the requirement for the reissue applicant, i.e., the patent owner, to submit the actual letters pate nt document to the Office as part of the reissue process. The filing of the reissue application would cons titute a consent that the original patent be deemed surrendered upon granting of the reissue patent. The r eissue applicant need not take any affirmative action beyond the mere filing of the reissue applicatio n. Title of 37 CFR 1.178: The title of 1.178 would be revised to conform to the pro posed changes of paragraph (a) regarding surrender of the original patent. See the attachment as to the title of 37 CFR 1.178, and the rewrite of 1.178(a). Discussion of Risks There might be those who argue that the letters patent should be given some defe rence. It is, however, clear that the letters patent has no legal effect. Note that after the issuance of the reexamination certificate or a certificate of correction, the prior version of the patent is l egally replaced by the version of the patent as modified by the certificate, despite the failure to sur

render the patent. There is no reason why the reissue patent then should require the surrender, for it to re place the patent. It might also be urged that the public may inadvertently rely on a retained lett ers patent of the reissued patent without realizing the patent has been reissued. It is to be note d, however, that the 3 P-56 UNITED STATES PATENT AND TRADEMARK OFFICE letters patent is not surrendered where claims are deleted by statutory disclaim ers and dedication to the public, where claims are limited in duration by terminal disclaimer, and whe re claims are modified in a plurality of ways by reexamination certificate. Yet, there has bee n no input that the public has inadvertently relied on the retained letters patent without realizing the patent has been modified. The result should be no different for reissue. Estimated benefits: The Office will look good in advancing the elimination of an annoying anachronism that may at times be time-consuming and burdensome. At the same time , the Office will save itself, and the public, expenditure of resources that could better be appli ed elsewhere. 4 P-56 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment A DELETE REQUIREMENT FOR PHYSICAL SURRENDER OF THE PATENT 1.178 Automatic surrender of original patent; continuing duty of applicant. (a) The filing of an application for reissue of a patent shall constitute an off er to surrender the original patent for which reissue is requested. Such surrender shall take effect at the t ime the reissue application issues as a reissue patent. Until that point in time, the original p atent shall remain in effect. *****. 5 P-56 UNITED STATES PATENT AND TRADEMARK OFFICE ELIMINATION OF EIGHTEEN-MONTH PUBLICATION NON-PUBLICATION AND REDACTION EXCEPTIONS AND EXCLUSIONS OF PLANT APPLICATIONS Action: The non-publication and redacted publication exceptions set forth in 35 U.S.C. 122(b)(2)(B) to the eighteen-month publication provisions should be eliminated. Further, plant applications should be excluded from the eighteen-month publication provis ions. Background Information: The practices for the non-publication and redaction exceptions to eighteen-month publication are extremely costly for the Office and have caused many processing problems for the Office and many applicants. The Office has to check each application for a non-publicat ion request which creates processing delays and publication errors. Many applicants have fil ed improper non-publication requests and rescissions, and failed to file timely notification s of foreign filings. The redaction procedures are complicated for applicants and labor inten sive for the Office to process the redaction requests and to maintain two different sets of r ecords for

redacted applications. Only a handful of applicants have requested redacted publ ication and complied with all of the requirements. The proposed amendment would simplify the publication procedures and reduce processing delays and errors. The Office currently prepares each plant application for publication and does no t publish most of the plant applications because the average pendency of plant application s is short and most plant applications are no longer pending at the end of the 18-month period. Furthermore, since plant applications are not published in color, the benefit of the publication of plant applications is limited. The proposed amendment would save Office resou rces for preparing plant applications for publication and for publishing plant applicatio ns that are still pending at the end of the 18-month period. Options Considered: Option #1: Eliminate the non-publication and redaction exceptions, and adopt the exception for plant applications. Option #2: Adopt the plant application exception only and provide changes to 35 U.S.C. 122(b) to implement the continuation initiative, which requires publicati on of all utility applications claiming continuity under 35 U.S.C. 120, 121, or 365 (c) without exception. P-67 1 UNITED STATES PATENT AND TRADEMARK OFFICE USPTO Recommended Course of Action: Pursue Option 1 by amending 35 U.S.C. 122(b)(2) to delete subsection 122(b)(2)(B ) and add an exception for plant applications. Attachment: See attachments for proposed statutory changes. P-67 2 UNITED STATES PATENT AND TRADEMARK OFFICE (b) PUBLICATION. (1) IN GENERAL. Attachment A: Proposed Changes to 35 U.S.C. 122(b) for Option #1 Section 122(b) of title 35, United States Code, is amended to read as follows: 35 U.S.C. 122 Confidential status of applications; publication of patent applica tions. ***** (A) Subject to paragraph (2), each application for a patent shall be published, in accordance with procedures determined by the Director, promptly after the expiration of a period of 18 months from the earliest filing date for which a be nefit is sought under this title. At the request of the applicant, an application may be published earlier than the end of such 18-month period. (B) No information concerning published patent applications shall be made available to the public except as the Director determines. (C) Notwithstanding any other provision of law, a determination by the Director to release or not to release information concerning a published patent application shall be final and nonreviewable. (2) EXCEPTIONS. (A) An application shall not be published if that application is (A) (i) no longer pending; (B) (ii) subject to a secrecy order under section 181 of this title; (C) (iii) a provisional application filed under section 111(b) of this title; or (D) (iv) an application for a design patent filed under chapter 16 of this title

; or (E) an application for a plant patent filed under chapter 15 of this title. (B)(i) If an applicant makes a request upon filing, certifying that the inventio n disclosed in the application has not and will not be the subject of an applicati on filed in another country, or under a multilateral international agreement, that requir es publication of applications 18 months after filing, the application shall not be published as provided in paragraph (1). (ii) An applicant may rescind a request made under clause (i) at any time. (iii) An applicant who has made a request under clause (i) but who subsequently files, in a foreign country or under a multilateral international a greement specified in clause (i), an application directed to the invention disclosed in t he application filed in the Patent and Trademark Office, shall notify the Director of such filing not later than 45 days after the date of the filing of such foreign or in ternational application. A failure of the applicant to provide such notice within the prescr ibed period shall result in the application being regarded as abandoned, unless it is shown to the satisfaction of the Director that the delay in submitting the notice was unintentional. (iv) If an applicant rescinds a request made under clause (i) or notifies the Director that an application was filed in a foreign country or under a multilate ral international agreement specified in clause (i), the application shall be publis hed in P-67 3 UNITED STATES PATENT AND TRADEMARK OFFICE accordance with the provisions of paragraph (1) on or as soon as is practical af ter the date that is specified in clause (i). (v) If an applicant has filed applications in one or more foreign countries, directly or through a multilateral international agreement, and such foreign fil ed applications corresponding to an application filed in the Patent and Trademark O ffice or the description of the invention in such foreign filed applications is less e xtensive than the application or description of the invention in the application filed in the Patent and Trademark Office, the applicant may submit a redacted copy of the application filed in the Patent and Trademark Office eliminating any part or description of the invention in such application that is not also contained in a ny of the corresponding applications filed in a foreign country. The Director may only pub lish the redacted copy of the application unless the redacted copy of the application is not received within 16 months after the earliest effective filing date for which a b enefit is sought under this title. The provisions of section 154(d) shall not apply to a c laim if the description of the invention published in the redacted application filed und er this

clause with respect to the claim does not enable a person skilled in the art to make and use the subject matter of the claim. ***** P-67 4 UNITED STATES PATENT AND TRADEMARK OFFICE (b) PUBLICATION. (1) IN GENERAL. Attachment B: Proposed Changes to 35 U.S.C. 122(b) for Option #2 Note: the changes in 122(b)(2)(B)(vi) need to be harmonized with the continuatio n initiative. Section 122(b) of title 35, United States Code, is amended to read as follows: 35 U.S.C. 122 Confidential status of applications; publication of patent applica tions. ***** (A) Subject to paragraph (2), each application for a patent shall be published, in accordance with procedures determined by the Director, promptly after the expiration of a period of 18 months from the earliest filing date for which a be nefit is sought under this title. At the request of the applicant, an application may be published earlier than the end of such 18-month period. (B) No information concerning published patent applications shall be made available to the public except as the Director determines. (C) Notwithstanding any other provision of law, a determination by the Director to release or not to release information concerning a published patent application shall be final and nonreviewable. (2) EXCEPTIONS. (A) An application shall not be published if that application is (i) no longer pending; (ii) subject to a secrecy order under section 181 of this title; (iii) a provisional application filed under section 111(b) of this title; or (iv) an application for a design patent filed under chapter 16 of this title; or (v) an application for a plant patent filed under chapter 15 of this title. (B)(i) If an applicant makes a request upon filing, certifying that the inventio n disclosed in the application has not and will not be the subject of an applicati on filed in another country, or under a multilateral international agreement, that requir es publication of applications 18 months after filing, the application shall not be published as provided in paragraph (1). (ii) An applicant may rescind a request made under clause (i) at any time. (iii) An applicant who has made a request under clause (i) but who subsequently files, in a foreign country or under a multilateral international a greement specified in clause (i), an application directed to the invention disclosed in t he application filed in the United States Patent and Trademark Office, shall notify the Director of such filing not later than 45 days after the date of the filing of s uch foreign or international application. A failure of the applicant to provide such notice within the prescribed period shall result in the application being regarded as abandoned, unless it is shown to the satisfaction of the Director that the delay in submitting the notice was unintentional. P-67 5 UNITED STATES PATENT AND TRADEMARK OFFICE

(iv) If an applicant rescinds a request made under clause (i) or notifies the Director that an application was filed in a foreign country or under a multilate ral international agreement specified in clause (i), the application shall be publis hed in accordance with the provisions of paragraph (1) on or as soon as is practical af ter the date that is specified in clause (i). (v) If an applicant has filed applications in one or more foreign countries, directly or through a multilateral international agreement, and such foreign-fil ed applications corresponding to an application filed in the Patent and Trademark O ffice or the description of the invention in such foreign-filed applications is less e xtensive than the application or description of the invention in the application filed in the United States Patent and Trademark Office, the applicant may submit a redacted c opy of the application filed in the United States Patent and Trademark Office elimin ating any part or description of the invention in such application that is not also co ntained in any of the corresponding applications filed in a foreign country. The Directo r may only publish the redacted copy of the application unless the redacted copy of th e application is not received within 16 months after the earliest effective filing date for which a benefit is sought under this title. The provisions of section 154(d) sha ll not apply to a claim if the description of the invention published in the redacted application filed under this clause with respect to the claim does not enable a person skilled in the art to make and use the subject matter of the claim. (vi) The provisions of clauses (i) though (v) shall not apply to any application that contains or is amended to contain a reference to an earlier application or applications under sections 120, 121, or 365(c) of this title. ***** P-67 6 UNITED STATES PATENT AND TRADEMARK OFFICE LEGISLATIVE AND RULEMAKING ISSUES TRADEMARKS Action: There are changes that could be made to the Lanham Act and Trademark Rules of Pr actice that would assist the Agency in implementing e-government in Trademarks without affecting t he value of Federal registrations. Background Information: Statutory and regulatory requirements implemented when the Office primarily used paper for communication and record keeping have a negative impact on the use of electronic systems in Trademarks. These requirements include: (1) The requirement to submit a signed a ffidavit or declaration in support of certain filings; (2) submitting specimens showing use of the mark, (3) for nonU.S. filers, appointing of domestic representatives for service of process, and (4) for filers whose applications are based on foreign registrations, submitting certified copies of

these foreign registrations to support applications for registration in the United Stated made under provisi ons of the Paris Convention. These requirements result in a correspondingly large number of initi al refusals or work against the use of electronic filing. This in turn increases costs and increases pendency. Efficiency of the examining operation is also affected by a statutory provision that grants applicants six months to respond to all actions issued by the Office. Finally, the Trademark Operation s efficiency is hampered by a provision of the Tr ademark Act that allows the Director to raise trademark fees only once each year, and only to ref lect fluctuations in the Consumer Price Index. USPTO Recommended Course of Action: Lessen cumbersome requirements and reduce costs and pendency by amending the Tra demark Act to: 1. Eliminate the requirement for signatures on trademark documents submitted to the USPTO and amend the Lanham Act to create a statutory presumption that the submission of ma terials to the USPTO means that the submission is consistent with the requirements of the Act; 2. Eliminate the requirement for appointment of a domestic representative and re place that requirement with a provision that by declining to appoint a domestic representat ive, a foreign applicant agrees to accept service by publication; 3. Eliminate the requirement for submission of foreign registrations and provide that applicants may, instead, provide an uncertified copy or facsimile of the foreign registrati on; 4. Provide that a response to refusals or requirements be submitted within a tim e prescribed by the Director in the Rules of Practice in Trademark Cases. 5. Enhance USPTO efficiency by amending the Trademark Act to eliminate the provi sion that the Director may raise only raise trademark fees yearly, and only in response to flu ctuations in the consumer price index. T-07 1 UNITED STATES PATENT AND TRADEMARK OFFICE Amend the Rules of Practice to allow applicants to choose between four examinati on options: (1) file using paper, (2) file electronically; (3) file electronically complying with add itional requirements that will provide for expedited registration of the trademark; or (4) file electronic ally complying with additional requirements, including provision of a likelihood of confusion search from a USPTO Certified Search Service, that will provide of expedited registration of the tra demark. Applications filed through the two expedited examination procedures, and those fil ed electronically, will have lower filing fees than those filed on paper. Applications filed under options three and four and will be subject to the following requirements to be implemented through rule mak ing: 1. The applications, and all subsequent related communications must be submitted electronically;

2. All fees must be submitted with the initial application; 3. All requirements for a complete application must be submitted with the initia l application; 4. Descriptions of goods and/ or services must be derived from the U.S. Identifi cation Manual; and 5. All responses to office actions forwarded by the Office must be submitted wit hin 30 days of date the electronic communication was forwarded. In addition to the changes related to expedited examination, the following actio ns will be taken: 6. The Rules of Practice and Trademark Manual of Examining Procedure will be ame nded to account for the fact that applications filed under this procedure will be examin ed out of order and that examination will continue regardless of earlier filed applications filed un der non-expedited examination procedures. 7. The Office will eliminate requirements in the Rules of Practice and the Trade mark Manual of Examining Procedure related to the examination of specimens submitted in support of use of the trademark and limit examination of specimens to ensuring that the specimen shows the trademark shown in the drawing. Timing Draft and submit legislative changes in FY 2002 Draft and publish CFR and TMEP changes in FY 2002 Implement on October 1, 2003 in conjunction with e-government initiatives. Estimated benefits Promotes electronic filing Removes examination procedures that may result in extended pendency T-07 2 Task Name LR-1 - Legislation/Rules - 2004 Draft legislation (LR-1) Obtain Administration Clearance (LR-1) Introduce legislation (LR-1) Publish proposed rules (LR-1) Enact legislation (LR-1) Comment period closes (LR-1) Publish final rules (LR-1) Implement final rules (LR-1) Duration 336 days 64 days 62 days 103 days 76 days 96 days 75 days 21 days 0 days Finish Wed 10/1/03 Contact S. Kunin Start Mon 6/3/02 FY 2003 Resources

$0 Mon 6/3/02 Fri 8/30/02 Fri 11/29/02 Wed 2/5/03 Tue 7/1/03 Mon 9/2/02 Mon 3/17/03 Fri 2/14/03 Tue 7/1/03 Tue 7/1/03 Thu 5/15/03 Fri 8/29/03 Tue 9/2/03 Tue 9/30/03 Wed 10/1/03 Wed 10/1/03 Productivity Pendency 1 Pendency 2 Pendency 3 Pendency 4 PLACE Actions TRANSFORMING WORK: THE e-GOVERNMENT WORK FOUR-TRACKS PATENT EXAMINATION PROCESS LIMITATION ON THE NUMBER OF CLAIMS REFER TO OTHER PENDENCY PAPERS 1, 2, & 3 UNITED STATES PATENT AND TRADEMARK OFFICE TRANSFORMING WORK: THE E-GOVERNMENT WORK PLACE Action: Current processes for examination of applications for the registration of tradem arks should be changed to meet the needs of U.S. trademark owners in the 21st Century . Background Information: Currently, GS-905 attorney advisors (Trademarks) complete all substantive and procedural examination on applications for the registration of trademarks. Other than a decision in the 1960 s to move from using non-attorney examiners to attorney exami ners, examination and how examination is completed by the USPTO appears to have been relatively consistent since the implementation of the Lanham Act in 1946. When applicants and registrants raise questions regarding the work of the Office, reg ardless of whether the topic is quality or pendency, generally the question is not whether or not the substantive provisions of the Lanham Act should be changed, but whether or not t he USPTO is interpreting the Act and examining applications for the registration of trademarks in a satisfactory manner generally coming down to the question: should the examiner have made a specific refusal of registration in a particular applic ation? However, to date, there has been little or no internal or external demand to sub stantially change examination processes to address quality or pendency issues. The U.S. economy and the use of trademarks in that economy have substantially ch anged in the 56 years between passage of the Lanham Act and today. Because of these ch anges,

consideration is being given to whether or not it is appropriate to consider cha nging how the USPTO serves trademark owners in the day-to-day administration of the U.S. s ystem for the Federal registration of trademarks. In 1946, Congress stated the followi ng regarding the Lanham Act: The purpose of this bill is to place all matters relating to trademarks in one statute and to eliminate judicial obscurity, to simplify registration and to make it stronger and more liberal, to dispense with mere technical prohibitions and arbitrary provisions, to make procedure simple, and relief against infringement prompt and effective. S. Res. No. 1333, 79th Cong. 2d Session (1946). Given the generally robust nature of the American economy since the end of World War II, to the degree that trademarks affect the economy, there may be little questi on that the Lanham Act succeeded in updating U.S. trademark law to deal with the economic realities of the mid-20th century. At the start of the 21st century, it is time to consider whether the registration procedure is simple, could it work better, and does it provide trademark owners with registrations that meet their needs? For a number of years there T-01 1 UNITED STATES PATENT AND TRADEMARK OFFICE has been an ongoing discussion inside the USPTO and in the Trademark Bar regardi ng the structure and focus of the Trademark Operation s examination process. Further, there is a perception of tension between timeliness of examination and quality of exam ination inside and outside of the Trademark Operation. The Lanham Act is relatively silent regarding the examination process and the ro le the Office should have in the examination and registration of trademarks. Section 10 62 of the Lanham Act states that: Upon the filing of an application for registration and payment of the prescribed fee, the Director shall refer the application to the examiner in charge of the registration of marks, who shall cause an examination to be made and, if on such examination it shall appear that the applicant is entitled to registration, or would be entitled to registration upon the acceptance of the statement of use required by section 1051(d) of this title, the Director shall cause the mark to be published in the Official Gazette of the Patent and Trademark Office. Section 1052 of the Act states that: No trademark by which the goods of the appli cant may be distinguished from the goods of others shall be refused registration on t he principal register on account of its nature , but, it does not prescribe that an ex aminer must examine an application for any of the substantive relative or absolute grou nds set forth in the Section. Section 1051, in setting the requirements for an applicati on, states that the applicant: shall comply with such rules or regulations as may be prescri bed by the Director. Most of what an examiner does during the examination of an applicat ion

for registration of a trademark is set forth in Rules of Practice and the Tradem ark Manual of Examining Procedure. There is minimal language in the Lanham Act itself stati ng that during examination the Office must perform a specific act as part of the examina tion process. Section 1063 of the Act provides for a pre-registration opposition proc eeding that allows any person who believes that he would be damaged by registration of a mark upon the principal register . . . , to oppose registration. This section provides an opportunity to any party with an interest to oppose the registration of a tradem ark regardless of any decisions made during the examination process. Finally, sectio n 1064 provides for a post-registration cancellation proceeding to any person who believ es that he is or will be damaged by registration of a mark. When the United States Patent Office began moving in 1946 to implement the Lanha m Act, the United States and the world were substantially different than at the st art of the 21st century. The U.S. was emerging from World War II and was attempting to move from a war-based economy to a consumer-focused economy. The U.S. economy, and th e use and registration of trademarks, was essentially defined by the conditions in the fortyeight states of the continental United States, and the Patent Office issued registrati on number 444,811 on June 19, 1946, marking the end of the registration series unde r pre1946 Trademark Acts. In 1946, communications with the Patent Office were primari ly through the U.S. Postal Service, 1st class stamps cost 3 cents, and if one wishe d to access a searchable file of registered marks, they came to the Patent Office and used t he paper T-01 2 UNITED STATES PATENT AND TRADEMARK OFFICE search files. Other than purchases made through mail-order catalogs, most consum er purchases were made at brick and mortar stores in the purchasers local neighborhood or community, most commonly for products made in the United States. Today applications for registration of trademarks may be filed electronically, registr ations and pending applications in the USPTO may be searched anywhere in the world by acces sing the USPTO Web site, and the marketplace for increasing numbers of U.S. companies and source of goods for consumers is the world. On May 14, 2002, the USPTO will issu e registration number 2,570,478, and, often the Internet is the store that the consu mer accesses from their home using the domain name of the seller before they see the registered trademark for the product or service they are purchasing on-line. The Lanham Act of 1946 was intended to remedy the deficiencies in the 1905 Trade

mark Act on the basis that the 1905 Act was inadequate to cope with the realities of t he twentieth century commerce and brand names. McCarthy on Trademarks, Section 5:3 (1996 ed.) Now, 56 years after the passage of Lanham Act, at the start of the 21 st century, is it time to ask if the examination system being used at the USPTO, th at emerged from the Lanham Act of 1946, needs to be revisited to better cope with th e realities of the twenty-first century where business is often done using a tradem ark and a domain name, and the customer need not leave their home to purchase goods or ser vices? In response to that question, the following options were considered: Options: 1. Retain the current system for the examination of applications for the registr ation of trademarks without change a status quo option. GS-905 attorney advisors would continue to perform all examination activities, as is done today, accommodating any changes that would be required as the Trademark Operation introduces technology into its operations. This contemplates that in FY 2004, when the Trademark Information System (TIS) is fully implemented and most pre-examination and post-examination activities are moved into the law offices, examining attorneys would assume some functions that are currently performed by support staff. The implementation of e-government technology in FY 2004 has a high potential for improving quality of products and pendency but, a statu s quo solution for performing examination, even with the addition of TIS, is unlikely to address some issues related to examination quality that generate complaints from applicants. T-01 3 UNITED STATES PATENT AND TRADEMARK OFFICE 2. Retain the current system for the examination of applications for the registr ation of trademarks using a mix of attorney and paralegal/non-attorney examiners. Potentially non-attorney examiners could perform all of procedural examination work currently being completed by attorneys. Attorneys would only address substantive issues related to relative and absolute grounds of refusal in applications and handle all final refusals of registration. Non-attorney examine rs would handle all examination regarding procedural issues in applications. The availability of electronic file wrappers and electronic file management systems in FY 2004 will substantially, or entirely, eliminate problems associated with moving and providing access to paper files to more than one employee during the examination process. For example, multiple employees can electronically access the same file at the same time and the prosecution history for every application could be set up with edits to ensure that both the substantive and procedural examinations have been completed. The results of the examination by two employees could be combined into a single communication to the applicant. If the Trademark Operation were able to incorporate non-attorney examiners at a 31 ratio (3 non-attorneys to 1 attorney), assuming a GS-11 working grade, it woul d result in saving approximately $6M in compensation costs during the first full year of the change at FY 2003 staffing levels. However, unless the Agency moved very quickly, these cost savings will not be realized in the near term. Bu t, if changes in the composition of the workforce were implemented in a short time

frame, there is a significant potential that the change would result in disrupti ons in the examination process and/or the flow of work through the Trademark Operation. Therefore, it is recommended that any changes in the composition of the examining workforce be implemented over a period of time and that attorneys be replaced with non-attorney examiners as attorneys leave the office and the vacant positions are filled until a ratio of attorneys to paralegals is achieved that is consistent with the content of the examination work in the Office. 3. Contract examination activities. This assumes that examination may be defined as not being an inherently governmental function on the basis that all decisions by an examiner may be taken on an ex parte appeal to the TTAB and that it is only the TTAB who may render final determinations regarding registration of any trademark. This option was rejected because: (a) there could be substantial issu es regarding the drafting and administration of a contract that would have the intended positive impact on pendency, quality, and cost of operations; and (b) i f the option were implemented in a short time frame, it could result in substantia l disruptions regarding the transition to examination by contract personnel and in dealing with employment issues regarding attorneys who would no longer be needed in the workforce. These disruptions could have a substantial negative impact on the administration of the U.S. trademark system for a substantial peri od of time until the contractor was fully operational. T-01 4 UNITED STATES PATENT AND TRADEMARK OFFICE 4. Adopt a system of examination that places increased responsibility on the applicant to assist in the processing and examination of the application. Applicants would be required to use electronic communications and to provide information that would assist in the examination of the application. In return, the Trademark Operation would guarantee expedited examination and prompt registration of marks eligible for registration, second pair of eyes review of all relative and absolute refusals proposed by an examiner with a focus on elimination of unnecessary refusals and high quality refusals; and electronic communication with the applicant throughout the process. Requirements for applications filed under this option: a. Electronic filing and communications by the applicant; b. Thirty (30)-day response period to all communications received from the Office regarding the application; c. Complete applications (i.e., all fees must be paid for all classes when the application is filed; all information required for a complete application must be provided; specimens [if required] must be attached; the application must be signed, etc.); d. U.S. Identification Manual descriptions would be required for all goods and services listed in the application; e. The applicant would provide a likelihood of confusion search from a private sector search company that had been certified by the Office. The Certified Search Service (CSS) would provide the Trademark Operation with an electronic list of federally registered and pending trademarks rankorder ed by how close the results were related to the applicant s mark. The steps involved in performing the search would include: (i) identifying criteria for the search based on the applicant s mark; (ii) selecting and

defining the search tool used to perform the search; and (iii) providing a brief explanation regarding the search strategy based on the characteristics of the applicant s mark. The rank-ordered listing should contain no more than 300 marks found during the likelihood of confusion search by the CSS. Applicant and/or applicant s representative would not be required to provide any further reviews, opinions or explanations beyond those provided by the CSS and the materials could be electronically submitted to the Trademark Operation without review by the applicant so long as the CSS report could be matched with the application submitted by the applicant. 5. The Trademark Operation would complete a full examination based on the search provided by the CSS and other evidence found during the examination or available in Office records, and would make refusals of registration on any relative (likelihood of confusion) or absolute grounds in the Lanham Act if supported by the record before the examiner. The USPTO would assess the likelihood of confusion based on the search provided by the CSS and a likelihood of confusion search provided to the examining attorney by the Trademark Information System (TIS) pre-examination search function. The examiner would T-01 5 UNITED STATES PATENT AND TRADEMARK OFFICE conduct a full review and research for supplemental materials, including materia ls provided by the pre-examination search function in TIS, regarding absolute grounds of refusal se t forth in the Lanham Act. A full procedural examination would be completed to ensure that all of the elements required in an application were present and that the applicant had complied with all filing requirements. All applications filed unde r this option would receive priority examination. If the application was complete and there were no refusals on relative absolute grounds, the trademark would be published for opposition on an expedited basis. This process would be implemented in the Trademark Operation concurrently with the implementation of the Trademark Information System on October 1, 2003. 6. Adopt a deposit system for registration of trademarks. The Office would manda te that all applications deposited for registration: (1) be filed electronically, a nd (2) use an identification of goods or services listed in the U.S. Identification Man ual. The Office would conduct a procedural examination to ensure that the application contained all of elements required for a complete application and a limited examination on absolute grounds required by treaty obligations or public policy grounds set forth in sections 1052 (a), (b), (c) and (e)(2) of the Act. If the application was complete and no refusal was made regarding the limited absolute grounds, the application would be forwarded for publication for opposition. USPTO Recommended Course of Action: After consideration of the proposed options and the current condition of the Tra demark processes in the USPTO, it was not believed that major revisions to the Lanham A ct or the examination process were required or desirable. However, the USPTO is propos ing to adopt a market-based strategy relative to procedures for filing and examinati on of applications for the registration of trademarks with a focus on using technology

to enhance and improve the process. Applicants will be allowed to choose between fo ur filing options that will affect fees, method of filing, and speed of process. Ea ch option will have a different fee based on the level of resources required to process an d examine the application and will allow trademark owners to select the filing and examina tion option that best suited their needs and budget. Listed in order of amount of fil ing fees (lowest to highest), the four options would be: 1. File a complete application electronically, provide a likelihood of confusion search regarding federally registered and pending trademarks from a Certified Search Service (CSS), and the Office will guarantee priority examination. The applicant would provide a likelihood of confusion search from a USPTO certified search service. The Certified Search Service (CSS) would provide the Trademark Operation with an electronic list of federally registered and pending trademarks rank-ordered by how close the results are related to the applicant s mark. The lis t would consist of the serial number and/or registration number, the mark, and the owner name, which the USPTO would use to access the marks in its X-Search database and provide them electronically to the examiner. The CSS would also T-01 6 UNITED STATES PATENT AND TRADEMARK OFFICE provide: (i) the criteria for the search based on the applicant s mark; (ii) defin e the search tool used to perform the search; and, (iii) provide a brief explanati on regarding the search strategy based on the characteristics of the applicant s mark . The rank-ordered listing would contain no more than 300 marks found during the likelihood of confusion search by the CSS. Applicant and/or applicant s representative would not be required to provide any further reviews, opinions or explanations beyond those provided by the CSS and the materials could be electronically submitted to the Trademark Operation without review by the applicant so long as the CSS report could be matched with the application submitted by the applicant. The applicant would also be expected to comply with all of the filing and other requirements established by the USPTO to take advantage of this expedited service. The application would be examined for all substantive and non-substantive grounds set forth in the Lanham Act and the Rules of Practice using a mix of attorneys and non-attorney examiners. Finally, applications with substantive refusals under this option will be subjec t to a second-set-of-eyes review to ensure that the refusal is appropriate and of high quality; 2. File a complete application electronically and the Office will guarantee priori ty processing. The applicant would be expected to comply with all of the filing and examination requirements established by the USPTO to take advantage of this expedited service. The Trademark Operation would examine the application for all substantive and non-substantive grounds set forth in the Lanham Act using a mix of attorneys and non-attorney examiners. Finally, applications with substantive refusals under th is

option will be subject to a second-set-of-eyes review to ensure that the refusal i s appropriate and of high quality; 3. File the application electronically under current Rules of Practice for recei ving a filing date. The Trademark Operation would examine the application for all substantive and non-substantive grounds set forth in the Lanham Act and the Rules of Practice using a mix of attorneys and non-attorney examiners; and 4. File the application on paper under current Rules of Practice for receiving a filing date. The Trademark Operation would examine the application for all substantive and non-substantive grounds set forth in the Lanham Act and the Rules of Practice using a mix of attorneys and non-attorney examiners. It is believed that these options would have positive impact on quality and pend ency and result in a higher rate of satisfaction with the administration of the Lanham Ac t by the USPTO because trademark owners could select the filing option that best suited t heir business or legal needs. Under each option, there would be an improvement in qua lity of examination and process because attorney examiners would primarily focus on examining the relative and absolute grounds of refusal set forth in the Lanham A ct. In addition, the Office will be implementing quality improvement measures such as i nprocess reviews, second-set-of-eyes review for some files, and will implement a certification program for employees to ensure that their knowledge of the law an d examining skills are current. In all applications in which a substantive refusal is made, an attorney examiner will handle the entire examination to ensure that the applican t only had T-01 7 UNITED STATES PATENT AND TRADEMARK OFFICE to work with one examiner during the prosecution of the application. In applicat ions in which there were no substantive refusals, up to 60% of the trademark application s filed in the USPTO, a non-attorney examiner would handle the application and work with th e applicant regarding any needed amendments. The focus on examination of legal issues in applications reviewed by attorneys s hould result in greater job satisfaction and improved quality of examination by Agency attorneys because of increased use of their legal skills and the reduced require ment to handle non-substantive examination issues. Similarly, the use of non-attorney ex aminers for non-substantive examination should reduce compensation costs and improve qua lity because these examination jobs in Trademarks would be more interesting and provi de better opportunities for advancement to a higher grade. Exclusive use of electronic processes to communicate and manage the application process in Options 1 and 2 are designed to provide improvements in quality of pr oduct, efficiency and cost of operations. The cost savings that will result from the implementation of e-government method

s for supporting the filing, examination and registration processes, and the reduction in compensation costs associated with greater use of non-attorney examiners in spec ified examination activities, should result in the overall cost of Trademark examining operations being reduced. In turn, these savings could be passed on to applicant s in terms of lower fees. Further, it is expected that e-government/e-commerce initiatives will reduce the need for both contract and Government employees who primarily support paper-based operations and lower the incidence of lost files and papers, resulti ng in substantial cost savings over time. Options 1 and 2 above would have the lowest fee. The highest fee would be associ ated with paper filings because of the higher costs associated with processing a pape r application vs. one filed electronically. Currently, the fee for handling paper applications is approximately $50 higher than the costs associated with filing a n application electronically. Under the current fee schedule, the cost for an elec tronic filing under option 3 would be $325 and the fee for filing a paper application would be $375. After the USPTO implements the Trademark Information System (TIS) on October 1, 2003, and has the capability to process applications under Options 1 and 2, the fees for filing applications for the registration of trademarks will be recalculated to t ake into consideration the two additional options for filing applications and any cost considerations related to electronic filing and processing. After the implementation of e-government on October 1, 2003, the goal for averag e pendency to first action under Options 3 and 4 will be two months, and average p endency to registration or issuance of a Notice of Allowance (NOA) will be 12 months. Un der Options 1 and 2, the goal for average pendency to first action would be one mont h or less with average pendency to registration or issuance of a NOA of nine months. T-01 8 UNITED STATES PATENT AND TRADEMARK OFFICE Timing: Draft and publish CFR changes in FY 2002 Draft and submit needed amendments to the Lanham Act in FY 2002 Plan the redesign of jobs and restructure the Trademark Operation in FY 2003 Implement on October 1, 2003, in conjunction with e-government initiatives Benefits: Higher level of certainty regarding Office practices Variable filing fees for examination and registration of marks depending on option chosen by applicant Expedited registrations resulting from use of e-government Option selected would set expectations for quality and the time to registration Faster access to Federal courts to protect trademark rights Attorney examiners would primarily focus on substantive, legal work providing greater job satisfaction Paralegal examiners would perform procedural examination regarding elements of

application which would provide more satisfying jobs for qualified members of the current Trademark support staff T-01 9 Task Name T-01 - Transforming Work - The E-Government Work Place Draft CFR changes (T-01) Publish proposed rules (T-01) Draft and submit amendments to Lanham Act (T-01) Plan the redesign of jobs and restructure the operations (T-01) Implement in conjunction with e-gov't initiatives (T-01) Duration 346 days 44 days 40 days 44 days 30 days 10 days Finish Wed 10/15/03 FY 2003 Resources $250,000 Contact B. Anderson Start Mon 6/3/02 Mon 6/3/02 Fri 8/2/02 Mon 8/5/02 Fri 9/27/02 Tue 12/3/02 Thu 1/16/03 Wed Mon 9/30/02 Wed 12/4/02 Wed 10/1/03 10/15/03 UNITED STATES PATENT AND TRADEMARK OFFICE FOUR-TRACKS PATENT EXAMINATION PROCESS Action: The USPTO should move to a Four-Tracks Examination Process to eliminate duplicat ion of effort, leverage greater participation from the applicant community and publi c, improve the quality of our patents, and decrease processing time. Background Information: Although the USPTO s mission in administering the intellectual property laws has a continuous tradition stretching back to the founding of the republic,1 the econo mic environment in which it undertakes that mission has changed in the past decade. Technological innovation and the marketing of new goods and services have increa singly driven U.S. economic growth. This has led to prolonged rapid growth in demand fo r the USPTO s principal products patents and trademark registrations. The USPTO has undertaken major projects to address these challenges. Nevertheles s, the USPTO finds itself trying to catch up in its efforts to improve the quality of p atent

examination and keep the time for making decisions on applications at acceptable levels. While the current process has served us well, there are numerous short-comings t hat, if unchanged, will not deliver the quality patents in a timely manner that are need ed to promote expansion of business opportunities, stimulate research and development, and expand U.S. businesses globally. First, all applications are currently subject to the same processing criteria, a ll applications are examined the same way (See Figure 1) and we examine all claims in the same w ay in each application. Although some number of our workload can be cut by restriction practice,2 the vast majority of our workload requires examiners to search and ex amine all claims. Patent applications in the complex areas have been increasing, concentra ting the growth in workload in the high tech areas as communications, computer hardware a nd software, and biotechnology. Information disclosure statements may be submitted but applicants are doing so j ust to satisfy their duty of disclosure under 37 CFR 1.56. Apart from heavy dose of ini tial training, primary examiners do not get enough continuing legal education trainin g once they get their primary status. 1 As noted by one commentator, the current patent examination system has not cha nged significantly in 160 years, and was established in 1836 after forty-three years of an unsuccessful registration system. See N. Linck, A New Patent Examination System for the New Millennium, 35 Houston Law Review 305, 306 (1998) . 2 That is, restriction practice could be modified by rule or practice change to provide that if there are product claims and method of making and/or method of using claims, the USPTO will examine only the product claims and if the product claims are allowable, we will then rejoin any method of making or method of using claims that contain all the limitations of the allowed product claims. This practice will allow the USPTO to restrict examination to the product claims while still avoiding the need for an applicant to file (and the USPTO to examine) divisional applications directed to the method of making or method of using the product. 1 P-01 Current File 0-months UNITED STATES PATENT AND TRADEMARK OFFICE In addition, we currently have an ineffective post-grant review, where only 400 ex parte reexam requests are filed per year and so far only 3 inter parte reexam filed.3 Since 1974, the Office of Patent Quality Review (OPQR) has been doing end-checking process, where the error rates have been oscillating between 3 to 7 percent, with the ave rage around 5 percent. More importantly, there has been no significant quality improv ement since the establishment of OPQR.

While other international offices enjoy automatic drop-out of applications due t o separate search and examination fee, we have no drop-out rate for applications since once applicant pays the filing fee, he/she gets an examination of their applications. 4 We also have no accelerated examination with a guarantee of pendency. Participation rate of current petition to make special (accelerated examination) is low since there is no guarantee of short pendency or when a first action will be done. Furthermore, other intellectual property offices search reports while being utili zed by the examiners, the other IP offices' searches are not given full faith and credit. The Proposed Four-Tracks Examination Process outlined in the next several pages will address some of the current system s shortcomings and transform it into a more eff icient and effective patent system for all parties involved. FAOM of filing Amendment Issue within within 6-40 months 3-months within 9-months Figure 1 Current Examination Process 3 The limitations of the current reexamination system are well known to the pate nt community. See N. Linck, A New Patent Examination System for the New Millennium, 35 Houston Law Review at 314-1 5, 318-20, and 325. 4 The patent community recognized for decades the need for a separate filing and examination fee to allow applicants to control the pace of substantive examination. See N. Linck, A New Patent Exami nation System for the New Millennium, 35 Houston Law Review at 323-25. P-01 2 UNITED STATES PATENT AND TRADEMARK OFFICE Options Considered: Future Four-Tracks Examination In this new approach, the current single-track examination process is replaced w ith an examination process that gives the applicant the option of choosing one of four examination tracks, based on the level of participation by the applicant and the efforts by other intellectual property offices. Under all tracks, the applicant will be req uired to request examination to be conducted on the application and to pay an examination fee, rather than receiving an automatic examination of the application. The first thr ee tracks will provide benefits to the Office by relying on primarily either a prior art s earch provided by applicant, an ISA, or on the results of examination efforts of other intellectual property offices. The USPTO plans to provide access to the USPTO se arch system by Certified Search Services (CSS). The fourth track allows applicants wh o qualify as micro-entities to request that the USPTO conduct the prior art search . The

number of claims that may be presented for examination would be effectively limi ted under all four tracks by imposing an escalating surcharge on applications contai ning an excessive number of claims. The new four-tracks process combined with quality enhancement initiatives will deliver improved quality and pendency. The advantages of the 4-Tracks Initiative are: Quality: Concurrently, a series of quality enhancement initiatives will be implemented. The details of initiatives for quality improvement are set forth in other Issue Papers (P-07, P-17, P-19, P-20, P-21, and P-23). Pendency: By reducing the search burden on the examiners, they will spend less ti me with the searching function. We estimate that examiners will have an increase in productivity between 5 and 20 percent and hence pendency will decrease. Quality assurance and certification procedures will ensure that accurate search results are provided. Cost-effectiveness: With the primary search being provided by the applicant and with the reduced number of claims5 to be searched and examined, the time and eff ort devoted to searching will be substantially reduced and an extensive infrastructu re of search systems will not be required to handle the large volumes of searches conducted today.6 For those applicants choosing Track 3, the other IP offices wi ll be using their own search systems. Hence, the USPTO will be able to reduce expenditures for examiner access to the automated search systems. 5 If fee imposed on large number of claims is sufficiently high, it would discou rage applicants from filing excessive number of claims. 6 Examiners in Track 2 or Track 3 applications will usually only perform update or supplemental searches of the prior art. P-01 3 The USPTO would need to develop a quality assurance system in order to en sure the reliability of a prior art search (and examination results) provided by a CSS or another intellectual property office. Fil Track 4 Micro-entity only Track 3 Track 2 PCT/US/ISA/IPEA Contractor Search Track 1 Fil 0-months 0-18 months per applicant *Examination fee with ISSR from: (a) Private sector search service (CSS) (b) Foreign IPO w/bilateral agreement with US (c) Foreign IPO qualified as a CSS (d) ISR/IPER from a foreign IPO

(e) Negative binding patentable determination from a foreign IPO w/bilateral agreement with US (f) ISR from US PCT (in a Track 2 NS) Figure 2 Four-Tracks Examination Process Search by USPTO or USPTO contractor FAOM Examination Fee Examination fee, Foreign examination results and English translation of prior art with indentification of claim Examination Fee, 371 papers & search reports FAOM Examination Fee* In process Review 0-30 months within within 6-months 3-months of examination fee Issue Amendments Post-Grant review time expires Issue Amendment/ ISR within 6-months within 12 months of grant or within 4 months of notice of infringemen P-01 UNITED STATES PATENT AND TRADEMARK OFFICE 4 A . UNITED STATES PATENT AND TRADEMARK OFFICE Track 1 - Applicant Submits a Certified Search Report If the applicant chooses track 1 (the basic track), the Office would examine the application on the basis of an International-Style Search Report (ISSR). The app licant will be responsible for contracting with a certified search authority to perform a search of the prior art using PCT guidelines augmented by the USPTO s guidelines for non-pat ent literature searching and must submit an ISSR. The certified authority will be re

gulated by the USPTO to ensure it produces searches according to these requirements and of sufficient quality. The ISSR must identify on a claim-by-claim basis the most re levant X and Y references and explain the relevant section of references. Examination wil l be based primarily on the art submitted by applicant. If examination based on the p rimary search and any other art submitted by the applicant leads the Examiner to conclu de that there is allowable subject matter, the Examiner will perform a supplemental sear ch, as appropriate and subject to supervisor approval, to confirm the adequacy of the p rimary search. Additionally, as a matter of course an update search will be conducted. Highlights of the first track are: The applicant will be required to provide a search from the certified search autho rity prior to requesting examination. The search report from the certified authority will provide information found in the ISSR along with additional information that exp lains the context, scope, and results of the search actually conducted. Applicants wou ld also have the right to submit observations on the search report being provided, and c ould also be required by the examiner under 37 CFR 1.105 to provide more information regarding the relevance of the prior art cited in the search report to particula r claims. Applicants would be allowed to provide observations in addition to the work produc t produced by the CSS. It would be appropriate to impose some structure to these submissions (e.g., comments should specifically identify claims to which the com ments pertain). It may be appropriate after the USPTO examiner has reviewed the search to require an applicant to provide more information under 37 CFR 1.105, such as spe cific explanations of relevance of a cited reference to a particular claim, but this s hould be imposed on a case-by-case basis by the examiner if needed. In most circumstances , the examiner will not need any additional information to determine if a cited refere nce qualifies as a reference under 35 U.S.C. 102 or 103. Applicants will be more comfortable responding in a very detailed way to a conclusion of the PTO rather than a summary opinion of the CSS. ISSR is provided by applicant. Thus, a prior art search will be conducted using PC T and Non-patent Literature (NPL) search guidelines. Applicant would be considered to have acted in good faith under 37 CFR 1.56 as lon g as there is a clear absence of an intent to mislead7 when submitting the search report with only observations thereon. 7 The USPTO expects that an applicant (or representative) would engage a search service to conduct a prior art search and prepare an international-style search report. Provided that there is no clea

r act to mislead the USPTO (i.e., applicant falsifies or omits the documents uncovered during the search in the IS SR), the USPTO would presume that there was no misconduct on the part of the applicant and that the ISSR was submi tted in good faith. P-01 5 UNITED STATES PATENT AND TRADEMARK OFFICE Examination will normally be based on prior art listed on ISSR as supplemented to the extent appropriate if allowable subject matter is found. Limited number of claims for examination, by charging escalating surcharge for exc ess claims. Limited to single invention per application subject to rejoinder at allowance. B. Track 2 International Search Authority (ISA) Provides Search Any applicant that may file a request that the USPTO act as an International Sea rching Authority under the PCT (e.g., at least one U.S. citizen named as an applicant o r where the U.S. has agreed to be an ISA for other PCT member states applicants) may in l ieu of Track 1 file an international application. The USPTO may not under the PCT requi re that an applicant provide a search during the international stage. Thus, if the USPTO serves as the ISA, a search will be provided by the Office. (Note: the USPTO pla ns to outsource PCT Chapter I.) The ISSR, if any, would be provided to the Office for primary use during the examination of the National Stage application under Track 1. Full faith and cred it for the ISSR will be provided, to be supplemented to the extent appropriate if allowable subject matter is found. Because of the high cost to the Office to provide this service and as the applicant may not have the opportunity to review an ISSR before submitting claim s for the Office to review, an appropriately priced fee will be charged (during the in ternational phase). Highlights of the second track are: An examination fee set to cover cost recovery for contracted searches and their re view during the International stage will be charged, while a low examination fee duri ng the National Stage will be charged Applicant or the International Bureau will submit the PCT search results Examination of the National Stage will be based primarily on prior art cited by th e United States International Searching Authority (under Track 1) Limited number of claims for examination of the National Stage application, by charging escalating surcharge for excess claims Preferential order of examination of international stage based on PCT timelines, a nd in the National Stage C. Track 3 Another Intellectual Property (IP) Office Provides Positive Examination Results If the applicant chooses track 3 where the U.S. has an appropriate bilateral agr eement with another IP office, the Office would examine the application on the basis of

the claims allowed by the other IP office (e.g., JP, EP, DE, UK, CA, and AU). The applicant must request expedited examination by the other IP office and may requ est delayed examination in the USPTO such that the application will be searched and examination completed by the other IP office, prior to the examination by the US PTO. P-01 6 UNITED STATES PATENT AND TRADEMARK OFFICE The USPTO would examine the U.S. application claims based upon the allowed claim s from the counterpart application as a guide when determining patentability of th e U.S. claims. While the applicant would be able to present only allowed claims from th e office of first filing, the USPTO must still make an independent patentability a ssessment due to the substantive differences in patent laws. If examination based on the s earch of the other IP office and any other art submitted by the applicant leads the Exami ner to conclude that there is allowable subject matter, the examiner will perform a sup plemental search as appropriate and subject to supervisory approval. . Highlights of the third track are: Applicant is required to submit the allowed claims and prior art resulting from th e other IP office examination which will be used in making the patentability determinati on in the U.S. Examination will give near full faith and credit to the other IP office examinatio n, to be supplemented if allowable subject matter is found by a supplemental search as appropriate and subject to supervisory approval. Examination based primarily on prior art cited by the other IP office. Claims in U.S. application that conform to the claims allowed by the other IP offi ce would be examined only to extent that there would be a different patentability o utcome due to a difference between U.S. and foreign law Limited number of claims for examination through use of surcharge on excess number of claims Limited to a single invention subject to rejoinder at allowance Narrowing amendments only permitted Prior art and allowed claims from the foreign counterpart application must be subm itted in English Track 4 USPTO Provides Search D. If the applicant chooses track 4, the Office will only examine the application o n the basis of its own search (note: the Office plans to outsource this search work, and if examination based on the outsourced search and any other art submitted by the ap plicant leads the Examiner to conclude that there is allowable subject matter, the Exami ner will perform a supplemental search as appropriate and subject tot supervisory approva l.) Highlights of the fourth track are: Limited to microentities Limited number of claims for examination through use of surcharge on excess number

of claims Limited to a single invention subject to rejoinder at allowance Details of the Four Tracks Examination Process The current single-track examination process is replaced with an examination pro cess that gives the applicant the option of choosing one of four examination tracks. The multiP-01 7 UNITED STATES PATENT AND TRADEMARK OFFICE track approach allows the applicant to decide whether to provide an ISSR and ana lysis to assist in the examination process and sets filing/examination fees in accordance with the level of assistance provided in each track. In each of the tracks, applicants would be required to pay an escalating surchar ge to present more than a limited number of claims for examination. Size of applicatio ns will be controlled through a surcharge on oversized applications. This change will he lp focus the Office s examination efforts on a single invention based on the broadest scope to which applicants believe they are entitled. Detailed Explanation of Track 1 - Applicant Provides Search 1. Applicant Submits a Certified Search Report This proposal would allow an applicant to provide a search performed in accordan ce with the international guidelines provided under the Patent Cooperation Treaty and na tional guidelines for searching NPL, and to submit the results in an ISSR to the Office . The results of the search would be used as the primary basis for determining patenta bility. Paralleling this change would be a new post-grant review procedure for cancellat ion of invalid U.S. patents whereby third parties would be permitted to initiate post-g rant review proceedings before the USPTO to patents for a limited period of time after publi cation of the patents. The Office is currently working through the Office of General Couns el on the specifics of the post-grant review (as well as streamlined reexamination). Applicants will have a certified search service conduct a search of the prior ar t. The search results will be submitted in an ISSR. The A document8 citations listed on t he ISSR will be limited in number by governing guidelines established for CSS and t he ISSR will provide a relevancy description of each citation. The steps involved i n performing a prior art search includes (1) identifying a field of search that wo uld cover the disclosed invention, (2) selecting the proper tools to perform the search, a nd (3) determining the appropriate search strategy for each of the selected search tool s. The USPTO expects that an applicant (or representative) would engage a certified sea rch service, which could be another IP office having a bilateral agreement with the

USPTO or a private sector enterprise regulated by the USPTO to conduct a prior art sea rch and prepare an international-style search report. Applicants would be expected to search both patents and non-patent literature, b oth of which are available on the Internet or through commercial databases. Applicants would need to present the actual search terms employed along with the places searched and the raw results so that the examiner, if necessary, can evaluate the search quality. While the applicant would have to meet the 37 CFR 1.56 burden of candor and good faith in executing a search, the Office recognizes that searching is inherently an uncert ain process that cannot be bounded with any precision, and therefore, any search that on its face 8 Using the PCT X, Y, and A documents designations. P-01 8 UNITED STATES PATENT AND TRADEMARK OFFICE incorporates a reasonable set of search criteria and a reasonably encompassing s cope of art within which the search is executed, would be considered to be in good faith . The courts have further assured applicants that the burden of candor and good faith would not be unreasonably imposed in the opinion in Burlington Industries Inc. v. Dayco Co rp., 849 F.2d 1418, 7 USPQ2d 1158 (Fed Cir 1988), " [t]his court will not hold unenforcea ble a patent once granted in the absence of an intent to mislead, although the nondisc losure of facts of which the applicant should have known the materiality may justify an in ference of intent to mislead in appropriate cases" and "the court should find inequitabl e conduct only if shown by clear and convincing evidence." So long as there is a clear abs ence of intent to mislead (i.e., applicant falsifies or omits the documents uncovered du ring the search in the ISSR), a search submitted by an applicant would be considered havi ng been performed in good faith. A statutory change may also be necessary to reduce the risk of unenforceability. The benefits of this change in practice from CSS would be numerous, in that it w ill assist the Office in alleviating an ever-increasing search burden. Many times, applican ts possess the expertise to recognize and identify the most pertinent prior art pat ents and publications related to their invention(s). Review of the ISSR will result in ap plicant identification of significant patentability issues related to novelty and obviou sness before an examiner even begins, thus enabling examiners to better spend their time on t he analysis of patentability that is critical to patent quality. This, coupled with the other USPTO quality initiatives set forth in Issue Papers P-07, P-17, P-19, P-20, P-21 , and P-23

will result in better examination of applications under 4-Track examination. While an individual post-grant review proceeding would be more costly and time consuming than the current examination proceedings, it is expected that only a s mall percentage of issued patents would result in such proceedings. In the EPO, approximately 6.5 % of all published patents result in post-grant reviews9. Appl ying this ratio to the approximately 160,000 patents issued annually by the Office, 10,400 patents would result in post-grant review proceeding each year. This number is, however, unrealistic in view of the following: The patent systems of the individual member-states of the EPO have a long histor y of post-grant review proceedings. The parties practicing before the EPO have accord ingly developed a comfort level to file post-grant review requests, as they do this in their home states. Such a comfort level will not be found in the United States, to which th e filing of post-grant review requests is totally foreign. Therefore, it is envisioned that a lower percentage of post-grant review proceedings will be filed in the United States w here postgrant reviews are not an institutionalized part of our national patent law system. Thu s, a more conservative estimate of post-grant review filings per year should be used. The number of ex parte reexamination requests filed in the United States is approximately 400 per year. Because post-grant review proceedings permit challen ges based on any issue of patentability and permit increased third party participati on, the 9 Source: www.european-patent-office.org (For the year 1999: 2303 oppositions fi led, and 35,358 patents issued). P-01 9 UNITED STATES PATENT AND TRADEMARK OFFICE volume would be expected to be higher than reexamination filings. Thus, the expe cted growth in annual volume of post-grant review filings in the first couple of year s would be about 200 to 300, building up to about 400 in the third to fourth year. It is pr obable that we would receive no greater than 1000 post-grant review filings by the fifth yea r. With enhanced quality measures to be taken during implementation of quality initiativ es set forth in issue papers P-07, P-17, P-19, P-20, P-21, and P-23, it is expected tha t the demand for requesting post-grant reviews will be tempered. Therefore, this change in practice would not only streamline patent operations b y alleviating a tremendous primary search burden and thus conserving already chall enged patent resources, but it would also create a more knowledgeable and savvy applic ant base. Potential patent applicants will have more information for consideration p rior to filing and prosecution of their patent application(s), and will thus be empowere d to make critical business decisions based upon key prior art information. A collaborativ

e effort between applicants and the Office, will not only foster a working partnership be tween the Office and applicants, but it will also improve efficiency and substantive focus in the preparation, examination, and prosecution of patent applications in a more costeffective and expeditious manner. It will, with implementation of the quality initiatives, strengthen the quality of patents, thus providing a more substantive and valuable end-produ ct for patent holders to take to the bank to offset additional costs eventually diminis h the demand for post-grant review proceedings. I. Detailed Explanation of Track 1 Options for Applicants A. Certified Search Service Conducts Search In order to allow applicants to participate in the process, applicants will not only commission a search of the prior art, but will also be responsible for submittin g the search results to the Office, in a manner that facilitates efficient examination of the application by the Office. The search results will be submitted in an ISSR. The CSS will produce a search report that is enhanced relative to an ISSR. The C SS would be required (under the certification requirements) to include a simple characterization of prior art that is found to be relevant (e.g., the X/Y/A docu ment designation) and identify claims to which each reference is considered relevant. It should also provide the search terms, sources searched, and raw results, to allow the exa miner to review the quality of search if needed. The applicant would then have the opt ion of providing observations on the search report and/or claim amendments in the reque st for examination. Observations and/or claim amendments would be considered before any substantive opinions on patentability are rendered by the USPTO. For example, if an applicant considers the art/designation by the CSS to be seriously flawed, he ma y not want to make any statements to the USPTO since the examiner would likely reach t he same conclusion. Applicants may also wish to have the examiner express an opinio n on the relevance of a prior art reference before having to express any views on the reference. Giving the applicant the option will produce more useful input. P-01 10 UNITED STATES PATENT AND TRADEMARK OFFICE The A document citations listed on the ISSR that do not provide that one or more claims are unpatentable will be limited in number through governing guidelines i ssued for CSS and it will provide a relevancy description of each citation. The steps involved in performing a prior art search includes (1) identifying a field of search that would cover the disclosed invention, (2) selecting the proper tools to perform the search, a nd (3)

determining the appropriate search strategy for each of the selected search tool s. The search process and preparation of the ISSR are activities between the applicant and the CSS. The CSS would initially prepare a proposed technical search abstract. The applicant would review and improve on the abstract; approve a search strategy, i ncluding the field of search, search logic (e.g., where to search, if Non-Patent Literatu re (NPL)) and terms; and send it back to the CSS for confirmation before proceeding furthe r. The process would differ slightly based upon whether the applicant files a provision al or nonprovisional application (see Figure 3). Using the abstract and discussions with the applicant, the CSS would carry out t he search and prepare a report similar to the international-style search report (ISSR) usi ng PCT guidelines and USPTO search guidelines for NPL. The applicant would submit this information to the Office with a request for examination. Examination would not be conducted until the date that the applicant presents this information and the re quired examination fee. The examiner would then review the search report and prior art cited. If the sea rch were inadequate, the examiner would contact the applicant and explain the deficiency (using 37 CFR 1.105) and seek supplemental information from the applicant. If examinati on based on the primary search and any other art submitted by the applicant leads t he Examiner to conclude that there is allowable subject matter, the Examiner will p erform an appropriate supplemental search subject to supervisory approval to confirm th e adequacy of the primary search. i. Certification of CSS All CSSes must be certified by the USPTO, using a process similar to the ISO 900 0 certification technique. The criteria would be similar to those utilized to desi gnate an International Search Authority (ISA) under PCT, such as number and type of techn ical employees; training provided; claim interpretation; ability to timely deliver re port and handle volume; as well as other potential evaluation elements including experien ce of management and executive staff, competency to perform high quality searches, tec hnical knowledge and organizational infrastructure such as in-house databases or search engines. After the initial certification, the CSS would be required to undergo a regular recertification process to ensure that quality standards are continually met. P-01 11 UNITED STATES PATENT AND TRADEMARK OFFICE ii. Quality Assurance A component of the In-Process review is to evaluate the quality of the search re

sults for each CSS. A statistically valid sample of cases would be reviewed using criteria such as, whether the search was based on what is claimed and reasonably expected to be cl aimed, and acceptability of the results to the examiner based upon specific findings of substantive deficiencies. B . ISR or First Office Action from Qualified Foreign IP Office. In this option, the U.S. would establish bilateral agreements with a number of f oreign Offices that would establish the criteria for searching and claim-by-claim analy sis that is necessary to best promote the use of the efforts by a first Office in a second O ffice s examination. In this option, the nation of first filing would provide a high qua lity search and report for use with the Offices of subsequent filings. Where the U.S. is a n ation of subsequent filing, the examination fee would be reduced. Quality Assurance: A component of the bilateral agreement would be that an In-Pr ocess review by the nation of subsequent filing would occur to evaluate the quality of the search results provided by the IP Office of the first filing. A statistically va lid sample of cases would be reviewed using criteria such as, whether the search was based on what is claimed and reasonably expected to be claimed. Sanctions for failure to provide high quality results may result in loss of qualified status. C . Foreign IP Office serving as a Certified Search Service ISA/IPEA Resulting from Foreign PCT Application by an IP Office Without a Any foreign IP Office may be qualified as a CSS under the same standards that th e private sector is qualified. Following qualification, the foreign IP Office ISSR s and applicants using such services will be treated as set forth in I above. D. Bilateral Agreement with the USPTO Alternately, applicant may obtain an ISSR by an International Searching Authorit y (ISA) that is not qualified as set forth in Option B above. The examination fee is exp ected to be set at a high level, since full faith and credit would not be given. E. Binding Negative Patentability Determination by a Qualified foreign IP Office Applicants that have received a binding negative patentability determination by a qualified Office may provide office actions, claims and prior art in English fro m the earlier prosecuted application. The examination fee for this option would be red uced. P-01 12 F . Non-provisional Applications (NP)

File Provisional (P) 0-months UNITED STATES PATENT AND TRADEMARK OFFICE ISR from U.S. PCT (in a Track 2 national stage) Applicants may obtain an ISR from the U.S. acting as an ISA in an international PCT application under Track 2. The examination fee for this option in the Track 1 na tional stage would be reduced. Treatment of amendments, further prosecution and 35 U.S.C. 102(e) prior art. An appropriate ISSR is required to include a broad enough search to uncover prio r art related to any subject matter that is likely to be claimed. Thus, a prior art se arch of newly issued patents or published international applications that have matured since t he date of the ISSR need be done by the Office when reviewing an application for the first time or when amended claims are submitted. Where different claims are submitted, the Examiner in his/her discretion may perform a supplemental search as appropriate and subject to supervisory approval or an updated search may be required from applic ant under 37 CFR 1.105. Similarly, upon filing of a continuation-in-part application , a new search should be provided. Amendments that narrow claims, or filing of a continu ation application with narrower claims should rarely require a new search from the app licant. Requests CSS to Perform Search Request for Examination ** 0-18 months (NP) 12-18 months (P to 12 months 0-12 months *with claims written to avoid prior arts based on the CSS search NP) **with fee, ISSR, any pre-amendments revising claims to avoid prior arts based on ESS search as updated Differences in Provisional and Non-Provisional Applications Figure 3 P-01 13 UNITED STATES PATENT AND TRADEMARK OFFICE II. Detailed Explanation of Track 2 International Search Authority (ISA) Provide s Search Examination would be based primarily on the search conducted by the United State s

International Searching Authority under the PCT (for national stage applications only), supplemented as appropriate and subject to supervisory approval to conform the adequacy of the ISA search if examination based on that search and any other art submitted by the applicant leads the Examiner to conclude that there is allowabl e subject matter. Where an applicant has received an international search report (ISR/US) for an international application the applicant may request that examination proceed in the United States based on that search report. Examination of the application would be limited to the items listed on the search report, and any disclosures (ISSR and relevancy discussions) submitted by applicants under the conditions set forth in Track 1. In order to submit amended claims not covered by original ISR, applicant would submit an ISSR and relevancy discussion under the conditions set forth in Track 1. If the PCT application claims priority to an earlier filed U.S. non-provisional application that is under Track 1 examination and a search report has been provided by the a pplicant for that application, the international search report and any international prel iminary examination report for the PCT application will be based upon the search report has been provided by the applicant in the earlier filed U.S. non-provisional application. For other PCT applications there will be an increased international search fee because the USPTO will need to conduct a search or have a search conducted. III . Detailed Explanation of Track 3 Another IP Office Provides Examination Results Forty-five percent of the Office s non-provisional application filings are based o n foreign origin applications. There must be a bilateral agreement between the USPTO and t he other IP office as a pre-condition to the availability of this track (track 3). Where available, the USPTO is the Office of the second filing, an applicant may choose this track if the search and examination of the foreign origin application have been performed by the office of the first filing when the U.S. examiner picks up the U.S. appli cation for examination. The U.S. examiner will use allowed claims from the foreign counterp art application as a guide when examining the U.S. claims. Two options are available under this track. Claims in the U.S. application must conform to the claims allowed by the Office of first filing. The U.S. application would be examined giving near full faith and credit to the examination record in the other IP office, supplemented as appropriate and subje ct to supervisory approval to confirm the adequacy of the search of the other IP offic e if

allowable subject mater is found. Examination of the application would be based on the previously developed record, and any disclosures submitted by applicants under t he conditions set forth in Track 1. In order to submit amended claims (with respect to the claims deemed patentable by the other IP office), an applicant would have to sub mit narrowed claims only. The fee for examination would be reduced. P-01 14 A. D. UNITED STATES PATENT AND TRADEMARK OFFICE IV. Track 4 USPTO Provides Search In order to promote participation in the Patent system for individuals of limite d means, a request for examination may be made under this track by payment of a discounted examination fee. Only independent inventors whose income meet micro-entity defin ition created by rule, may request examination under this track. Applications under Tr ack 4 examination would be processed similar to today s environment where the Office wou ld conduct the search. With all of the tracks, following patent grant, third parties would be entitled to request a post-grant review. As set forth above, the Office should expect a relatively sma ll number of requests compared to the number of patents granted. Statutory Changes Suggested for Tracks 1-4: Revise section 2 to provide for the USPTO to certify search services. B. Revise section 22 to provide authority to charge a surcharge for applications and other papers that are not filed in accordance with the USPTO s electronic filing requirements. C. Revise section 41 to set forth a separate basic filing fee and examination fe e(s), which examination fees are reduced by rule to cover the differing costs of exami nation under Tracks 1, 3 through 410, and to provide authority to charge a surcharge fo r: claims in excess of [2] independent and [10] total claims; applications containing patentability indistinct claims; continuing applications Add a new section 123 to reduce the risk of unenforceability. E. Revise section 131 to provide that an application other than under Track 4, i s not examined unless the applicant requests examination (and pays a fee), that the ap plication becomes abandoned if the applicant does not request examination (and pay a fee) within a specified period of time; also revise section 131 to provide that applicants ( other than micro-entities) must conduct a search and provide a search report with the reque st for examination; also revise section 131 to provide for a further examination fee re duction when Track 3 is implemented. F Post-Grant Review : Refer to separate paper on this topic. 10 The Track 2 search and examination fee is/would be charged during the interna

tional phase under the authority currently provided in section 376. P-01 15 UNITED STATES PATENT AND TRADEMARK OFFICE USPTO Recommended Course of Action: Timing In order to fully implement the Four-Tracks Examination Process as envisioned, legislation is needed for many of the components including post-gran t review and change in fee structure. P-01 16 Task Name P-01 - Four-Tracks Examination Process Draft legislation (P-01) Introduce FY 03 Fee Legislation (P-01) Enact FY 03 Fee Legislation (P-01) FY 03 Fee Legislation Effective (P-01) Publish direct final rule providing fee reduction for Section 371 applications w/positive IPER from US (P-01) Begin track 3 bilateral negotiations (P-01) Publish direct final rule providing fee reduction for micro entities (P-01) Introduce FY 04 Fee Plus Legislation (P-01) Publish notice of requirements for private commercial search (P-01) Enact FY 04 Fee Plus Legislation (P-01) Publish proposed rules for qualifying private commercial search service (P-01) Publish proposed rule for revised international search fee to cover outsourced PCT Chapter I Search (Track 2) (P-01) Publish proposed rules setting out requirements for search reports/search abstracts (P-01) Duration 747 days 47 days 11 days 64 days 0 days 10 days 10 days 10 days 10 days 10 days 10 days 10 days 10 days 10 days FY 2003 Resources $5,110,000 Contact B. Bahr Start Finish Thu 3/28/02 Thu 3/3/05 Thu 3/28/02 Mon 6/3/02 Fri 6/14/02 Fri 6/28/02 Mon 9/30/02 Tue 10/1/02 Tue 10/1/02 Tue 7/2/02 Fri 12/13/02 Mon 12/2/02

Thu 1/2/03 Wed 1/15/03 Mon 9/16/02 Wed 1/15/03 Wed 5/14/03 Tue 9/3/02 Thu 1/2/03 Thu 5/1/03 Fri 8/1/03 Thu 8/14/03 Tue 9/2/03 Mon 9/15/03 Mon 9/15/03 Tue 9/2/03 Mon 9/15/03 Tue 9/2/03 Task Name FY 04 Fee Plus Legislation Effective (P-01) Publish final rules for qualifying private commercial search services (P-01) Final rules for qualifying private commercial search services effective (P-01) Publish final rule for revised international search fee to cover outsourced PCT Chapter I (Track 2) (P-01) Publish final rules setting out requirements for search reports/search abstracts (P-01) Begin having some bilateral agreements for track 3 applications in place (P-01) Begin qualifying private commercial search services (P-01) Final rule for revised international search fee to cover outsourced PCT Chapter I search (Track 2) effective (P-01) Final rules setting out requirements for search reports/search abstracts effective (P-01) Define PAIR Requirements (P-01) Baseline PAIR Project (P-01) Enhance PAIR (P-01) Define PALM Requirements (P-01) Baseline PALM Project (P-01) Duration 10 days 10 days 10 days 10 days 10 days 10 days 10 days 10 days 10 days 168 days 21 days 365 days 168 days 21 days Finish Wed 10/15/03

Start Wed 10/1/03 FY 2003 Resources Contact Mon 3/1/04 Fri 3/12/04 Wed 4/14/04 Thu 4/1/04 Wed 7/14/04 Thu 7/1/04 Wed 7/14/04 Thu 7/1/04 Mon 8/2/04 Fri 8/13/04 Mon 8/2/04 Fri 8/13/04 Thu 10/14/04 Fri 10/1/04 Thu 10/14/04 Fri 10/1/04 Thu 1/2/03 Fri 8/29/03 Tue 9/2/03 Tue 9/30/03 Wed 10/1/03 Thu 1/2/03 Fri 8/29/03 Thu 3/3/05 Tue 9/2/03 Tue 9/30/03 Task Name Enhance PALM (P-01) Define RAM Requirements (P-01) Baseline RAM Project (P-01) Enhance RAM (P-01) Duration 365 days 168 days 21 days 365 days Start Wed 10/1/03 Finish Thu 3/3/05 FY 2003 Resources Contact Thu 1/2/03 Fri 8/29/03 Tue 9/2/03 Tue 9/30/03 Wed 10/1/03 Thu 3/3/05 UNITED STATES PATENT AND TRADEMARK OFFICE LIMITATION ON THE NUMBER OF CLAIMS Description of Option: The USPTO would charge very high fees for excess Action: The USPTO should place limits on the number of claims that may be presented for examination in an application and the most effective mechanisms for doing so. Background Information: Under current practice, an applicant is permitted to submit a large number of cl aims by paying modest excess claims fees. The USPTO is experiencing an increase in the

number of applications being filed, especially in the complex arts, as well as a n increase in the number of claims per application. These factors have exacerbated the burd en on the USPTO to timely examine the applications. Deterring high number of claims in an application is an effective means for allowing the USPTO s resources to be used to process a larger number of applications. Fewer issues to resolve focuses the exa mination for better resolution. Reducing the number of claims will reduce the creation of confusing mazes of claims within an application, which will allow for improvemen ts in quality. Options Considered: Option #1: Provide high fees for excess claims claims. This would discourage the vast majority of applicants from submitting mo re than a reasonable number of claims for examination. Since the excess claims fees are set by statute (35 U.S.C. 41(a)(1)(B)), this option would require an amendment to the p atent code (35 U.S.C. 41(a)). Option #2: Limit the number of claims per application The USPTO has historically treated the issue of applications containing an Description of Option: The USPTO would place a limit on the number of claims that could be presented for examination in an application. This would prevent ap plicants from being able to submit more than a reasonable number of claims for examinatio n. excessive number of claims on a case-by-case basis, in that the presentation of an unreasonable number of claims in an application may result in an undue multiplic ity rejection. See MPEP 2173.05(n). The CCPA has affirmed rejections based upon undu e multiplicity when the degree of repetition and multiplicity in the claims beclouds definition in a maze of confusion. See In re Chandler, 319 F.2d 211, 225, 138 USP Q 138, 148 (CCPA 1963); see also In re Chandler, 254 F.2d 396, 117 USPQ 361 (CCPA 1958). In subsequent decisions, however, the CCPA has declined to hold that the presentation of any particular number of claims is so excessive as to confuse or obscure the inventions defined by the claims. See In re Wakefield, 422 F.2d 897, 164 USP Q 636 P-02 1 UNITED STATES PATENT AND TRADEMARK OFFICE (CCPA 1970); and In re Flint, 411 F.2d 1353, 162 USPQ 228 (CCPA 1969). These subsequent decisions have severely cut back on the usefulness and use of rejecti ons based upon undue multiplicity. See Ex parte Sheldon, 172 USPQ 319 (BPAI 1972). Since the USPTO has never proposed to deal with the issue of applications containing an excessive number of claims via rule making, there is no CCPA or Fe deral Circuit decision on that point.1 A rule limiting the number of claims in an appl ication should be considered as within the USPTO s rule making authority under 35 U.S.C. 2(b)(2) if it is within the [USPTO s] statutory authority and is reasonably related

to the purposes of the enabling legislation . . . and does no violence to due process. S ee Patlex Corp. v. Mossinghoff, 758 F.2d 594, 606, 225 USPQ 543, 252 (Fed. Cir. 1985) (cit ations omitted). 35 U.S.C. 41(a)(1)(B) provides that an applicant must pay an additiona l fee for the presentation of each independent claim in excess of three and each claim in excess of twenty. This implies that an applicant is entitled to present more than three in dependent claims, and more than twenty total claims, but it does not imply that the USPTO may place no limit on the number of claims that an applicant may present. See Ex par te Jenkins, 1930 Dec. Comm r Pat. 8 (1930) (that the patent statute now requires a fe e for additional claims does not mean that there is no end to the number of claims tha t the applicant may present). Placing a reasonable limit on the number of claims that may be presented for examination will: (1) permit the USPTO to more equitably distribut e its resources among the vast number of applications that must be examined each year (35 U.S.C. 131 and 132); and (2) assist the USPTO, public, and the courts in ascerta ining what it is that the applicant considers to be the invention (35 U.S.C. 112, 2). 35 U.S.C. 131 and 132 require the USPTO to examine the more than three hundred thousand applications that are filed each year, and 35 U.S.C. 282 provid es that each claim of the patents resulting from these applications is presumed to be va lid, each independently of the others. To reasonably ensure that the patents issuing on th e everincreasing number of applications filed each year contain only claims that have been subjected to an appropriate examination, the USPTO may determined that it must p lace some limits on the number of total claims and independent claims that an applica nt may present in a single application. Such a rule would bear a reasonable relationship to the provisions of 35 U.S.C. 112, 2, that an application conclude with one or more claims particularly pointi ng out and distinctly claiming the subject matter which the applicant regards as his in vention. While 35 U.S.C. 112, 2, provides that the claims describe the subject matter whic h the applicant regards as his invention (emphasis added), it does not preclude the USPTO from regulating the claims in regard to matters of form. See Fressola v. Manbeck, 36 USPQ2d 1211, 1214 (D.D.C. 1995). 1 The USPTO survived a challenge to its single claim rule for design applications in Leer v. Lehman, 26 F.3d 138 (Fed Cir. 1994) (Rule 36). However, that decision is non-pre cedential (with no opinion) and may be distinguished as nothing more than deference to a long-st anding USPTO rule or practice. 2 P-02 UNITED STATES PATENT AND TRADEMARK OFFICE

On the other hand, while the USPTO could mount a reasonable defense of a rule limiting the number of claims in an application as within the USPTO s rule making authority under 35 U.S.C. 2(b)(2), it would certainly be better if the patent co de (35 U.S.C. 112) were amended to expressly grant such rule making authority to the USPTO. Description of Option: The USPTO would charge additional fees for additional Option #3: Charge additional fees for pages in excess of a set number of pages f or an application pages in excess of a set number of pages for an application. This would act as a control on the number of claims per application since if the USPTO limits the number of pages, it would be unlikely that applicant will have a large number of claims for an ap plication that does not have too many pages of description. Since the patent code does not set forth fees for pages in excess of a set number of pages for an application, the USPTO could charge a fee set under 35 U.S.C. 41(d) for such additional pages. USPTO Recommended Course of Action: Details: The USPTO should seek an amendment to 35 U.S.C. 41(a) to replace the Option 1 excess claims fee provisions with authorization for the USPTO to require an esca lating excess claim fee for the presentation of independent claims in excess of 3, and total claims (independent or dependent) in excess of 20. 3 P-02 Task Name P-02 - Fee Restructuring - 2003 Draft fee scheme (P-02) Obtain Administration Clearance (P-02) Introduce legislation (P-02) Enact legislation (P-02) Obtain clearance on final rules (p-02) Publish final rules (P-02) Implement final rules (P-02) Duration 131 days 37 days 10 days 11 days 64 days 23 days 11 days 0 days Contact S. Kunin Start Finish Thu 3/28/02 Tue 10/1/02 FY 2003 Resources $0 Thu 3/28/02 Fri 5/17/02 Mon 5/20/02 Fri 6/14/02 Fri 6/28/02 Mon 6/3/02 Mon 9/30/02

Tue 7/2/02 Fri 8/2/02 Tue 7/2/02 Mon Mon 9/16/02 9/30/02 Tue 10/1/02 Tue 10/1/02 UNITED STATES PATENT AND TRADEMARK OFFICE PRODUCTIVITY PENDENCY 4 REFER TO OTHER PENDENCY PAPERS (PENDENCY 1, PENDENCY 2, AND PENDENCY 3) P-49 1 Productivity Accelerated Examination Actions UNITED STATES PATENT AND TRADEMARK OFFICE ACCELERATED EXAMINATION Action: Applicants should be given the option of choosing an accelerated examination pro cedure. An application subject to an accelerated examination procedure would have a pend ency of no longer than 12 months. Background Information: New patent applications are normally taken up for examination in the order of th eir effective United States filing date. However, the Commissioner may provide that a patent application will be advanced out of turn for examination if a petition to make special under 37 CFR 1.102(c) or (d) is granted. Currently, applicants can file a petition to make special for utility patent appli cations requesting accelerated examination under the guidelines set forth in MPEP 708.02 , subsection VIII. Under the current petition to make special procedure, applicants must (1) pay a $130 petition fee, (2) direct all claims to a single invention, (3) co nduct a preexamination prior art search, (4) submit a copy of the references most closel y related to the claimed subject matter, and (5) submit a detailed discussion of the most closely related references. At a cost of $130, it might be expected that the petition to make special procedure would be widely used. However, the number of petitions to make special, accelerated examination based on MPEP 708.02, subsection VIII, filed pe r year has been very small. For calendar year 1997, 359 petitions were filed; for 1998, 490 petitions were filed; for 1999, 549 petitions were filed; for 2000, 670 petition s were filed; and for 2001, 373 petitions were filed. The reason for the small number of filin gs may be that a grantable petition to make special does not serve to expedite initial app lication processing and post-allowance publication, or that the Office has not stated any specific pendency reduction goal for the petition to make special procedure. The proposed accelerated examination procedure provides an attractive option to applicants frustrated by extended pendency and who desire their patents to issue more

quickly. Options Considered: An applicant may request expedited examination process for a newly filed nonprov isional application by submitting a request for expedited examination along with the req uired fee at the time of filing of the application. An application subject to this expedit ed examination process will have a pendency of no longer than 12 months. In order f or a newly filed nonprovisional application to be eligible for this expedited examina tion process, the following requirements must be met: P-10 1 UNITED STATES PATENT AND TRADEMARK OFFICE A complete application must be electronically submitted to the USPTO. Payment of any patent filing/process fees must be paid by either authorizing the charge to applicant s deposit account or charging the fees to a credit card; Applicant must perform a preexamination search including U.S. patents and published applications, foreign patents and publications, and non-patent literat ure. Applicant must include a statement that a preexamination search was made, listin g the field of search by class and subclass, databases searched, and the search qu eries used in such database searches. Based on the preexamination search performed, applicant must provide a presumptive classification for the application; Applicant must submit an information disclosure statement (IDS) complying with 37 CFR 1.98. Applicant must identify each reference cited in the IDS that is deemed to be the most closely related to the claimed subject matter and include a relevancy d iscussion for each reference identified. Applicant would be required to supply a copy of e ach reference identified as the most closely related to the claimed subject matter i n the IDS in an electronic image format; The application must be limited to a total of no more than 20 claims with no more than 3 of those claims being independent claims. Examiners will only examine the indepe ndent claims and the dependent claims will stand or fall with the independent claims; All the claims must be directed to a single invention. During prosecution of the application, the following expedited procedures must b e followed: The newly filed nonprovisional application will be taken up for examination by th e examiner before all other categories of applications, and the application will b e given a complete first action on an expedited basis. A first action rejection will set a two-month shortened statutory period for reply. No supplemental amendment is permitted. No extension of time is permitted; All correspondence to the Office after the initial filing of the application, inc luding replies to Office actions, must be made by facsimile transmission or via e-mail within the

two-month period; The examiner will, within two weeks from the date of receipt of applicant s reply, take up the application for final disposition. This disposition will constitute either a final rejection with a setting of a two-month shortened statutory period for reply, or a notice of allowance. If a notice of allowance and issue fee due is mailed, the notice will indicate that applicant is required to submit a publication ready version of the applicat ion along with the issue fee within one-month from the mailing date of the notice. No exte nsion of time is permitted; If a final rejection is mailed, the Office action will set a two-month shortened statutory period for reply. An amendment after final rejection to be entered must place th e application in condition for allowance. Otherwise, a reply to the final rejectio n is limited to the filing of a notice of appeal under 37 CFR 1.191 or the filing of a reques t for continued examination (RCE) under 37 CFR 1.114. The filing of a notice of appeal or an RCE will remove the application from the expedited examination process; During the two-month period for reply to the final rejection, applicant is encour aged to request an interview with the examiner for the purpose of reaching an agreement on an P-10 2 UNITED STATES PATENT AND TRADEMARK OFFICE amendment, which would place the application in condition for allowance. If an agreement cannot be reached to place the application in condition for allowance, applicant s reply to the final rejection is limited to the filing of a notice of a ppeal or an RCE; Any supplemental IDSs must be submitted via an RCE. After allowance, these applications subject to the expedited examination process will be given top priority for printing. USPTO Recommended Course of Action: Details: Adopt the option and seek statutory change to provide for a cost-based expedited examination procedure that would guarantee applicant a pendency of no longer tha n 12 months from filing to patent issuance. Implement accelerated examination as part of an additional track under the proposed 4-tracks examination process. P-10-01 3 Task Name P-10 Accelerated Examination Draft legislation Obtain Administration Clearance Introduce legislation Publish proposed rules Enact legislation Comment period closes Publish final rules Implement final rules

Duration 336 days 64 days 62 days 103 days 76 days 96 days 75 days 21 days 0 days Finish Wed 10/1/03 Contact S. Kunin Start Mon 6/3/02 FY 2003 Resources $0 Mon 6/3/02 Fri 8/30/02 Fri 11/29/02 Wed 2/5/03 Tue 7/1/03 Mon 9/2/02 Mon 3/17/03 Fri 2/14/03 Tue 7/1/03 Tue 7/1/03 Thu 5/15/03 Fri 8/29/03 Tue 9/2/03 Tue 9/30/03 Wed 10/1/03 Wed 10/1/03 Productivity Shared Responsibility 1 Shared Responsibility 2 Actions PROPOSAL TO RESTRUCTURE PATENT FEES AND PRACTICES FOR FISCAL YEARS 2003 AND 2004 POST-GRANT REVIEW OF PATENT CLAIMS UNITED STATES PATENT AND TRADEMARK OFFICE OVERVIEW PROPOSAL TO RESTRUCTURE PATENT FEES AND PRACTICES FOR FISCAL YEARS 2003 and 2004 It is proposed to amend 35 USC 41 to: Set fees for the filing of patent applications and related services that would recover a substantial portion of the Office cost for performing the processing and examination of patent applications. Set fees for additional independent and total claims at progressive rates. Set a fee surcharge for additional pages of specification. Set a fee surcharge which would be assessed for excessive generational claims for priority under 35 USC 120, 121 and 365(c). Set a fee surcharge for presenting patentably indistinct claims in multiple applications. Increase the fees for extensions of time Increase the fees due at issue and at all maintenance fee periods Increase the fees for an appeal to the Board of Patent Appeals and Interferences. Institute a 4 track application system a set fee discounts for applicants submitting various types of documentation and for independent inventors

with moderate incomes. Establish a system for expediting certain applications. Set a surcharge for non-electronic document submission. Set a fee for post grant cancellation proceedings. The Office is proposing to increase and reapportion the existing combination of patent application filing, issuance and maintenance fees to align the fee amounts with the costs and timing of examination and to reduce the existing economic incentives for pra ctices that are inconsistent with public policy. Section 4204 of the American Inventors Protection Act of 1999 (AIPA) directed the Office to conduct a study of alternati ve fee structures that could be adopted [by the Office] to encourage maximum participat ion by the inventor community in the United States. See Pub. L. No. 106-113, 113 Stat. 1 501, 1501A-555 (1999). The study undertaken pursuant to section 4204 has been conclud ed and this proposed revision of patent and trademark fees is being submitted to Co ngress as its result. FY 2003 Consistent with the existing structure, fees would continue to be primarily asse ssed for filing and examination of an application, for patent grant, and for continuing b enefit of patent rights. Fee discounts and surcharges would be adopted to support practice s that FR-1 1 UNITED STATES PATENT AND TRADEMARK OFFICE reduce Office burden or that allow for greater participation by financially less advantaged participants (discounts) and to deter practices that increase Office burden or d isadvantage the public (surcharges). Although the proposed fee structure remains essentially the same as the existing structure, more optimal alignment of fees with services is expected from bifurca ting collection of the fees covering filing and examination, so that the bulk is not due until the applicant requests substantive examination. Existing practice bundles filing and examination in a composite fee, as though the applicant only received value for the combination. The result, as expected with no incremental cost for examination, h as been to encourage applicants to pursue prosecution until final disposition once the f iling fee has been paid, irrespective of commercial utility to them of obtaining a patent. Instead of this simplistic model, under which substantive examination invariably follows fi lings in lockstep, a more precise model would recognize that applicants have differing ne eds that may be satisfied with different levels of service. By filing patent applications , inventors receive something of substantial value, since the filing preserves prospective p atent

rights, defines subject matter that may subsequently be patented, and sets a pri ority date for the potentially eligible subject matter. Therefore, assigning a substantial, but affordable fee, for filing, itself, which is commensurate with the value for thi s essential service, properly balances the competing needs for ensuring access and potential for participation by all inventors and for minimizing cavalier and profligate applic ations that dissipate Office resources. Because the filing fee is proposed to be due in two increments, the lesser of th e two increments would be due at filing, corresponding to the lesser effort and value associated with filing relative to the subsequent substantive search and examination. The l arger portion of the filing fee would be due at the time the applicant requests examin ation and, in some instances, search. Making a request for examination a separate patent prosecution transaction is designed to enhance the applicant s control over the pa ce of patent prosecution. Applicants have great incentive to file applications as earl y as possible, even if they are uncertain about the commercial practicality of the di sclosed subject matter. In contrast, the expense of prosecution, and the risks associate d with inadvertent admissions narrowing the scope of patentable protection, suggest the need for time during which an applicant may conduct market research, conduct a prior art search, and make reasoned decisions of whether and how to go forward. Hence, the proposa l is to offer an applicant a window of time during which the Office will agree to not proceed to substantive examination until requested by the applicant. Should the applican t fail to make such a request during that window of time, the application would be held as abandoned. But this bifurcation serves both the applicant and the Office. The ap plicant gets needed time to fully examine the bases for patentability and the commercial viability of the invention, and the Office gets time to consolidate the papers in an appli cation, and properly assign the application for examination. Since applicants will make more fully informed judgments about whether to pursue patent protection, it is likely that applicants will be better prepared to prosecute their applications and the Office will be r elieved of the burden of examining many uneconomic applications. FR-1 2 UNITED STATES PATENT AND TRADEMARK OFFICE Under the proposal, the bulk of the fee would be levied upon the request for exa mination. Making the examination fee higher than the filing fee reflects that examination involves greater effort and adds greater value than filing. Whereas currently about 1/3 o f the total

fees paid through issuance are due at filing, and 2/3 at allowance, the proposed fees would strike a more equal balance. Giving applicants time to evaluate their applications before pursuing examinatio n is expected to result in a finer selection of which applications, and which claims within those applications, make economic sense to enter into substantive examination. U pon making their formal request to the Office to examine the application, applicants could make any preliminary claim amendments reflecting the results of applicants' anal ysis of marketability and patentability of the disclosed subject matter. Upon such a req uest for examination, the fee associated with examination would be due. Because the filin g fee would no longer be a sunk cost for the entire examination, a significant number of applications would never enter examination, which we anticipate will relieve muc h of the current strain on examination resources. Further, of the applications that do pr oceed to examination, other fees are proposed to keep the effort needed for examination w ithin the general norms of experience. In particular, substantial additional fees are prop osed for seeking benefits beyond the norm in terms of the number of claims entered, the s ize of the disclosure, the extent of reliance on prior filings for establishing an effe ctive filing date, and the use of multiple applications to claim patentably indistinct subjec t matter. The fees for additional claims beyond the ordinary usage is proposed to be incre ased to reflect the enormous additional burden that extensive numbers of claims place on the Office. Patent claims form the metes and bounds of patent property rights, so ap plicants and the Office focus heavily on the claims. Applicants sometimes need the added protection of many more claims than the norm, primarily as insurance against adv erse claim construction in subsequent litigation, and to obtain the breadth of protec tion to which they are entitled where there is no clear shorthand manner of drafting suc h claims. This protection comes at a heavy cost in examination time, and the proposed fees reflect this. Claims form the focal point of examination analysis and are frequently ame nded during prosecution. Independent claims place particularly high demands on examin ers because of their complexity and the interplay of distinction and commonality tha t must be unraveled among each such claim. Most applications require no more than 3 indepe ndent and 20 dependent claims. Recognizing these parameters as the upper limits of the norm, each independent claim beyond 3 would require a fee of progressively increasing amount.

Similarly, each dependent claim beyond 20 would incur a fee, the amount of which would increase progressively, but the progression would occur only in groups of 5. That is, the twenty-first through the twenty-fifth claim would each have a fee attach ed of the same amount. The twenty-sixth through the thirtieth claim would each have a fee attached of the same amount, but the amount for each of these claims 26-30 would be higher than the amount for each of claims 21-25. These claim fees would be set s o that either 8 independent or 35 total claims would essentially double the total cost through issuance; having both 8 independent and 35 total claims would therefore triple t he total cost through issuance. The claim fee rates would be progressive, so that an appl ication FR-1 3 UNITED STATES PATENT AND TRADEMARK OFFICE containing twice these numbers of independent and dependent claims (16 independe nt and 70 total) would cost about 25 times more. A new fee for reliance on more than two continuations is proposed to reflect the additional complexity that arises when an application incorporates the disclosed subject matter and prosecution history of many prior applications. The examination proce ss essentially provides for two examinations of an applicant's claims in an applica tion. Today's complex technology frequently requires more examinations than this to fa irly discover the broadest boundaries of patentability, and the practice of filing a request for continued examination (RCE) provides for this. A particularly frequent adaptatio n of this practice occurs after applicants with highly complex inventions file multiple ap plications with similar disclosures simultaneously. The different disclosures focus on diff erent aspects of the invention as perceived at the time of filing. As examination alte rs the perception of the boundaries of patentability in each application with each iter ation, the interrelation among these various multiple filings often becomes critical to sup porting the evolving claims. Continuation practice is then used as a vehicle for combining t he subject matter among such multiple filings to support claims that depend on mult iple disclosures. The attendant combination of disclosures and all the applicant and examiner communications regarding such claimed subject matter must be examined in combina tion and analyzed to adequately determine patentability of the evolving claims. This practice requires a substantial investment of examiner time, and, therefore, a fee design ed to deter this practice is proposed. This excessive continuation fee also acts as a disincentive to the applicant pra ctice of

using long strings of continuations as place holders instead of going forward wi th substantive prosecution on the merits. Applicants adopting this tactic seek to w ithhold some applications where the market is not developing rapidly, such that a timely patent would essentially jump the economic gun of profit maximization. Applicants wait until the market gives a more clear depiction of the most beneficial manner in which c laimed subject matter might be drafted into claims to pursue such claims in substantive examination. Although this practice, which avoids substantive examination, is no t particularly costly in terms of examiner resources, it does incur significant re sources on a recurring basis for essentially no purpose that is consistent with Office policy , and fees for this practice are appropriate to both discourage the practice and to assist in covering the costs of such applications that are prosecuted in a manner inconsistent with Office policy. Similarly the excessive continuation fee encourages applicants to resolve all is sues related to an application within a limited number of applications including fina l resolution of the patentability of claims determined by the examiner as not bein g allowable during the first two examinations on the merits. Applicants may be mor e likely to proceed with further consideration of the patentability of (broader) rejected claims by either continued examination under 35 USC 132(b) or by appeal rather than to all ow some (narrower) claims to issue in the first application and to continue prosecu tion of other (broader) claims by way of a continuation application. FR-1 4 UNITED STATES PATENT AND TRADEMARK OFFICE A new fee for reliance on claiming patentably indistinct subject matter in multi ple applications is proposed to reflect the additional complexity injected from havi ng to search other applications in order to discover the existence of such claims whic h present double patenting issues under 35 USC 101, and to also reflect additional complex ity arising from the multiple claims related to the same disclosed subject matter, w hich is further discussed above. Where applicants have more than a single invention, mul tiple applications are not only encouraged, they may be required. But where applicants have only a single invention, spreading claims to that invention over multiple applic ations is wasteful and inefficient. Examiners spend much time reading patent disclosures. Spreading the same invention over multiple applications creates a likelihood tha t more than one examiner will have to read the same disclosure where a single examiner would

have sufficed. And even where a single examiner does manage to examine all the r elated applications, the administration of multiple applications is inefficient. Theref ore, this fee acts to reduce the incentive for applicants to have more than one such applicati on examined, so as to maximize examiner efficiency with respect to a single disclos ure. This fee is particularly necessary to mitigate any tactical applicant use of mul tiple applications to circumvent the proposed increases in fees for additional claims. In any progressive fee structure, there is generally a point at which it is economicall y favorable to split a transaction. With the new progressive claim fees, it becomes economic al to split claims over multiple applications fairly soon up the claim fee schedule. T his fee for claiming patentably indistinct subject matter is set to negate the economic valu e of this strategy by adding a fee roughly equivalent to the savings that one would otherw ise obtain in splitting an application. There is a significant exception that will b e granted by operation of Director's discretion. In recognizing applicant's need to continue to pursue patentably indistinct claims in continuing applications for which the parent has been patented or abandoned, this fee would not apply to such continuations, where the only other applications with patentably indistinct claims were either passed to issue or were abandoned. This fee would be assessed and be due at the time an applicant reques ted examination, because the nature of claimed subject matter would not affect prose cution prior to that event. An increase in the existing fees for extensions of time is proposed in order to reduce the use of such extensions and consequently reduce the pendency of applications to i ssue. Extensions of time are granted to patent applicants for replying to Office commu nications or meeting a patent prosecution requirement. Applicants generally receive a suff icient, but not overly generous amount of time to perform such requirements and replies. Applicants frequently would like the opportunity for additional time to more ful ly consider and prepare the requirement or reply. To accommodate this desire, exten sions of time are provided, but at an economic cost to minimize frivolous and wasteful delays. However, as pendency to issuance has deteriorated, these extensions of time are exacerbating the already lengthy delays in prosecution. To mitigate against such delay, increased fees for extensions of time would cause such delays to be considered FR-1 5 UNITED STATES PATENT AND TRADEMARK OFFICE economically as well as operationally, reducing the extent of such extensions, w hich in

turn, would reduce overall patent pendency. The existing fees for maintenance of issued patents are proposed to be increased in aggregate, to reflect the increased value of patents over a full term, but by a reduced amount at the first stage. The legislative policy in setting maintenance fees ha s been to partially fund patent examination operations from patent owners who continue to receive value from their patent rights. The recent trends toward intellectual property d riven economic growth have dramatically increased the value received by patent owners and maintenance fees should reflect this trend to more fairly apportion the cost of the examination process to those receiving the greatest benefit. The existing fees for appeal, including the fees due at the time of filing the n otice of appeal, and at the time of filing an appeal brief, are proposed to be increased to reflect the cost of appeal and to remove an anomalous discrepancy in fee levels that causes notices of appeal to be used in place of extensions of time. Existing appeal fees are se t very low in pursuit of a policy of low economic threshold to appeal predicated on the nee d for appeal as a control over improper examiner discretion in rejecting claimed subje ct matter. This policy accepted appeal as a component of the patent examination process, ge nerally funded from the application filing, issue and maintenance fees, but with minimal fees to deter totally frivolous appeals. The proposed policy direction of more precisely aligning fees with Office costs argues for increasing appeal fees on its own merits. The argument for increasing appeal fees becomes more compelling in view of the implications o f the remaining fee changes. Higher costs for continuing prosecution after final rejec tion will make appeal a far more attractive alternative at existing fee levels, particular ly as the traditionally long appeal backlog has been cut down. It would be highly anomalou s to retain a fee structure that would drive applicants to higher cost administrative patent judges with fees that do not cover their costs instead of encouraging continuing prosecution with an examiner, costing substantially less than a panel of adminis trative patent judges. The higher fee for filing a notice of appeal is particularly nece ssary to cut down on the volume of such notices as a cheap extension of time. The fee for a n otice of appeal is less than the fee for requesting the second month extension of time, a nd provides two months of time instead of a single month as the extension of time p etition provides. Therefore, the existing notice of appeal fee is essentially no more th an a

convenient back door for applicants to get two months time for less than the cos t of a single second month. As a result, it is proposed to increase the level of this f ee above the fee for the third month extension of time. The result of all these patent fee proposals, including increasing and reapporti onment among filing, examination, issue and maintenance, and including fees for dealing with applicant practices that are beyond the norm and therefore consume abnormally la rge amounts of resources, more closely aligns applicant payment and Office revenue w ith actual Office cost, reduces the incentives for applicant's to pursue wasteful ex amination, encourages applicants to pursue due diligence and to be more concise and focused in their participation in prosecution, and recovers the Office cost of operations more di rectly. This should result in more immediate funding availability to meet changes in pat ent FR-1 6 UNITED STATES PATENT AND TRADEMARK OFFICE demand, improved quality of examination from increased applicant participation, and more timely examination from applicant's decision of when to pursue examination and reduce reliance on extensions of time. In addition to the changes in patent fees and procedure described above, the pro posed amendments also permit trademark fees to be raised in 2003 beyond increases just ified by changes in the consumer price index. This will enable adjustments in trademark f ees to reflect current costs and practices more accurately. FY 2004 This fee structure targeted for implementation in FY2004 has been referred to as "4track" because it provides for 4 different modes of examination that would respo nd to a specific customer need. One track would provide a low cost examination for indep endent inventors of modest financial resources (this is known as track-4), another trac k would provide a lowered cost, relatively prompt examination for applicants who already demonstrated evidence of patentability via a foreign patent, or a favorable pate nt examination opinion, examined by the EPO or JPO (this is known as track-3). Anot her track would provide a PCT search report (this is known as track-2). Another trac k would provide examination for all other applications (this is known as track-1). These examination sequences respond to the strategic need to fill the gap betwee n supply and demand and the long pace of examination by sharing the very time consuming t ask of searching for prior art with third parties. The degree to which the results of s uch sharing are reliable for finding issues of patentability directly reduces the effective demand for

examination services and reduces the time examiners must spend between reviewing an application and rendering opinions as to patentability of claimed subject matter , and accordingly reduces the gap between supply and demand and the time between start and end of examination. The degree of reliability and the costs of achieving such re liability are the most influential factors in setting a fee structure distinguished across the above four examination sequences for this proposal. In connection with all of these four examination sequences, additional events, n ot currently authorized, are being separately proposed that would incur a fee: (1) an application or other paper might be conveyed to the Office in paper after the Of fice had effectively converted to electronic examination media; and (2) the applicant mig ht request expedited examination that would result in a patent within 12 months. Th e proposals respond to the need for reduced lag between filing and patent grant by encouraging the use of electronic media efficiencies and providing a fast track examination where necessary. The transition between the current system and the 4-track implementation will necessarily include a transition from the current practice of searching in every application to relying on third party search results. This transition implies a reduction in the examination workload, which further implies a comparable reduction in fee. The proposed fees in the 4 track proposals show only modest fee reduction, relative to the FR-1 7 UNITED STATES PATENT AND TRADEMARK OFFICE current proposal, in most instances, and a substantial increase in PCT Internati onal search fees. Within track-1, which will encompass applications by all applicants other than t he financially less able, those with corresponding foreign patent applications that have finished examination in the Office of first filing, and those seeking a PCT Inte rnational search report a wide variety of sources for the searches may be permitted. A sig nificant issue is whether and to what degree the examination fee would be predicated on t he source and state of the search report provided, on the premise that examiners ma y rely on some reports more than others and thereby achieve economies worthy of fee reduct ion. The most compelling examples for discounts in examination fee would be where the search was the result of a track-2 PCT search by the Office, or where the search report contained a patentability report from a foreign patent office that the Office ha d previously agreed to extend reciprocal reliance privileges with. Other gradations that migh t warrant consideration for fee discounts include where the source is the EPO or JPO, wher

e the source is a certified search service, where the source is a foreign patent offic e with which the Office has agreed to extend reciprocal reliance privileges with, and whether the search report contains a detailed analysis of the patentability of each claim ov er the art cited in the search report. The transition to a set of examination sequences having differing fee amounts, particularly the set of potential fee differences among the track-1 sources, cre ates an administrative complexity that will consume much applicant and Office time in determining proper fee amounts, verifying fee amounts, processing the collection of fees, petitioning when apparent miscalculations occur and responding to such petitions . The degree to which the fee differentials actually result in applicant practices mos t conducive to economy, timeliness and quality must be weighed against the cost of introduci ng administrative complexity. Many comments to prior queries regarding potential fe e changes indicated that many consider even the existing fee structure to be overl y complex; the proposed fee structures add multiple levels of complexity to the ex isting fee structure. The feasibility of fee discounts for applicants with limited financial capacity depends on the proposed legislation providing the Director with discretion to discount fees . Such discounts would be provided to encourage the dissemination of useful inventive s ubject matter by individuals unable to financially afford the increased patent fees, re cognizing that there is substantial value to be gained by publishing such subject matter a nd by affording such inventors the opportunity to commercialize their inventions. The primary issues are the level of discounting, which examination transactions would be off ered discounts, and what the threshold criteria for receiving such a discount would b e. The current proposal is that search and examination fees would receive a 75% discoun t and this discount (along with others normally available to small entities) would be available to independent inventors having taxable income of $70,000 or less. Expedited examination would be similar the existing petition to make special pra ctice, but the Office would guarantee to issue or issue a final rejection within 12 mon ths. FR-1 8 UNITED STATES PATENT AND TRADEMARK OFFICE Affording such a guarantee would require limitations on the number of claims and the amount of time an applicant could take to respond to an Office action. This prop osal would directly respond to the strategic need to provide more prompt patents wher e applicants needed such speed. The appropriate fee level depends on what fee woul

d be low enough to be acceptable and high enough to both reflect the value to the app licant and to limit the participation by applicants in such an option to a very small p ercentage, perhaps about 2-3 percent of applications. Another proposal is post grant cancellation proceedings to provide for streamlin ed inter partes review of issues material to patentability. The fee proposed depends on t he cost of such proceedings and the extent to which they should be financed by direct fees. Estimates of cost made now would, of course, be approximations based on the most similar procedures that the Office now conducts. Cost estimates would attempt to take into account the proportion of proceedings that would be expected to terminate p rior to a final decision after full hearing on the merits, a factor that would of course b e influenced by the precise design of the procedure. The degree to which the process should b e financed by direct fees imposed on complainants depends both on the value to thi rd parties of such a proceeding relative to litigation, and the extent to which a s ystem for canceling improper claims can be regarded as an overhead cost of the patent syst em as a whole. The net result of these patent fee proposals is to elicit a level of participati on from applicants and third party searchers that provide economies in examination while maintaining and improving timeliness and quality. The issues from their interpla y go to the consistency among them and the existing fees, the degree to which they meet perceived value, the complexity of administering them, and the degree to which i nventors of little financial capacity may continue to participate in the system. In 2004 the USPTO also intends to fully implement significant changes in tradema rks operations and fees to create a market-based system consistent with the 21st cen tury economy. In short, the USPTO will seek to offer services applying a market-based concept of operation regarding the examination of applications for the registrat ion of trademarks that will allow applicants to choose between four filing options that will affect speed of service and the nature of the applicant s communications with the USPTO. The variety of the proposed options will entail imposing different fees f or filing applications based on the resources that the Office is required to expend to pro cess and examine the application. Lower fees would apply to applications and other docume nts that are filed electronically, whereas fees for paper filings would be set at a higher rate to recover the costs of handling paper for those who would continue to file on pape r.

Additionally, applicants who file complete applications electronically, and agree to conduct all communications electronically, will pay the lowest filing fees and r eceive expedited services from the Office. Ideally, trademark applicants would have suf ficient information to select the filing and examination option that best suited their n eeds and budget with costs controlled by the visibility that the fee structure would prov ide. FR-1 9 UNITED STATES PATENT AND TRADEMARK OFFICE ACCELERATED EXAMINATION FEE (P-10-02) Action: Accelerated examination or expedited processing alters the relative timi ng among applications by assigning high priority for a fee. Examination accelerates for priority applications, ensuring prompt attention, expediting the steps of the en tire prosecution process, and achieving a final disposition within a guaranteed time period. The value to the applicant from this service is in obtaining the economic value of patent rights early, in minimizing the risks to the inventors, investors, producers and users, associated with an unknown ultimate scope of patent rights and an unknown length of time to obtaining those rights, and in maintaining momentum and knowledge throug hout the prosecution process which keeps the applicant and examiner resources focused . Background Information: The specific search and examination services performed d o not differ from normal prosecution, so an accelerated examination fee is not aim ed at direct cost recovery. Instead, it is a fee for assigning a preferential priority to an application. Because there is no significant incremental cost associated with th e fee, the fee helps offset the costs for all applications. The requirements for an applica tion obtaining accelerated status may include other expediting elements, such as prel iminary search, copies of references, detailed analysis of references, and limitation of scope of subject matter. The fee must be set sufficiently high, to have a discriminatory effect. If every applicant applies, then no applicant receives the expected service and the fee becomes a d e facto addition to the filing fee. If a majority, or even a substantial minority of app licants apply for accelerated docket designation, then those applicants will still not receive the expected service because examiners will simply have multiple applications that c ome to the head of their docket; each such application then is still delayed by its pos ition in this queue of accelerated applications. The expected service is only received when ea ch affected examiner has only one or, at most, a few such applications. This implie

s the fee, and other requirements, must be sufficiently high to limit the rocket docket app licants to only a few percent of the total. Options Considered: No change Choice of 12-month or 18-month guarantee 12-month guarantee only USPTO Recommended Course of Action: The expedited examination recommended would give the applicants the option of receiving a patent within 12 months abou t onehalf the time of our normal, current process. To be eligible for this process, an application would be subject to some procedural restrictions, as well as a fee s urcharge. FR-1 10 UNITED STATES PATENT AND TRADEMARK OFFICE SEPARATE FILING AND EXAMINATION FEE (P-31) Action: The USPTO should separate filing fees from search and examination fees. A filing fee would entitle applicants to obtain a filing date, a formalities revie w, and the publication of the application. If the applicant wishes to receive a search/exam ination of the application, a separate fee must be paid. Applicants would be given a specif ic period (see P-32) to exercise their option of entering the search/examination phase. Background Information: The rationale for segmenting the current prosecution pro cess on a fee for service basis is to allocate USPTO resources more rationally and to serve the actual needs of the customer better. This is accomplished by allowing the applic ant to decide how far to proceed with prosecution and at what pace, based upon a billin g stream designed to reflect resource availability. The expectation is that an increased number of applicants will determine that the incremental cost of pursuing prosecution will exceed the expected benefit and terminate prosecution earlier in the prosecution cycle than current experience. This is because, unlike the current situation in which the f iling fee becomes a sunk cost, beyond which incremental prosecution activity incurs no incremental cost (absent applicant-initiated time extensions or petitions) until allowance, separation of filing and search/examination fees incurs incremental cost for eac h discrete prosecution activity, which an applicant must rationally consider in an ongoing cost/benefit trade-off. More importantly, the effects of applicants' decisions w ill better match applicant's need for further prosecution with the pace at which prosecutio n proceeds by conditioning each transaction on applicant's payment of the attendan t fee. This will more optimally allocate the Office resources to those prosecution acti vities actually benefiting applicants. Applicants would have up to 18 months on original applications between the date of filing and when the examination would be requested, during which applicants woul d have

time to obtain an international search report from a certified search service an d submit it with the examination fee. There would be no such delay on continuations, if the 18 months had already elapsed in the parent application(s), and the filing, includi ng publication, and examination fees would both be due at the time of filing. Options Considered: No change Charge a basic examination fee to be collected prior to prosecution Combine the filing and publication fees USPTO Recommended Course of Action: Adopt the examination fee. Upon their determination of commercial viability, applicants will only require the full pat ent processing and its associated costs for those they wish to pursue further. The b ifurcation of fee events into filing and substantive examination occurrences is expected to induce a reduction in the number of applicants opting for substantive examination, freein g up examiner resources. We estimate a drop-out rate of 10% and, as a result, USPTO examination resources will not be expended for applications that are not conside red economically viable by the applicants. FR-1 11 UNITED STATES PATENT AND TRADEMARK OFFICE REQUESTED EXAMINATION (P-32) Action: The Patent Act often motivates applicants to file for patent protection before the marketability of their inventions is known. The current statutory fee structure embodies this recognition by imposing post-issue maintenance fees, thus reducing filing f ees to levels that will not unduly discourage inventors who may not yet have ascertaine d the economic opportunities from their inventions. Recent experience suggests that a significant proportion of applicants would be willing to delay examination of th eir applications if they could meet the necessary formalities for a patent filing in a timely fashion. However, current law requires the USPTO to search for conflicting prior art and examine the merits of every national application. Background Information: In a requested examination system, search and examinatio n can be postponed for several years after initial filing, and if not requested, t he application lapses. In 1964,1968, and 1971, respectively, the Netherlands, Germany, and Japa n changed their patent laws to incorporate requested examination systems. The life of a grant runs from the date of filing, each system providing for varying degrees of protection to the applicant during various stages of pendency. The value of a request system, in general, is that it provides an inventor with time to more fully investigate the commercial viability of an invention prior to deciding whe ther to continue with the expense of prosecution. At the same time, the examining agency benefits in the sense that marginal inventions are more often abandoned prior to

examination, eliminating the need to expend resources on an application that wou ld likely provide no future social benefit. Clearly, this system would work better if comb ined with low application fees and fees for search and examination. Such a structure would reinforce the incentives for inventors to choose carefully those applications th at they wish to submit for full examination. Options Considered: No change 14-month period for requesting examination 18-month period for requesting examination USPTO Recommended Course of Action: Applicants would be given 18 months to exercise their option of entering the search and examination phase. For many app licants such a period is very attractive and would allow a much more definitive assessme nt of market potential before a decision is necessary to continue prosecution. FR-1 12 UNITED STATES PATENT AND TRADEMARK OFFICE INCENTIVES FOR ELECTRONIC FILING (P-33) Action: The Office should charge a surcharge for filing applications and follow on papers in paper for those submissions for which electronic delivery is available . This proposal would allow applicants the choice to file in a way that is less efficie nt for USPTO operations, but that would capture the additional cost. Over time, the pro portion of fees generated by this differential should decrease, as patent practitioners switch to electronic filing. However, the additional fees generated over this period would help the USPTO finance its transition to full electronic processing of applications. Background Information: E-filing related fees are surcharges for the service of accepting applicant's submission in anything other than a properly formatted ele ctronic medium. These fees are premised on the Office use of electronic file wrappers in which all prosecution documents are maintained in electronic form. The Office will rea lize many administrative efficiencies with an electronic file wrapper, including enha nced speed, security, organization and storage, which argue for universal adoption of electronic file wrappers for all applications. Therefore, fee surcharges related to e-filing would reflect any services the applicant required in converting information to o r from the requisite electronic form. One immediate alternative is to simply require that all submissions to and trans mittals from the Office be in properly formatted electronic form and eliminate any need for associated fees. It is likely that third party clerical support services providi ng electronic translation would become available commercially as warranted by demand. Presentl y, initial provisional and non-provisional applications, assignments, information d

isclosures, and maintenance fees may be delivered electronically. Options Considered: No change Mandate electronic filing through legislation or regulation. Charge a fee surcharge for paper filings. USPTO Recommended Course of Action: To incentivize the use of the USPTO efiling system and to begin realizing the operational efficiencies of an automated Offic e, a fee surcharge will be created between a paper-filed application and an e-filed a pplication. Substantial future cost savings in the form of productivity increases arising fr om reduced clerical operations are partially offset by the need to remedy procedural proble ms. This surcharge may be phased in as the electronic delivery systems become more robust and stable, so as not to coerce use of electronic delivery before the systems that s upport it are fully proven. FR-1 13 UNITED STATES PATENT AND TRADEMARK OFFICE REALIGNING FEES WITH THE NUMBER OF CLAIMS (P-34) Action: The USPTO should charge significant fee amounts based on the number of claims presented for examination in an application, and what are the most effect ive fee structures for doing so. Background Information: Placing an effective limit on the number of claims by an y of the below options will allow the USPTO s resources to be used to process a larger number of applications. Options Considered: Charge significantly higher per claim fees for excess independent and total claims. Begin charging fees for independent and total claims after a lower threshold than the current 3 independent and 20 total claims. Charge progressively higher rates per claim as the number of claims increased in an application. USPTO Recommended Course of Action: The USPTO should pursue option 3. Amend 35 U.S.C. 41(a) to replace the excess claims fee provisions with authoriza tion for the USPTO to require a surcharge for excess claims. The three critical parameter s for each of the independent and total claim fee structures are the number of claims included in the base fee, the fee for the first incremental claim beyond the base number of claims, and the rate of progression of incremental rates thereafter. FR-1 14 UNITED STATES PATENT AND TRADEMARK OFFICE REALIGNING CONTINUATION FEES WITH CLAIMS TO PRIORITY (P-60) Action: The USPTO should charge significant continuation fee amounts based on th e number of prior applications claimed for priority presented for examination in a n application, and what are the most effective fee structures for doing so. Background Information: As the length of prosecution through continuation increa ses, quality of examination decreases, as examiners spread limited time across review ing longer prosecution history. Although the applicant is reducing the effective len

gth of patent term by continuing prosecution, the applicant is increasing the effective value of the eventual patent by incorporating unfolding commercial information into the s cope of claims during continuation. This practice makes continuing applications more com plex both due to size of prosecution history and the degree of claim amendment drafti ng. Placing an effective limit on excessive numbers of continuations by any of the b elow options will allow the USPTO s resources to be used to process a larger number of applications. Options Considered: Charge a fee predicated on the number of applications claimed for priority filed. Determine whether fees would be proportional or exponential, determine whether fees apply to filing alone or examination also. Raise the continuation fee if the applicant failed to pursue allowable subject matter through to an issued patent in parent application. Would encourage publication of allowed subject matter in issued patents. Would further discourag e continuations as patent fees became an economic issue. Would provide an economic method for achieving a laches sanction for failure to prosecute in good faith to allowance USPTO Recommended Course of Action: The USPTO should pursue options 1 and 2, simultaneously. Amend 35 U.S.C. 41(a) to add a continuation fee provision with authorization for the USPTO to require a surcharge for the number of continuatio ns claimed for priority. The proposal would raise the basic filing fee for an appli cation to the power of the number of continuations claimed for priority. That is, the firs t continuation would be charged double the basic filing fee, and the next continua tion would be charged quadruple. FR-1 15 UNITED STATES PATENT AND TRADEMARK OFFICE REALIGNING FEES WITH THE SPECIFICATION SIZE (P-61) Action: The USPTO should charge significant fee amounts based on the size of the specification presented for examination in an application, and what are the most effective fee structures for doing so. Background Information: As the length of disclosure increases beyond the length necessary to meet the written description and enablement requirements, quality o f examination decreases. Placing an effective limit on the disclosure length by an y of the below options will allow the USPTO s resources to be used to process a larger numb er of applications. Options Considered: Charge a fee for each increment in disclosure length over a threshold sufficient to provide the basis for written description and enablement in most applications. Exclude the molecular sequence listings from the disclosure length subject to fee , or charge a substantially reduced rate. Would encourage complete submission of genetic specification. Exclude the chemical table listings from the disclosure length subject to fee, or

charge a substantially reduced rate. Would encourage complete submission of chemical property specification. USPTO Recommended Course of Action: The USPTO should pursue options 1, 2 and 3, simultaneously. Amend 35 U.S.C. 41(a) to add a disclosure length fee provisio n with authorization for the USPTO to require a surcharge for excess disclosure length. The three critical parameters for measuring disclosure length are the sizes of the s pecification as measured in number of pages of disclosure and drawings, the presence of supplementary tables and molecular sequence listings that are required to meet w ritten description and enablement provisions, and the metrics of disclosure size for el ectronic submissions. The proposal would allow 50 pages as the threshold disclosure size, and charge increased amounts at greater increments. FR-1 16 UNITED STATES PATENT AND TRADEMARK OFFICE CREATING FEE SCHEDULES FOR THE FOUR PATENT EXAMINATION TRACKS (P-65) Action: The fees for each of the major transactions among the four track patent examination process be set. Background Information: A separate proposal sets out a four track patent examina tion process. Each track contains transactions for application filing, examination, p re-grant publication, issuance and maintenance. The primary distinction among the four tr acks upon which any fee differentials would be based is in the prior art search activ ity. Track 1 has an applicant provided search; track 2 has a PCT provided search; track 3 h as a foreign patent office provided search; and track 4 has the USPTO perform the sea rch. The fee schedule for each track would additionally be susceptible to the remaini ng fee alternative proposals. Options Considered: Charge a significantly large search fee where the USPTO had to provide the search, as in track 4, but would not charge a search fee otherwise. The USPTO would charge a basic examination fee uniformly across all tracks, that would be discounted where part of the examination work had been performed and documented and for entities lacking financial resources. Charge a basic examination fee uniformly across all tracks, that would include provision for the search in track 4, but that would be discounted where part of the examination work had been performed and documented and for entities lacking financial resources. USPTO Recommended Course of Action: The USPTO should pursue option 1 to achieve reduction of examination resource demand. Amend 35 U.S.C. 41(a) to allow for appropriate discounting. FR-1 17 UNITED STATES PATENT AND TRADEMARK OFFICE PATENTABLY INDISTINCT CLAIMS ACROSS APPLICATIONS FEES (P-70) Action: Fees should be set so as to discourage submission of essentially equival ent claims in multiple applications. Such fees should be predicated on whether the a pplicants have failed to inform the Office that such claims have been submitted and on whe

ther the applicants have filed the equivalent claims in both a parent and continuation ap plication, thus failing to advance the prosecution. Background Information: Applicants frequently submit multiple applications for a common invention. This practice provides the applicant with the means for obtain ing several different and distinguishable patent rights covering various aspects of the claimed subject matter. However, applicants frequently use this practice to submit patentably indistingu ishable claims in multiple applications as a form of forum shopping among examiners and art units, and as a form of insurance against file wrapper estoppel in any one appli cation. This practice is highly consumptive of examiner resources, because applicants ar e demanding the time for examining multiple applications where a single applicatio n is sufficient. It is even more consumptive where examiners are unaware of the commonality of claims, because examiners are then unable to economize their time from the commonality of prosecution. Applicants also use this practice in filing continuations as a means for continu ing to argue the patentability of the same claimed subject matter without going to appeal. Al though such continuations are generally examined by the same examiner as in the parent application, allowing for the examiner to take advantage of the economy of havin g already assimilated the claimed subject matter, this practice merely burns furth er examiner time without advancing the prosecution. Because the Office and the public derive no benefit, and considerable cost, from this practice, it may be appropriate to discourage this practice with fees that are d ue when the Office discovers such indistinguishable claimed subject matter or when a continu ation is filed without claims that are patentably distinguishable from those in the paren t application. Options Considered: Charge an additional fee in each application where an applicant had submitted claims in multiple applications that were patentably indistinct among each other across the applications. May result in fewer redundant filings and increased abandonments. Charge an additional fee in each application where the Office discovered an applicant had submitted claims in multiple applications that were patentably indistinct among each other across the applications. May result in increased abandonments FR-1 18 UNITED STATES PATENT AND TRADEMARK OFFICE Charge an additional fee in each continuation application where the claims are patentably indistinct from those in the parent application. May result in increa sed abandonments. USPTO Recommended Course of Action: Pursue options 2 and 3 to reduce the

redundant filings that the applicant does not disclose and the number of continu ations that fail to advance the prosecution. FR-1 19 UNITED STATES PATENT AND TRADEMARK OFFICE RESTRUCTURING TRADEMARK FEES Action: Revise the current fee structure. Background: The cost of operations directly supporting Trademark processing have been recovered through user fees since fiscal 1983 under authority granted by 35 U.S.C. 42(c). Until fiscal 1990, trademark fees were set at levels sufficient to cover the direct costs of funding Trademark operations. Since 1991, with the implementation of th e Omnibus Budget Reconciliation Act (OBRA) the funding formula for the US PTO was changed, making the Agency, not just Trademarks, totally fee supported. Prior to OBRA, the USPTO received appropriated funds from the General Treasury, a portion of wh ich supported the cost of government operations that did not provide direct support for the examination of trademarks but which did provide services essential to the mainte nance of operations. After OBRA was enacted, the costs of all USPTO operations had to be funded from patent and trademark fees, including activities that had previously been funded by appropriated, taxpayer funds. Requests to increase fees beyond CPI req uire legislative authority, subject to congressional approval, which controls the implementation date and restricts the ability of the USPTO to plan accordingly. The current fee structure is essentially unchanged since 1990. In total, the cos t of all USPTO operations, and its annual budget authority are based on revenues from pat ent and trademark fees. Previously, the USPTO did not have the means to identify the full cost of providing services in relation to establishing individual fee amounts. T he costs of some services are completely or substantially subsidized at the expense of highe r fees for other services. Options Considered: Retain the current structure for trademark fees without change. Realign fees to better reflect the cost of providing the service. Realign fees to better reflect the value associated with the service or protection granted. Realign fees to encourage electronic filing and communications. Charge actual cost for information collection services that are provided for profit enterprises. USPTO Recommended Course of Action: It is recommended that the USPTO pursue legal authority to set fees according to a market and performance-based concept that better reflects the actual costs associated with the service or value provided. The USPTO would operate in a more business like manner and be more responsive to controlli ng the cost of its operations by offering services in relation to their commercial valu e. The USPTO is considering alternatives for filing and handling proceedings that would seek to

encourage greater participation in the trademark system at lower cost. Trademark owners FR-1 20 UNITED STATES PATENT AND TRADEMARK OFFICE would be provided a fee structure that allowed them to select the option that be st suited their needs: (1) Lower fees for filing electronically; (2) Alternatives for filing applications and examination that provide choice bas ed on value and cost; (3) Recover costs of providing specialized services that do not directly support examination. FR-1 21 Task Name FR-1 - Fee Restructuring - 2003 Draft fee scheme (FR-1) Obtain Administration Clearance (FR-1) Introduce legislation (FR-1) Enact legislation (FR-1) Obtain clearance on final rules (FR-1) Publish final rules (FR-1) Implement final rules (FR-1) Duration 131 days 37 days 10 days 11 days 64 days 23 days 11 days 0 days Contact S. Kunin Start Finish Thu 3/28/02 Tue 10/1/02 FY 2003 Resources $0 Thu 3/28/02 Fri 5/17/02 Mon 5/20/02 Fri 6/14/02 Fri 6/28/02 Mon 6/3/02 Mon 9/30/02 Tue 7/2/02 Fri 8/2/02 Tue 7/2/02 Mon Mon 9/16/02 9/30/02 Tue 10/1/02 Tue 10/1/02 UNITED STATES PATENT AND TRADEMARK OFFICE POST-GRANT REVIEW OF PATENT CLAIMS Action: The patent laws should be amended to provide for a post-grant review of patentab ility of patent claims. Background information: Currently post-grant review of the patentability of patent claims takes place be fore the USPTO (1) when an applicant files an application to reissue a patent and request s

correction of at least one error in the patent, (2) when an interference is decl ared between the patent and a pending application, and the applicant in the interference seek s judgment based on unpatentability of patent claims, (3) when a patent owner or a third-pa rty requests reexamination of the patent, and (4) when the Director initiates reexamination o f a patent on his own initiative. Apart from an interference, a third-party, however, has n o statutory right to appear before the USPTO and challenge the patentability of patent claim s, in an inter partes proceeding, with the right to seek judicial review. Summary of Proposed Post-Grant Review Procedures: Implementation of a post-grant review procedure in the form of a review proceedi ng is recommended to provide for correction of recently issued patents. The same proce edings would also provide accused infringers and patent holders with an alternative for um to district court litigation of patent validity issues. The proposed review proceeding would allow the public to petition the USPTO to c ancel one or more claims in a patent within one year of its issue date. And it allows anyone who is threatened with a patent infringement suit to petition for review within four months of being threatened. To prevent misuse, the review petitioner would be required to make a sufficient initial showing of unpatentability; otherwise the petition would be d ismissed. If the showing is found to be sufficient, a fact-finding proceeding leading to a he aring by the Board on the merits would follow. It is contemplated that both parties would be obliged to make mandatory disclosure of all relevant information, followed by discovery as permitted by the Board. During the review proceeding, the patent owner would have a single opportunity as of right to make a narrowing amendment of the challenged claims. The proceedings would be conducted by the Board of Patent Appeals and Interferen ces, renamed the Board of Patent Adjudication. Thus, Administrative Patent Judges (AP Js) of the Board would preside over streamlined hearings, designed to be concluded with in a year, in which direct cases could be presented by documents, and live cross-exam ination allowed where necessary. The proceeding offers an expedited and less expensive alternative to district co urt, would serve as a useful quality control mechanism for patents, and should be palatable to the public. Additionally, the present proposal would eliminate inter partes reexamin ation entirely and make initiation of third-party requested reexamination discretionar y. This should alleviate the burden on the examiners of having to examine complex and le ngthy reexamination proceedings, and thus free examiners to examine applications and r

educe P-05-01 1 UNITED STATES PATENT AND TRADEMARK OFFICE pendency thereof. Further, the proposal provides a vehicle wherein the third par ty develops and presents the evidence thus saving the Office a significant amount o f resources that it currently expends in making the case for patentability. Attachments: The pros and cons of significant alternative design issues with respect to such a proceeding are attached. P-05-01 2 IMPLEMENTING POST-GRANT PATENT REVIEW: ALTERNATIVE DESIGN ISSUES, OPTIONS, AND RECOMMENDATIONS Alternative Design Issue #1 - Nature of Proceedings 1. 2. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE Attachment A Option A - Adopt a patent review proceeding which would be instituted before, and handled by, the Board of Patent Appeals and Interferences (BPAI). (a) Pros Provides quality check to USPTO examination which public can choose, particularly when patents have significant commercial effect. Allows for USPTO to offer other forms of examination that may otherwise appear to compromise quality. Relieves pressure on courts to decide validity questions. Provides for prompter test of validity than court proceedings. (b) Cons EPO review proceedings are perceived as expensive and allowing for vexatious litigation. Patent practitioners are more familiar with reexamination and expanding reexamination may serve some, if not all, of the same purposes without risks of great litigation burdens. Determinations by the USPTO regarding some of the patentability requirements contained in sections 101, 102(a) (known/used by others bar), 102 (b) (public use/on-sale bar), 112 (best mode requirement) may be controversial with the patent bar. Option B - Expand Inter Partes Patent Reexamination (a) Pros Builds and expands on procedure already in place. Proposal regarding this option is currently pending in Congress. 3 3. Alternative Design Issue #2 - Timing of Review Proceeding 1. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE Examiner would evaluate evidence in the first instance. Relieves courts and provides for prompter test of claim validity than courts. May relieve parties of some of the burdens of litigation. (b) Cons Reexamination is less comprehensive and not a complete substitute for district court litigation of defense of validity. Permits amendment of claims thereby creating a moving target for

petitioner. Courts cannot allow amended claims. Adjudication before examiner, not before an inter partes hearing officer where demeanor of witnesses can be observed. Difficult to have examiner control discovery and other inter partes issues for which examiners are not trained. Does not necessarily provide marketplace quality check to USPTO examination. Recommendation: Propose legislation creating expeditious post-grant patent review proceeding with protections against cost and vexatious litigation. Option A - Anyone may file a review petition anytime during a patent s term. (a) Pros Ability to file at any time opens the field to any challenger, so it can serve as a continuous quality check on patents throughout their life. 4 2. 3. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE (b) Cons Absent any limitation on challengers or any limitation on the time when challenges may be asserted, patent owners will view the review proceeding as an unduly burdensome harassment tool. A major objection to the analogous EPO practice is harassment of patent owners. Option B-A review petitioner must file petition within 12 months of the issuance of any claim challenged. (a) Pros The 12-month deadline can provide patent owners with peace of mind that after a year from issuance, the patent claim is no longer subject to review. (b) Cons Limiting the time for challenge curtails, to some extent, the effectiveness of the quality check on patents. Fails to provide a mechanism to address challenges from alleged infringers who are accused more than a year after issuance of the patent claim. Thus, in many instances, Option B would not provide an alternative to district court invalidity litigation. May lead to review proceedings where the subject matter lacks real commercial significance, e.g., a review presented by a public interest group. Consistent with EPO experience, concentrating review petitions in the first year of issuance may create an initial flood of proceedings, rather than having them spread out over the lives of the patents. Option C - A review petitioner must file petition within 12 months of the issuance of any claim challenged, except that after 12 months, a review petitioner may file a petition not later than 4 months after the review petitioner is placed in substantial apprehension of being sued for infringement of the challenged patent claim. 5 4. 1. Alternative Design Issue #3 - Grounds for Patent Review That May Be Brought In R eview Proceeding Option A - Allow any and all grounds that may be brought in a district court P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE (a) Pros

Opens the window of time and the field of challengers wider to include those who, even more than a year after the patent issues, would meet standards similar to the jurisdictional requirements for a declaratory judgment action on patent invalidity in district court. Thus, it almost always provides an alternative to district court. (b) Cons May limit, to some extent, the effectiveness of the review proceeding as a quality control mechanism. Recommendation: Option C is recommended, as striking the most appropriate balance between security and predictability for the patent owner, on the one hand, and providing a viable alternative to district court invalidity cases, on the other hand, i.e., more marketplace confidence in patent validity. The 12-month window where any party may challenge the patent allows for a period of quality check from outside the USPTO, while affording the patent owner greater stability after the 12 months expires. The additional window for petitioning to cancel is provided only to those who have some substantial apprehension of being sued, so that the patent owner exercises control over who might qualify as a review petitioner under the 4-month provision. Option C also ensures that anyone who could go to district court to litigate the validity of a patent claim can also resolve the matter in a review proceeding in the USPTO. to challenge patent validity or enforceability. (a) Pros Encourages petitioners to use the proceeding rather than burdening District Courts with declaratory judgment actions. Ensures that all issues related to patent validity can be heard in a single forum. 6 2. 3. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE (b) Cons Places the heaviest burden on the Office. Requiring the Office to determine issues of enforceability will require development of new expertise within Office. Allowing Office to determine issues of enforceability will be controversial within the patent bar. Allowing the Office to determine certain issues of validity, e.g., known or used by others, may be controversial within the patent bar. Option B - Allow any and all grounds that may be brought in a district court to challenge patent validity, but not to challenge patent enforceability. (a) Pros Encourages petitioners to use the proceeding rather than burdening the district court with declaratory judgment actions. Would not require Office to develop new expertise, as such issues are now considered in interference proceedings. Ensures that all issues related to patent validity will be heard in a single forum. As interference proceedings are now used as back-door means to cancel patents, the demand for the Office to consider such matters currently exists and including all validity issues in review proceedings would eliminate limitations on when such proceedings can be brought. (b) Cons Requires litigants who wish to raise enforceability concerns to go to district court. Allowing the Office to determine certain issues of validity, e.g., known or used by others, may be controversial within the patent bar. Option C - Allow only certain grounds related to patent validity and nothing

related to enforceability to be brought before Office. (a) Pros 7 4. Alternative Design Issue #4 - Standing to Bring Review Proceeding 1. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE Does not require Office to become involved in enforceability issues. Limits amount of discovery that must be allowed and supervised. (b) Cons Requires litigants who wish to raise enforceability concerns to go to district court. Requires litigants who wish to raise certain issues of patentability to go to district court. Will likely be of less use to litigants who may have to use multiple forums to decide patent validity. Would increase likelihood of using the Office for harassment during infringement cases because patent owner could be forced into multiple actions to defend validity of patent. Recommandation: Option B. This would clearly separate enforceability issues from validity issues. It would allow the Office to use its expertise to check the quality of the patents and allow the district courts to use their expertise to determine issues such as fraud and inequitable conduct. Option A - Any person may file a petition for review-no standing requirement. (a) Pros Lack of a requirement for standing provides the strongest quality check on patents. Simplifies proceeding and conserves resources because BPAI will not need to adjudicate standing. (b) Cons Lack of a standing requirement makes use of a review proceeding more viable as a harassment tool. Lack of a standing requirement may lead to proceedings that are politically or personally motivated involving subject matter of commercial significance. 8 2. 3. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE Lack of a standing requirement may create Article III and prudential standing issues on judicial review as to review petitioners, possibly (1) precluding judicial review of holding that claim is patentable or (2) necessitating USPTO participation, including a greater burden on the USPTO Solicitor's Office. Option B - Any petitioner who believes that it is or will be economically damaged by the patent may file a petition for review at any time. (a) Pros Option B mirrors the standing requirement to cancel a trademark under 15 U.S.C. 1092, except for the modification that the damage be economic; the standard will be familiar for the USPTO and for practitioners. Option B is less restrictive than the standing requirement to litigate patent invalidity in district court, but still requires that some sort of potential dispute exist between the review petitioner and the patent owner. (b) Cons A less restrictive standing requirement increases the likelihood that

review could be used for harassment. Option C - Any petitioner who believes that it is or will be damaged by the patent may file a petition for review (1) within 12 months of the issuance of any claim challenged, or (2) within 4 months of being placed in substantial apprehension of being sued for infringement of any claim challenged. (a) Pros Option C provides the most restrictive standing requirement, which offers patent owners the most protection against use of the review proceeding as a harassment tool. Option C limits reviews to real controversies between parties as to the validity of a patent claim, and would eliminate Article III and prudential standing concerns on judicial review of any final USPTO review decision, without necessitating USPTO involvement. (b) Cons 9 4. Alternative Design Issue #5 - Nature of Initial Showing Required of Petitioner 1. 2. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE Limiting the field of challengers somewhat limits use of review as a quality check. Restrictive standing requirements will likely complicate proceeding and require expenditure of resources for BPAI to adjudicate standing issues. Recommendation: Option A is recommended. Option A allows the review proceeding to (1) function most effectively as a quality check, and (2) proceed expeditiously to the merits. Option A - Require review petitioner to show a prima facie case of unpatentability and provide initial disclosures similar to those required by Fed. R. Civ. P. 26(a). Patent owner would then have an opportunity to challenge the adequacy of the prima facie case by moving to dismiss; alternatively the BPAI would also have authority to sua sponte dismiss deficient review petitions. A decision by the USPTO that a prima facie case had been made out would not be subject to judicial review. (a) Pros Expedites the proceeding. Maximizes possibility that petitioner has a genuine interest. Reduces potential use of proceeding to harass patent owner. (b) Cons May be difficult to show some grounds of unpatentability (e.g., best mode, public use, on sale) without discovery, although a prima facie case would be evaluated on the basis of a proffer of evidence. Difficult for a petitioner under the 4-month deadline to assemble case in that time frame. Adds a step in the process--more burdensome for BPAI. Option B - Require review petitioner to show a likelihood of success on the merits and provide initial disclosure (a showing of likelihood of success would be less than a showing of a prima facie case of unpatentability). Patent owner can then challenge the adequacy of the showing, or BPAI can sua sponte dismiss for failure to make the requisite showing. A decision by 10 3. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE the USPTO that a likelihood of success had been established would not be subject to judicial review. (a) Pros

Eliminates meritless complaints at earliest stage. Expedites the proceeding. Ensures that the petitioner has a genuine interest. Reduces harassment. (b) Cons Difficult to make out case for some grounds of unpatentability. Difficult for a petitioner under the 4-month deadline to assemble case. Adds a step in the process and makes it more burdensome for the BPAI. Option C - Require review petitioner to show a substantial new question of patentability and provide initial disclosures. Patent owner could then challenge the adequacy of the showing, or BPAI can sua sponte dismiss for failure to make the requisite showing. A decision by the USPTO that a substantial new question of patentability had been established would not be subject to judicial review. (a) Pros Same standard used to determine whether the USPTO should begin a reexamination. Eliminates meritless complaints at an early stage. Expedites the proceeding. Ensures that the petitioner has a genuine interest. Reduces harassment. (b) Cons Difficult to make out case for some grounds of unpatentability. 11 4. Option D - No threshold showing required other than a Fed. R. Civ. P. Rule 12(b)(6) standard, i.e., the review petitioner must state a claim upon which relief may be granted. (a) Pros (b) Cons 5. Option E - Adopt Option A or B for 12-month proceedings, Option C for 4-month proceedings. (a) Pros (b) Cons P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE Difficult for a petitioner under the 4-month deadline to assemble case. Adds a step in the process and makes it more burdensome on the BPAI. May cause confusion over what cause of unpatentability the petitioner may pursue. May allow courts to read reexamination requirements into review proceedings. Same standard is used by district courts. Allows for the most bases of unpatentability to be brought in the proceeding - even those on which supporting information must be obtained through discovery. Stronger patents may result. Allows maximum number of meritless petitions - harassment danger. Could lengthen proceedings and encourage sand-bagging. Allows 4-month petitioner access to discovery and remedies. Eliminates meritless petitions by 12-month petitioners. Adds a step in process for 12-month proceedings. 12 6. 7. Alternative Design Issue #6 - Discovery and Sanctions

1. 2. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE Difficult for 12-month petitioner to allege some grounds of unpatentability. Option F - Require initial statement of review grounds from petitioner, but give Director discretion to set time by which a showing of sufficient justification to proceed must be made. Otherwise the BPAI may dismiss the proceeding. Recommendation: Adopt Option F. Allow the Director discretion to issue a regulation as to the time by which a petitioner must file all its supporting information, allowing the BPAI, either sua sponte, or on motion of the patent owner, to dismiss if the showing is insufficient to justify proceeding. This lessens the initial burden so that petitioners may gather the necessary supporting information in the proceeding if such information would not otherwise be available to them. Thus, review proceedings may serve the public interest by testing the patentability of claims in issued patents. However, the patent owner is protected from harassment by economically disinterested parties through the required sufficiency showing. A decision by the Board to dismiss the proceeding is final and not appealable. Option A - Mandatory initial disclosures of information, with no further discovery permitted. (a) Pros The lack of further discovery would streamline the proceeding. Reduces the expense and burden on parties. Reduces the opportunities to harass parties. (b) Cons Lack of discovery would not allow for adequate development of evidentiary cases. Would preclude review from having collateral estoppel effect--no "full and fair opportunity to litigate". Option B - Mandatory limited initial disclosures of information, with further discovery for good cause shown. (a) Pros 13 3. 4. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE Further discovery affords a better opportunity to adequately develop cases. Good cause standard for obtaining discovery contains expense associated with discovery. Good cause standard allows the BPAI to determine whether the discovery is appropriate, and restrict its nature and volume. Would likely meet standard for collateral estoppel of review proceeding. (b) Cons Restricted discovery may be viewed as limiting ability to develop cases. Could lead to challenges to collateral estoppel effect of BPAI decisions based on APJ exercise of discretion in limiting discovery. Option C - Mandatory initial disclosures, with unrestricted discovery (a) Pros Allows full development of cases. Maximizes chance that collateral estoppel effect will be accorded to final BPAI review determinations. Parallels what is available in courts. (b) Cons

Could render the review proceeding as expensive and burdensome as district court litigation. Discovery could be used for harassment. Option D - Sanctions authority in accordance with (1) Fed. R. Civ. P. 11, including imposition of nonmonetary and monetary sanctions for bad faith pleadings or representations to the BPAI and (2) Fed. R. Civ. P. 37, including imposition of nonmonetary and monetary sanctions for failure to make disclosure or cooperate in discovery. (a) Pros 14 5. Alternative Design Issue #7 - Nature of Evidentiary Showing 1. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE Discourages harassment tactics and bad faith conduct in review proceedings. Parallels authority available to district courts. (b) Cons Could result in burdensome collateral proceedings before the BPAI on sanction issues. More complicated for the USPTO to administer. Added burden on parties and possibly Solicitor's Office to defend sanctions awards. Recommendation: Option B is recommended as striking the appropriate balance between the review petitioner, who may have a legitimate need to develop its case through discovery, and the patent owner, who may need protection from unduly burdensome unchecked discovery. Option B allows further legitimate discovery, including discovery from third parties (35 U.S.C. 24) whose information might not be available through mandatory disclosure, only where the BPAI deems it appropriate in scope and nature. Option D is also recommended to allow BPAI the necessary sanctions authority to control adversarial proceedings of this nature. Option A - Apply preponderance of evidence standard. (a) Pros Traditional standard applied to proponent of proposition in administrative proceedings, including patent examination, patent reexamination, reissue proceedings and most interference issues. Lesser standard than in district court assures that USPTO can use review proceeding as quality control measure. (b) Cons By allowing review on standard less than the clear and convincing evidence standard applied in district courts on the issue of patent invalidity, critics may perceive process as diminishing value of patent. 15 2. 3. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE USPTO likely to become forum of choice by infringers because of lower evidentiary standard for obtaining a holding that a patent claim is unpatentable, not because of expertise. Option B - Apply Evidentiary Rules aligned with the Federal Rules of Evidence. (a) Pros Will eliminate one of objections to EPO practice, which allows extensive hearsay. Fed. R. Evid. are used in district courts which has jurisdiction to consider patent claim invalidity and by the BPAI in interference

matters. Experience in interference cases where Fed. R. Evid. has been applied since 1985 has minimized the need for resolution of issues related to admissibility of evidence. (b) Cons Those APJs who have principally handled ex parte appeals will lack experience with Fed. R. Evid. and will need training to avoid making technical errors leading to reversible error that more likely would not arise under more lenient Administrative Procedure Act standard. May prolong proceedings unnecessarily. Option C - Allow presentation of case-in-chief by affidavit and deposition, followed by hearing allowing live cross-examination. (a) Pros Allows for full presentation of evidence and testing of case-in-chief through cross-examination. Providing live cross-examination will maximize and preserve deference by appellate court to fact-finding by APJs who can observe demeanor. Requirement that party present to opponent entire case-in-chief before opponent decides whether cross-examination is desirable, lessens (but does not necessarily eliminate) need for some discovery 16 UNITED STATES PATENT AND TRADEMARK OFFICE disputes, minimizes discovery disputes and allows more expedited proceeding. Current interference proceeding and some district courts in non-jury trials require certain direct testimony to be presented in affidavit form, subject to live cross-examination; process has been found to be highly effective. Permitting live cross-examination will enhance perception of process as suitable substitute for district court action while presentation of case-in-chief in paper will facilitate expedition. (b) Cons Lack of live direct testimony may mean that APJs ability to test credibility is narrower. Use of live cross-examination may make expedition more difficult. 4. Recommendation: Adopt Options A, B, and C. Alternative Design Issue #8 - Amendment of Claims in Review Proceeding 1. Option A - Allow no amendment of claims. (a) Pros More expedited proceeding. Parallel to district court and U.S. International Trade Commission (USITC) proceedings, where no amendment is permitted. (b) Cons Would lead to multiplicity of proceedings, since amended claim could be obtained through reissue, reexamination, and interferences. Would diminish settlement prospects. Would diminish use of review to improve quality. 2. Option B - Allow unlimited amendment of claims. (a) Pros Would substitute for reissue process. P-05-01 17 3. 4. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE Would diminish risk of unpatentability of substitute claim. (b) Cons

Would unduly prolong proceeding. Would be perceived as unfair to review petitioner, who must challenge a "moving target". Would make review proceeding primarily into a form of examination. Would diminish utility of proceeding as substitute for district court. Option C - Allow single, narrowing amendment of any claim at issue, with additional amendment on good cause shown. Additional dependent claims would be allowed. (a) Pros Permitting narrowing amendment after petitioner's proffer would (1) encourage petitioner to be aware that an amendment might be presented, (2) to prepare for that contingency and (3) limit the need for extensive further discovery. Provides a patent owner with a fair chance to maintain a patent with patentable claims. Permitting one opportunity as a matter of right to present narrower claims has been a successful practice in interference cases. Additional amendment with leave minimizes possibility of inadvertency leading to patent owner s not obtaining valid claim. (b) Cons Less effective in allowing patent owner to assure obtaining valid claim. Good cause motion practice may become burdensome. Option D - Only permit amendment upon surrender of original claim. (a) Pros 18 5. Alternative Design Issue #9 - Time for Completing Review Proceeding 1. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE Would simplify subsequent litigation. Somewhat parallels reissue. (b) Cons Would require patent owner to choose to abandon claims which are possibly patentable. Recommendation: Adopt Option C. Permit patent owner to propose single, narrowing amendment of claim at issue, and/or the addition of dependent claims, with additional amendment on good cause shown. Do not require surrender of original claim. This strikes the best balance between fairness to the patent owner and to the review petitioner. Option A - Have statutory provision requiring the Director to put in place regulations designed to result in final decisions in review proceedings to be entered within one year from docketing of review proceeding. (a) Pros Would provide assurance of expedition without mandatory language that would make USPTO subject to mandamus in the event of reasonable delay. Would give assurance to courts that stays of litigation pending outcome of review before USPTO would be justified. USPTO has experience achieving one-year deadlines, since from 1998 it has decided the patentability phase of almost all interferences within a 10-month period; USITC sets 15-month goal for more complex patent cases. (b) Cons Would put pressure on Director to allocate budget to achieve set goal for review proceeding, perhaps at cost of other processes. Alternative of mandatory deadlines would provide litigants more certainty.

Setting forth specific deadlines for interim points of proceeding within statute would provide greater assurance. 19 UNITED STATES PATENT AND TRADEMARK OFFICE 2. Option B - Use "conducted with special dispatch" language to ensure that BPAI will not allow other matters to take precedence. (a) Pros Does not interfere with Director discretion in setting priorities for funding in USPTO. Instructs the BPAI as to priorities in proceedings. (b) Cons May not provide adequate assurance of expedition to make legislative package acceptable, because BPAI has in past allowed inter partes proceedings to become quite extended and "special dispatch" proceedings are not reliably expedited in USPTO. 3. Recommendation: Set time-limited expedition goal in statute and give Director flexibility to design rules to meet it. Alternative Design Issue #10 - Relation to Other Post-Grant Proceedings 1. Option A - Eliminate inter partes reexamination. (a) Pros Process has been little used and its function is likely to be superseded. (b) Cons Inter partes reexamination would be useful if both sides could appeal. 2. Option B - Eliminate requirement that Director act on third-party requests for reexamination. (a) Pros Would facilitate devoting greater examiner time to original examination. Would still allow requests to Director, thereby putting information in his hands to use at his discretion. P-05-01 20 3. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE Would limit prospects of simultaneous parallel reexamination proceedings against same patent owner in USPTO. In cases where parties are simply seeking an opinion from the USPTO, they can achieve the same effect by agreeing not to proceed beyond a motion to dismiss in a review proceeding. Since review proceeding allows full participation by party challenging patent, limitations on third party-initiated reexamination should make it a less attractive option. (b) Cons Would eliminate reasonably efficient proceeding with which practitioners are familiar to decide friendly disputes on which they simply want declaration of rights and not cost of adversary proceedings. Option of providing reexamination opportunity based on third-party submission on order of Director may be little used if requestor has no guarantee of action and thus may be less effective as a quality control procedure. Option C - Merge into review proceeding any issues raised in pending reexamination or narrowing reissue proceeding that review petitioner raises in review proceeding, and allow any other issues to proceed in reexamination or reissue. (a) Pros Would prevent parallel proceedings on same issues. Would assure that review petitioner is fully informed of existence of

other proceeding. Would yield a single judgment from USPTO on overlapping issues. (b) Cons Would take choice of forum out of hands of patent owner and other third parties. Would impose some administrative burdens in consolidating proceedings. 21 4. 5. 6. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE May, in some cases where reexamination is well developed, delay results. Option D - In the event of pending reissue proceeding in first two years after issuance of patent, when broadening is allowed, authorize review petitioner choice of whether to stay review proceeding pending outcome of reissue or vice-versa. (a) Pros Would minimize burden on patent owner of parallel proceedings without prohibiting reissue. Allows review petitioner to delay effort of review litigation if narrowing amendment sought by patent owner ex parte would moot case. Would allow narrowed claim to be tested by review petitioner if so chosen. Prevents issuance by USPTO of inconsistent judgments and race between units of USPTO. (b) Cons Takes existing choice of reissue out of hands of patent owner. May delay broadening reissue needed for other reasons. Option E - Review proceeding estops the parties and privies from pursuing district court actions, reexamination and future reviews on the same issues. Option F - Statute will give the Director flexibility to determine, by regulation or otherwise, the manner in which various proceedings will proceed, including the power to terminate, transfer, consolidate and/or stay any proceedings where appropriate. (a) Pros Offers the most flexibility to address complex (and currently unforeseeable) interrelationships between Office proceedings involving the same or related patents. Conserves resources by ensuring that duplicative proceedings need not go forward concurrently. 22 7. Alternative Design Issue #11 - Settlement 1. 2. P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE (b) Cons May be viewed as depriving parties of their current rights to pursue other Office proceedings, such as reexamination or reissue. Recommendation: Eliminate inter partes reexamination, and third-party requested reexamination, as a matter of right, but not other forms of post-grant proceedings. Give the Director broad authority to regulate the interrelationship among Office proceedings, to provide the most efficiency for the Office and the parties. Option A - Allow settlement by parties without reporting content of

settlement to the USPTO or obtaining USPTO approval. (a) Pros Facilitates expedition in completion of proceeding. Makes USPTO no more burdensome to parties than district court. Recognizes that commercial interests of parties may be served by minimizing litigation costs. (b) Cons May lead to repeated review proceedings starting from scratch if other competitors also doubt validity of patent claim. Provides less access by Federal Trade Commission (FTC) and Department of Justice (DOJ) to settlements than current law concerning interferences. May lead to collusion between competitors. Option B - Allow parties to settle without approval by USPTO, but require filing of settlement agreement. (a) Pros Parallel to current interference practice (35 U.S.C. 135(c)). Provides antitrust enforcers ability to assure that USPTO not used to create anticompetitive agreements. 23 UNITED STATES PATENT AND TRADEMARK OFFICE (b) Cons May lead to preservation of claims that are known to, or suspected by, BPAI to be unpatentable. May make any follow-on litigation by other parties more burdensome on those other parties. 3. Option C - Provide BPAI ability to reject settlements terminating reviews, based on the public interest. (a) Pros Serves quality control purpose of proceeding by allowing BPAI to cancel claims known, or suspected, to be unpatentable. Prevents burden on third parties to bring additional proceedings. (b) Cons May discourage settlement and thus expedition in case. May require APJ to exercise public policy discretion in matters beyond USPTO expertise (e.g., antitrust concerns). Diverges from district court practice. 4. Option D - Allow APJ to take other actions--require submission of discovery taken to date, Director-ordered reexamination--short of rejection of settlement. (a) Pros Would have less effect in discouraging potentially meritorious settlement while allowing USPTO to take action to minimize burdens on third parties. Option would lessen risk of DOJ/FTC objection to review proceeding as possibly allowing collusion. (b) Cons USPTO may allow to stand some claims known to be unpatentable. Would delay the proceeding. P-05-01 24 Alternative Design Issue #12 - Judicial Review P-05-01 UNITED STATES PATENT AND TRADEMARK OFFICE APJs currently have authority to recommend Director-ordered reexamination, but Director-ordered reexamination rarely takes place. Additional reexamination would take away resources available for initial examination of patents. 5. Recommendation: Adopt Option B, with appropriate modifications to the 135(c) [interference settlement] model. To protect against collusion, do

not provide for the issuance by the BPAI of any decision on patentability of proposed amended claims, in the event of settlement. This system places little burden on the Office, but still protects the public interest by requiring disclosure of settlement agreements and by minimizing any advantages that might be gained through collusion. 1. Option A - Allow judicial review of final decisions (not interlocutory orders) in the Federal Circuit or a district court. (a) Pros Would be parallel to most appeal processes from decision by USPTO. Would allow parties to bring USPTO record before district court judge who has jurisdiction over total dispute between parties. Expedition not as crucial as in original examination, where appeals may prolong patent term, but dual options allowed in those cases. (b) Cons Access to district courts will discourage full litigation before USPTO, thus detracting from utility of proceeding. Prolongs proceedings, since appeal to Federal Circuit following district court decision would still be available. Limits utility of proceeding to divert cases from judicial system. Different standards applied in Federal Circuit (substantial evidence) and district court (clear error on existing evidence and de novo on new) encourages forum shopping. 25 2. 3. Recommendation: Adopt Option B. USPTO Recommended Course of Action: Implementation of a review proceeding is recommended to respond to strong intere st from the public in such a proceeding, to provide a quality check on issued patents, a nd to provide an alternative to district court litigation of patent validity issues. Legislati on would be necessary, and is unlikely to be passed before 2003. Thus, implementation of the proceeding in the USPTO in 2004 would be realistic. Fees for review proceedings could be set to cover the costs of these proceedings. The review proceeding should be structured to place some limits on when patents can be challenged and who is eligible to challenge them. A review petitioner should be required to make a strong initial showing in order to go forward in the proceeding, and a ll parties should be required to make mandatory disclosures of the relevant information, wi th limited additional discovery allowed for good cause. A patent owner would have the limit ed ability to narrow the challenged claims by amendment. Hearings should be streaml ined so that direct cases can be presented by documents, and live cross-examination allo wed where necessary. As structured, the proceeding could offer a more expedited and potent ially less expensive alternative to district court, and could serve as a useful quality con trol mechanism for patents. Estimated investment: P-05-01

UNITED STATES PATENT AND TRADEMARK OFFICE Option B - Allow appeal from final decisions to Federal Circuit only. (a) Pros Faster and eliminates forum shopping. Encourages full submissions before agency, in which case judicial review by civil action should be unnecessary. Serves efficiency in courts by eliminating claims that might otherwise proceed to full litigation and providing courts guidance on claims that are not cancelled. Model already provided for this step in inter partes reexamination. (b) Cons Does not allow district court with jurisdiction over matter as a whole to reopen matter when justice warrants. of litigation. Push for expedition in USPTO may prevent full and fair opportunity 26 UNITED STATES PATENT AND TRADEMARK OFFICE 1. APJ training to allow APJs to become familiar with handling live testimony ca ses (currently only some interference APJs handle live testimony on an irregular bas is). 2. Promulgation of rules. 3. Additional Associate Solicitor positions to defend the BPAI s review decisions in appeals where, because of the lack of standing required for the 12-month review petitioner, the petitioner lacks standing (no actual case or controversy ) to defend the decisi on. 4. Currently, it would be somewhat difficult to assess the extent to which revie w might be used and hence the resources to implement review. If review were to be instituted, it is likely--given trademark's experience--that interferences gener ally would not be necessary. Accordingly, the BPAI resources dedicated to handling interference s at least initially would be expected to be sufficient to handle reviews, at least in a 20 04 time frame. While there is no solid basis for estimating the number of reviews, if it is ass umed that the BPAI would have to handle twice as many reviews as it handles interferences, it would be expected that 300 reviews could be presented in 2004. Those reviews could be han dled by the 15 APJs currently assigned to interferences, if it is assumed that interfere nces would decrease or be eliminated--probably a good assumption. Additional resources woul d be a function of how successful review proceedings are viewed by the public and the n umber of reviews filed. On the other hand, some reviews would take the place of reexamina tions, and accordingly, there would be some examiner resources freed for other purposes . Estimated benefits: The principal benefit of the proposal is in providing a review proceeding where the patentability of patent claims can be tested, before the Office, by a party with an economic interest in determining the patentability of a claim. The proceeding would be a

cheaper and faster alternative to district court litigation and would serve as a useful qual ity control mechanism for patents. Additionally, the proposal would eliminate inter partes reexamination entirely and make initiation of third-party requested reexaminatio n discretionary. This should alleviate the burden on the examiners of having to ex amine complex and lengthy reexamination proceedings, and thus free examiners to examin e applications and reduce pendency thereof. Further, the proposal provides a vehic le wherein the third party develops and presents the evidence thus saving the Offic e a significant amount of resources that it currently expends in making the case for unpatentability. P-05-01 27 Task Name P-05-01 - Post-Grant Review of Patent Claims Draft post-grant review legislation (P-05-01) Introduce legislation (P-05-01) Publish proposed rules (P-05-01) Legislation enacted (P-05-01) Comment period closes (P-05-01) Publish final rules (P-05-01) Implement final rules (P-05-01) Train APJs (P-05-01) Advertise for solicitor positions (P-05-01) Comprise panel (P-05-01) Hire additional solicitor positions (P-05-01) Duration 781 days 64 days 103 days 76 days 96 days 23 days 31 days 0 days 10 days 60 days 60 days 60 days Contact J. Toupin Start Finish Mon 6/3/02 Thu 6/23/05 FY 2003 Resources $0 Mon 6/3/02 Fri 8/30/02 Wed 2/5/03 Tue 7/1/03 Mon 3/17/03 Fri 2/14/03 Tue 7/1/03 Tue 7/1/03 Fri 8/15/03 Wed 7/16/03 Mon 8/18/03

Wed 10/1/03 Wed 10/1/03 Fri 10/1/04 Tue 9/30/03 Wed 10/1/03 Wed 10/15/03 Thu 12/23/04 Mon 1/3/05 Fri 3/25/05 Fri 4/1/05 Thu 6/23/05 Legislation PROPOSED FEE LEGISLATION Actions UNITED STATES PATENT AND TRADEMARK OFFICE UNITED STATES PATENT AND TRADEMARK OFFICE REAUTHORIZATION ACT, FISCAL YEAR 2003 PURPOSE AND NEED FOR PROPOSED STATUTORY CHANGES TO 35 U.S.C. 41 FEES The proposed statutory changes to patent fees in section 41 of title 35, United States Code, and the authorization to change trademark fees to levels in excess of the increase in the Consumer Price Index over the last twelve months, provide an alternative to the surcharges proposed in the President s 2003 budget proposal for the U.S. Patent an d Trademark Office (USPTO), and would still generate the levels of patent and trad emark fee income reflected in that budget even though the USPTO has received fewer pat ent and trademark application filings than the estimates on which the 2003 budget wa s based and, therefore, a corresponding reduction in fee income. The President s 2003 budget proposes a 19.3 percent surcharge on all patent fees a nd a 10.3 percent surcharge on trademark fees to cover necessary costs to fund the US PTO s long-term quality, e-Government, and pendency initiatives, and to pay the full Government share of the accruing cost of retirement for current CSRS employees a nd post-retirement health benefits for current civilian employees. Private sector i nterests oppose the use of surcharges because such surcharges do not reflect accurately t he costs of the particular services for which the fees are paid. The proposed fee changes in this legislation provide an alternative to the surcharges, an alternative that reflec ts more accurately the costs of the services provided. The alternative would produce inc ome levels equivalent to the 2003 budget proposal, taking into account the reduction s in patent and trademark application filings. The resulting revenues will ensure that there was no delay in the implementation of the USPTO s new initiatives aimed at improving the quality of granted patents and trademark registrations, increasing efficiency th rough e-

Government programs, and reducing pendency in processing applications for patent s and for registration of trademarks. The proposed changes to section 41 also will initiate a restructuring of patent fees by, among other things, providing a separate filing fee and an examination fee, rath er than the composite fee currently charged. This change will provide patent applicants with a reduced filing fee and an opportunity to evaluate the commercial value of their invention before having to pay a fee to cover the cost of patent examination. This change also will eliminate the need for the USPTO to examine all patent applications, regardless of whether the applicant determines that its invention is of sufficient commercial value to justify prosecuting its application. It is critical that the proposal be given expedited treatment, since the changes need to be in place by the beginning of fiscal year 2003. The Office of Management and Budg et has no objection from the standpoint of the Administration s program to the submission of this legislative proposal to the Congress. Reauthorization Act 1 UNITED STATES PATENT AND TRADEMARK OFFICE SEC. 1. SHORT TITLE. $160. FEE LEGISLATION This Act may be cited as the United States Patent and Trademark Office Reauthorization Act, Fiscal Year 2003. SEC. 2. FEES FOR PATENT SERVICES. (a) GENERAL PATENT FEES. Section 41 of title 35, United States Code, is amended by striking subsection (a) and inserting the following: (a) The Director shall charge the following fees and surcharges (1) FILING AND BASIC NATIONAL FEES. (A) On filing each application for an original patent, except for design, plant, or provisional applications, $300. (B) On filing each application for an original design patent, $130. (C) On filing each application for an original plant patent, $200. (D) On filing each provisional application for an original patent, (E) On filing each application for the reissue of a patent, $300. (F) The basic national fee for an international application entering the national stage under section 371 of this title, $300. (G) In addition, the surcharge as prescribed by the Director for any application the specification and drawings of which exceed 50 sheets of paper (or equivalent as prescribed by the Director if filed in an electronic medium). (2) EXCESS CLAIMS FEES. (A) INDEPENDENT CLAIMS. On filing in an application or on presentation at any other time of a claim in independent form in excess of 3 (i) For a 4th claim in independent form, $160; (ii) For a 5th claim in independent form, $320; (iii) For a 6th claim in independent form, $640; and Fee Legislation 1 UNITED STATES PATENT AND TRADEMARK OFFICE (iv) For each claim in independent form in excess of 6, 125 percent of the fee specified in this subparagraph for the previous

claim in independent form. (B) TOTAL CLAIMS. On filing in an application or on presentation at any other time of a claim (whether dependent or independent) in excess of 20 (i) For each claim in excess of 20 but not in excess of 25, $80; (ii) For each claim in excess of 25 but not in excess of 30, $160; (iii) For each claim in excess of 30 but not in excess of 35, $320; (iv) For each claim in excess of 35 but not in excess of 40, $640; and (v) For each claim in excess of 40, by groups of 5 claims, 125 percent of the fee specified in this subparagraph for each claim in the previous group of 5 claims. (C) For each application containing a multiple dependent claim, $280. For purpose of computing fees, a multiple dependent claim as referred to in section 112 of this title or any claim depending therefrom shall be considered as separate depe ndent claims in accordance with the number of claims to which reference is made. (D) The Director may, by regulation, provide for a refund of the fee specified in subparagraphs (A) or (B) for any claim or claims that are cancelled as the resul t of a requirement for restriction under section 121 of this title. (E) Errors in payment of the additional fees under this paragraph may be rectified in accordance with regulations prescribed by the Director. (3) RELATED APPLICATION SURCHARGE. contains or is amended to contain a specific reference to an earlier filed appli cation or applications under section 120, 121, or 365(c) of this title. or is amended to contain 1 or more claims that are not patentably distinct from 1 or more claims in another pending application or patent. (A) The surcharge as prescribed by the Director for filing an application that (B) The surcharge as prescribed by the Director for an application that contains (C) Errors in payment of the additional fees under this paragraph may be rectified in accordance with regulations prescribed by the Director. (4) EXAMINATION FEES. (A) On filing a request for examination of an application for an original patent, except for a design or plant application, or of an application for the reissue o f a patent, $1250. Fee Legislation 2 UNITED STATES PATENT AND TRADEMARK OFFICE (B) On filing a request for examination of an application for an original design patent, $560. (C) On filing a request for examination of an application for an original plant patent, $860. Upon payment of the fee required by this paragraph in an application for a patent, except for provisional applications, the application shall be examined in accordance with chapter 12 of this title, but if the fee required by this paragr aph is not paid within such period and under such conditions as may be prescribed by the Director, the application shall be regarded as abandoned. The Director may, by regulation, reduce the fee specified in this paragraph for independent invent ors who meet the conditions prescribed by the Director, and for applicants who provide a search report that meets the conditions prescribed by the Director. (5) ISSUE FEES. (A) For issuing each original patent, except for design or plant patents, or each

(A) On filing an appeal from the examiner to the Board of Patent Appeals and reissue patent, $1660. (B) For issuing each original design patent, $600. (C) For issuing each original plant patent, $810. (6) DISCLAIMER FEE. On filing each disclaimer, $110. (7) APPEAL FEES. Interferences, $520. (B) In addition, on filing a brief in support of the appeal, $1730, and on requesting an oral hearing in the appeal before the Board of Patent Appeals and Interferences, $460. (8) REVIVAL FEES. On filing each petition for the revival of an unintentionally abandoned application for a patent, for the unintentionally dela yed payment of the fee for issuing each patent, or for unintentionally delayed respo nse by the patent owner in any reexamination proceeding, $1280, unless the petition is filed under section 133 or 151 of this title, in which case the fee shall be $11 0. (9) EXTENSION FEES. For petitions for 1-month extensions of time to take actions required by the Director in an application (A) On filing a first petition, $140; (B) On filing a second petition, $520; (C) On filing a third or subsequent petition, $1200. . Fee Legislation 3 UNITED STATES PATENT AND TRADEMARK OFFICE (b) PATENT MAINTENANCE FEES. Section 41 of title 35, United States Code, is amended by striking subsection (b) and inserting the following: (b) The Director shall charge the following fees for maintaining in force all patents based on applications filed on or after December 12, 1980 (1) 3 years and 6 months after grant, $900. (2) 7 years and 6 months after grant, $3000. (3) 11 years and 6 months after grant, $5000. Unless payment of the applicable maintenance fee is received in the U.S. Patent a nd Trademark Office on or before the date the fee is due or within a grace period o f six months thereafter, the patent will expire as of the end of such grace period. Th e Director may require the payment of a surcharge as a condition of accepting within such 6 -month grace period the payment of an applicable maintenance fee. No fee may be establi shed for maintaining a design or plant patent in force. . (c) APPLICATION OF SMALL ENTITY FEE REDUCTION. Section 41(h)(1) of title 35, United States Code, is amended by adding at the en d thereof the following sentence: The provisions of this paragraph shall not apply to the fees charged under subsection (a)(4). . SEC. 3. EFFECT ON PATENT TERM ADJUSTMENT. The 14-month period specified in section 154(b)(1)(A) and the 3-year period specified in section 154(b)(1)(B) of title 35, United States Code, shall be meas ured from the date on which the examination fee specified in section 41(a)(4) of title 35, United States Code, was paid. SEC. 4. EFFECTIVE DATE, APPLICABILITY, AND TRANSITION. (a) EFFECTIVE DATE AND APPLICABILITY.

(1) The amendments made by section 2 shall take effect on October 1, 2002, and shall apply to all patents, whenever granted, and to all applications pendin g on or filed after October 1, 2002, except that the fees specified in sections 41(a)(1) and 41(a)(4) of title 35, United States Code, shall apply only to all applications for patent filed under section 111 of title 35, United States Code, on or after October 1, 2002, and to all international applications entering the nat ional stage after compliance with section 371 of title 35, United States Code, on or a fter October 1, 2002. Fee Legislation 4 UNITED STATES PATENT AND TRADEMARK OFFICE (2) Section 3 shall take effect on October 1, 2002 and, except for design patent applications filed under chapter 16 of title 35, United States Code, shall apply to all applications for patent filed under section 111(a) of title 35, United State s Code, and to all international applications in which the national stage is commenced under section 371(b) or (f) of title 35, United States Code, on or aft er October 1, 2002. (3) The surcharges provided for in sections 41(a)(1)(G) and 41(a)(3) of title 35, United States Code, shall not take effect until at least 30 days after the d ate on which notice of the surcharge is published in the Federal Register. (4) The time period and conditions prescribed by the Director under section 41(a)(4) of title 35 United States Code, shall take effect on the day following the date on which notice of such time period and conditions is published in the Federal Register. (b) TRANSITIONAL PROVISIONS. (1) Between October 1, 2002 and the effective date of the surcharge provided for in section 41(a)(3)(A) of title 35, United States Code, the Director shall charge (A) For each application that contains or is amended to contain a specific reference to 3 earlier filed applications under section 120, 121, or 365(c) of title 35, United States Code, $1000; (B) For each application that contains or is amended to contain a specific reference to 4 earlier filed applications under section 120, 121, or 365(c) of title 35, United States Code, $2000; (C) For each application that contains or is amended to contain a specific reference to 5 earlier filed applications under section 120, 121, or 365(c) of title 35, United States Code, $4000; (D) For each application that contains or is amended to contain a specific reference to 6 or more earlier filed applications under section 120, 121, or 365(c) of title 35, United States Code, $8000 for each application in excess of 5 to which the application contains or is amended to contain a specific reference under section 120, 121, or 365(c) of title 35, United States Code. (2) Between October 1, 2002 and the effective date of the surcharge provided for in section 41(a)(3)(B) of title 35, United States Code, the Director shall charge (A) For each application that contains or is amended to contain 1 or more claims that are not patentably distinct from 1 or more claims in 1 other pending application or patent, $10,680; Fee Legislation 5 UNITED STATES PATENT AND TRADEMARK OFFICE (B) For each application that contains or is amended to contain 1 or more

claims that are not patentably distinct from 1 or more claims in 2 other pending applications or patents, $13,350; (C) For each application that contains or is amended to contain 1 or more claims that are not patentably distinct from 1 or more claims in 3 other pending applications or patents, $16,690; and (D) For each application that contains or is amended to contain 1 or more claims that are not patentably distinct from 1 or more claims in 4 or more other pending applications or patents, 125 percent of the fee set forth in this paragraph for an application that contains or is amended to contain 1 or more claims that are not patentably distinct from 1 or more claims in 1 fewer other pending applications or patents. (3)(A) Between October 1, 2002 and the effective date of the time period and conditions prescribed by the Director under section 41(a)(4) of title 35, United States Code, the examination fee specified in section 41(a)(4) shall be accompanied by a request in writing for examination of the application and, except as provided in subparagraphs (B) through (D), shall be paid within 18 months from the date on which the application was filed in the United States, or if the application contains a specific reference to an earlier filed application or applications under section 119(e), 120, 121, or 365(c) of title 35, United State s Code, 18 months from the date on which the earliest such application was filed. (B) In any original application filed under section 111(a) of title 35, United States Code, except for a design patent application filed under chapter 1 6, of title 35, United States Code, that contains a specific reference to an earlie r filed application or applications under section 119(e), 120, 121, or 365(c) of title 3 5, United States Code, the examination fee specified in section 41(a)(4) shall be p aid either within the period specified in subparagraph (A) or within the period and under the conditions prescribed by the Director under section 111(a)(3) of title 35, United States Code, for payment of the fee for filing the application. (C) In any application for the reissue of a patent filed under section 251 of title 35, United States Code, and in any original design patent application file d under chapter 16 of title 35, United States Code, the examination fee specified in section 41(a)(4) shall be paid within the period and under the conditions prescribed by the Director under section 111(a)(3) of title 35, United States Co de, for payment of the fee for filing the application. (D) In any international application, the examination fee specified in section 41(a)(4) shall be paid by the date on which the national stage commenced under section 371(b) or (f) of title 35, United States Code. Fee Legislation 6 UNITED STATES PATENT AND TRADEMARK OFFICE SEC. 5. ADJUSTMENT OF TRADEMARK FEES For fiscal year 2003, the Director may adjust fees established under section 31 of the Trademark Act of 1946 by amounts in excess of fluctuations during the preced ing 12 months in the Consumer Price Index, as determined by the Secretary of Labor, wit hout regard to any other provision of law.

Fee Legislation 7 UNITED STATES PATENT AND TRADEMARK OFFICE SECTION-BY-SECTION ANALYSIS SECTION ONE Section One sets forth the short title of the bill, the United States Patent and Trademark Office Reauthorization Act, Fiscal Year 2003. SECTION TWO. Section Two prescribes the dollar amounts for certain corresponding general patent and patent application fees set forth in 35 U.S.C. 41(a) and (b) and authorizes the Director to require payment of a surcharge in certain situations. Section 41(a) now speci fies an examination fee (paragraph 4) that is separate from the filing fee (paragraph 1) . Under 41(a), the applicant in an original application (other than a provisional or des ign application) would pay the filing fee on filing (or shortly thereafter), but may delay requesting examination and paying the examination fee for eighteen months from t he application s earliest effective United States filing date (or a period specified in the USPTO s regulations). Separate fees for filing and examination will give the appli cant time to determine whether the invention claimed in the application has sufficien t commercial viability to make it worthwhile to pay the fee to proceed with examin ation, and will obviate the need for the USPTO to examine applications where the applic ant has determined that the invention does not have sufficient commercial viability to p ay the fee to proceed with examination of the patent application. Section 41(a)(1) sets out the filing fees for applications filed under 111 of th e patent law (original or reissue) and the basic national fee for Patent Cooperation Trea ty (PCT) international applications entering the national stage under 371 of the patent l aw. Under 41(a)(1), the filing fees for applications filed under 111 are as follows: The filing fee for an application for an original patent, except for design, plant, or provisional applications, is $300. The filing fee for an application for an original design patent is $130. The filing fee for an application for an original plant patent is $200. Th e filing fee for a provisional application is $160. And, the filing fee for an application fo r the reissue of a patent is $300. Under 41(a)(1), the basic national fee for any PCT international application ent ering the national stage under 371 is $300. Under 41(a)(1), the Director is also authorized to prescribe a surcharge for any application whose specification and drawings exceed 50 sheets of paper (or equiv alent as prescribed by the Director if filed in an electronic medium). It is to be recall

ed that the Senate Report Language for the USPTO s fiscal year 2002 appropriation: "The Committee further directs that the "electronic file wrapper" be fully imple mented by the end of fiscal year 2004." Senate CJS Sub-C 7-19-01. Section-by-Section Analysis 1 UNITED STATES PATENT AND TRADEMARK OFFICE Section 41(a)(2) sets out excess claims fees each independent claim in excess of 3 and for each claim (whether dependent or independent) in excess of 20. The excess claims fees increase progressively as the number of claims increases to encourage applicants to file excess claims only when necessary for adequate protection of the invention. Under 41(a)(2)(A), the excess claims fee for a 4th claim in independent form is $160, the additional excess claims fee for a 5th claim in independent form is $320, an d the additional excess claims fee for a 6th claim in independent form is $640. Under 41(a)(2), the additional excess claims fee for each claim in independent form in excess of 6 is 125 percent of the excess claims fee for the previous claim in independe nt form. For example, the additional excess claims fee for a 7th claim in independent for m is $800, the additional excess claims fee for an 8th claim in independent form is $1,000, and the additional excess claims fee for a 9th claim in independent form is $1,250. Under 41(a)(2)(B), the excess claims fee for each claim (whether dependent or independent) in excess of 20 but not in excess of 25 is $80, the additional exce ss claims fee for each claim in excess of 25 but not in excess of 30 is $160, the addition al excess claims fee for each claim in excess of 30 but not in excess of 35 is $320, and t he additional excess claims fee for each claim in excess of 35 but not in excess of 40 is $640. Under 41(a)(2)(B), the additional excess claims fee for each claim in exce ss of 40, by groups of 5 claims, is 125 percent of the excess claims fee for each clai m in the previous group of 5 claims. For example, the additional excess claims fee for ea ch claim in excess of 40 but not in excess of 45 is $800, the additional excess claims fe e for each claim in excess of 45 but not in excess of 50 is $1,000, and the additional exce ss claims fee for each claim in excess of 50 but not in excess of 55 is $1,250. Under 41(a)(2)(C), the fee for each application containing a multiple dependent claim is $280. For the purpose of computing fees, a multiple dependent claim as referred to in section 112 of the patent code or any claim depending therefrom is considered as separate dependent claim in accordance with the number of claims to which reference is ma de. Under 41(a)(2)(D), the Director may, by regulation, provide for a refund of the excess claims fee for any claim or claims that are canceled as the result of a requirem ent for

restriction under section 121 of the patent code. The Director may prescribe the time when the excess claims fees required by 41(a )(2) must be paid. For example, the Director may require that the excess claims fees required by 41(a)(2) be paid with the filing or basic national fee under 41(a)(1), or may permit the excess claims fees to be paid with the examination fee under 41(a)(4). In ad dition, errors in payment of the additional fees under 41(a)(2) may be rectified in acco rdance with regulations prescribed by the Director. Section 41(a)(3) authorizes the Director to charge the following surcharges: The Director may require a surcharge for filing an application that contains or is amended to contain a specific reference to an earlier filed application or applications under 120, 121 , or 365(c) of the patent law. The Director may also require a surcharge for an appli cation that contains or is amended to contain one or more claims that are not patentabl y distinct from one or more claims in another pending application or patent. The phrase not Section-by-Section Analysis 2 UNITED STATES PATENT AND TRADEMARK OFFICE patentably distinct has the same connotation as it has in the context of obviousn ess-type double patenting, namely the surcharge is required if the application at issue c ontains one or more claims that would be subject to an obviousness-type double patenting rej ection over one or more claims in another pending application or patent. See, e.g., In re Berg, 140 F.3d 1428, 46 USPQ2d 1226 (Fed. Cir. 1998), In re Longi, 759 F.2d 887, 225 U SPQ 645 (Fed. Cir. 1985), In re Van Ornum, 686 F.2d 937, 214 USPQ 761 (CCPA 1982), a nd In re Vogel, 422 F.2d 438, 164 USPQ 619 (CCPA 1970). The surcharges required und er this authority are expected to be established at a level that modifies applicant behavior and not at levels to just generate revenue for the USPTO. Specifically, the surc harge required under 41(a)(3)(A) is expected to motivate the vast majority of applican ts to conclude prosecution of an application in fewer than three continuing applicatio ns, and the surcharge required under 41(a)(3)(B) is expected to motivate the vast majori ty of applicants to include all patentably indistinct claims in a single application d espite the excess claims fees provided for in 41(a)(2). Finally, errors in payment of the surcharges under 41(a)(3) may be rectified in accordance with regulations prescr ibed by the Director. Section 41(a)(4) sets out the examination fees for all applications (except for provisional applications), including PCT international applications entering the national st age under 371. The examination fee for an application for an original patent, except for a

design or plant application, and for any reissue application, is $1,250. The examinatio n fee for an original design patent is $560. And, the examination fee for an original plan t patent is $860. The examination fee does not apply to provisional applications because a provisional application is not examined as provided in 131 et seq. of the patent law. If the examination fee required by 41(a)(4) is paid in an application (other than a provisional application), the application will be examined under 131 et seq. The application, however, will become abandoned if the examination fee is not paid w ithin such period and under such conditions as may be prescribed by the Director. The Director may require that the request for examination and fee be accompanied by a search report (as prescribed by the Director). Under 41(a)(4), the Director may reduce the examination fee for certain applican ts. First, the Director may reduce the examination fee for independent inventors who meet certain conditions as prescribed by the Director (e.g., have an income level bel ow an amount specified in the regulations). Second, the Director may reduce the examin ation fee for applicants who provide a search report that meets the conditions prescri bed by the Director and thus reduces the USPTO s cost of examining the application. This prov ision does not authorize the Director to reduce the examination fee for applicants on an ad hoc basis, but only authorizes the Director to reduce the examination fee for applic ants who meet the conditions specified in the regulations for the fee reduction. Section 41(a)(5) sets out the fees for issuing a patent. Under 41(a)(5), the fee for issuing each original patent, except for design or plant patents, and each reiss ue patent is $1,660; the fee for issuing each original design patent is $600; and the fee for issuing each original plant patent is $810. Section 41(a)(6) sets out the fee due upon filing a disclaimer under section 253 of the patent law in a patent or a patent application, which is $110. Section-by-Section Analysis 3 UNITED STATES PATENT AND TRADEMARK OFFICE Section 41(a)(7) sets out the appeal fees. Under 41(a)(7), the fee due upon fili ng an appeal from the examiner to the Board of Patent Appeals and Interferences is $52 0; the fee due upon filing a brief in support of the appeal is an additional $1,730; an d the fee due for requesting an oral hearing in the appeal before the Board of Patent Appe als and Interferences is an additional $460. Section 41(a)(8) sets out the fees due upon filing a petition to revive an aband oned application or to accept a delayed response by the patent owner in a reexaminati on

proceeding, which is $1,280, unless the petition is filed under 133 or 151 of th e patent law, in which case the fee is $110. Section 41(a)(9) sets out the fees due upon filing a petition for one-month exte nsions of time. Under 41(a)(9), the fee for filing the first petition is $140, the additio nal fee for filing the second petition is $520, and the additional fee for filing the third or subsequent petition is $1,200. Section 41(b) sets out the fee for maintaining in force a patent based on applic ations filed on or after December 12, 1980. Under 41(b), the maintenance fee due at 3 years a nd 6 months after grant is $900; the maintenance fee due 7 years and 6 months after g rant is $3000; and the maintenance fee due 11 years and 6 months after grant is $5000. S ection 41(b) also provides that unless payment of the applicable maintenance fee is rec eived in the USPTO on or before the date on which the fee is due or within a grace period of 6 months thereafter, the patent will expire as of the end of such grace period, th at the Director may require the payment of a surcharge as a condition of accepting with in such 6-month grace period the payment of an applicable maintenance fee, and that no f ee may be established for maintaining a design or plant patent in force. Section 41(h)(1) is amended to provide that the 50 percent small entity fee disc ount does not apply to the examination fee provided for in 41(a)(4). SECTION THREE Section Three provides that the 14-month period specified in 154(b)(1)(A)(i) of the patent law, and that the 3-year period specified in 154(b)(1)(B) of the patent l aw, shall be measured from the date on which the examination fee specified in 41(a)(4) was paid. Since the USPTO will not examine an application unless and until the examination fee has been paid, the above time frames of 154(b) are measured from the date on whi ch the examination fee specified in 41(a)(4) was paid. SECTION FOUR Section Four sets forth the effective date of this bill: October 1, 2002. Sectio n Four also provides that the amendments made by Section Two take effect on October 1, 2002, and shall apply to all patents, whenever granted, and to all applications pending on or filed after October 1, 2002. Since applications pending before October 1, 2002 paid fi ling or Section-by-Section Analysis 4 UNITED STATES PATENT AND TRADEMARK OFFICE basic national fees based upon former 41(a), Section Four also provides that the filing and examination fees specified in 41(a)(1) and 41(a)(4) apply only to all applica tions for patent filed under 111 on or after October 1, 2002, and to all PCT internati

onal applications entering the national stage after compliance with 371 on or after O ctober 1, 2002. Section Four also provides that Section Three takes effect on October 1, 2 002, and applies to all applications for patent filed under 111(a) on or after October 1, 2002 (except for design applications), and to all PCT international applications in w hich the national stage commenced under 371(b) or (f) on or after October 1, 2002. Sectio n Four also provides that the surcharges provided for in 41(a)(1)(G) and 41(a)(3) s hall not take effect until at least 30 days after notice of the surcharge has been pu blished in the Federal Register, and that the time period and conditions prescribed by the Director under 41(a)(4) shall not take effect until notice of such time period and condit ions has been published in the Federal Register. Section Four also provides transitional provisions. Section Four specifically pr ovides that between October 1, 2002 and the effective date of the surcharge provided fo r in 41(a)(3)(A), the Director shall charge: (1) $1,000 for each application that con tains or is amended to contain a specific reference to 3 earlier filed applications under 120, 121, or 365(c); (2) $2,000 for each application that contains or is amended to c ontain a specific reference to 4 earlier filed applications under 120, 121, or 365(c); (3) $4,000 for each application that contains or is amended to contain a specific reference to 5 earlier filed applications under 120, 121, or 365(c); and (4) for each application that c ontains or is amended to contain a specific reference to 6 or more earlier filed applica tions under 120, 121, or 365(c), $8000 for each such earlier filed application referenced in excess of 5. Section Four also provides that between October 1, 2002 and the effective date of the surcharge provided for in 41(a)(3)(B), the Director shall charge: (1) $10,68 0 for each pending application that contains or is amended to contain one or more clai ms that are not patentably distinct from one or more claims in 1 other pending applicati on or patent; (2) $13,350 for each pending application that contains or is amended to contain one or more claims that are not patentably distinct from one or more claims in 2 other pending applications or patents; and (3) $16,690 for each pending application th at contains or is amended to contain one or more claims that are not patentably dis tinct from one or more claims in 3 other pending applications or patents. This surcharge fo r an application increases by 125 percent for each additional other pending applicati on or

patent that contains one or more claims that are not patentably distinct from on e or more claims in the application. For example, the Director shall charge $20,860 for ea ch pending application that contains or is amended to contain one or more claims th at are not patentably distinct from one or more claims in 4 other pending applications or patents, and shall charge $26,080 for each pending application that contains or is amended to contain one or more claims that are not patentably distinct from one or more claims in 5 other pending applications or patents. Section Four also provides that between October 1, 2002 and the effective date o f the time period and conditions prescribed by the Director under 41(a)(4), the examin ation fee must be accompanied by a request in writing for examination of the applicati on and must (except as otherwise provided) be paid within 18 months from the date on wh ich the application was filed in the United States, or if the application contains a spe cific Section-by-Section Analysis 5 UNITED STATES PATENT AND TRADEMARK OFFICE reference to an earlier filed application or applications under 119(e), 120, 121, or 365(c), 18 months from the date on which the earliest such application was filed . The examination fee must be paid either within the period specified above or within the period and under the conditions prescribed by the Director under 111(a)(3) for p ayment of the filing fee for any original application filed under 111(a), except for a design patent application filed under chapter 6 of title 35, that contains a specific r eference to an application or applications under 119(e), 120, 121, or 365(c). The examination fe e must be paid either within the period and under the conditions prescribed by the Director under 111(a)(3) for payment of the filing fee in any reissue application and in any design patent application. And, the examination fee must be paid by the date on which the national stage commenced under 371(b) or (f) in any PCT international applic ation. SECTION FIVE Section Five authorizes the Director of the USPTO to adjust trademark fees for f iscal year 2003 in amounts that exceed the fluctuations of the Consumer Price Index fo r the preceding 12 months, without regard to any other provision of law. Section-by-Section Analysis 6