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Sufficient to Reduce the Patent Application Backlog' which was released 
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Report to the Ranking Member, Committee on Oversight and Government 
Reform, House of Representatives: 

United States Government Accountability Office: 

GAO: 

September 2007: 

U.S. Patent And Trademark Office: 

Hiring Efforts Are Not Sufficient to Reduce the Patent Application 
Backlog: 

U.S. Patent and Trademark Office: 

GAO-07-1102: 

GAO Highlights: 

Highlights of GAO-07-1102, a report to the Ranking Member, Committee on 
Oversight and Government Reform, House of Representatives. 

Why GAO Did This Study: 

Increases in the volume and complexity of patent applications have 
lengthened the amount of time it takes the U.S. Patent and Trademark 
Office (USPTO) to process them. In addition, concerns have continued 
about USPTO’s efforts to hire and retain an adequate patent examination 
workforce that can not only meet the demand for patents but also help 
reduce the growing backlog of unexamined patent applications. In this 
context, GAO was asked to determine for the last 5 years (1) USPTO’s 
process for identifying its annual hiring estimates and the 
relationship of these estimates to the patent application backlog; (2) 
the extent to which patent examiner hiring has been offset by 
attrition, and the factors that may contribute to this attrition; and 
(3) the extent to which USPTO’s retention efforts align with patent 
examiners’ reasons for staying with the agency. For this review, GAO 
surveyed 1,420 patent examiners, and received an 80 percent response 
rate. 

What GAO Found: 

In each of the last 5 years, USPTO primarily identified its projected 
annual hiring estimates on the basis of available funding levels and 
its institutional capacity to support additional staff and not on the 
existing backlog or the expected patent application workload. USPTO’s 
process for identifying its annual hiring estimates is generally 
consistent with accepted workforce planning strategies. Each year the 
agency determines how many new patent examiners it has the budget and 
supervisory and training capacity to hire. However, because this 
approach does not take into account how many examiners are needed to 
reduce the existing patent application backlog or address the inflow of 
new applications, it is unlikely that the agency will be able to reduce 
the growing backlog simply through its hiring efforts. 

Although USPTO is hiring as many new patent examiners as its budget and 
institutional capacity will support, attrition is offsetting hiring 
progress, and agency management and patent examiners disagree about the 
causes for attrition. From 2002 through 2006, one patent examiner left 
USPTO for nearly every two the agency hired. This represents a 
significant loss to the agency because 70 percent of those who left had 
been at the agency for less than 5 years and new patent examiners are 
primarily responsible for the actions that remove applications from the 
backlog. According to USPTO management, patent examiners leave the 
agency primarily for personal reasons, such as the job not being a good 
fit or family reasons. In contrast, 67 percent of patent examiners 
identified the agency’s production goals as one of the primary reasons 
examiners may choose to leave USPTO. These production goals are based 
on the number of applications patent examiners must complete biweekly 
and have not been adjusted to reflect the complexity of patent 
applications since 1976. Moreover, 70 percent of patent examiners 
reported working unpaid overtime during the past year, in order to meet 
their production goals. Such a large percentage of patent examiners who 
are working extra time to meet their production goals and would choose 
to leave the agency because of these goals may be an indication that 
the production goals do not accurately reflect the time patent 
examiners need to review applications and is undermining USPTO’s hiring 
efforts. 

The retention incentives and flexibilities provided by USPTO over the 
last 5 years generally align with the primary reasons identified by 
patent examiners for staying with the agency. Between 2002 and 2006, 
USPTO used a variety of retention flexibilities such as a special pay 
rate, performance bonuses, flexible work schedules, and a telework 
program to encourage patent examiners to stay with the agency. 
According to USPTO management the most effective retention efforts were 
those related to compensation and an enhanced work environment. GAO’s 
survey of patent examiners indicates that most patent examiners 
generally approved of USPTO’s retention efforts, and ranked the 
agency’s salary and other pay incentives as well as the flexible work 
schedule among the primary reasons for staying with the agency. 

What GAO Recommends: 

GAO recommends that USPTO undertake a comprehensive evaluation of the 
assumptions that the agency uses to establish its production goals. 
USPTO generally agreed with this recommendation. 

[hyperlink, http://www.gao.gov/cgi-bin/getrpt?GAO-07-1102]. 

To view the full product, including the scope and methodology, click on 
the link above. For more information, contact Anu Mittal, 202-512-3841, 
mittala@gao.gov. 

[End of section] 

Contents: 

Letter: 

Results in Brief: 

Background: 

USPTO's Annual Hiring Estimates Are Determined by Funding and 
Institutional Capacity and Are Unlikely to Reduce the Patent 
Application Backlog: 

Attrition Has Greatly Offset Hiring over the Last 5 Years, and Agency 
Management and Patent Examiners Disagree about the Reasons for 
Attrition: 

Retention Incentives and Flexibilities Provided over the Last 5 Years 
Generally Align with the Primary Reasons Patent Examiners Identified 
for Staying at USPTO: 

Conclusion: 

Recommendation for Executive Action: 

Agency Comments and Our Evaluation: 

Appendix I: Objectives, Scope, and Methodology: 

Appendix II: Selected Survey Results: 

Appendix III: Comments from the Department of Commerce: 

Appendix IV: GAO Contact and Staff Acknowledgments: 

Tables: 

Table 1: Retention Incentives and Flexibilities Provided by USPTO by 
Category, and Other Retention Efforts, Fiscal Years 2002 through 2006: 

Table 2: Number of Bonuses and Bonus Amounts USPTO Awarded, and Number 
of Patent Examiners Participating in the Telework Program in Fiscal 
Years 2002 through 2006: 

Table 3: Patent Examiners' Views on Compensation-Related and Enhanced 
Work Environment Incentives and Flexibilities in Decreasing Order of 
Importance: 

Table 4: Summary of Patent Examiner Population and Survey Sample by 
Stratum: 

Figures: 

Figure 1: USPTO Patent Examiner Projected Hiring Estimates and Actual 
Number Hired, Fiscal Years 2002 through 2006: 

Figure 2: Patent Examiner Attrition by Years of Experience, Fiscal 
Years 2002 through 2006: 

Figure 3: Estimated and Actual First Actions Completed, Fiscal Years 
2002 through 2006: 

Abbreviations: 

GS: general schedule: 

OPM: Office of Personnel Management: 

PALM: Patent Application Locating and Monitoring: 

POPA: Patent Office Professional Association: 

UPR: utility, plant, and reissue USPTOU.S. Patent and Trademark Office: 

United States Government Accountability Office: 

Washington, DC 20548: 

September 4, 2007: 

The Honorable Tom Davis Ranking Member Committee on Oversight and 
Government Reform House of Representatives: 

Dear Mr. Davis: 

Protecting intellectual property rights and encouraging technological 
progress are important for ensuring the current and future 
competitiveness of the United States. The U.S. Patent and Trademark 
Office (USPTO) helps protect the nation's competitiveness by granting 
patents for innovations ranging from new treatments for diseases, to 
new wireless technology applications, to new varieties of 
plants.[Footnote 1] USPTO's ability to keep up with the demand for 
patents is essential for achieving its mission. However, increases in 
both the volume and complexity of patent applications have lengthened 
the amount of time it takes the agency to process them. As a result, 
the inventory of patent applications that have not yet been reviewed, 
called the backlog, has been growing for over 15 years--since fiscal 
year 2002 alone, the backlog has increased by nearly 73 percent to 
about 730,000 applications. 

Inventors submit applications to USPTO to obtain a patent for their 
inventions and the right it affords the holder to exclude others from 
making, using, or selling the patented item in the United States. USPTO 
is funded by fees collected from the public for specific activities 
related to processing applications. The spending of these fees is 
subject to provisions determined by Congress in annual appropriations 
acts. USPTO relies on a workforce of nearly 5,000 patent examiners-- 
attorneys, engineers, and other scientific and technical professionals-
-to review and make decisions on patent applications. The number of 
these professionals that USPTO hires, as well as the overall size and 
experience of the patent examination workforce, affects the number of 
applications that can be reviewed in any given year. As part of the 
review process, patent examiners are assigned what is known as a 
biweekly "production goal" on the basis of their position in the agency 
and the types of patent applications they are assigned to 
review.[Footnote 2] Production goals are the number of specific actions 
and decisions that patent examiners must make about patent applications 
they review during a 2-week period.[Footnote 3] Patent examiners' 
performance is assessed biweekly on their ability to meet their 
production goals; their inability to meet these goals could have an 
impact on their compensation and continued employment with the agency. 
However, as we noted in 2005, the assumptions underlying the agency's 
production goals were established over 30 years ago and have not since 
been updated. 

Since 2000, USPTO has implemented a variety of human capital 
flexibilities intended to help recruit and retain enough patent 
examiners and maintain a workforce that is sufficient to meet the 
demand for patents. These flexibilities have included the use of 
recruitment bonuses, law school tuition reimbursement, and a casual 
dress policy. In 2005, in response to congressional concerns about 
USPTO's efforts to attract and retain a qualified workforce, we 
reported that it was too soon to determine the long-term success of 
USPTO's recruitment and retention efforts because, in part, they had 
been inconsistently sustained during the limited time they had been in 
effect, and that not all of the planned initiatives had been 
implemented.[Footnote 4] However, concerns have continued because of 
increasing patent examiner attrition, especially among patent examiners 
who have been at the agency for less than 5 years, which is causing the 
workforce to grow at a slower rate than would be expected given the 
number of patent examiners the agency has been hiring each 
year.[Footnote 5] 

In this context, you asked us to determine, for the last 5 years, (1) 
USPTO's process for identifying its annual hiring estimates and the 
relationship of these hiring estimates to the patent application 
backlog; (2) the extent to which patent examiner hiring has been offset 
by attrition at USPTO, and what factors may contribute to patent 
examiners' decisions to leave the agency; and (3) the extent to which 
the retention incentives and flexibilities USPTO has implemented align 
with patent examiners' reasons for staying with the agency. 

To determine USPTO's process for developing annual hiring estimates and 
the relationship these estimates have to the patent application 
backlog, we interviewed agency officials and reviewed agency documents 
and reports by other organizations relating to USPTO's workforce 
planning process, including data the agency used to identify the number 
of patent examiners it planned to hire in each of the last 5 fiscal 
years. We analyzed patent examiner and patent application data for the 
last 5 fiscal years, as well as USPTO's projections of that data 
through fiscal year 2012. In addition, we reviewed the Office of 
Personnel Management's (OPM) workforce planning guidance and 
interviewed officials from OPM's Human Capital Assessment and 
Accountability Framework Office to develop criteria to assess USPTO's 
workforce planning process. To determine the extent to which patent 
examiner hiring has been offset by attrition at USPTO over the last 5 
years, we analyzed patent examiner workforce, hiring, and attrition 
data from this time period. To determine factors that may contribute to 
patent examiners' decisions to leave the agency, we conducted a Web- 
based survey of a stratified random sample of 1,420 USPTO patent 
examiners. Overall, we received an 80 percent response rate to our 
survey. Estimates based on this survey allow us to project our results 
to all patent examiners at USPTO with a 95 percent level of confidence. 
All percentage estimates included in this report have a 95 percent 
confidence interval with plus or minus 5 percentage points. To address 
this objective, we had to rely on the views of current patent examiners 
because USPTO does not maintain contact information for patent 
examiners that have left the agency and we could not identify any 
organizations that maintain this information for USPTO staff. In 
addition, we interviewed USPTO officials, representatives of the patent 
examiner union--the Patent Office Professional Association (POPA)--and 
an official from the American Intellectual Property Law Association. To 
determine the extent to which the retention incentives and 
flexibilities provided by USPTO align with patent examiners' reasons 
for staying with the agency, we interviewed USPTO officials about the 
retention incentives and flexibilities they have used in the past 5 
years, reviewed our previous report on USPTO's recruitment and 
retention efforts, interviewed representatives from POPA and an 
official from the American Intellectual Property Law Association to 
obtain their perspectives on factors affecting patent examiner 
retention and workload, and used the Web-based survey described above 
to obtain patent examiners' views on USPTO's retention incentives and 
flexibilities. Specifically, we sought patent examiners' views on the 
reasons they would choose to stay at the agency. Appendix I contains a 
more detailed discussion of our scope and methodology. We conducted our 
work from August 2006 through July 2007 in accordance with generally 
accepted government auditing standards. 

Results in Brief: 

In each of the last 5 years, USPTO has identified its annual hiring 
estimates on the basis of the agency's funding levels and institutional 
capacity to support additional staff and not on the existing backlog or 
the expected patent application workload. Because of its increasing 
workload relative to its existing workforce, over the last 5 years, 
USPTO has had to hire additional patent examiners each year. The 
primary factors that determined USPTO's annual hiring estimates during 
this time have been the agency's annual funding levels and its capacity 
to train and supervise new patent examiners. About 18 months before the 
start of the hiring year, USPTO considers these factors to determine 
its projected hiring estimates for the coming year. During these 18 
months, the agency refines these estimates on the basis of its most 
current budget and patent examination workforce data to determine the 
number of patent examiners the agency can actually hire. In each of the 
last 5 years, for various reasons, the number of patent examiners the 
agency actually hired differed from the hiring estimate that the agency 
had originally projected. For example, the projected hiring estimate 
for fiscal year 2004 was 750 patent examiners, but the agency actually 
hired 443 because of subsequent funding limitations. USPTO's current 
process is consistent with workforce planning strategies endorsed by 
OPM, though it is a significant deviation from the agency's previous 
workforce planning strategy, which was more directly linked to the 
patent examination workload. Over the last 5 years the agency has moved 
away from its prior strategy because it realized that it did not have 
the institutional capacity to train and supervise the relatively large 
number of new patent examiners it would need to hire annually to keep 
pace with the increasing number of incoming patent applications 
expected each year. Although shifting to its current approach has 
enabled USPTO to better match its hiring estimates to its institutional 
training and supervisory capacity, this approach does not take into 
account how many patent examiners are needed to reduce the backlog of 
existing patent applications or address the expected inflow of new 
applications. Consequently, the patent application backlog has 
continued to increase, and it is unlikely that the agency will be able 
to reduce the backlog simply through its hiring efforts. 

From 2002 through 2006, patent examiner attrition has continued to 
significantly offset USPTO's hiring progress. Although USPTO is hiring 
as many new patent examiners as it has the annual capacity to supervise 
and train, for nearly every two patent examiners it has hired over the 
last 5 years at least one has left the agency. Specifically, USPTO 
hired 3,672 patent examiners between 2002 and 2006, and 1,643 patent 
examiners left the agency during this time. More importantly, of those 
who left, 70 percent had been at USPTO for less than 5 years. This is a 
significant loss to the agency because, according to USPTO officials, 
new patent examiners are primarily responsible for making the initial 
decisions on applications, which removes them from the backlog. We 
found that within the agency there is significant disagreement about 
why patent examiners are continuing to leave. According to USPTO 
management, patent examiners leave primarily for personal reasons--for 
example, because the job is not a good fit for them or they need to 
relocate because of a spouse's job. In contrast, patent examiners, and 
the union officials who represent them, identified unrealistic agency 
production goals, which were established 30 years ago, as one of the 
primary reasons patent examiners may choose to leave. For example, 
union officials told us that attrition can primarily be attributed to 
the insufficient amount of time provided to patent examiners to meet 
their production goals. This was supported by our survey of patent 
examiners, in which 67 percent indicated that the agency's production 
goals were among the primary reasons they would consider leaving USPTO. 
Moreover, to meet their production goals, the majority of patent 
examiners had to work substantial unpaid overtime in the last 12 
months, while many others worked while on annual leave. According to 
one of our survey respondents, "vacation time means catch up time." 
Such a large percentage of patent examiners working extra time to meet 
their production goals, is an indication that USPTO's production goals 
may no longer accurately reflect the time patent examiners need to 
review applications. Given the high rate of attrition that may result, 
in part, from such outdated production goals, we are recommending that 
USPTO undertake a comprehensive evaluation of how it establishes these 
goals and revise these goals as appropriate. 

The retention incentives and flexibilities that USPTO has provided over 
the last 5 years generally align with the primary reasons patent 
examiners identified for staying at the agency. USPTO management told 
us that their most effective retention efforts have been those that 
provide additional compensation to and an enhanced work environment for 
patent examiners. Specifically, USPTO officials identified the agency's 
special pay rates, which can be more than 25 percent above federal 
salaries for comparable positions; the agency's bonus structure, which 
allows patent examiners to earn various cash awards for exceeding 
production goals; and opportunities for patent examiners to work either 
part-time or full-time from remote locations as being the most 
effective retention measures for the agency. For example, in fiscal 
year 2006, USPTO awarded 4,645 bonuses to patent examiners totaling 
over $10.6 million; patent examiners may receive up to three different 
types of bonuses in a fiscal year. That same year, approximately 20 
percent of patent examiners participated in the agency's telework 
program, which allows patent examiners to work some or all of their 
time from an off-site location, and approximately 10 percent of patent 
examiners were enrolled in the hoteling program, through which USPTO 
provides equipment to those patent examiners who are approved to work 
full-time from an off-site location. According to our survey, most 
patent examiners generally identified these types of retention 
incentives and flexibilities as among the most important reasons to 
stay at the agency. For example, 58 percent of patent examiners 
identified salary, and 49 percent flexible work schedules, as the 
primary reasons for staying with the agency. 

In its written comments on a draft of our report (reprinted in app. 
II), the Department of Commerce agreed with our findings, conclusions, 
and recommendation. In addition, the agency provided technical comments 
that we have incorporated as appropriate. 

Background: 

To obtain a patent, inventors--or more usually their attorneys or 
agents--submit an application to USPTO that fully discloses and clearly 
describes one or more distinct innovative features of the proposed 
invention and pay a filing fee to begin the examination process. Patent 
examiners review these applications to determine if a patent is 
warranted. In making this determination, patent examiners must meet two 
specific milestones in the patent examination process: first actions 
and disposals. 

² First action. Patent examiners notify applicants about the 
patentability of their invention through what is called a first action. 
After determining if the invention is new and useful, or a new and 
useful improvement on an existing process or machine, patentability is 
determined through a thorough investigation of information related to 
the subject matter of the patent application and already available 
before the date the application was submitted, called prior art. Prior 
art includes, but is not limited to, publications and U.S. and 
international patents. 

² Disposal. Patent examiners dispose of a patent application by 
determining, among other things, if a patent will be granted--called 
allowance--or not. 

Patent examiners receive credit, called counts, for each first action 
and disposal, and are assigned production goals (also known as quotas) 
on the basis of the number of production units--composed of two counts-
-they are expected to achieve in a 2-week period. The counts in a 
production unit may be any combination of first actions and disposals. 

The production goals that are used to measure patent examiner 
performance are based on the same assumptions that USPTO established in 
the 1970s. At that time, the agency set production goals in the belief 
that it should take a patent examiner a certain amount of time to 
review a patent application and achieve two counts based on the patent 
examiner's experience (as determined by the patent examiner's position 
in the agency) and the type of patent application reviewed. As a 
result, these goals vary depending upon the patent examiner's position 
in the federal government's general schedule (GS) pay scale and the 
technology center in which the patent examiner works.[Footnote 6] For 
example, a GS-12 patent examiner working on data processing 
applications is expected to achieve two counts in 31.6 hours, whereas a 
GS-12 patent examiner working on plastic molding applications is 
expected to do so in 20.1 hours. In contrast, GS-7 patent examiners 
working on these two types of applications are expected to achieve two 
counts in 45.1 and 28.7 hours, respectively. 

Patent examiner achievements are recorded biweekly, and, at the end of 
each fiscal year, those patent applications that have not been reviewed 
for first action are counted as part of USPTO's inventory of unexamined 
applications, otherwise known as the patent application backlog. In 
2002, we reported that the patent application backlog had increased by 
nearly 250 percent from 1990 to 2001, and that USPTO had projected that 
the inventory would increase to between 393,000 and 512,000 in fiscal 
year 2002.[Footnote 7] In addition, we reported that the agency had 
made three significantly different predictions about the future of the 
backlog in three separate reports that were based on different 
assumptions: 

² In its Fiscal Year 2002 Corporate Plan, in 2001, USPTO projected that 
the backlog would increase to almost 1.3 million by the end of fiscal 
year 2006. 

² In USPTO's Business Plan, in 2002, the agency projected that the 
backlog would increase to about 584,000 through fiscal year 2007. 

² In the 21st Century Strategic Plan, in 2002, USPTO projected that the 
backlog would decrease to about 144,000 through fiscal year 
2007.[Footnote 8] 

In 2005, we also reported on USPTO's efforts and challenges in 
attracting and retaining a qualified patent examination workforce. 
Specifically, we reported that USPTO faced human capital challenges 
because, among other things, it had not established an effective 
mechanism for managers to communicate and collaborate with patent 
examiners, and managers and patent examiners had differing opinions on 
the need to update the monetary award system that is based on 
assumptions of the time it takes to review a patent application that 
were established in 1976. We recommended that USPTO develop formal 
strategies to improve communication and collaboration among management, 
patent examiners, and the union to resolve key issues identified in the 
report, such as the assumptions underlying the quota system. In 
response to that recommendation, USPTO conducted an internal survey on 
communication, and is working to develop a communication strategy on 
the basis of the results. However, the agency has not addressed the 
issues we identified relating to the assumptions underlying the quota 
system. 

USPTO's Annual Hiring Estimates Are Determined by Funding and 
Institutional Capacity and Are Unlikely to Reduce the Patent 
Application Backlog: 

Over the last 5 years, as a result of its increasing workload relative 
to its existing workforce, USPTO determined that it would need to hire 
additional patent examiners each year. However, the agency identified 
its annual hiring estimates primarily on the basis of available funding 
levels and its institutional capacity to train and supervise new patent 
examiners, and not on the basis of the number of patent examiners 
needed to reduce the existing backlog or review new patent 
applications. While the process USPTO uses to identify its annual 
hiring estimates is consistent with OPM's workforce planning strategies 
and has enabled the agency to better match its hiring estimates to its 
institutional capacity, it is unlikely that the agency will be able to 
reduce the patent application backlog simply through its hiring 
efforts. 

USPTO's Funding Levels and Supervisory and Training Capacity Determine 
Its Annual Hiring Estimates: 

According to USPTO, during the last 5 years, the agency has used its 
available funding levels and its capacity to supervise and train patent 
examiners as the primary factors for identifying its projected annual 
hiring estimates. Specifically, USPTO begins the process of identifying 
projected hiring estimates as part of creating its budget submission 
for the Office of Management and Budget (OMB) 18 months before the 
start of the hiring year in order to meet OMB's budget submission 
timeline. As part of this process, the agency considers expected 
funding levels and patent examiner workforce data that are available at 
that time.[Footnote 9] On the basis of these data, USPTO next considers 
its institutional capacity to supervise and train patent examiners. For 
example, in identifying its fiscal year 2002 hiring estimate, USPTO 
determined that funding availability would limit the number of patent 
examiners the agency would be able to hire, and used the number of 
patent examiners it had hired in the most recent year as a guide for 
its projected hiring estimate. However, in fiscal years 2003 through 
2006, USPTO determined that funding levels would not be a limiting 
factor for hiring, and therefore established its hiring estimates 
primarily based on its institutional capacity to supervise and train 
patent examiners. 

In determining its institutional capacity to supervise and train new 
patent examiners, USPTO considers a number of factors. For example, the 
agency estimates its supervisory capacity by determining how many 
additional patent examiners can be placed in each of the technology 
centers. This number is limited by the number of supervisors available 
in each center who can sign patent application approvals and rejections 
and provide on-the-job training for new patent examiners. Although new 
patent examiners can review the prior art relating to a patent 
application, only supervisors can authorize a new patent examiner's 
decision to approve or reject a patent application.[Footnote 10] 
Therefore, the agency tries to ensure that the patent-examiner-to- 
supervisor ratio is about 1 supervisor for every 12 patent examiners; 
otherwise it could result in delays and inefficiencies in making 
initial and final decisions on patent applications. Similarly, USPTO's 
training capacity is determined by the number of patent examiners the 
agency believes it can train in a year. Before fiscal year 2006, 
training capacity was determined by how many patent examiners could be 
accommodated in the required training courses offered by the agency to 
new patent examiners. This training consisted of 2-or 3-week courses 
that were offered throughout the year and were led by supervisory 
patent examiners. The courses could accommodate about 16 patent 
examiners each, and in fiscal year 2004, according to USPTO, the agency 
offered about 28 training sessions. 

Because USPTO's projected hiring estimates are established at least 18 
months in advance of the hiring year, USPTO continues to refine them to 
reflect changes that might occur during the 18-month period. For 
example, in 2002 USPTO established a projected hiring estimate of 750 
patent examiners for fiscal year 2004 when it created its budget 
submission for OMB. However, USPTO actually hired 443 patent examiners 
in fiscal year 2004 because of budget constraints that had to be 
considered after its original estimates had been developed. Figure 1 
shows USPTO's projected and actual hiring numbers for fiscal years 2002 
through 2006. 

Figure 1: USPTO Patent Examiner Projected Hiring Estimates and Actual 
Number Hired, Fiscal Years 2002 through 2006: 

[See PDF for image] 

Source: USPTO. 

[End of figure] 

The reasons for the differences between projected hiring estimates and 
the number of patent examiners hired in fiscal years 2002 through 2006 
were primarily related to funding availability. In fiscal years 2003 
and 2004, according to USPTO, the agency's appropriations were 
significantly less than the agency's budget requests. As a result, the 
agency could not financially support the number of new patent examiners 
it had initially planned to hire. Conversely, in fiscal years 2005 and 
2006, USPTO hired more patent examiners than originally planned because 
the agency received greater funding for those years than originally 
anticipated. 

The way in which USPTO identifies annual patent examiner hiring 
estimates is generally consistent with workforce planning strategies 
endorsed by OPM. OPM has identified key elements that agencies should 
consider when planning to hire additional personnel, and OPM officials 
told us that these key elements are well recognized throughout the 
field of workforce planning. For example, OPM recommends that agencies 
regularly track workforce trends to ensure updated models for meeting 
organizational needs, base decisions on sources of information such as 
past workforce data, and include in its workforce planning process a 
workforce analysis system that identifies current and future losses due 
to attrition. We found that in identifying its hiring estimates, USPTO 
generally applies these principles because it makes decisions on the 
basis of trends in hiring, attrition, and total workforce data from 
recent years, and identifies current losses due to attrition when 
identifying its annual hiring estimates and estimates of attrition for 
the hiring year. 

Although consistent with OPM's workforce strategies, USPTO's current 
approach is significantly different from the approach that the agency 
used prior to fiscal year 2002. At that time, the number of patent 
examiners USPTO wanted to hire was based on the number of patent 
applications the agency expected to receive in the hiring year, as well 
as on the anticipated patent application backlog at the beginning of 
the hiring year. According to USPTO officials, since fiscal year 2002, 
the agency has moved away from this approach because it realized that 
it could no longer supervise and train enough patent examiners to keep 
up with the increasing workload. 

However, USPTO recognizes that it needs to increase its institutional 
capacity to hire more patent examiners, and in this regard is taking 
steps to increase its training and supervisory capacity. For example, 
to increase its training capacity, USPTO implemented an 8-month 
training program in fiscal year 2006 called the Patent Training Academy 
that will provide the agency a constant annual training capacity of 
1,200 new patent examiners for each of the next 5 years. USPTO also 
believes that the academy may indirectly improve the agency's 
supervisory capacity because it will better prepare new patent 
examiners to start work in a technology center, and therefore they will 
need less supervision and on-the-job training. USPTO plans to monitor 
new patent examiners after they have graduated from the academy in 
order to determine if the agency can further use this approach to 
increase its institutional capacity and, therefore, its future annual 
hiring estimates. 

Even with its increased hiring estimates of 1,200 patent examiners each 
year for the next 5 years, USPTO's patent application backlog will 
continue to grow, and is expected to increase to over 1.3 million at 
the end of fiscal year 2011. According to USPTO estimates, even if the 
agency were able to hire 2,000 patent examiners per year in fiscal year 
2007 and each of the next 5 years, the backlog would continue to 
increase by about 260,000 applications to 953,643 at the end of fiscal 
year 2011. The agency has acknowledged that it cannot hire its way out 
of the backlog despite its recent increases in hiring, and is now 
focused on slowing the growth of the backlog instead of reducing it. 

Attrition Has Greatly Offset Hiring over the Last 5 Years, and Agency 
Management and Patent Examiners Disagree about the Reasons for 
Attrition: 

Although USPTO is hiring as many new patent examiners as it has the 
annual funding and institutional capacity to support, increasing 
attrition among patent examiners has resulted in the loss of one patent 
examiner for nearly every two hired over the last 5 years. While agency 
officials cited personal reasons for patent examiner attrition, patent 
examiners disagreed and cited the agency's outdated production goals as 
one of the primary reasons they would choose to leave the agency. 

Over the Last 5 Years, One Patent Examiner Has Left USPTO for Nearly 
Every Two Hired: 

Although USPTO hired 3,672 patent examiners from the beginning of 
fiscal year 2002 through fiscal year 2006, the patent examination 
workforce increased by only 1,644 because 2,028 patent examiners either 
left the agency or moved to other positions. More specifically, during 
this time, 1,643 patent examiners left the agency, and 385 patent 
examiners were either transferred or promoted out of the position of 
patent examiner. As shown in figure 2, of the 1,643 patent examiners 
who left the agency, approximately 70 percent had been at USPTO for 
less than 5 years, and nearly 33 percent had been at USPTO for less 
than 1 year.[Footnote 11] 

Figure 2: Patent Examiner Attrition by Years of Experience, Fiscal 
Years 2002 through 2006: 

[See PDF for image] 

Source: USPTO. 

Note: In each fiscal year, the number of patent examiners at USPTO for 
less than 5 years is inclusive of those at USPTO for less than 1 year. 

[End of figure] 

The attrition of patent examiners who were at the agency for less than 
5 years is a significant loss for USPTO for a variety of reasons. 
First, because these less experienced patent examiners are primarily 
responsible for making the initial decision on patent applications, 
which is the triggering event that removes applications from the 
backlog, attrition of these staff affects USPTO's ability to reduce the 
patent application backlog. Second, because patent examiners require 4 
to 6 years of on-the-job experience before they become fully proficient 
in conducting patent application reviews, when these staff leave USPTO 
the agency loses as much as 5 years of training investment in them. 
Third, the continuous churning of so many new patent examiners makes 
the overall workforce less experienced. As a result, the more 
experienced patent examiners who have the ability to examine more 
applications in less time have to instead devote more of their time to 
supervising and training the less experienced staff, thereby further 
reducing the overall productivity of the agency. Finally, these 
workforce losses affect the agency's supervisory capacity, because they 
reduce the pool of potential supervisory patent examiners for the 
future and therefore negatively affect USPTO's ability to increase its 
capacity and ultimately its hiring goals. 

USPTO Management Links Attrition to Employees' Personal Reasons, while 
Patent Examiners Link It to the Agency's Production Goals: 

We found that USPTO management and patent examiners disagree 
significantly on the reasons for the attrition that is occurring at the 
agency. According to USPTO management, personal reasons are the primary 
reasons that cause patent examiners to leave the agency.[Footnote 12] 
Some of these reasons include the following: 

² The nature of the work at USPTO does not fit with the preferred 
working styles of some patent examiners such as those with engineering 
degrees who are looking for more "hands-on" experiences. 

² Many patent examiners enter the workforce directly out of college and 
are looking to add USPTO to their résumés and move on to another job 
elsewhere rather than build a career at the agency, otherwise known as 
the "millennial problem." 

² Patent examiners may choose to leave the area, as opposed to choosing 
to leave the agency, because their spouse transfers to a position 
outside of the Washington, D.C., area; the cost of living is too high; 
or the competition is too high for entry into the Washington, D.C., 
area graduate and postgraduate programs for those patent examiners who 
would like to pursue higher education. 

USPTO management told us that the agency is taking steps to help 
address these issues through efforts such as developing a recruitment 
tool to better assess applicant compatibility with the agency's work 
environment; targeting midcareer professionals during the recruitment 
process; and considering the creation of offices located outside the 
Washington, D.C., area that would provide lower cost-of-living 
alternatives for employees. 

While union officials agreed that in some cases personal reasons, such 
as the high cost of living in the Washington, D.C., area, may lead to 
attrition among patent examiners, they believe that attrition at USPTO 
can be primarily attributed to the unrealistic production goals that 
the agency sets for patent examiners.[Footnote 13] Specifically, union 
officials explained that the production goals do not allow adequate 
time for patent examiners to do their work, especially in light of the 
increased scrutiny and quality initiatives implemented by management. 
They told us that the production goals have created a "sweat shop 
culture" within the agency that requires patent examiners to do more in 
less time and has therefore been a significant contributor to patent 
examiners' decisions to leave USPTO. To emphasize this concern, the 
union joined the Staff Union of the European Patent Office and other 
international patent examiner organizations in April 2007 to sign a 
letter declaring that the pressures on patent examiners around the 
world have reached such a level that in the absence of serious 
measures, intellectual property worldwide would be at risk. The letter 
recommended, among other things, an increase in the time patent 
examiners have to review patent applications. 

According to our survey of patent examiners, 67 percent, regardless of 
their tenure with the agency, agree with union officials that the 
agency's production goals are among the primary reasons they would 
consider leaving USPTO. Moreover, we estimated that 62 percent of 
patent examiners are very dissatisfied or generally dissatisfied with 
the time allotted by USPTO to achieve their production goals. According 
to our survey, 50 percent of patent examiners are also very 
dissatisfied or generally dissatisfied with the way in which the 
agency's production goals are calculated, and a number of respondents 
noted that the production goals are outdated, have not changed in 30 
years, and some technologies for which they evaluate applications had 
not even been discovered at the time the agency's production goals were 
set. When asked for suggestions on how to improve the production 
system, 59 percent of patent examiners felt that the system needs to be 
reevaluated, including altering the production goals to allow more time 
for patent examiners to conduct their reviews. 

USPTO employees who participated in OPM's 2006 Federal Human Capital 
Survey reported similar results.[Footnote 14] Specifically, 89 percent 
of the respondents, comprising both patent examiners and managerial/ 
supervisory employees, reported that they believe the work they do is 
important.[Footnote 15] However, respondents were almost evenly split 
on whether their workload was reasonable, with 41 percent considering 
their workload reasonable and 40 percent considering it unreasonable. 

We and others have noted in the past that the assumptions the agency 
uses to calculate patent examiner production goals were established in 
the 1970s and have not since been adjusted to reflect changes in 
science and technology. Moreover, the agency uses these production 
goals to establish its overall performance goals, such as the number of 
first actions to be completed in a given year.[Footnote 16] However, 
the agency has missed its projections for first actions completed in 4 
of the last 5 years, as shown in figure 3, which further suggests that 
these goals may be unrealistic. 

Figure 3: Estimated and Actual First Actions Completed, Fiscal Years 
2002 through 2006: 

[See PDF for image] 

Source: USPTO. 

[End of figure] 

Furthermore, according to our survey, patent examiners are discontented 
with the actions they have to take in order to meet their production 
goals. According to our survey, during the last year, 70 percent of 
patent examiners worked unpaid overtime to meet their production goals, 
some more than 30 extra hours in a 2-week period. The percentage of 
patent examiners who worked unpaid overtime increased with the length 
of tenure they had with the agency. We estimated that while 46 percent 
of patent examiners who had been at USPTO from 2 to 12 months had to 
work unpaid overtime to meet their production goals; 79 percent of 
patent examiners with over 5 years' experience at the agency had to put 
in unpaid overtime. In addition, we estimated that 42 percent of patent 
examiners had to work to meet production goals while on paid annual 
leave during the past year. The percentage of patent examiners working 
while on paid leave also was significantly higher for those with a 
longer tenure at the agency. We estimated that 18 percent of patent 
examiners who had been at USPTO from 2 to 12 months worked to meet 
their production goals while on paid leave, and 50 percent of patent 
examiners with over 5 years' experience at the agency had to work to 
meet production goals while on annual leave. As one respondent to our 
survey explained, "Vacation time means catch up time." Another 
respondent summed up the situation as follows: "I know that the 
production goals are set to keep us motivated in order to help get over 
the backlog but if a majority of examiners cannot meet those goals 
without relying on unpaid overtime or annual leave then something is 
wrong with the system." We estimated that because of the amount of 
unpaid overtime that they have to put into meeting their production 
goals, 59 percent of patent examiners consider it one of the primary 
reasons they would choose to leave USPTO, and 37 percent identified the 
amount of time they must work during paid leave to meet their 
production goals among the primary reasons they would leave the agency. 

This extensive amount of unpaid overtime does not appear to be a 
concern to USPTO management, even though the agency has not been able 
to meet its productivity goals for the last 4 years. When we queried 
USPTO management about the agency's policy regarding patent examiners 
working unpaid overtime to meet their production goals, the Deputy 
Commissioner for Patent Operations told us, "As with many professionals 
who occasionally remain at work longer to make up for time during the 
day spent chatting or because they were less productive than intended, 
examiners may stay at the office (or remote location) longer than their 
scheduled tour of duty to work." 

Retention Incentives and Flexibilities Provided over the Last 5 Years 
Generally Align with the Primary Reasons Patent Examiners Identified 
for Staying at USPTO: 

From 2002 to 2006, USPTO offered a number of different retention 
incentives and flexibilities in three main areas to improve the 
retention of patent examiners, as shown in table 1.[Footnote 17] 

Table 1: Retention Incentives and Flexibilities Provided by USPTO by 
Category, and Other Retention Efforts, Fiscal Years 2002 through 2006: 

Category: Compensation; 
Retention incentive, flexibility, or other: Performance bonuses; 
Retention incentive, flexibility, or other: Flexible spending accounts 
that allow patent examiners to set aside funds for expenses related to 
health care and care for dependents; 
Retention incentive, flexibility, or other: Law school tuition 
reimbursement program[A]; 
Retention incentive, flexibility, or other: Noncompetitive promotion to 
the full performance level; 
Retention incentive, flexibility, or other: Recruitment bonuses of up 
to $9,900. 
Retention incentive, flexibility, or other: Special pay rate[B]; 
Retention incentive, flexibility, or other: Transit subsidy program. 

Category: Enhanced work environment; Retention incentive, flexibility, 
or other: Casual dress policy; 
Retention incentive, flexibility, or other: Flexible work schedules, 
including the ability to schedule hours off during the day; 
Retention incentive, flexibility, or other: Improved management 
communication techniques (e.g., town hall meetings, online chats with 
the Commissioner); 
Retention incentive, flexibility, or other: No-cost health screenings 
at an on-site health unit staffed with a registered nurse and part-time 
physician; 
Retention incentive, flexibility, or other: On-site child care and 
fitness centers; 
Retention incentive, flexibility, or other: Creation of a committee to 
organize recreational and social activities, such as a basketball 
tournament and Halloween party; 
Retention incentive, flexibility, or other: Work at home 
opportunities;  

Category: Other retention efforts; 
Retention incentive, flexibility, or other: Additional training for 
managers, such as workshops on intergenerational issues and technical 
training for patent examiners. 
Retention incentive, flexibility, or other: Formation of a Patents 
Retention Council to focus on patent examiner retention issues at 
USPTO; 
Retention incentive, flexibility, or other: A survey given to potential 
applicants during the recruiting process to better assess applicant 
compatibility with the USPTO work environment; 

Source: GAO analysis of USPTO information. 

[A] USPTO provided the law school tuition program for 2 years between 
fiscal years 2002 and 2006. 

[B] The special pay rate was approved in 2006 and went into effect in 
January 2007. 

[End of table] 

According to USPTO management officials, the three most effective 
retention incentives and flexibilities that they have offered are the 
special pay rates, the bonus structure, and opportunities to work from 
remote locations. 

² Special pay rate. In November 2006, USPTO received approval for an 
across-the-board special pay rate for patent examiners that can be more 
than 25 percent above federal salaries for comparable positions. For 
example, in 2007, a patent examiner at USPTO earning $47,610 would earn 
$37,640 in a similar position at another federal agency in the 
Washington, D.C., area. 

² Bonus structure. The agency awards bonuses at the end of each fiscal 
year to patent examiners who exceed their production goals by at least 
10 percent. For example, according to USPTO, 60 percent of eligible 
patent examiners who exceeded production goals by 10 percent or more 
received a bonus in fiscal year 2006. As table 2 shows, USPTO awarded 
4,645 bonuses totaling over $10.6 million to patent examiners in fiscal 
year 2006.[Footnote 18] 

² Opportunities to work from remote locations. In fiscal year 2006, 
approximately 20 percent of patent examiners participated in the 
agency's telework program, which allows patent examiners to conduct 
some or all of their work away from their official duty station 1 or 
more days per week. In addition, when USPTO began a hoteling program in 
fiscal year 2006, approximately 10 percent of patent examiners 
participated in the program, which allows some patent examiners to work 
from an alternative location.[Footnote 19] 

Table 2: Number of Bonuses and Bonus Amounts USPTO Awarded, and Number 
of Patent Examiners Participating in the Telework Program in Fiscal 
Years 2002 through 2006: 

Number of bonuses[A]; 
2002: 4,877; 
2003: 4,839; 
2004: 5,015; 
2005: 4,567; 
2006: 4,645. 

Bonus amount (dollars in millions); 
2002: $10.3; 
2003: $10.9; 
2004: $11.5; 
2005: $10.9; 
2006: $10.6. 

Patent examiners in telework program; 
2002: Not applicable[B]; 
2003: 800; 
2004: 345; 
2005: 1014; 
2006: 999. 

Source: USPTO. 

[A] Up to three types of bonuses may be awarded to one patent examiner 
in a fiscal year, one of which may be awarded twice per fiscal year. 

[B] USPTO did not offer a telework program in fiscal year 2002. 

[End of table] 

According to the results of our survey, patent examiners generally 
identified compensation-related retention incentives and USPTO's 
efforts to enhance the work environment as among the most important 
reasons for staying with the agency. (See app. II for more detailed 
information on the questions included in and the results of our 
survey.) Specifically, as table 3 shows, patent examiners ranked 
current total pay, flexible work schedules, the hoteling program, and 
federal benefits as among the primary reasons they would choose to stay 
at USPTO. Similarly, 51 and 87 percent of the USPTO employees who 
participated in OPM's 2006 Federal Human Capital Survey reported that 
they were satisfied with their pay and alternative work schedules, 
respectively. 

Table 3: Patent Examiners' Views on Compensation-Related and Enhanced 
Work Environment Incentives and Flexibilities in Decreasing Order of 
Importance: 

USPTO incentives and flexibilities offered to patent examiners: Current 
total pay (excluding benefits); 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 58. 

USPTO incentives and flexibilities offered to patent examiners: The 
availability of the flexible work schedule program; 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 49. 

USPTO incentives and flexibilities offered to patent examiners: The 
availability of a hoteling program; 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 38. 

USPTO incentives and flexibilities offered to patent examiners: Current 
federal benefits; 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 30. 

USPTO incentives and flexibilities offered to patent examiners: The 
availability of a teleworking program; 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 17. 

USPTO incentives and flexibilities offered to patent examiners: The 
recent implementation of a special pay rate increase; 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 16. 

USPTO incentives and flexibilities offered to patent examiners: 
Opportunities for career advancement; 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 15. 

USPTO incentives and flexibilities offered to patent examiners: The 
ability to be promoted to the next GS level; 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 14. 

USPTO incentives and flexibilities offered to patent examiners: The 
availability of the law school tuition program; 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 10. 

USPTO incentives and flexibilities offered to patent examiners: The 
availability of monetary awards; 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 5. 

USPTO incentives and flexibilities offered to patent examiners: The 
casual dress policy; 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 4. 

USPTO incentives and flexibilities offered to patent examiners: Access 
to an on-site fitness center; 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 4. 

USPTO incentives and flexibilities offered to patent examiners: The 
availability of a transit subsidy program; 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 2. 

USPTO incentives and flexibilities offered to patent examiners: The 
availability of on-site child care; 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 1. 

USPTO incentives and flexibilities offered to patent examiners: The 
availability of flexible spending accounts (i.e., the program that 
allows you to pay for eligible out-of-pocket health care and dependent 
care expenses with pretax dollars); 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 1. 

USPTO incentives and flexibilities offered to patent examiners: The 
availability of an on-site health unit; 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 0. 

USPTO incentives and flexibilities offered to patent examiners: 
Activities offered by the Work-Life Committee; 
Estimated percentage of patent examiners who identified these 
incentives and flexibilities as reasons to stay with the agency: 0. 

Source: GAO survey. 

Note: To determine the estimated percentages in this table, we included 
the total number of times patent examiners identified a particular 
retention incentive and flexibility as one of the three most important 
reasons they would choose to stay at USPTO. 

[End of table] 

Conclusion: 

Despite its efforts to hire an increasing number of patent examiners 
annually and implement a number of retention incentives and 
flexibilities over the last 5 years, USPTO has had limited success in 
retaining new patent examiners. While many of the measures implemented 
generally align with the primary reasons that patent examiners would 
stay with the agency, these efforts have not been enough to prevent the 
agency from losing one patent examiner for nearly every two that it has 
hired, and especially troubling is the high loss of patent examiners 
who have been with the agency for less than 5 years. Although USPTO 
management does not agree, the root of this high level of attrition 
appears to be the stress resulting from the agency's outdated 
production goals. To meet the agency's production goals, most patent 
examiners, regardless of their tenure with the agency, have had to work 
unpaid overtime or work during paid leave time, and therefore consider 
this to be a primary reason for leaving USPTO. Because the production 
goals appear to be undermining USPTO's efforts to hire and retain a 
highly qualified workforce, we believe the agency will continue to be 
limited in its ability to meet the increasing demand for U.S. patents 
and reduce the growth of the patent application backlog, and ultimately 
may be unable to fulfill its mission of ensuring U.S. competitiveness. 

Recommendation for Executive Action: 

We recommend that the Secretary of Commerce direct the Under Secretary 
of Commerce for Intellectual Property and Director of the U.S. Patent 
and Trademark Office to undertake a comprehensive evaluation of the 
assumptions that the agency uses to establish patent examiner 
production goals and revise those assumptions as appropriate. 

Agency Comments and Our Evaluation: 

We provided a draft of this report to the Department of Commerce and 
USPTO for review and comment. In its comments, the Department of 
Commerce agreed with our findings, conclusions, and recommendation and 
agreed that the agency's hiring efforts are not sufficient to reduce 
the patent application backlog. In light of this issue, the Department 
of Commerce stated that USPTO is implementing various initiatives 
designed to increase the productivity of the agency that will result in 
a more efficient and focused patent examination process. Once USPTO 
determines the effect of these initiatives on patent examiner 
productivity, it will reevaluate the assumptions used to establish 
patent examiner production goals. The agency also provided technical 
comments that we have incorporated as appropriate. The Department of 
Commerce's letter is included in appendix II. 

As agreed with your office, unless you publicly announce the contents 
of this report earlier, we plan no further distribution until 30 days 
from the report date. At that time, we will send copies to interested 
congressional committees and Members of Congress and the Secretary of 
Commerce. We also will make copies available to others upon request. In 
addition, the report will be available at no charge on the GAO Web site 
at [hyperlink, http://www.gao.gov]. 

If you or your staff have questions about this report, please contact 
me at (202) 512-3841 or mittala@gao.gov. Contact points for our Offices 
of Congressional Relations and Public Affairs may be found on the last 
page of this report. GAO staff who made key contributions to this 
report are listed in appendix IV. 

Sincerely yours, 

Ms. Anu K. Mittal: 

Director, Natural Resources and Environment: 

[End of section] 

Appendix I: Objectives, Scope, and Methodology: 

To determine the U.S. Patent and Trademark's (USPTO) process for 
developing annual hiring estimates and the relationship these estimates 
have to the patent application backlog, we analyzed patent examiner 
data that USPTO extracts from the National Finance Center, and patent 
application data from the agency's Patent Application Locating and 
Monitoring (PALM) system,[Footnote 20] from fiscal years 2002 through 
2006, and projections of that data through fiscal year 2012.[Footnote 
21] Specifically, these data included actual end of fiscal year numbers 
from 2002 through 2006 and estimates from fiscal years 2002 through 
2012 for patent examination workforce, patent examiners hired, patent 
examiners lost to attrition, first actions, received patent 
applications, and the patent application backlog. USPTO provided the 
majority of these data to us in the form of USPTO's fiscal years 2002 
through 2008 Budget Requests of the President of the United States. The 
budget requests for fiscal years 2003 through 2005 contained the hiring 
estimates for each of those years as well as those projected for an 
additional 4 years, and the actual number of patent examiners hired for 
fiscal years 2002 and 2003.[Footnote 22] USPTO provided the remaining 
estimates in an interview, and the remaining actual numbers hired by 
extracting that information from the National Finance Center into Excel 
documents. 

We assessed the reliability of the patent examiner data USPTO extracted 
from the National Finance Center and the agency's PALM system and 
determined that they were acceptable for our purposes. We assessed the 
reliability of patent examiner data by comparing the data to patent 
examiner data in the Central Personnel Data File. To assess the 
reliability of the PALM system, we interviewed the Acting Director of 
the Office of Patent Audit and Evaluation. We also interviewed USPTO's 
Administrator of the Office of Patent Resources Administration to gain 
an understanding of the process through which USPTO identifies hiring 
estimates and the role of the backlog in that process. In addition, we 
reviewed reports by other organizations, such as the National Academy 
of Public Administration, relating to USPTO's workforce planning 
process. We reviewed the Office of Personnel Management's (OPM) 
workforce planning guidance and interviewed officials from OPM's Human 
Capital Assessment and Accountability Framework Office to develop 
criteria to assess USPTO's workforce planning process. We compared 
USPTO's process for developing annual hiring estimates to OPM's 
workforce planning strategies and other best practice information we 
received from OPM's Human Capital Assessment and Accountability 
Framework Office in order to determine if USPTO's process for 
identifying annual hiring estimates was consistent with OPM's 
recommended workforce planning strategies. 

To determine the extent to which hiring patent examiners has been 
offset by attrition at USPTO over the last 5 years, we analyzed patent 
examiner workforce, hiring, and attrition data from this time period as 
described above. In addition, USPTO provided attrition data by years of 
experience for each of those years in separate documents derived from 
the National Finance Center. Specifically, we compared the total number 
of patent examiners hired in each of the last 5 years to the total 
workforce growth and the total patent examiner attrition in that time. 
To determine the factors that may contribute to patent examiners' 
decisions to leave the agency, we conducted a Web-based survey of a 
stratified random sample of 1,420 current patent examiners.[Footnote 
23] To address this objective, we had to rely on the views of current 
patent examiners because USPTO does not maintain contact information 
for patent examiners that have left the agency, and we could not 
identify any organizations that maintain this information for USPTO 
staff. Through the survey instrument, we gathered patent examiners' 
views on satisfaction with various aspects of working at USPTO, the 
time worked to meet production goals, and reasons they would choose to 
stay with or leave the agency. In addition, we asked for their views on 
ways to improve the production system. 

The target population for our sample consists of patent examiners who 
were employed by USPTO as of November 22, 2006, and were still employed 
as of the survey closing date, February 28, 2007. We selected our 
sample from a study population composed of all USPTO patent examiners 
as of November 22, 2006, and we asked agency officials to provide the 
names, e-mail addresses, and length of time at USPTO for patent 
examiners at the agency on that date. Patent examiners who were hired 
after November 22, 2006, are not represented in our sample. Similarly, 
patent examiners who left or retired from the agency between November 
22, 2006, and February 28, 2007, might be sampled but would not be a 
part of our target population (and therefore are considered out of the 
scope of our survey). From that list, we selected a random sample of 
patent examiners,[Footnote 24] stratified by the length of time they 
would have been at the agency at the beginning of the survey period in 
late January 2007.[Footnote 25] Our sample consisted of 1,420 patent 
examiners, and we obtained complete survey responses from 1,129 of 
them, for an overall response rate of about 80 percent. Table 4 
summarizes population size, sample size, and disposition of sample 
cases for each of these strata. 

Table 4: Summary of Patent Examiner Population and Survey Sample by 
Stratum: 

Stratum[A]: 1. Patent examiners: 2-12 months; 
Population: 1,007; 
Sample: 430; 
Respondents: 342; 
Out of scope[A]: 0; 
Response rate: 80%. 

Stratum[A]: 2. Patent examiners: 1-5 years; 
Population: 1,506; 
Sample: 480; 
Respondents: 385; 
Out of scope[A]: 0; 
Response rate: 80%. 

Stratum[A]: 3. Patent examiners: 5+ years; 
Population: 2,305; 
Sample: 510; 
Respondents: 402; 
Out of scope[A]: 8; 
Response rate: 80%. 

Stratum[A]: Total; 
Population: 4,818; 
Sample: 1,420; 
Respondents: 1,129; 
Out of scope[A]: 8; 
Response rate: 80%. 

Source: GAO. 

[A] From the initial notification, we identified 8 sampled individuals 
who were outside the target population. Individuals were determined to 
be outside the target population for reasons such as they performed a 
function other than patent examination or they had since left the 
agency. 

[End of table] 

All sample surveys are subject to sampling error--that is, the extent 
to which the survey results differ from what would have been obtained 
if the whole population had been observed. Each patent examiner in the 
study population has a known nonzero probability of being selected, and 
the data for each respondent are appropriately weighted to account 
statistically for all patent examiners in that stratum, including those 
that were not selected. Because we followed a probability procedure 
based on random selections, our sample is only one of a large number of 
samples that we might have drawn. Since each sample could have provided 
different estimates, we expressed our confidence in the precision of 
our particular sample's results as a 95 percent confidence interval. 
This is the interval that would contain the actual population value for 
95 percent of the samples we could have drawn. As a result, we are 95 
percent confident that each of the confidence intervals based on the 
survey includes the true values in the sample population. Estimates 
based on this survey allow us to project our results to all patent 
examiners at USPTO with a 95 percent level of confidence. All 
percentage estimates in this report have a 95 percent confidence 
interval within plus or minus 5 percentage points of the estimate 
itself. For example, our survey estimates that 42 percent of patent 
examiners worked while on annual leave during the past year, and we are 
95 percent confident that the actual proportion of patent examiners 
working while on leave during this period is within 5 percentage points 
of 42, i.e., between 37 and 47 percent. All reported comparisons of 
patent examiner groups for a particular survey question are 
statistically significant with a probability of 0.05. 

In addition to the reported sampling errors, as previously indicated, 
the practical difficulties of conducting any survey may introduce 
errors, commonly referred to as nonsampling errors. For example, 
differences in how a particular question is interpreted, the 
information sources available to respondents, or the types of sample 
members who do not respond can introduce unwanted variability into the 
survey results. Our estimation method assumes that nonrespondents are 
missing at random. If characteristics of respondents are different from 
those of nonrespondents on key items, it could introduce a bias not 
accounted for in our analysis. We took extensive steps in questionnaire 
development, data collection, and the editing and analysis of the 
survey data to minimize nonsampling errors. For example, the survey was 
developed by a GAO survey specialist in conjunction with subject matter 
experts, and then reviewed by a second independent survey specialist. 
In addition, we pretested the survey with patent examiners. During 
these pretests, we asked the patent examiners to complete the survey as 
they would when they received it. We then interviewed the respondents 
to ensure that (1) the questions were clear and unambiguous, (2) the 
terms used were precise, (3) the survey did not place an undue burden 
on the patent examiners completing it, and (4) the survey was 
independent and unbiased. We also provided a copy of the survey to 
USPTO officials and representatives from the patent examiner union--the 
Patent Office Professional Association (POPA)--to gain their thoughts 
on the four previously mentioned criteria. On the basis of the feedback 
from the pretests and our discussions with agency officials and union 
representatives, we revised the questions, as appropriate. 

Additionally, the statistical programs that produced our survey 
estimates, including estimates of categories derived from content 
analysis, were reviewed by a second independent programmer to ensure 
accuracy in the logic and syntax of the program. Finally, to ensure 
security and data integrity, we provided all participants with a user 
name and a personal password that allowed them to access and complete 
the survey. No one else could access that survey or edit its data. To 
reduce survey nonresponse, we sent out e-mail reminder messages to 
encourage them to complete the survey. We activated the survey and 
informed respondents of its availability on January 25, 2007, and 
allowed respondents access to the survey through February 28, 2007. 

We conducted a computer-enabled content analysis to analyze a key open- 
ended survey question soliciting respondents' suggestions for 
improvements to the production system. Two reviewers collaboratively 
developed content categories based on survey responses, and then 
independently assessed and coded each survey response into those 
categories. In cases where disagreements among the two reviewers 
regarding the coding of responses into content categories were found, 
all disagreements were resolved through reviewer discussion. 
Ultimately, there was 100 percent agreement between the reviewers. 

In addition to the survey mentioned above, we spoke with USPTO 
officials, representatives from POPA, and an official from the American 
Intellectual Property Law Association, a national bar association of 
lawyers involved in fields of law affecting intellectual property, to 
gain their perspectives on why patent examiners leave the agency. 

To determine the extent to which the retention incentives and 
flexibilities that USPTO provides align with patent examiners' reasons 
for staying with the agency, we spoke with USPTO officials, union 
representatives, and an official from the American Intellectual 
Property Law Association to gain their perspectives on the 
effectiveness of the retention incentives and flexibilities at USPTO. 
We also analyzed USPTO policies and information regarding the agency's 
retention incentives and flexibilities. In addition, we used the Web- 
based survey described above to obtain patent examiners' views on the 
reasons they would choose to stay at the agency. 

We conducted our work from August 2006 through July 2007 in accordance 
with generally accepted government auditing standards. 

[End of section] 

Appendix II: Selected Survey Results: 

The following tables contain summary results of selected questions from 
our survey of patent examiners at USPTO. For each question reported 
below, the estimated percentage is presented. All percentage estimates 
have a 95 percent confidence interval within plus or minus 5 percentage 
points of the estimate itself. These tables do not include summary- 
estimate data for the demographic questions and do not include the 
results from any open-ended questions. 

Table 5: Q6. Over the past 12 months, on average, about how much 
voluntary/uncompensated overtime have you worked per biweek to meet 
your production goal?:  

Number of hours: Less than 1 hour; 
Estimated percentage: 5. 

Number of hours: 1-10 hours; 
Estimated percentage: 62. 

Number of hours: 11-20 hours; 
Estimated percentage: 23. 

Number of hours: 21-30 hours; 
Estimated percentage: 5. 

Number of hours: More than 30 hours; 
Estimated percentage: 5. 

Source: GAO survey. 

Note: Respondents to this question had self-identified in a previous 
question as having worked voluntary/uncompensated overtime to meet 
their production goals. 

[End of table] 

Table 6: Q8. Over the past 12 months, on average, about how much annual 
leave have you used per quarter to meet your production goal?:  

Number of hours: Less than 1 hour; 
Estimated percentage: 2. 

Number of hours: 1-10 hours; 
Estimated percentage: 47. 

Number of hours: 11-20 hours; 
Estimated percentage: 29. 

Number of hours: 21-30 hours; 
Estimated percentage: 12. 

Number of hours: More than 30 hours; 
Estimated percentage: 10. 

Source: GAO survey. 

Note: Respondents to this question had self-identified in a previous 
question as having used annual leave to meet their production goals. 

[End of table] 

Table 7: Q10a. How important, if at all, are each of the following 
factors as reasons for you to stay with USPTO?: 

Very important or important reason to stay: 

Reason: a. Your current total pay (excluding benefits); 
Estimated percentage: 77. 

Reason: b. Your current federal benefits; 
Estimated percentage: 77. 

Reason: c. The availability of monetary awards; 
Estimated percentage: 45. 

Reason: d. The recent implementation of a special pay rate increase; 
Estimated percentage: 80. 

Reason: e. The caliber of your current supervision; 
Estimated percentage: 58. 

Reason: f. The extent to which resources, such as mentors, are 
available to answer your questions; 
Estimated percentage: 44. 

Reason: g. Your opportunities for career advancement; 
Estimated percentage: 59. 

Reason: h. Your ability to be promoted to the next GS level; 
Estimated percentage: 67. 

Reason: i. The extent to which this job fits your work style; 
Estimated percentage: 71. 

Reason: j. Your production goals; 
Estimated percentage: 17. 

Reason: k. The amount of paid leave that you must use to meet 
production goals; 
Estimated percentage: 10. 

Reason: l. The amount of voluntary/uncompensated overtime that you must 
work to meet production goals; 
Estimated percentage: 9. 

Reason: m. The amount of review of your work (i.e., for quality 
purposes); 
Estimated percentage: 14. 

Reason: n. Activities offered by the Work-Life Committee (e.g., 4 on 4 
basketball tournament, trip to Atlantic City, but NOT activities run by 
the PTO Society or your Technology and/or Art Center); 
Estimated percentage: 11. 

Reason: o. The availability of the law school tuition program; 
Estimated percentage: 43. 

Reason: p. The availability of a hoteling program (i.e., the 
opportunity for examiners to work full-time from an off-site location); 
Estimated percentage: 79. 

Reason: q. The availability of a teleworking program (i.e., the 
opportunity for examiners to work some hours from an off-site 
location); 
Estimated percentage: 77. 

Reason: r. The availability of the flexible work schedule program; 
Estimated percentage: 94. 

Reason: s. The availability of flexible spending accounts (i.e., the 
program that allows you to pay for eligible out-of-pocket health care 
and dependent care expenses with pretax dollars); 
Estimated percentage: 42. 

Reason: t. The availability of a transit subsidy program; 
Estimated percentage: 58. 

Reason: u. The availability of an on-site health unit; 
Estimated percentage: 37. 

Reason: v. The casual dress policy; 
Estimated percentage: 55. 

Reason: w. The availability of on-site child care; 
Estimated percentage: 26. 

Reason: x. Access to an on-site fitness center; 
Estimated percentage: 47. 

Reason: y. Other--Please specify below; 
Estimated percentage: 34. 

Source: GAO survey. 

[End of table] 

Table 8: Q10b. How important, if at all, are each of the following 
factors as reasons for you to leave USPTO?: 

Very important or important reason to leave: 

Reason: a. Your current total pay (excluding benefits); 
Estimated percentage: 8. 

Reason: b. Your current federal benefits; 
Estimated percentage: 3. 

Reason: c. The availability of monetary awards; 
Estimated percentage: 8. 

Reason: d. The recent implementation of a special pay rate increase; 
Estimated percentage: 0. 

Reason: e. The caliber of your current supervision; 
Estimated percentage: 11. 

Reason: f. The extent to which resources, such as mentors, are 
available to answer your questions; 
Estimated percentage: 12. 

Reason: g. Your opportunities for career advancement; 
Estimated percentage: 14. 

Reason: h. Your ability to be promoted to the next GS level; 
Estimated percentage: 9. 

Reason: i. The extent to which this job fits your work style; 
Estimated percentage: 10. 

Reason: j. Your production goals; 
Estimated percentage: 52. 

Reason: k. The amount of paid leave that you must use to meet 
production goals; 
Estimated percentage: 49. 

Reason: l. The amount of voluntary/uncompensated overtime that you must 
work to meet production goals; 
Estimated percentage: 61. 

Reason: m. The amount of review of your work (i.e., for quality 
purposes); 
Estimated percentage: 27. 

Reason: n. Activities offered by the Work-Life Committee (e.g., 4 on 4 
basketball tournament, trip to Atlantic City, but NOT activities run by 
the PTO Society or your Technology and/or Art Center); 
Estimated percentage: 2. 

Reason: o. The availability of the law school tuition program; 
Estimated percentage: 1. 

Reason: p. The availability of a hoteling program (i.e., the 
opportunity for examiners to work full-time from an off-site location); 
Estimated percentage: 0. 

Reason: q. The availability of a teleworking program (i.e., the 
opportunity for examiners to work some hours from an off-site 
location); 
Estimated percentage: 0. 

Reason: r. The availability of the flexible work schedule program; 
Estimated percentage: 0. 

Reason: s. The availability of flexible spending accounts (i.e., the 
program that allows you to pay for eligible out-of-pocket health care 
and dependent care expenses with pretax dollars); 
Estimated percentage: 0. 

Reason: t. The availability of a transit subsidy program; 
Estimated percentage: 1. 

Reason: u. The availability of an on-site health unit; 
Estimated percentage: 0. 

Reason: v. The casual dress policy; 
Estimated percentage: 1. 

Reason: w. The availability of on-site child care; 
Estimated percentage: 1. 

Reason: x. Access to an on-site fitness center; 
Estimated percentage: 0. 

Reason: y. Other--Please specify below; 
Estimated percentage: 39. 

Source: GAO survey. 

[End of table] 

Table 9: Q11. Looking at the list of reasons in question 10, what are 
the top three reasons why you would choose to stay with USPTO?: 

Reason: a. Your current total pay (excluding benefits); 
Estimated percentage: 58. 

Reason: b. Your current federal benefits; 
Estimated percentage: 30. 

Reason: c. The availability of monetary awards; 
Estimated percentage: 5. 

Reason: d. The recent implementation of a special pay rate increase; 
Estimated percentage: 16. 

Reason: e. The caliber of your current supervision; 
Estimated percentage: 9. 

Reason: f. The extent to which resources, such as mentors, are 
available to answer your questions; 
Estimated percentage: 3. 

Reason: g. Your opportunities for career advancement; 
Estimated percentage: 15. 

Reason: h. Your ability to be promoted to the next GS level; 
Estimated percentage: 14. 

Reason: i. The extent to which this job fits your work style; 
Estimated percentage: 15. 

Reason: j. Your production goals; 
Estimated percentage: 1. 

Reason: k. The amount of paid leave that you must use to meet 
production goals; 
Estimated percentage: 0. 

Reason: l. The amount of voluntary/uncompensated overtime that you must 
work to meet production goals; 
Estimated percentage: 0. 

Reason: m. The amount of review of your work (i.e., for quality 
purposes); 
Estimated percentage: 0. 

Reason: n. Activities offered by the Work-Life Committee (e.g., 4 on 4 
basketball tournament, trip to Atlantic City, but NOT activities run by 
the PTO Society or your Technology and/or Art Center); 
Estimated percentage: 0. 

Reason: o. The availability of the law school tuition program; 
Estimated percentage: 10. 

Reason: p. The availability of a hoteling program (i.e., the 
opportunity for examiners to work full-time from an off-site location); 
Estimated percentage: 38. 

Reason: q. The availability of a teleworking program (i.e., the 
opportunity for examiners to work some hours from an off-site 
location); 
Estimated percentage: 17. 

Reason: r. The availability of the flexible work schedule program; 
Estimated percentage: 49. 

Reason: s. The availability of flexible spending accounts (i.e., the 
program that allows you to pay for eligible out-of-pocket health care 
and dependent care expenses with pretax dollars); 
Estimated percentage: 1. 

Reason: t. The availability of a transit subsidy program; 
Estimated percentage: 2. 

Reason: u. The availability of an on-site health unit; 
Estimated percentage: 0. 

Reason: v. The casual dress policy; 
Estimated percentage: 4. 

Reason: w. The availability of on-site child care; 
Estimated percentage: 1. 

Reason: x. Access to an on-site fitness center; 
Estimated percentage: 4. 

Reason: y. Other--Please specify below; 
Estimated percentage: 4. 

Source: GAO survey. 

Note: To determine the estimated percentages in this table, we included 
the total number of times patent examiners identified a particular 
retention incentive and flexibility as one of the three most important 
reasons they would choose to stay at USPTO. Percentages total more than 
100 percent because respondents selected three reasons each. 

[End of table] 

Table 10: Q12. Looking at the list of reasons in question 10, what are 
the top three reasons that would cause you to consider leaving USPTO?: 

Reason: a. Your current total pay (excluding benefits); 
Estimated percentage: 16. 

Reason: b. Your current federal benefits; 
Estimated percentage: 4. 

Reason: c. The availability of monetary awards; 
Estimated percentage: 6. 

Reason: d. The recent implementation of a special pay rate increase; 
Estimated percentage: 1. 

Reason: e. The caliber of your current supervision; 
Estimated percentage: 13. 

Reason: f. The extent to which resources, such as mentors, are 
available to answer your questions; 
Estimated percentage: 8. 

Reason: g. Your opportunities for career advancement; 
Estimated percentage: 15. 

Reason: h. Your ability to be promoted to the next GS level; 
Estimated percentage: 8. 

Reason: i. The extent to which this job fits your work style; 
Estimated percentage: 11. 

Reason: j. Your production goals; 
Estimated percentage: 67. 

Reason: k. The amount of paid leave that you must use to meet 
production goals; 
Estimated percentage: 37. 

Reason: l. The amount of voluntary/uncompensated overtime that you must 
work to meet production goals; 
Estimated percentage: 59. 

Reason: m. The amount of review of your work (i.e., for quality 
purposes); 
Estimated percentage: 26. 

Reason: n. Activities offered by the Work-Life Committee (e.g., 4 on 4 
basketball tournament, trip to Atlantic City, but NOT activities run by 
the PTO Society or your Technology and/or Art Center); 
Estimated percentage: 1. 

Reason: o. The availability of the law school tuition program; 
Estimated percentage: 1. 

Reason: p. The availability of a hoteling program (i.e., the 
opportunity for examiners to work full-time from an off-site location); 
Estimated percentage: 2. 

Reason: q. The availability of a teleworking program (i.e., the 
opportunity for examiners to work some hours from an off-site 
location); 
Estimated percentage: 1. 

Reason: r. The availability of the flexible work schedule program; 
Estimated percentage: 2. 

Reason: s. The availability of flexible spending accounts (i.e., the 
program that allows you to pay for eligible out-of-pocket health care 
and dependent care expenses with pretax dollars); 
Estimated percentage: 0. 

Reason: t. The availability of a transit subsidy program; 
Estimated percentage: 0. 

Reason: u. The availability of an on-site health unit; 
Estimated percentage: 0. 

Reason: v. The casual dress policy; 
Estimated percentage: 1. 

Reason: w. The availability of on-site child care; 
Estimated percentage: 0. 

Reason: x. Access to an on-site fitness center; 
Estimated percentage: 0. 

Reason: y. Other--Please specify below; 
Estimated percentage: 7. 

Source: GAO survey. 

Note: To determine the estimated percentages in this table, we included 
the total number of times patent examiners identified a particular 
retention incentive and flexibility as one of the three most important 
reasons they would choose to leave USPTO. Percentages total more than 
100 percent because respondents selected three reasons each. 

[End of table] 

[End of section] 

Appendix III: Comments from the Department of Commerce: 

The Deputy Secretary Of Commerce: 
Washington, D.C. 20230: 

August 15, 2007: 

Ms. Anu K. Mittal: 
Director, Natural Resources and Environment: 
U.S. Government Accountability Office: 
441 G Street, N.W.: 
Washington, D.C. 20548: 

Dear Ms. Mittal: 

Thank you for the opportunity to comment on the Government 
Accountability Office (GAO) draft report GAO-07-1102 entitled, Hiring 
Efforts Are Not Sufficient to Reduce the Patent Application Backlog. 

The Department of Commerce (DOC) and the United States Patent and 
Trademark Office (USPTO) appreciate the effort your staff made in 
reviewing the USPTO's annual hiring estimates, patent examiner 
attrition, and ongoing retention efforts. 

The report is a good assessment of the progress the USPTO is making in 
finding better ways to hire, train, and retain our patent examiners. We 
agree with the report's finding that hiring efforts are not sufficient 
to reduce the patent application backlog. While hiring is a critical 
component of the USPTO's plan, Under Secretary Dudas has stated that 
hiring alone is simply not enough to keep pace with the growth of 
patent applications. The USPTO's Strategic Plan released this year 
places a strong emphasis on increasing productivity in the USPTO and in 
patent systems throughout the world by leveraging the work that is 
being done in other offices, by applicants themselves and from 
interested public parties to help the patent examiners in their jobs. 
Of interest are: 

* Claims-Continuations initiative, which will require applicants to 
provide additional information to assist in the examination process if 
they submit more than five independent claims or more than 25 total 
claims in an application, and will require applicants to provide a 
justification for third or subsequent continuing application. 

* Information Disclosure Statement (IDS) initiative, which will require 
applicants who submit more than a threshold number of references or 
other documents for consideration by the examiner to explain the 
relevance of the reference or other document. 

* Alternative (or Markush) Claim initiative, which will require that a 
patent claim that defines the invention using alternative language be 
directed to a group of alternatives that are sufficiently related so as 
to be considered a single invention. 

* Applicant Quality Submissions, which if pursued, will require most 
applicants to provide the USPTO with an applicant quality submission 
and written analysis to assist the examiner in the examination of the 
application. 

In general, the USPTO agrees with GAO's assessment of the challenges 
facing it and GAO's conclusion that hiring efforts alone are not 
sufficient to reduce the patent application backlog. The above 
initiatives being implemented and those under consideration by the 
USPTO will result in a more efficient and focused examination on the 
part of the patent examiner. It is anticipated that there will be 
efficiencies gained from these initiatives. Once the USPTO determines 
the effect of these initiatives on examiner productivity, we will 
reevaluate the assumptions that we use to establish examiner production 
goals. 

I enclose a list of specific technical comments that clarify and/or 
correct certain points covered in your report. 

Many thanks to Michelle Triestman and Vondalee Hunt who spent many 
hours reviewing survey data and talking to USPTO employees. I also 
extend my appreciation to you and your team for your dedication to the 
highest standards of professionalism in preparing the draft report. 

Sincerely, 

Signed by: 

David A. Simpson: 

Enclosure: 

[End of section] 

Appendix IV: GAO Contact and Staff Acknowledgments: 

GAO Contact: 

Anu K. Mittal, (202) 512-3841: 

Staff Acknowledgments: 

In addition to the contact named above, Vondalee R. Hunt (Assistant 
Director), Nancy Crothers, Nancy Hess, Stuart Kaufman, Grant Mallie, 
Rebecca Shea, Michelle K. Treistman, Lisa Vojta, and Greg Wilmoth made 
significant contributions to this report. Scott Derrick and Omari 
Norman also contributed to this report. 

[End of section] 

Footnotes: 

[1] USPTO, an agency within the Department of Commerce, consists of two 
organizations: one for patents and one for trademarks. This report 
focuses on the patent organization. 

[2] USPTO assigns patent applications to one of its eight technology 
centers for review: (1) Biotechnology and Organic Chemistry; (2) 
Chemical and Materials Engineering; (3) Computer Architecture, 
Software, and Information Security; (4) Communications; (5) 
Semiconductors, Electrical and Optical Systems and Components; (6) 
Transportation, Electronic Commerce, Construction, Agriculture, 
National Security and License and Review; (7) Mechanical Engineering, 
Manufacturing, and Products; and (8) Designs for Articles of 
Manufacture. 

[3] USPTO tracks two key milestones in the patent application process 
to evaluate patent examiners' performance. One milestone is the patent 
examiner's initial action on the merits of the case. Most patent 
applications are removed from the backlog when this initial action is 
made. The other milestone is when the application is allowed, 
abandoned, or sent to the Board of Patent Appeals and Interferences. 

[4] GAO, Intellectual Property: USPTO Has Made Progress in Hiring 
Examiners, but Challenges to Retention Remain, GAO-05-720 (Washington, 
D.C.: June 17, 2005). 

[5] USPTO includes patent examiners who transfer or are promoted out of 
the patent examination workforce to another position within the agency 
in its attrition count, in addition to those patent examiners who leave 
the agency. This report uses USPTO's inclusive definition of attrition 
in order to be consistent with the agency's projections used in this 
report, and therefore will be different from USPTO attrition data as 
reported by the Office of Personnel Management, which does not include 
intra-agency transfers or promotions as part of attrition. 

[6] Technology centers specialize in specific areas of science and 
engineering. 

[7] GAO, Intellectual Property: Information on the U.S. Patent and 
Trademark Office's Past and Future Operations, GAO-02-907 (Washington, 
D.C.: Aug. 23, 2002). 

[8] USPTO's Corporate Plan was submitted with the fiscal year 2002 
budget. USPTO's Business Plan was the agency's first 5-year strategic 
plan. It was replaced by the 21st Century Strategic Plan after a new 
Director decided the Business Plan did not go far enough. 

[9] In commenting on a draft of this report, USPTO stated that it uses 
a robust forecasting and modeling process to determine the optimal 
hiring, staffing, and production levels. This model was evaluated by 
the National Academy of Public Administration and determined to be 
appropriate. While we acknowledge that USPTO uses this model to 
identify optimal hiring levels, we found that the determination of 
projected estimates was made on the basis of funding levels and the 
capacity to support additional staff. 

[10] We are including both supervisory patent examiners and primary 
examiners as supervisors for the purpose of this report. 

[11] These percentages include patent examiners who transferred or were 
promoted out of the patent examination workforce, but remained at 
USPTO, and represent approximately 19 percent of patent examiner 
attrition from fiscal year 2002 through 2006. 

[12] The term "primary reasons" in this report refers to the top three 
reasons patent examiners leave the agency provided by USPTO management, 
as well as the top three or more statistically significant reasons 
provided by patent examiners in our survey. 

[13] Union officials also identified a recent decision by USPTO 
management to track when patent examiners enter and leave the building 
as another reason why patent examiners would choose to leave the 
agency. Union officials declined to rank the reasons they believe 
patent examiners leave USPTO, preferring instead that we rely on patent 
examiner survey results. 

[14] OPM's Federal Human Capital Survey is a tool that measures 
employees' perceptions of whether, and to what extent, conditions that 
characterize successful organizations are present in their agencies. 

[15] USPTO respondents to the Federal Human Capital Survey included 
employees from both the patent organization, which accounts for about 
76 percent of the agency's resources, and the trademark organization. 

[16] USPTO predicts first actions by multiplying the number of patent 
examiners in the workforce by production goals. 

[17] GAO reported on key practices for effective use of human capital 
flexibilities in GAO, Human Capital: Effective Use of Flexibilities Can 
Assist Agencies in Managing Their Workforces, GAO-03-2 (Washington, 
D.C.: Dec. 6, 2002). 

[18] USPTO may award up to three types of bonuses to one patent 
examiner in a fiscal year. 

[19] Patent examiners who qualify for hoteling are assigned USPTO 
computer hardware and are not assigned permanent office space but share 
space when it is necessary for them to come into the USPTO offices. 

[20] PALM is an internal USPTO system that contains current patent 
application status information. 

[21] USPTO officials explained that the agency does not store patent 
examiner data on site, but relies on access to the National Finance 
Center to obtain that information when necessary. 

[22] According to USPTO, the data requirements for the budget requests 
can change and USPTO provides the required data to the Office of 
Management and Budget accordingly. As a result, not all of the 
information we requested was available in these documents. 

[23] While we also surveyed supervisory patent examiners, we did not 
include their responses in our analysis and estimates because we 
determined during the course of our review that they perform a very 
different function than nonsupervisory patent examiners. Consequently 
supervisory patent examiners have different job-related concerns and 
different reasons than nonsupervisory patent examiners for choosing to 
stay with or leave USPTO. Because our report focuses on why staff 
performing the patent examiner function stay with or leave the agency, 
we focused only on the responses of nonsupervisory patent examiners. 

[24] We defined patent examiners as those responsible for reviewing 
utility, plant, and reissue (UPR) patent applications. 

[25] For example, a person newly hired at the time the population frame 
was created in late November 2006 would have been at the agency 2 
months by late January 2007. This is why the shortest tenure displayed 
in table 4 is 2 months. 

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