U.S. Patent and Trademark Office
Hiring Efforts Are Not Sufficient to Reduce the Patent Application Backlog Gao ID: GAO-08-527T February 27, 2008The U.S. Patent and Trademark Office (USPTO) helps protect U.S. competitiveness by granting patents for new ideas and innovations. Increases in the volume and complexity of patent applications have extended the time for processing them. Concerns continue about the agency's efforts to attract and retain qualified patent examiners who can meet the demand for patents and help reduce the growing backlog of unexamined patent applications. In 2007, GAO reported on (1) USPTO's process for making 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 examiners' reasons for staying with the agency. GAO recommended that USPTO comprehensively evaluate the assumptions it uses to establish its production goals. USPTO agreed to implement this recommendation once it determines the effect of recent initiatives designed to increase the productivity of the agency through a more efficient and focused patent examination process. This testimony is based on GAO's 2007 report, which was based in part on a survey of 1,420 patent examiners. See, GAO, U.S. Patent and Trademark Office: Hiring Efforts Are Not Sufficient to Reduce the Patent Application Backlog, GAO-07-1102.
USPTO primarily determined its annual hiring estimates on the basis of available funding levels and 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 of patent applications or review new patent applications. USPTO's process for identifying its annual hiring estimates is generally consistent with accepted workforce planning strategies. However, because this approach does not consider how many examiners are needed to reduce the existing 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 significantly offsetting the agency's hiring efforts, and agency management and patent examiners disagree about the causes of attrition. Specifically, from 2002 through 2006, one patent examiner left USPTO for nearly every two hired--70 percent of those who left had been at the agency for less than 5 years. This represents a significant loss to the agency because new patent examiners are primarily responsible for the actions that remove applications from the backlog. According to USPTO management, patent examiners primarily leave the agency because of personal reasons, such as finding that the job is not a good fit. In contrast, 67 percent of patent examiners identified the agency's production goals among the primary reasons they would consider leaving the agency. These goals are based on the number of applications patent examiners must complete during a 2-week period. However, the assumptions underlying these goals were established over 30 years ago and have not since been adjusted to reflect changes in the complexity of patent applications. Moreover, 70 percent of patent examiners reported working unpaid overtime during the past year in order to meet their production goals. The large percentage of examiners working overtime to meet production goals and who would choose to leave the agency because of these goals may indicate that these goals do not accurately reflect the time needed to review applications and are undermining USPTO's hiring efforts. The retention incentives and flexibilities USPTO has provided over the last 5 years generally align with the primary reasons patent examiners identified for staying with the agency. Between 2002 and 2006, USPTO used a variety of retention flexibilities, such as a special pay rate, performance bonuses, and a flexible work place to encourage patent examiners to stay with the agency. According to USPTO management, their 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.
GAO-08-527T, U.S. Patent and Trademark Office: Hiring Efforts Are Not Sufficient to Reduce the Patent Application Backlog
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Testimony:
Before the Subcommittee on Courts, the Internet, and Intellectual
Property, Committee on the Judiciary, House of Representatives:
United States Government Accountability Office:
GAO:
For Release on Delivery Expected at 1:30 p.m. EST:
Wednesday, February 27, 2008:
U.S. Patent And Trademark Office:
Hiring Efforts Are Not Sufficient to Reduce the Patent Application
Backlog:
Statement of Robin M. Nazzaro, Director:
Natural Resources and Environment:
GAO-08-527T:
GAO Highlights:
Highlights of GAO-08-527T, testimony before the Subcommittee on Courts,
the Internet, and Intellectual Property, Committee on the Judiciary,
House of Representatives.
Why GAO Did This Study:
The U.S. Patent and Trademark Office (USPTO) helps protect U.S.
competitiveness by granting patents for new ideas and innovations.
Increases in the volume and complexity of patent applications have
extended the time for processing them. Concerns continue about the
agency‘s efforts to attract and retain qualified patent examiners who
can meet the demand for patents and help reduce the growing backlog of
unexamined patent applications.
In 2007, GAO reported on (1) USPTO‘s process for making 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 examiners‘ reasons for staying with the agency. GAO recommended
that USPTO comprehensively evaluate the assumptions it uses to
establish its production goals. USPTO agreed to implement this
recommendation once it determines the effect of recent initiatives
designed to increase the productivity of the agency through a more
efficient and focused patent examination process.
This testimony is based on GAO‘s 2007 report, which was based in part
on a survey of 1,420 patent examiners. See, GAO, U.S. Patent and
Trademark Office: Hiring Efforts Are Not Sufficient to Reduce the
Patent Application Backlog, GAO-07-1102.
What GAO Found:
USPTO primarily determined its annual hiring estimates on the basis of
available funding levels and 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 of patent
applications or review new patent applications. USPTO‘s process for
identifying its annual hiring estimates is generally consistent with
accepted workforce planning strategies. However, because this approach
does not consider how many examiners are needed to reduce the existing
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 significantly
offsetting the agency‘s hiring efforts, and agency management and
patent examiners disagree about the causes of attrition. Specifically,
from 2002 through 2006, one patent examiner left USPTO for nearly every
two hired”70 percent of those who left had been at the agency for less
than 5 years. This represents a significant loss to the agency because
new patent examiners are primarily responsible for the actions that
remove applications from the backlog. According to USPTO management,
patent examiners primarily leave the agency because of personal
reasons, such as finding that the job is not a good fit. In contrast,
67 percent of patent examiners identified the agency‘s production goals
among the primary reasons they would consider leaving the agency. These
goals are based on the number of applications patent examiners must
complete during a 2-week period. However, the assumptions underlying
these goals were established over 30 years ago and have not since been
adjusted to reflect changes in the complexity of patent applications.
Moreover, 70 percent of patent examiners reported working unpaid
overtime during the past year in order to meet their production goals.
The large percentage of examiners working overtime to meet production
goals and who would choose to leave the agency because of these goals
may indicate that these goals do not accurately reflect the time needed
to review applications and are undermining USPTO‘s hiring efforts.
The retention incentives and flexibilities USPTO has provided over the
last 5 years generally align with the primary reasons patent examiners
identified for staying with the agency. Between 2002 and 2006, USPTO
used a variety of retention flexibilities, such as a special pay rate,
performance bonuses, and a flexible work place to encourage patent
examiners to stay with the agency. According to USPTO management, their
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.
To view the full product, including the scope and methodology, click on
[hyperlink, http://www.GAO-08-527T]. For more information, contact
Robin M. Nazzaro at (202) 512-3841 or nazzaror@gao.gov
[End of section]
Mr. Chairman and Members of the Subcommittee:
I am pleased to be here today to discuss GAO's recent report on the
U.S. Patent and Trademark Office (USPTO).[Footnote 1] Protecting
intellectual property rights and encouraging technological progress are
important for ensuring the current and future competitiveness of the
United States. As you know, USPTO helps protect the nation's
competitiveness by issuing patents that protect new ideas and
investments in innovations, ranging from new treatments for diseases to
new wireless technology applications.[Footnote 2] However, recent
increases in both the complexity and volume of patent applications have
lengthened the time it takes the agency to process them and raised
concerns among intellectual property organizations, patent holders, and
others about the quality of the patents that are issued. Over the last
15 years, the number of patent applications that have not yet been
reviewed, called the backlog, has continued to grow--increasing since
fiscal year 2002 by nearly 73 percent to about 730,000 applications.
USPTO relies on a workforce of nearly 5,000 patent examiners to review
and make decisions on patent applications. The number of patent
applications that can be reviewed in any given year is determined by,
among other things, the number of examiners hired, as well as the
overall size and experience of the patent examination workforce. Patent
examiners are assigned a biweekly "production goal," which represents
the number of specific actions and decisions that patent examiners must
make about patent applications they review in a 2-week period.[Footnote
3] USPTO assesses patent examiners' performance on their ability to
meet their goals. However, as we noted in 2005 and again in 2007, the
assumptions underlying the agency's production goals have not been
updated since 1976.
Since 2000, USPTO has implemented a variety of human capital
flexibilities, such as recruitment bonuses and law school tuition
reimbursement, to help attract and retain enough patent examiners to
meet the growing demand for patents. Nevertheless, the rate of
attrition for patent examiners has continued to increase, especially
among patent examiners who have been with the agency for less than 5
years.
My testimony today summarizes findings from GAO's 2007 report,
specifically (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 the factors that 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. This report was conducted in accordance with generally accepted
government auditing standards. Those standards require that we plan and
perform the audit to obtain sufficient, appropriate evidence to provide
a reasonable basis for our findings and conclusions based on our audit
objectives. We believe that the evidence obtained provides a reasonable
basis for our findings and conclusions based on our audit objectives.
In summary, we found the following:
* In each of the last 5 years, USPTO identified its projected annual
hiring estimates primarily on the basis of how many new patent
examiners it has the budget and supervisory and training capacity to
support, and not on the existing backlog or the expected patent
application workload. Although USPTO's process for identifying its
annual hiring estimates is generally consistent with accepted workforce
planning strategies, this process does not consider how many examiners
are needed to reduce the existing patent application backlog or address
the inflow of new applications. As such, it is unlikely that the agency
will be able to reduce the growing backlog simply through its hiring
efforts.
* Attrition is significantly offsetting USPTO's hiring progress, and
agency management and patent examiners disagree about the causes for
this attrition. From 2002 through 2006, one patent examiner left USPTO
for nearly every two the agency hired. Of those who left, 70 percent
had been at the agency for less than 5 years. This represents a
significant loss to the agency because 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 we
surveyed as part of our 2007 report identified the agency's production
goals as one of the primary reasons examiners may choose to leave
USPTO. 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 choosing 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 are undermining USPTO's hiring efforts.
* The retention incentives and flexibilities USPTO has provided over
the last 5 years generally align with the primary reasons patent
examiners identified for staying with the agency. According to USPTO
management, the most effective retention efforts were those related to
compensation and an enhanced work environment. Specifically, between
2002 and 2006, USPTO used a variety of retention flexibilities, such as
a special pay rate, performance bonuses, flexible work place, and a
telework program to encourage patent examiners to stay with the agency.
Most patent examiners who participated in our survey indicated that
they 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.
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. USPTO
evaluates the application for completeness, classifies it by the type
of patent and the technology involved,[Footnote 4] and assigns it for
review to one of its operational units, called technology centers, that
specializes in specific areas of science and engineering. Supervisors
in each technology center then assign the application to a patent
examiner for further review 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.
* First action. At this milestone, patent examiners notify applicants
about the patentability of their invention. 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, scientific publications and U.S. and international
patents.
* 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 on the basis of the
number of production units--comprised 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 today to measure patent examiner
performance are based on the same assumptions that USPTO established in
the 1970s. At that time, production goals were determined based on 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 their
experience (as determined by their position in the agency) and the type
of patent they are reviewing. As a result, these goals vary depending
upon the patent examiner's position based on the federal government's
general schedule pay scale (GS) and the technology center in which the
patent examiner works. 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. GS-7 patent examiners
working on those types of applications, however, 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.
USPTO's Annual Hiring Estimates Are Determined by Funding and
Institutional Capacity and Are Unlikely to Reduce the Patent
Application Backlog:
In each of the last 5 years, USPTO has 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. Although this
process is consistent with workforce planning strategies established by
the Office of Personnel Management (OPM) and has enabled the agency to
better match its hiring estimates to its institutional capacity,
USPTO's ability to reduce the patent application backlog simply through
its hiring efforts is unlikely.
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 submission timeline. After considering
expected funding levels and available patent examiner workforce
data,[Footnote 5] USPTO 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
could hire, and established its estimate on the basis of the number of
patent examiners the agency had hired in the most recent year. However,
in fiscal years 2003 through 2006, USPTO determined that funding would
not be a limiting factor, and the agency's hiring estimates were based
primarily on its institutional capacity to supervise and train patent
examiners.
USPTO considers a number of factors in determining its institutional
capacity to supervise and train new patent examiners. For example, it
determines its supervisory capacity by considering the number of
additional patent examiners who can be placed in a technology center.
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 patent
applications, only supervisors can authorize a new patent examiner's
decision to approve or reject a patent application. In an effort to
avoid delays and inefficiencies in initial and final decisions on
patent applications, the agency tries to ensure that the supervisor to
patent examiner ratio is about 1 supervisor for every 12 patent
examiners. Similarly, USPTO's training capacity is determined by the
number of patent examiners the agency believes it can train in a year.
Training capacity was based on 2-or 3-week courses 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, the agency continually refines
the estimates to reflect changes that might occur during this period.
For example, in 2002, when it created its budget submission to OMB,
USPTO projected it would hire 750 patent examiners for fiscal year
2004. However, due to budget constraints, the agency actually hired 443
patent examiners in fiscal year 2004. 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:
This figure is a combination bar graph showing USPTO patent examiner
projected hiring estimates and actual number hired, between fiscal
years 2002 and 2006. The X axis represents the fiscal year, and the Y
axis represents patent examiners. One par represents the patent
examiner hiring estimates, and the other represents the patent
examiners hired.
[See PDF for image]
Source: USPTO.
[End of figure]
The differences between projected hiring estimates and the number hired
occurred primarily because of 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. In fiscal years 2005 and 2006,
however, USPTO hired more patent examiners than originally planned
because the agency's appropriation for those years was greater than
anticipated.
The way in which USPTO identifies annual patent examiner hiring
estimates is generally consistent with workforce planning strategies
endorsed by OPM. 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 USPTO generally followed these processes.
Recognizing the need to increase its institutional capacity to hire
more patent examiners, USPTO has taken steps to increase its training
and supervisory capacity. To increase its training capacity, USPTO
implemented an 8-month training program in fiscal year 2006 called the
Patent Training Academy. According to USPTO, the academy provides the
agency with a constant annual training capacity for 1,200 new patent
examiners for each of the next 5 years. Moreover, USPTO officials
believe that the academy may indirectly improve the agency's
supervisory capacity because new patent examiners should be better
prepared to start work in a technology center and therefore will need
less supervision and on-the-job training. USPTO plans to monitor new
patent examiners after they have graduated from the academy to
determine if the agency can 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 is
expected to increase to over 1.3 million at the end of fiscal year
2011. The agency has also estimated that if it 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. Despite its
recent increases in hiring, the agency has acknowledged that it cannot
hire its way out of the backlog and is now focused on slowing the
growth of the backlog instead of reducing it.
Attrition Has Significantly 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, attrition has
continued to increase among patent examiners--one patent examiner has
been lost for nearly every two hired over the last 5 years. For
example, from the beginning of fiscal year 2002 through fiscal year
2006, USPTO hired 3,672 patent examiners. However, the patent
examination workforce only increased by 1,644 because 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, approximately 70 percent of the patent examiners who
left the agency had been at USPTO for less than 5 years, and nearly 33
percent had been at the agency for less than 1 year.[Footnote 6]
Figure 2: Patent Examiner Attrition by Years of Experience, Fiscal
Years 2002 through 2006:
This figure is a combination bar graph showing patent examiner
attrition by years of experience between fiscal years 2002 and 2006.
The X axis is the fiscal year, and the Y axis is the patent examiners.
One bar represents the patent examiners at USPTO for less than 1 year,
the other represents the patent examiners at USPTO for less than 5
years, and the last represents the patent examiners at USPTO for 5
years or more.
[See PDF for image]
Source: USPTO.
[End of figure]
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.
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, attrition of these staff affects USPTO's ability to reduce the
patent application backlog because these less experienced patent
examiners are primarily responsible for making the initial decisions on
patent applications--the triggering event that removes applications
from the backlog. Second, when these staff leave USPTO, the agency
loses up to 5 years of training investment in them because patent
examiners require 4 to 6 years of on-the-job experience before they
become fully proficient in conducting patent application reviews.
Third, the more experienced 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 agency's overall productivity. Finally, these
workforce losses reduce the pool of potential supervisory patent
examiners for the future and therefore impair USPTO's ability to
increase its supervisory capacity and, ultimately, its hiring goals.
We found that USPTO management and patent examiners disagree
significantly on the reasons for the agency's attrition. According to
USPTO management, personal reasons are the primary reasons that cause
patent examiners to leave the agency.[Footnote 7] Some of these reasons
include the following:
* 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.
* Many patent examiners enter the workforce directly out of college and
are looking to add USPTO to their resumes and move on to another job,
rather than building a career at the agency, otherwise known as the
"millennial problem."
* 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 post graduate programs for those patent examiners who
would like to pursue higher education.
According to USPTO management, the agency has a number of ongoing
efforts to help address these issues. For example, the agency is
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 to provide lower cost-of-
living alternatives for employees.
While Patent Office Professional Association officials--the union that
represents patent examiners--agreed that in some cases personal reasons
may contribute to patent examiners leaving the agency, they believe
that the unrealistic production goals that the agency sets for patent
examiners is primarily responsible for attrition.[Footnote 8]
Specifically, according to union officials unrealistic 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 call attention to this concern, in April 2007 the union joined the
Staff Union of the European Patent Office and other international
patent examiner organizations in 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.
Patent examiners who participated in our survey generally agreed with
union officials. Specifically, approximately 67 percent of patent
examiners, regardless of their tenure with the agency, said that the
agency's production goals were 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 USPTO allots to achieve their production goals; and 50 percent
of patent examiners are very dissatisfied or generally dissatisfied
with how the agency calculates production goals. In addition, 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. Fifty-nine percent of patent examiners
believed that the production system should be reevaluated, including
altering the production goals to allow more time for patent examiners
to conduct their reviews.
We and others have reported in the past that the assumptions underlying
the agency's production goals were established over 30 years ago and
have not since been adjusted to reflect changes in science and
technology. Moreover, USPTO uses these production goals to establish
its overall performance goals for patent examiners, such as the number
of first actions to be completed in a given year.[Footnote 9] However,
from 2002 through 2006, the agency missed its projections in 4 of the 5
years. Furthermore, according to our survey, patent examiners are
discontented with the actions they have to take in order to meet their
production goals. Specifically, 70 percent of patent examiners who
participated in our survey reported working unpaid overtime to meet
their production goals during the last year, some reporting working
over 30 extra hours in a 2-week period. In addition, we estimated that
42 percent of patent examiners had to work while they were on paid
annual leave in order to meet their production goals. The percentage of
patent examiners working while on paid leave was significantly higher
for those with 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, compared
with 50 percent of patent examiners with over 5 years' experience. 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." According to our survey results, 59 percent
of patent examiners identified the amount of unpaid overtime that they
have to put into meeting their production goals as a primary reason
they would choose to leave USPTO, and 37 percent identified the amount
of time they must work during paid leave in order to meet their goals
as a primary reason to leave the agency.
Even though the agency has not been able to meet its productivity goals
for the last 4 years, this extensive amount of unpaid overtime patent
examiners have to work in order to meet their production goals does not
appear to be a concern for the agency. When we asked USPTO management
about the agency's policy for unpaid overtime to meet 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, as table 1 shows.
Table 1: Retention Incentives and Flexibilities Provided by USPTO by
Category, and Other Retention Efforts, Fiscal Years 2002 through 2006:
Category; .
Category: Compensation;
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;
* Law school tuition reimbursement program[A];
* Noncompetitive promotion to the full performance level;
* Recruitment bonuses up to $9,900;
* Special pay rate[B];
* Transit subsidy program;
Category: Enhanced work environment;
Retention incentive, flexibility, or other:
* Casual dress policy;
* Flexible work schedules, including the ability to schedule hours off
during the day;
* Improved management communication techniques (e.g., town hall
meetings, online chats with the Commissioner);
* No-cost health screenings at an on-site health unit staffed with a
registered nurse and part-time physician;
* On-site child care and fitness centers;
* Creation of a committee to organize recreational and social
activities, such as a basketball tournament and Halloween party;
* 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;
* Formation of a Patents Retention Council to focus on patent examiner
retention issues at USPTO;
* 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 two 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. More specifically:
* 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.
* Bonus structure. The agency awards bonuses to patent examiners who
exceed their production goals by at least 10 percent. For example,
according to USPTO, in fiscal year 2006, 60 percent of eligible patent
examiners who exceeded production goals by 10 percent or more received
a bonus. As table 2 shows, USPTO awarded 4,645 bonuses to patent
examiners that totaled over $10.6 million in fiscal year 2006.[Footnote
10]
* 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 a 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 11]
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;
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 APPLICABLEA];
2003: 800;
2004: 345;
2005: 1,014;
2006: 999.
Source: USPTO.
[A] USPTO did not offer a telework program until fiscal year 2002.
[End of table]
According to the results of our survey, patent examiners generally
agreed that compensation-related retention incentives and efforts to
enhance the work environment were among the most important reasons they
would choose to stay at USPTO, as table 3 shows.
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 pre-tax 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]
Despite USPTO's efforts to hire more patent examiners annually and
implement retention incentives and flexibilities over the last 5 years,
the agency has had limited success in retaining new patent examiners.
Because the agency's production goals appear to be undermining USPTO's
efforts to hire and retain a qualified workforce, we recommended in
2007 that the agency comprehensively evaluate the assumptions it uses
to establish patent examiner production goals and revise those
assumptions as appropriate.
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. It stated that
USPTO is implementing initiatives 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 productions goals.
Mr. Chairman, this concludes my prepared statement. I would be happy to
respond to any questions that you or Members of the Subcommittee may
have at this time.
Contacts and Acknowledgments:
For further information, please contact Robin M. Nazzaro at (202) 512-
3841 or nazzaror@gao.gov. Other contributors to this statement include
Vondalee R. Hunt, Assistant Director; Omari Norman; Jamie Roberts;
Carol Herrnstadt Shulman, and Lisa Vojta.
[End of section]
Footnotes:
[1] GAO, U.S. Patent and Trademark Office: Hiring Efforts Are Not
Sufficient to Reduce the Patent Application Backlog, GAO-07-1102
(Washington, D.C.: Sept. 4, 2007).
[2] USPTO, an agency within the Department of Commerce, consists of two
organizations, one for patents and one for trademarks. This statement
focuses on the patent organization, which accounts for approximately 76
percent of the agency's resources.
[3] USPTO tracks two key milestones in the patent application process
to evaluate a patent examiner's 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 occurs when the application is allowed,
abandoned, or sent to the Board of Patent Appeals and Interferences.
[4] Patents typically fall into one of three categories: (1) utility--
for useful inventions, such as processes, machines, articles of
manufacture, or composition of matter; (2) design--for changes in
configuration, shape, or surface ornamentation that do not involve
changes in function; or (3) plant--for asexually reproducible plants. A
fourth category, "reissue patents," refers to patents USPTO grants as
replacements for any patent that was in some way defective; these
patents constituted less than one-half of 1 percent of patents issued
in fiscal year 2003.
[5] 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.
[6] 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.
[7] The term "primary reasons" 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.
[8] Union officials also identified a recent decision by USPTO
management to track when patent examiners enter and leave the building
as another reason 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.
[9] USPTO predicts first actions by multiplying the number of patent
examiners in the workforce by production goals.
[10] USPTO may award up to three types of bonuses to one patent
examiner in a fiscal year, one of which may be awarded twice per fiscal
year.
[11] 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.
