An Overview of U.S. Patent Operations

David J. Kappos Under Secretary of Commerce for Intellectual Property and Director of the U.S. Patent and Trademark Office

2

Applications Awaiting First Action FY 2009 – FY 2012 (through November)

610,000620,000630,000640,000650,000660,000670,000680,000690,000700,000710,000720,000730,000740,000750,000760,000770,000

Appl

icat

ions

Aw

aitin

g Fi

rst A

ctio

n

Backlog

Preliminary FY 2012 Target:

624,700

668,466 as of November 30th.

3

0

25,000

50,000

75,000

100,000

125,000

150,000

175,000

200,000

225,000

250,000

275,000

300,000

325,000

350,000

375,000

400,000

425,000

450,000

475,000

500,000

525,000

550,000

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Appl

icat

ions

Fiscal Year

Total UPR and RCE Filings FY 2001 – FY 2012 (projections)

Preliminary FY 2012 Target:

533,300

FY 12 data are projections.

4

RCE Backlog FY 2010 – FY 2012 (through November)

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

RC

E A

pplic

atio

ns A

wai

ting

Nex

t Ac

tion

RCE Backlog

RCE Backlog 75,529 as of November 30th.

5

First Action Pendency and Total Pendency FY 2009 – FY 2012 (through November)

10.012.014.016.018.020.022.024.026.028.030.032.034.036.038.040.0

10/0

8

11/0

8

12/0

8

01/0

9

02/0

9

03/0

9

04/0

9

05/0

9

06/0

9

07/0

9

08/0

9

09/0

9

10/0

9

11/0

9

12/0

9

01/1

0

02/1

0

03/1

0

04/1

0

05/1

0

06/1

0

07/1

0

08/1

0

09/1

0

10/1

0

11/1

0

12/1

0

01/1

1

02/1

1

03/1

1

04/1

1

05/1

1

06/1

1

07/1

1

08/1

1

09/1

1

10/1

1

11/1

1

Mon

ths

First Action Pendency Total Pendency

Preliminary FY 2012 First action Target:

22.5 Months

Preliminary FY 2012 Total Pendency Target:

34.7 Months

6

Interview Time FY 2008 – FY 2012 (through November)

21,273 hours as of November 2011, compared with 20,177 hours in November 2010.

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

90,000

100,000

110,000

120,000

130,000

140,000

150,000

160,000

170,000

October November December January February March April May June July August September

Ho

urs

2008 2009 2010 2011 2012

01,0002,0003,0004,0005,0006,0007,0008,0009,000

10,00011,00012,00013,00014,00015,00016,00017,00018,00019,00020,00021,00022,00023,00024,00025,000

13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59

Num

ber o

f App

licat

ions

Months

Distribution of Corps Backlog (Tail)

Tail Cases Remaining Tail Cases Worked

7

Clearing the Oldest Patent Applications 2.0 (COPA 2.0) FY 2012 (through November 5th, 2011)

FY 2012 COPA Backlog (Tail): Applications with filing dates on or before September 1st, 2010 (304,000 on Oct. 1, 2011) FY 2012 Goal: Reduce COPA Backlog (Tail) by 260,000 applications

277,108 Total Tail Cases Remaining

FY2012 Goal: 260,000 Cases

26,892 Tail Cases Worked

233,108 Tail Cases Needed for Goal

Clearing the Oldest Patent Applications 2.0 (COPA) FY 2012 (through 11/5/11)

8

10.0

12.0

14.0

16.0

18.0

20.0

22.0

24.0

26.0

28.0

30.0

32.0

10/0

811

/08

12/0

801

/09

02/0

903

/09

04/0

905

/09

06/0

907

/09

08/0

909

/09

10/0

911

/09

12/0

901

/10

02/1

003

/10

04/1

005

/10

06/1

007

/10

08/1

009

/10

10/1

011

/10

12/1

001

/11

02/1

103

/11

04/1

105

/11

06/1

107

/11

08/1

109

/11

10/1

111

/11

Mon

ths

Forward Looking First Action Pendency FY 2009 – FY 2012 (through November)

Forward Looking Pendency represents an estimate of the average number of months it would take to complete a first Office action under current and projected workload and resource levels for an application filed at the given date.

9

Actions Per Disposal Target

Sustained decrease in actions per disposal is a positive indicator – issues are being resolved efficiently.

12 Month Rolling Average Actions Per Disposal, by Bi-Week FY 2009 – FY 2011 (through pay period 1120)

12 Month Rolling Average Actions Per Disposal, by Bi-Week FY 2009 – FY 2012 (through November)

1.8

1.9

2.0

2.1

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

3.0

10/1

1/20

08

11/8

/200

8

12/6

/200

8

1/3/

2009

1/31

/200

9

2/28

/200

9

3/28

/200

9

4/25

/200

9

5/23

/200

9

6/20

/200

9

7/18

/200

9

8/15

/200

9

9/12

/200

9

10/1

0/20

09

11/7

/200

9

12/5

/200

9

1/2/

2010

1/30

/201

0

2/27

/201

0

3/27

/201

0

4/24

/201

0

5/22

/201

0

6/19

/201

0

7/17

/201

0

8/14

/201

0

9/11

/201

0

10/9

/201

0

11/6

/201

0

12/4

/201

0

1/1/

2011

1/29

/201

1

2/26

/201

1

3/26

/201

1

4/23

/201

1

5/21

/201

1

6/18

/201

1

7/16

/201

1

8/13

/201

1

9/10

/201

1

10/8

/201

1

11/5

/201

1

10

12 Month Rolling Average Allowance Rate, by Bi-Week FY 2009 – FY 2011 (through pay period 1120)

Sustained increase in allowance rate is a positive indicator – it shows increased efficiency of the workforce.

12 Month Rolling Average Allowance Rate, by Bi-Week FY 2009 – FY 2012 (November)

40.0%

41.0%

42.0%

43.0%

44.0%

45.0%

46.0%

47.0%

48.0%

49.0%

50.0%

10/1

1/20

0810

/25/

2008

11/8

/200

811

/22/

2008

12/6

/200

812

/20/

2008

1/3/

2009

1/17

/200

91/

31/2

009

2/14

/200

92/

28/2

009

3/14

/200

93/

28/2

009

4/11

/200

94/

25/2

009

5/9/

2009

5/23

/200

96/

6/20

096/

20/2

009

7/4/

2009

7/18

/200

98/

1/20

098/

15/2

009

8/29

/200

99/

12/2

009

9/30

/200

910

/10/

2009

10/2

4/20

0911

/7/2

009

11/2

1/20

0912

/5/2

009

12/1

9/20

091/

2/20

101/

16/2

010

1/30

/201

02/

13/2

010

2/27

/201

03/

13/2

010

3/27

/201

04/

10/2

010

4/24

/201

05/

8/20

105/

22/2

010

6/5/

2010

6/19

/201

07/

3/20

107/

17/2

010

7/31

/201

08/

14/2

010

8/28

/201

09/

11/2

010

9/30

/201

010

/9/2

010

10/2

3/20

1011

/6/2

010

11/2

0/20

1012

/4/2

010

12/1

8/20

101/

1/20

111/

15/2

011

1/29

/201

12/

12/2

011

2/26

/201

13/

12/2

011

3/26

/201

14/

9/20

114/

23/2

011

5/7/

2011

5/21

/201

16/

4/20

116/

18/2

011

7/2/

2011

0716

/11

7/30

/201

18/

13/2

011

8/27

/201

19/

10/2

011

9/30

/201

110

/8/2

011

10/2

2/20

1111

/5/2

011

11/1

9/20

11

Allowance Rate

11

0%

1%

2%

3%

4%

5%

6%

7%

8%

9%

10%

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 10/11 11/11

Perc

ent

Fiscal Year

UPR Attrition Rate Less Transfers and Retirees

UPR Examiner Attrition Rate Less Transfers and Retirees

FY 2001 – FY 2012 (November)

83.084.085.086.087.088.089.090.091.092.093.094.095.096.097.098.099.0

100.0

09/0

512

/05

03/0

606

/06

09/0

612

/06

03/0

706

/07

09/0

712

/07

03/0

806

/08

09/0

812

/08

03/0

906

/09

09/0

912

/09

02/1

003

/10

04/1

005

/10

06/1

007

/10

08/1

009

/10

10/1

011

/10

12/1

001

/11

02/1

103

/11

04/1

105

/11

06/1

107

/11

08/1

109

/11

10/1

111

/11

Perc

ent

Final Disposition Compliance Rate In-Process Compliance Rate

Quality Measures 12 Month Rolling Average

FY 2005 – FY 2012 (through November)

2012 Final Disposition Compliance Rate Target Range

(95.6% - 96.7%)

2012 In-Process Compliance Rate Target Range

(94.6% - 96.0%) 12

Actual as of November 2011: 95.5% Actual as of November 2011: 95.3%

Quality Measures

13

Final Disposition Compliance Rate

In-Process Compliance Rate

Pre-FAOM Search Review

Complete FAOM Review

Quality Index Reporting

External Quality Survey

Internal Quality Survey

Quality Composite Score

FY12-Nov 95.5% 95.3% 95.1% 90.8% 89.4% N/A N/A N/AFY11Q4 95.4% 95.2% 94.6% 90.9% 89.5% 3.0 4.3 30.7FY11Q3 95.4% 94.7% 93.4% 90.0% 89.1% 2.7 4.2 26.4FY11Q2 95.3% 94.8% 90.8% 89.7% 88.9% 2.7 4.2 25.5FY11Q1 96.2% 94.9% N/A N/A 88.9% 3.6 N/A N/AFY10Q4 96.3% 94.9% N/A N/A 89.3% 3.6 N/A N/AFY10Q3 96.0% 94.6% N/A N/A 89.5% 1.8 N/A N/AFY10Q2 95.7% 94.4% N/A N/A 89.1% 1.8 N/A N/AFY10Q1 94.5% 94.1% N/A N/A 87.9% 1.2 N/A N/AFY09Q4 94.4% 93.6% N/A N/A 85.9% 1.2 N/A N/AFY09Q3 94.1% 94.1% N/A N/A 84.2% 1.1 N/A N/AFY09Q2 93.8% 93.9% N/A N/A 83.4% 1.1 N/A N/AFY09Q1 94.0% 93.4% N/A N/A 83.5% 1.3 N/A N/A

Defin

ition

s

The Final Rejection and Allow ance (Final Disposition) compliance rate focuses on the correctness of the examiners' overall determination of the patentability of the claims in the decision to f inally reject or allow an application. Metric determined by 12-month % Compliance as determined by OPQA random-sample-review of Allow ances and Final Off ice Actions.

The In-Process compliance rate focuses on the quality of examination early in prosecution, rather than on the end-product. Metric determined by 12-month % Compliance as determined by OPQA random-sample-review of Non-Final Off ice Actions.

12-month average of 5 Quality Index Reporting metrics being tracked for quality performance. Items are converted to "% desired behavior" for inclusion in Composite. Items tracked include:Actions per Disposal; RCEs as % of Total Disposals; Reopenings After Final; 2nd+ Action NonFinals; and Restrictions After First Action.

The External Quality Survey provides a measure of the degree to w hich the experience of patent applicants and practitioners reveal trends and issues indicative of quality concerns. The survey is conducted semi-annually and solicits input from stakeholders w ho are frequent customers of the USPTO on their perceptions of examination quality over the preceding three month period. The metric is reported as the ratio of positive to negative responses regarding satisfaction w ith overall examination quality.

The Internal Quality Survey measures the degree to w hich the experience of patent examiners reveals trends and issues indicative of quality concerns The survey is conducted semi-annually and ascertains examiner perceptions of their experiences w ith the various tools and inputs that are required to conduct a high quality examination. The metric is reported as the ratio of positive to negative responses to a question regarding overall satisfaction w ith examination quality.

The Quality Composite Score is composed of the seven individual metrics show n here. The composite metric determines progress in each component metric tow ards the desired f ive-year goal, applying a w eighting factor to each metric and summing the w eighted progress in each component metric to determine the overall progress tow ards the composite quality goal. A composite score of 0 represents the statistical achievement in the base year used for comparison. A composite score of 100 represents attainment of a superior level of performance identif ied as the stretch goal.

USPTO Patents Quality Composite Item - Actual MetricsReporting Period

The First Action On The Merits (FAOM) Search Review and Complete FAOM Review provide comprehensive assessments of the degree to w hich the search conducted prior to the f irst off ice action, and the f irst action on the merits, respectively, conform w ith best practices. Metric determined by OPQA random-sample, points-based-review of examiner w ork product. Score=Points earned/available points.

14

0255075

100125150175200225250275300325350375400425450475500525550

12/09 01/10 02/10 03/10 04/10 05/10 06/10 07/10 08/10 09/10 10/10 11/10 12/10 01/11 02/11 03/11 04/11 05/11 06/11 07/11 08/11 09/11 10/11 11/11

Await ing Decision Requests Granted Requests Dismissed Requests Denied Petit ions Received

Request Summary 12/09 1/10 2/10 3/10 4/10 05/10 06/10 07/10 08/10 09/10 10/10 11/10 12/10 01/11 02/11 03/11 04/11 05/11 06/11 07/11 08/11 09/11 10/11 11/11 TotalPetitions Received 325 351 124 76 67 72 234 133 95 86 32 166 340 287 165 548 150 276 216 162 151 145 291 202 4,790Awaiting Decision (by month) 316 541 138 68 58 77 147 42 42 56 51 107 256 220 224 310 327 285 272 282 244 252 325 357Requests Granted (by month) 2 12 209 67 45 38 98 180 65 48 26 81 122 222 117 263 86 237 167 116 206 111 156 128 2,802Requests Denied (by month) 7 0 2 29 18 7 30 28 14 11 6 1 0 10 9 23 14 14 9 0 3 0 7 0 242Requests Dismissed (by month) 0 121 316 43 14 8 36 30 16 13 5 28 69 91 35 176 33 67 53 41 65 32 55 42 1,389

Green Technologies Pilot

Green Technologies Pilot December 2009 – November 2011

Average time from petition grant to final disposition: 262 daysShortest time from petition grant to final disposition: 57 daysLongest time from petition grant to final disposition: 638 days

15

Request Summary 1/10 2/10 3/10 4/10 05/10 06/10 07/10 08/10 09/10 10/10 11/10 12/10 01/11 02/11 03/11 04/11 05/11 06/11 07/11 08/11 09/11 10/11 11/11 TotalPetitions Received 16 14 6 1 1 3 8 18 42 19 13 25 9 9 4 6 4 6 2 1 1 0 0 208Aw aiting Decision (by month) 1 8 1 1 1 4 12 18 5 10 8 17 6 0 1 1 4 4 0 0 0 0 0Requests Granted (by month) 15 6 8 1 1 0 0 4 41 14 11 14 19 15 3 3 1 5 5 1 1 0 0 168Requests Dismissed (by 0 1 5 0 0 0 0 8 14 0 4 2 1 0 0 3 0 1 1 0 0 0 0 40

Project Exchange Pilot

Project Exchange Pilot January 2010 – November 2011

02468101214161820222426283032343638404244

01/10 02/10 03/10 04/10 05/10 06/10 07/10 08/10 09/10 10/10 11/10 12/10 1/11 2/11 03/11 04/11 05/11 06/11 07/11 08/11 09/11 10/11 11/11

Awaiting Decision Requests Granted Requests Dismissed Petitions Received

16

Request Summary SeptemberFY11

OctoberFY12

NovemberFY12

Number of Requests Entered in PALM 852 403 233Number of Request Allowed 9

Prioritized Examination (through November)

Patents end2end

• IT Overhaul for the 21st Century • Dynamic views of drawings, claims, and annotations • Greater Examination & Agency Efficiency

18

4/9/2012 19

America Invents Act

Goals of Patent Reform Legislation • Encourage innovation and job creation • Support USPTO's efforts to improve patent quality

and reduce backlog • Establish secure funding mechanism • Provide greater certainty for patent rights • Provide less costly, time-limited administrative

alternatives to litigation

24

Timeline: Major Milestones

25

Group 1 Rulemakings and Other Actions (60-Day and Under Effective Dates) (a.k.a. G1 Rulemakings)

Date of Enactment (September 16, 2011)

10 Days After Date of Enactment

(September 26, 2011) October 1, 2011

60 Days After Date of Enactment

(November 15, 2011) • Inter partes reexamination threshold

and termination • Tax strategies are deemed within the

prior art • Best mode • Human organism prohibition • Venue change from DDC to EDVA for

suits brought under 35 U.S.C. §§ 32, 145, 146, 154 (b)(4)(A), and 293

• OED Statute of Limitations

• Fee Setting Authority (effective after

rulemaking) • Establishment of micro-entity

(effective after rulemaking)

• Prioritized examination

• 15% transition

surcharge

Reserve fund

Electronic filing incentive

26

Group 2 Rulemakings (12-Month Effective Date, i.e., September 16, 2012) (a.k.a. G2 Rulemakings)

• Inventor’s oath/declaration • Third party submission of prior art for patent application • Supplemental examination • Citation of prior art in a patent file • Priority examination for important technologies

• Inter partes review

• Post grant review

• Transitional program for covered business method patents

27

Group 3 Rulemakings and Other Actions (18-Month Effective Date, i.e., March 16, 2013) (a.k.a. G3 Rulemakings)

• First-Inventor-to-File • Derivation proceedings • Repeal of Statutory Invention Registration

28

Studies: USPTO as Lead Agency

Study Topic Due Date from Enactment

International Patent Protection for Small Businesses

4 months

Prior User Rights 4 months

Genetic Testing 9 months

Misconduct Before the Office Every 2 years

Satellite Offices 3 years

Virtual Marking 3 years

Implementation of AIA 4 years

29

AIA Micro-Site http://www.uspto.gov/americainventsact

30