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

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

stakeholders to do what our Founders intended us to do: understand that American intellectual property is our single greatest national resource - and encourage its protection and development. Developing the strategic plan was an open and participative process. We are grat eful for the wisdom and experience of the many USPTO employees who contributed, and for the c andor and positive spirit of representatives of the industry groups and others who shared their views. Displayed in my office is the original 1880 patent model for Thomas Edison s incan descent light bulb. It reminds me each day of the USPTO s mission: expedite the market opportuni ties for tomorrow s technologies that will enhance the quality of life for every human bein g. That is why our Founders focused on intellectual property when they drafted our Constitu tion; that is why the Bush Administration intends to remain faithful to their dreams for tomor row. Now it is time to turn promises m nto promises kept. I look forward to working w ith all the system to ensure that the goals presented here become UNITED STATES PATENT AND TRADEMARK OFFICE The 21st Century Strategic Plan June 3, 2002 THE 21ST CENTURY STRATEGIC PLAN EXECUTIVE OVERVIEW VISION MISSION STRATEGIC THEMES AGILITY CAPABILITY PRODUCTIVITY FIGURE 1: PATENT EXAMINER HIRING COMPARISON FIGURE 2: PATENT PENDENCY COMPARISON CRITICAL NEEDS PRESIDENT S MANAGEMENT AGENDA LONG-TERM AGENDA UNITED STATES PATENT AND TRADEMARK OFFICE TABLE OF CONTENTS 1 3 3 4 5 7 8 10 10 11 12 13 UNITED STATES PATENT AND TRADEMARK OFFICE EXECUTIVE OVERVIEW Today, the United States Patent and Trademark Office (USPTO) is under siege. Pat ent application filings have increased dramatically throughout the world. There are an estimated seven million pending applications in the world s examination pipeline, and the annual workload

growth rate is in the range of 20-30 percent. Technology has become increasingly complex, and dema nds from customers for higher quality products and services have escalated. Our applicant s are concerned that the fees they pay to have their patent and trademark applications examined are b eing diverted for other purposes, thereby jeopardizing the benefits intellectual property rights b ring to our national economy. In the United States, these demands have created substantial workload c hallenges in the processing of patents. The Congress, the owners of intellectual property, the pa tent bar, and the public-at-large have all told us that we must address these challenges aggressiv ely and promptly. We agree. We believe that the USPTO must transform itself into a quality-focused , highly productive, responsive organization supporting a market-driven intellectual property system. And we believe that we have the tools, the skills, the will and the plan to do so. The tools: The technology exists to create a high-quality, cost-effective, responsive, paperless patent examination process, building on our current success in automating trademarks. The skills: We have a cadre of talented staff with the expertise and the vision to help guide and support the technical and, even more important, the cultural transformation of the USPTO. The will: Organizational transformations require sustained commitment and constancy of purpose from the top. The USPTO leadership is dedicated to this task. The plan: This strategic plan lays out our approach for creating, over the next five years, an agile, capable and productive organization fully worthy of the unique leadership role the American intellectual property system plays in both the American and the global economies. This new 21st Century Strategic Plan is aggressive and far-reaching. However, an ything less would fall short of the expectations of the U.S. Congress, the applicants for, and own ers of, patents and trademarks, the patent and trademark bar, and the public-at-large. Additionally, the failure to adopt this strategic plan would have serious negative consequences. We would be unable to implement our quality and e-Government initiatives, pendency would rise to uncontrollable leve ls, and our costs would continue to grow. 21ST CENTURY STRATEGIC PLAN 1 UNITED STATES PATENT AND TRADEMARK OFFICE After the implementation of this strategic plan: Market forces will drive our business model. Geography and time will be irrelevant when doing business with the USPTO. We will strengthen our ability to be ranked as one of the highest quality, most-efficient intellectual property organizations in the world. Our products and services will be tailored to meet the needs of customers. Examination will be our core expertise. Our employees will be recognized as expert decision makers. Independent inventors, U.S. industry and the public will benefit from stronger, Our workplace will become a state-of-the art facility designed for the more enforceable intellectual property rights worldwide. 21st Century. Costs will be almost half-a-billion dollars less than under a business-as-usual scenario.

Fees will remain steady for the foreseeable future. ABOUT THE 21ST CENTURY STRATEGIC PLAN This five-year strategic plan reflects both a thorough internal process review a nd a systematic attempt to incorporate the best-thinking of our applicants, our counterparts in Europe, Japan and other countries, and our stakeholders. Key stakeholders also include our dedicat ed employees, without whose commitment the strategic plan could not have been developed and it s success could not be assured. The strategic plan takes a global perspective by envisioning the patent and trad emark systems of the future that American innovators would need to remain competitive around the worl d. It is built on the premise that American innovators need to obtain enforceable intellectual propert y rights here and abroad as seamlessly and cost-effectively as possible. It emphasizes the need for the U SPTO to collaborate with other intellectual property organizations in automation, global patent classific ation, and mutual reliance on search results. Finally, the plan is predicated not only on behavioral change s within the USPTO, but appropriate behavioral changes by all players in the intellectual property syste m. The strategic plan is supported with detailed documentation analyzing all of the related issues, a five-year implementation plan with identified critical tasks, proposed revisio ns to the fiscal year 2003 budget request to enable early implementation of the strategic plan, a nd corresponding proposed legislation and regulations necessary for a successful multi-year imple mentation. The strategic plan cannot succeed without enactment of the President s fiscal year 2003 budget, legislation changing the USPTO s current fee schedule, revisions to current rules, and legislation for streamlining the patent and trademark systems to facilitate these changes. 21ST CENTURY STRATEGIC PLAN 2 VISION MISSION of life for everyone. UNITED STATES PATENT AND TRADEMARK OFFICE The USPTO will lead the way in creating a quality-focused, highly-productive, re sponsive organization supporting a market-driven intellectual property system for the 21s t Century. We believe that quality must permeate every action taken by every employee of th e USPTO. The new initiatives in our strategic plan are targeted toward timeliness, e-Gove rnment, employee development and competitive sourcing all with a central quality focus. The USPTO mission is to ensure that the intellectual property system contributes to a strong global economy, encourages investment in innovation, fosters entrepreneurial spirit, an d enhances the quality In order to accomplish our mission, we have prepared this strategic plan. Provid ed we receive the funding and statutory changes necessary to implement this new strategy, we will:

Enhance the quality of patent and trademark examining operations through consolidation of quality assurance activities in fiscal year 2003. Achieve an average time to first action in patent applications that is more than 50 percent lower than the time projected in the 2003 Business Plan1 ; i.e., 5.8 months in 2008 rather than 12.3 months. Achieve and maintain 18 months patent pendency2 by 2008, compared to over 25 months in the 2003 Business Plan. Accelerate processing time by implementing e-Government in Trademarks by October 1, 2003, and in Patents by October 1, 2004. Reduce total patent examiner hires through fiscal year 2008 by 2,500 compared to the 2003 Business Plan projection. Competitively source classification and search functions, and concentrate Office expertise as much as possible on the core government functions. Expand our bilateral and multilateral discussions to strengthen intellectual property rights globally and to reduce duplication of effort among offices. 1 The 2003 Business Plan was submitted to the Congress in February 2002 as part of the USPTO s fiscal year 2003 President s Budget. The period of issuance of the first Office action is measured from the d ate the application is available for examination until the first Office action is completed. 2 This comparison is a measurement of USPTO s traditional examination processing t ime. However, in the 21st Century Strategic Plan, pendency is redefined as the examination duration period(i.e., f rom the time the applicant requests examination to the ultimate disposition of the patent application). This measure is the same measure that is used internationally in systems that permit deferred examination and is the proper metric of USPTO examination p erformance. When the average period of deferral is added, the average pendency from filing of the application to issue or abandonment would be 27 months. 21ST CENTURY STRATEGIC PLAN 3 UNITED STATES PATENT AND TRADEMARK OFFICE STRATEGIC THEMES To achieve our vision and accomplish our mission, we must transform our organiza tion and become a more agile, more capable and more productive USPTO. The Congress has di rected us to (1) improve patent and trademark quality, (2) aggressively implement e-Gov ernment to handle the workload associated with the 21st Century economy, and (3) reduce pat ent and trademark pendency. We have identified three strategic themes that correspond directly to these Congressional requirements: 1. Agility: Address the 21st Century Economy by Becoming a More Agile Organization We will create a flexible organization and work processes that can handle the increasing expectations of our markets, the growing complexity and volume of our work, and the globalization that characterize the 21st Century economy. We will work, both bilaterally and multilaterally, with our partners to create a stronger, better-coordinated and more streamlined framework for protecting intellectual property around the world. We will transform the USPTO workplace by radically reducing labor-intensive paper processing. 2. Capability: Enhance Quality through Workforce and Process Improvements We will make patent and trademark quality our highest priority by emphasizing quality in every component of this strategic plan. Through the timely issuance of high-quality patents and trademarks, we will respond to market forces by promoting advances in technology, expanding business opportunities and creating jobs.

3. Productivity: Accelerate Processing Times Through Focused Examination We will reduce patent and trademark pendency, substantially cut the size of our backlog of work, and recover our investments in people, processes and technology. We will transform the USPTO by adhering to these themes in each of the improveme nt initiatives upon which this strategic plan is based, as well as in all of our ot her programs. These initiatives are discussed in more detail under each of the major theme sec tions. 21ST CENTURY STRATEGIC PLAN 4 UNITED STATES PATENT AND TRADEMARK OFFICE AGILITY: ADDRESS THE 21ST CENTURY ECONOMY BY BECOMING A MORE AGILE ORGANIZATION An agile organization responds quickly and efficiently to changes in the economy , the marketplace, and the nature and size of workloads. In pursuit of an agile organization, the U SPTO will focus both internally and externally. As a first priority, we have made electronic end-to-end processing of both paten ts and trademarks the centerpiece of our business model. We will create a nimble, flexible enterprise that responds rapidly to changing m arket conditions. We will make the USPTO a premier place to work; we will rely on a smaller cadre of highly trained and skilled employees; and we will place greater reliance on the private sector, including drawing on the strengths of the information industry. We will enhance the quality of wor k life for our employees by exploring expansion of work-at-home opportunities and moving to the new Carlyle campus facility in Alexandria, Virginia. Further, we will establish alliances with our friends in other national and inte rnational intellectual property organizations to strengthen American intellectual property rights aroun d the world. Specific actions, with parenthetical cross-references to the analyses and implem entation plans in the Appendices, include: Implement automation for patent and trademark applications Develop a trademark electronic file management system and begin e-Government operations on October 1, 2003. [E-Government 1] Deliver an operational system to process patent applications electronically by October 1, 2004, including electronic image capture of all incoming and outgoing paper documents. [E-Government 2] Develop an automated information system to support a post-grant patent review process. [E-Government 3] Establish an information technology security program for fully certifying and accrediting the security of every automated information system. [E-Government 4] Provide maximum availability of computer systems to examiners, attorneys, the public and other patent and trademark offices in the event of an outage. [E-Government 5] 21ST CENTURY STRATEGIC PLAN 5 UNITED STATES PATENT AND TRADEMARK OFFICE Expand work-at-home opportunities Increase the efficiency and return on investment of our work-at-home program and thereby encourage more employees to participate. [Work-at-home] Increase flexibility through greater reliance on the private sector or

other intellectual property offices Increase reliance on the private sector or other intellectual property offices f or: Classifying patent documents. [Flexibility 1] Supporting national application and Patent Cooperation Treaty search activities. [Flexibility 2] Transitioning to a new global patent classification system. [Flexibility 3] Classifying trademark goods/services and searching design codes. [Flexibility 4] Global Development: Streamline intellectual property systems and strengthen intellectual property rights around the world Promote harmonization in the framework of the World Intellectual Property Organi zation and its Standing Committee on the Law of Patents; resolve major issues in a broa der context and pursue substantive harmonization goals that will strengthen the righ ts of American intellectual property holders by making it easier to obtain internation al protection for their inventions and creations. [Global Development 1] Negotiate bilateral and multilateral agreements to facilitate global convergence of patent standards. [Global Development 2] Accelerate Patent Cooperation Treaty reform efforts, focusing on the USPTO s proposal for simplified processing. [Global Development 3] Develop a universal electronic application by leveraging the United States experien ce with electronic filing of trademark applications. [Global Development 4] Share search results with other intellectual property offices Reduce duplication of effort and decrease workload by relying on search results obtained via partnerships with other intellectual property offices. [Work Sharing] Planned Agility Accomplishments Accelerate processing time by implementing e-Government in Trademarks by October 1, 2003, and in Patents by October 1, 2004. Competitively source classification and search functions, and concentrate USPTO expertise as much as possible on its core government functions. Expand our bilateral and multilateral discussions to strengthen intellectual pro perty rights globally and to reduce duplication of effort among intellectual property offices. 21ST CENTURY STRATEGIC PLAN 6 UNITED STATES PATENT AND TRADEMARK OFFICE CAPABILITY: ENHANCE QUALITY THROUGH WORKFORCE AND PROCESS IMPROVEMENTS A capable organization has a highly skilled, appropriately sized workforce; it h as systems and procedures that enhance the capability of every employee; and it has in place ef fective quality management processes to ensure high quality work and continuous performance impr ovement. In other words, a capable organization is committed to doing the right job right the first time and every time. We will be such an organization. Quality will be assured throughout the process by hiring the people who make the best patent and trademark examiners, certifying their knowledge and competencies throughout their careers at the USPTO, and focusing on quality in all aspects of the examination of paten t and trademark

applications. By bolstering confidence in the quality of U.S. patents and tradem arks, the USPTO will enhance reliability in the quality of products and services needed to incre asingly spur our economy and reduce litigation costs. Specific actions, with parenthetical cross-references to the analyses and implem entation plans in the Appendices, include: Enhance workforce capabilities by certifying competencies Create an enterprise-wide training strategy that meets the needs of the new business model and the e-Government generation. [Transformation 1] Restructure the USPTO by redirecting resources to core examination activities, implement revised performance plans to incorporate changes required to implement an e-Government workplace, meet agency-wide standards for senior executives, and implement selected award packages. [Transformation 2] Transform the workforce by exploring alternative organizational concepts and structures. [Transformation 3] Ensure that professionals, support staff and supervisors responsible for the patent process possess the requisite skills needed to carry out their responsibilities. [Transformation 4] Certification of Knowledge, Skills and Ability in Trademark Process. [Transformation 5] Implement pre-employment testing for patent examiners. [Transformation 6] Recertify the knowledge, skills and abilities of primary examiners to ensure currency in patent law, practice and procedures. [Transformation 7] Certify the legal competency and negotiation abilities of patent examiners before promotion to grade 13. [Transformation 8] Improve the selection and training of supervisory patent examiners to focus on their primary responsibilities of training patent examiners and reviewing and approving their work. [Transformation 9] 21ST CENTURY STRATEGIC PLAN 7 3 UNITED STATES PATENT AND TRADEMARK OFFICE Make improvements in patent and trademark quality assurance techniques Enhance the current quality assurance programs by integrating reviews to cover a ll stages of examination. [Quality 1] Expand reviews of primary examiner work. [Quality 2] Engineer quality into our processing, including the selective expansion of the second-pair-of-eyes review3 of work products in such advanced fields of technology as semiconductors, telecommunications, and biotechnology. [Quality 3] Incorporate an evaluation of search quality into the patent work product review process, and survey practitioners on specific applications. [Quality 4] Enhance the reviewable record of prosecution in patent applications. [Quality 5] Certify and monitor the quality of newly created searching authorities to ensure that patent searches provided by the private sector or other patent offices are complete and of high quality. [Quality 6] Make process improvements that contribute to enhanced quality through legislative/rule changes. Propose legislation and/or rule changes that have been identified as critical fo r the accomplishment of this strategic plan. Continue the process of seeking comments from stakeholders on proposed changes. Planned Capability Accomplishments Enhance the quality of patent and trademark examining operations through a comprehensive quality assurance program in fiscal year 2003. PRODUCTIVITY: ACCELERATE PROCESSING TIMES THROUGH FOCUSED EXAMINATION

We are committed to promoting advances in technology, expansion of business oppo rtunities and creation of jobs through the timely issuance of high quality patents and tradema rks. A productive organization maximizes its output of work performed. Improved productivity is ke y to reducing pendency and inventory. This strategic plan, when fully implemented, would ensure a steady 18-month aver age pendency time in Patents by far the fastest in the world and a 12-month pendency time in Trade marks. This will be accomplished through a radical redesign of the entire patent search and exami nation system based upon four examination tracks, greater reliance on commercial service providers, and variable, incentive-driven fees. Likewise, Trademarks will restructure the way it does bus iness to be compatible with an e-Government environment. A secondary review of applications for proper claim interpretation and to ensure that the closest prior art has been discovered and correctly applied. 21ST CENTURY STRATEGIC PLAN 8 UNITED STATES PATENT AND TRADEMARK OFFICE Specific actions, with parenthetical cross-references to the analyses and implem entation plans in the Appendices, include: Transition to market-driven examination options Adopt procedures that give greater choice and flexibility to trademark applicant s for filing and examination of applications for the registration of trademarks, with a focus on using technology to improve the process and provide a lower cost filing optio n. [Pendency 1] Move from a one-size-fits-all patent examination process to a four-track examinati on process that leverages search results of other organizations and permits applica nts to have freedom of choice in the timing of the processing of their applications. This ne w process will eliminate duplication of effort, encourage greater participation by the app licant community and public, permitting lapse of applications when examination is not r equested, and improving the quality of our patents and decreasing processing time. [Penden cy 2] Reduce the number of claims presented for examination in an application and the size of applications through fee-setting legislation. [Pendency 3] Achieve greater examiner productivity by reducing their prior art search burden. [Pendency 4] Implement an accelerated examination path option Offer patent applicants the market-driven new rocket docket option of choosing an accelerated examination procedure with priority processing and a pendency time o f no longer than 12 months. [Accelerated Examination] Share responsibility for timely and high quality patents and trademarks between applicants and the USPTO Seek legislation to restructure the USPTO fee schedule by October 1, 2002, and t hereby

create incentives and disincentives that contribute to achievement of USPTO goal s, for example, the filing fee will be reduced to incentivize applicants to file, a nd a separate examination fee will be established to permit applicants to choose the timing fo r examination. [Shared Responsibility 1] Make patents more reliable by proposing amendments to patent laws to improve a post-grant review of patents. [Shared Responsibility 2] Planned Productivity Accomplishments Achieve an average time to first action in patent applications that is more than 50 percent lower than the time projected in the fiscal year 2003 Business Plan; i.e., 5.8 m onths in 2008 rather than 12.7 months. Achieve and maintain 18 months patent pendency by 2008, compared to over 25 mont hs in the 2003 Business Plan. [See Figure 1 on page 10] Reduce total patent examiner hires through fiscal year 2008 by 2,500 compared to the 2003 Business Plan projection. [See Figure 2 on page 10] 21ST CENTURY STRATEGIC PLAN 9 1,000 800 550 300 UNITED STATES PATENT AND TRADEMARK OFFICE 2002 2003 2004 2005 2006 2007 2008 30 25 20 15 Fiscal Year 2003 Business Plan 21st Century Strategic Plan FIGURE 1. PATENT EXAMINER HIRING COMPARISON 2002 2003 2004 2005 2006 2007 2008 Fiscal Year 2003 Business Plan 21st Century Strategic Plan FIGURE 2. PATENT PENDENCY4 COMPARISON 4 Figure 2 shows comparable periods for the patent grant measured from when appl ications are available for examination. To determine average total pendency in the 21st Century Strategic Plan, 9 months should be added to reflect the estimated average request for examination period. Patent Examiners Hired Months 21ST CENTURY STRATEGIC PLAN 10 UNITED STATES PATENT AND TRADEMARK OFFICE CRITICAL NEEDS The performance commitments outlined in this strategic plan demand extraordinary effort from every USPTO employee and the full support of our key stakeholders. Our strategic plan is built around the following critical needs. Multilateral and Bilateral Agreements We will need to consult with, and receive the support of, other patent offices i n structuring new bilateral and multilateral initiatives.

Legislation/Rules We will need enactment of legislation by the Congress to adjust certain patent a nd trademark fees by October 1, 2002. We also will need to promulgate final rules to effect fee ch anges. We will need to continue working to develop the proposed legislative and rule ch anges that have been identified and continue the process of seeking comments from interested parties on ways to improve our operations. Labor Relations We will need to notify the three bargaining units representing USPTO employees o f proposed changes and negotiate, where necessary, any changes in working conditions. Budget We will need enactment of an appropriation for fiscal year 2003 that is consiste nt with the level of the President s 2003 budget. Move to Carlyle in Alexandria, Virginia We will need to concentrate on the high priority of relocating to a consolidated campus in Alexandria, Virginia, while minimizing any adverse effects on employees, applicants and the public. The USPTO is quickly moving into the implementation phase of the relocation of its facilit ies from 18 buildings spread throughout Crystal City to a single lease in a consolidated campus. This consolidation is expected to save $72 million over the 20-year term of the lease, but it is a hig hly complex and difficult endeavor. 21ST CENTURY STRATEGIC PLAN 11 UNITED STATES PATENT AND TRADEMARK OFFICE PRESIDENT S MANAGEMENT AGENDA Secretary Donald Evans has committed the Department of Commerce to speedy implem entation of the President s Management Agenda. President Bush has stated that true government refo rm must be based on a reexamination of the role of the Federal government. In this regard, he has ca lled for active, but limited government: a government that empowers states, cities, and citizens to make deci sions; ensures results through accountability; and promotes innovation through competition. The reforms he has identified to help the Federal government adapt to a rapidly changing world include a governme nt that is: Citizen-centered not bureaucracy-centered; Results-oriented not process-oriented; and Market-based actively promoting, not stifling, innovation, and competition. This strategic plan supports the President s Management Agenda: Human Capital We will provide the tools and the resources to ensure that we have a highly qualified, certified, knowledge-based, accountable workforce. Specifically, we w ill strengthen pre-employment testing, develop a competency certification program; create a new labor-management paradigm to meet changing business needs; streamline our workforce to maximize q uality and efficiency; and focus our training, performance evaluation and assessment enviro nment on our core expertise examination.

Competitive Sourcing We are committed to achieving performance enhancements and cost-savings, through the process of competitive sourcing. This process compares the capabilit ies and costs of commercial service providers with current government program providers. Greater competition drives down costs and yields more innovative solutions. We will seek improved effective ness in the following areas: patent and trademark searching, patent document classification, and infor mation technology and logistical support operations. Improved Financial Management The USPTO has a strong, fully integrated financial management system in place and we will continue to strengthen our internal contr ols, improve the timeliness and usefulness of our management information and continue to achi eve an unqualified financial audit opinion. E-Government We are accelerating the deployment of critical automated informatio n systems, particularly electronic end-to-end processing of patent and trademark applicatio ns. In addition, we are currently working on ways to improve delivery schedules, reliability, per formance, security and the cost of all of our automated information systems. Budget/Performance Integration We will allocate budget resources based on the co ncept of linking them to the achievement of both enterprise-wide goals and individual uni t performance. The USPTO will expand the involvement of applicants and the public in assessing the accomplishment of our goals and performance targets. As a reflection of our commitment to fund our strategic priorities, we have iden tified over $81 million in fiscal year 2003 resources that we will redirect to the examinati on process. 21ST CENTURY STRATEGIC PLAN 12 UNITED STATES PATENT AND TRADEMARK OFFICE LONG-TERM AGENDA This strategic plan is only the first step toward creating a quality-focused, hi ghly productive, responsive USPTO that supports a market-based intellectual property system for t he 21st Century. Once the initial phases of this plan have been supported, adopted and implemente d, the USPTO will explore further options to enhance its ability to more operate like a busin ess. Within the framework of the legislative and regulatory packages there are a numb er of items that will be implemented in the out years of the strategic plan: Restriction practice We will continue to explore the treatment of applications c ontaining multiple inventions at the international level in connection with WIPO s Standing Committee on Patents and within the framework of the Trilateral Offices (Europe, Japan, and the U.S.). Th erefore, any changes to restriction practice would be considered within the context of this internati onal framework. Patent term adjustment Before seeking legislation to simplify patent term adjust ment, we will

explore a number of options to address this issue with the small business commun ity and other key stakeholders. Mutual exploitation of examination results We will take a cautious approach to m utual exploitation of examination results by first evaluating International Preliminary Examination Reports that are generated during national stage examination. We will then consider whether the a cceptance of examination results (granted patents) from foreign offices is a proper basis for use in counterpart applications in the United States. However, the USPTO will never recommend any c hanges that would compromise our sovereign right to determine patentability issues or to pre clude our right to make further examinations when necessary. Copyright issues As part of the implementation of the electronic file wrapper, w e will ascertain the best means for assuring that these documents in an application file that may be subject to copyright protection can be included in the USPTO s databases. The intent of this option wou ld be to ensure full public access to all the information contained in a pending application fil e. Third party request for reexamination As part of the initiative to seek post-gra nt review legislation, we will explore the need for retention of third-party requested reexamination. District court actions We will evaluate the desirability of revising the provisi ons for judicial review of USPTO decisions to make an appeal to the U.S. Court of Appeals for the Federa l Circuit the sole avenue for judicial review of a Board of Patent Appeals and Interferences or the Trademark Trial and Appeal Board decision. Patent Cooperation Treaty Activities We will actively pursue revisions to Patent Cooperation Treaty search and examination guidelines to achieve an enhanced level of reliance on In ternational Search Reports and International Preliminary Examination Reports. 21ST CENTURY STRATEGIC PLAN 13 UNITED STATES PATENT AND TRADEMARK OFFICE Business-like practices We also will explore whether we have a good justificatio n for operating in a more business-like manner. USPTO Campus Once we have settled into the Carlyle campus and have fully impleme nted automated patent and trademark processing, we will be able to assess the feasibi lity of expanding our work-at-home program by using such virtual office concepts as telecommuting and flexible workplace to the maximum potential. Examiner Training We will evaluate the feasibility of reinstating the Examiner E ducation Program through corporate sponsorship to enable patent examiners to gain better insights into technological developments in the fields in which they examine. SOME FINAL THOUGHTS This 21st Century Strategic Plan sets forth an ambitious agenda to resolve the c risis all intellectual property organizations are facing. We believe economic and technolo

gical progress in the United States and the global market can be significantly enhanced through the implementation of the initiatives proposed in this plan. We intend to refine and update our strategic plan periodically to adjust to chan ging conditions and to incorporate the best thinking of the entire intellectual property community. We are eager to work with those who believe, as we do, that American innovators and businesses m ust have the very best intellectual property system in the world. This 21st Century Strategic Plan represents an important first step in the pursuit of this goal. 21ST CENTURY STRATEGIC PLAN 14 Actions Agility e-Government 1 e-Government 2 e-Government 3 e-Government 4 e-Government 5 Agility Work-at-Home TRADEMARK WORK-AT-HOME Agility Flexibility 1 Flexibility 2 Flexibility 3 Flexibility 4 Agility Global Development 1 PURSUIT OF SUBSTANTIVE PATENT LAW Global Development 2 Global Development 3 Global Development 4 Table of Contents TRADEMARK E-GOVERNMENT PATENT E-GOVERNMENT POST-GRANT PATENT REVIEW E-PROCESSING INFORMATION TECHNOLOGY SECURITY PROGRAM DATA REPLICATION FOR DISASTER RECOVERY INITIAL AND PG-PUB CLASSIFICATION OF NEWLY RECEIVED APPLICATIONS SUPPORT FOR PATENT COOPERATION TREATY (PCT) SEARCH ACTIVITY COMPETITIVE SOURCING OF RECLASSIFICATION FUNCTIONS AND TRANSITION TO INTERNATIONAL PATENT CLASSIFICATION SYSTEM COMPETITIVE SOURCING OF PRE-EXAMINATION PROCESSING RELATED TO PAPER APPLICATIONS HARMONIZATION OTHER BILATERAL/MULTILATERAL AGREEMENTS PATENT COOPERATION TREATY REFORM INTERNATIONAL COOPERATION: E-FILING AND CLASSIFICATION OF GOODS/SERVICES Agility Work Sharing Capability Transformation 1 Transformation 2 Transformation 2a Transformation 3 Transformation 4

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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