US patent backlog, employee attrition grow at alarming rates

Even with its increased hiring estimates of 1,200 patent examiners each year for the next 5 years, the US Patent and Trademark Office patent application backlog is expected to increase to over 1.3 million at the end of fiscal year 2011 the Government Accounting Office reported today.

The USPTO has also estimated that if it were able to hire 2,000 patent examiners per year in fiscal year 2007 and each of the next 5 years, the backlog would continue to increase by about 260,000 applications, to 953,643 at the end of fiscal year 2011, the GAO said.

Despite its recent increases in hiring, the agency has acknowledged that it cannot hire its way out of the backlog and is now focused on slowing the growth of the backlog instead of reducing it.This too is but one of the goals of the Patent Reform Act currently making the rounds in the US Senate and generating tons of concerned comments about the current trends and directions of the USPTO.

According to an IDG News Service story, the House in September passed a patent reform bill - supported by many large tech vendors, but opposed by several small tech companies - but similar legislation has been stalled in the Senate. Large tech vendors, including Microsoft, IBM and Symantec, have called for patent reform, saying it's too easy for companies with no intention of creating products to buy up patents and file multimillion-dollar infringement lawsuits against other companies. On Jan. 22, Senate Majority Leader Harry Reid, a Nevada Democrat, said patent reform was a priority, but it was in a line behind several other bills, including an economic stimulus package and a government surveillance authorization bill. The Senate would turn to patent reform, "time permitting," he said then.

In the meantime the USPTO is being overwhelmed, the GAO said. In its report it said that while the USPTO is hiring as many new patent examiners as it has the annual funding and institutional capacity to support, attrition has continued to increase among patent examiners-one patent examiner has been lost for nearly every two hired over the last 5 years. For example, from the beginning of fiscal year 2002 through fiscal year 2006, USPTO hired 3,672 patent examiners. However, the patent examination workforce only increased by 1,644 because 1,643 patent examiners left the agency and 385 patent examiners were either transferred or promoted out of the position of patent examiner.

Approximately 70% of the patent examiners who left the agency had been at USPTO for less than 5 years, and nearly 33% had been at the agency for less than 1 year. The attrition of patent examiners who were at the agency for less than 5 years is a significant loss for USPTO for a variety of reasons:

· Attrition of these staff affects USPTO's ability to reduce the patent application backlog because these less experienced patent examiners are primarily responsible for making the initial decisions on patent applications-the triggering event that removes applications from the backlog.

· When these staff leave USPTO, the agency loses up to 5 years of training investment in them because patent examiners require 4 to 6 years of on-the-job experience before they become fully proficient in conducting patent application reviews.

· The more experienced examiners who have the ability to examine more applications in less time have to instead devote more of their time to supervising and training the less experienced staff, thereby further reducing the agency's overall productivity.

According to USPTO management, patent examiners primarily leave the agency because of personal reasons, such as finding that the job is not a good fit. In contrast, 67% of patent examiners identified the agency's production goals among the primary reasons they would consider leaving the agency. These goals are based on the number of applications patent examiners must complete during a 2-week period, the GAO said. However, the assumptions underlying these goals were established over 30 years ago and have not since been adjusted to reflect changes in the complexity of patent applications.

Moreover, 70% of patent examiners reported working unpaid overtime during the past year in order to meet their production goals. The large percentage of examiners working overtime to meet production goals and who would choose to leave the agency because of these goals may indicate that these goals do not accurately reflect the time needed to review applications and are undermining USPTO's hiring efforts, the GAO said.

It's not that the agency isn't trying to remedy the situation, the GAO said. According to USPTO management officials, the three most effective retention incentives and flexibilities that they have offered are:

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

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

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

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