STATEMENT OF JERRY SHAW

Good morning, I am Jerry Shaw, General Counsel to the Senior Executive Association (SEA). SEA is a professional association which represents the interests of career members of the senior executive service and of equivalent pay systems, such as senior level/senior technical executives (SL/ST). Among the senior level employees eligible for membership in SEA are the Examinersin-Chief who serve on the Board of Patent Appeals and Interferences of the Patent and Trademark Office (PTO), an agency of the Department of Commerce (DOC). Since passage of the Federal Employees Pay Comparability Act of 1990 (FEPCA), SEA has monitored how pay reform is being implemented for its membership. The Examiners-in-Chief were affected by FEPCA since their pay statute, 35 U.S.C. § 3(c), referred to the pay rate GS-17 which was abolished by FEPCA and replaced by the new "higher than a GS15" pay range for senior level/senior technical (SL/ST)

employees.

BACKGROUND

The Board of Patent Appeals and Interferences traces its history back to 1861 when the first appeals board was formed in the Patents Office. The Board of Appeals became the Board of Patent Appeals and Interferences in 1984 when 35 U.S.C. § 7 was amended to merge the Board of Appeals with the Board of Patent An informative review of the history of the Board of Appeals in the PTO appears in the dissenting opinion of Judge

Interferences.

Smith in In re Wiechert, 370 F.2d 927, (CCPA 1967).' In reviewing this history, one could conclude that Congress intended the appellate tribunal in the PTO to exercise independent judgment in the matters before it for decision. In 1927, the patent laws were amended to eliminate the existing practice of appealing a decision of the Board to the Commissioner of Patents, making the Board the final agency determination of the matters before it.

As cited in Judge Smith's opinion, the legislative history of the various statutory changes affecting the Board throughout its history reflects an apparent desire of Congress that the Examiners-in-Chief exercise independent judgment in matters before them. The performance appraisal plans of the Examinersin-Chief indicate that this has, on occasion, been recognized in the PTO. For example, Item 1 of the current Performance Appraisal Plan for the Examiners-in-Chief, "Performance of Judicial Duties as a Member of the Board of Patent Appeals and Interferences," states "As required by 35 U.S.C. § 7, [an Examiner-in-Chief] demonstrates 'competent legal knowledge and scientific ability' in the exercise of independent judgment in all matters before him or her." The Court of Appeals for the Federal Circuit recently stated that the Board is not the "alter ego or agent" of the Commissioner and noted that when the

1 The issues raised in Wiechert are not involved in this matter.

These

Commissioner sits on the Board, "he serves as any other member." Animal League Defense Fund v. Quigg, 932 F. 2d 920 at 928-29 (Fed. Cir. 1991). Prior to its merger with the Board of Patent Interferences, one of the Examiners-in-Chief of the Board of Appeals served as its Chairman. Upon merging the two Boards to form the Board of Patent Appeals and Interferences, DOC and PTO created two positions in the Senior Executive Service to administer the new Board, the Chairman and Vice Chairman. SES officials are now respectively the approving and rating officials under the Performance Appraisal Plan for Examiners-inChief. While the individuals currently holding these positions serve on panels of the Board and decide cases under a grandfather clause, the statutory basis for future SESers holding these positions to do so is not clear. 35 U.S.C. § 7 states that the Board consists of the Commissioner of Patents, Deputy Commissioner, Assistant Commissioners, and the Examiners-in-Chief who must be appointed to the competitive service. The statute does not provide for a Chairman or Vice Chairman. Since these positions are in the SES, not the competitive service, it is not clear how the future holders of these positions can perform the duties of Examiners-in-Chief.

Prior to FEPCA, 35 U.S.C. § 3(c) stated that the Examinersin-Chief were to be paid at an annual rate not in excess of the rate for GS-17. Due to the capping of the GS scale, all

Examiners-in-Chief have in recent history been paid at the same rate. When the GS cap was lifted in January 1991, the PTO

assigned the Examiners-in-Chief to one of the five steps within the GS-17 grade based upon the years in service criteria applicable to all other general workforce employees.

The pay plan created by DOC and the PTO in May, 1991, to implement FEPCA for the Examiners-in-Chief significantly changed the manner in which the pay rate for each Examiner-in-Chief is determined. Instead of the five steps of former grade GS-17, the new pay plan has seven steps. The provision of steps six and seven is, however, apparently illusory since step six can only be achieved by receiving an "outstanding" performance rating for two consecutive years and step seven requires at a minimum, an additional two years of receiving an "outstanding" performance rating, and for some, satisfying additional performance criteria beyond those needed for an "outstanding" performance rating. In addition, moving between each level from step two to step five requires receiving a "fully successful" performance rating for two years or a commendable performance rating for one year. Keeping in mind that the Examiners-in-Chief are by statute in the competitive service, these criteria represent significant hurdles for moving up through the pay levels.

In order to understand the significance of linking the pay plan for Examiners-in-Chief to their performance appraisal plan for the first time in this manner, an understanding of the performance appraisal plan is necessary.

Prior to January 1986, the performance appraisal plan for the Examiners-in-Chief did not contain opinion writing quotas.

In 1986, DOC and PTO amended the performance appraisal plan by adding supplemental standards which imposed opinion writing

quotas on the Examiners-in-Chief.

Even though the qualitative

aspects of this position are still contained in the plan, a performance evaluation under this plan apparently amounts to counting the number of opinions written by an Examiner-in-Chief in a rating period and comparing that number with the quota set forth in the supplemental standards.

While the supplemental standards state that certain mitigating circumstances will be taken into account such as assignment of "inordinately difficult" cases when determining compliance with the quota, such consideration is apparently rarely demonstrated. First, the PTO has apparently not defined what constitutes any of the listed mitigating circumstances.2 Regardless of the language used to describe the mitigating factors, the determination of whether an individual case meets any of the listed mitigating circumstances is apparently now within the subjective judgment of the Chairman and/or Vice Chairman. Second, if a case is somehow determined by one of these management officials to fall within one of the mitigating circumstances, they apparently do not inform the Examiners-inChief of how that case will affect their compliance with the opinion writing quota. During the year, the Examiners-in-Chiefs state that they do not know how close they are to satisfying

2 Prior versions of the supplemental standards used the phrase "jumbo case" as well as "inordinately difficult."