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Very little support among respondents exists for an aggregate increase in the PTO fee levels which would be sufficient to increase the projected $337 million income from fees in FY 1991 beyond about $420 million (25%), with fewer than one in five supporting fees yielding more than $500 million.
On other financial issues:
77% of respondents indicated the subsidy for "small entities" in the form of reduced filing fees should be financed solely from general tax revenues, not excess user fees imposed on "large entities."
87% of respondents desired a greater role for users in advising the PTO on its finances.
85% of respondents felt that further, significant increases in user fees would adversely impact the rate at which patent applications are filed.
Four out of five respondents agreed that the PTO currently has significant problems with the quality of its search and examining operations.
Respondents did agree on several priorities for improving PTO operations:
Overall the survey results indicate that the focus on improvements in PTO quality, which has extended over many generations of patent practitioners, has yielded little in the way to tangible results. In no activity did practitioners express the view that the quality of PTO operations had actually improved over the past decade; in many critical areas, particularly searching, the PTO is clearly less capable today than ten or even five years ago.
The interplay of quality with user funding was also manifest in the survey. If the patent system is to be preserved, increases in fees must in the patent practitioners' view -- be moderated. The message from the survey is clear: if complete user funding is to be maintained, the PTO must deliver the "big bang" in quality enhancement from a few new "bucks" from user fee increases.
B. Trademark Operation
The trademark operation comprises less than 10% of total PTO staff and annual operating expenses. Since 1982, the trademark operation has been fully funded by user fees for trademark related services. Such fees are, by law, earmarked to provide those services. In 1991, Congress recognized that a portion of the general management and administrative services expenses of the PTO were attributable to supporting the trademark operation, and amended the law to provide that trademark fees could be used for those expenses. Even so,the trademark operation is not likely to comprise more than 10% of PTO expense.
Even, however, the relatively smaller, wholly user-funded trademark operations of the PTO, are susceptible to the same concerns over quality of the examination work product, timeliness of trademark examination, adequacy of computerized searching and other automated systems, and flexibility in financing that are so pronounced in the patent operation. Given the extensive parallels in private sector elements of concern as between the patent and trademark operations, both could anticipate substantially enhancements to quality of operations through government corporation status.
Similarly, the private sector advisory committee proposed by AIPLA would necessarily operate with trademark experts. Moreover, a portion of the professional staff of the advisory committee would be devoted to trademark operations within the PTO. Hence, the benefits of the advisory committee should flow equally to trademark applicants before the PTO as they are anticipated for patent applicants.
In September of 1991, the AIPLA surveyed its membership on issues relating to user perceptions of the quality of the PTO's trademark operations. In many respects the survey paralleled the patent operations survey conducted in March. 568 lawyers who practice trademark law responded to the survey. 80% of the respondents were in private practice and 20% in corporate practice. 74% of the respondents had practiced before the PTO for 10 years or more.
The survey was divided into six substantive areas: trademark examining, searching capabilities, administration, automated trademark searching, financing, and management. The full survey is in Appendix III.
1) Trademark Examining.
The survey gave high marks to the trademark examining process. Respondents agreed that the examiners, including senior and management attorneys, are accessible and cooperative, with only 2% of respondents expressing any disagreement with this proposition! Only one in eight respondents (12%) disagreed with the statement that the trademark examiners' refusals to register marks are normally justified. Only 6% of respondents disagreed with the proposition that, overall, the trademark examining corp effectively searches and examines applications for trademark registrations.
2) Trademark Searching
A large measure of satisfaction was expressed with the trademark searching capabilities of the PTO. Only one respondent in five (21%) disagreed that the integrity of the paper search files was satisfactory. By the same margin of dissent (21% disagreeing), respondents agreed that the integrity of the trademark paper search files is at least as satisfactory now as it was ten years ago. A slightly larger margin (23%) disagreed that the automated search files were satisfactory, versus 43% who expressed agreement that it was satisfactory.
By a margin of over two to one (57% agreeing, 25% disagreeing), respondents indicated that less than 10% of opposition proceedings resulted from examiners failure to find confusingly similar marks.
By wide margins, respondents agreed that all aspects of the administrative processing of trademarks was satisfactory. Included in the above was the administrative processing prior to examination (73% agree, 11% disagree), affidavits of use (66% agree, 11% disagree), renewal applications (66% agree, 8% disagree), and assignments (50% agree, 27% disagree).
4) Automated Trademark Searching
The survey concentrated on the current "T-Search" system. The majority of respondents were neutral on the question of whether it was satisfactory in four key respects: accuracy of database (60% neutral), speed of operation (58% neutral), ease of use (59%), and types of information retrievable (58% neutral). The high neutral factor means very few respondents are familiar with T-Search because they do not use it.
Respondents did strongly agree (65% versus 10%) that the trademark system would significantly benefit if examiners were provided access to private automated trademark search services and databases.
Trademark practitioners expressed strong support for maintaining the financial independence of the trademark operations from the patent operations. Only 8% disagreed with the proposition that the law should insure that trademark fees may only be used for the trademark operation and for PTO general administration function to the extent that they directly relate to trademarks. An overwhelming 81% agreed with this proposition.
When asked to comment on whether the fact that the trademark operation is in the same government agency as the patent operation has, overall, had a positive, negative, or neutral
affect on the quality of the trademark operation, 50% of respondents agreed with the proposition that the effect was neutral, 35% of respondents agreed with the proposition the that the effect was positive, and only 21% percent agreed with the proposition that the effect was negative. A majority of respondents (55%) disagreed with the proposition that the patent operation and the trademark operation should be separated into two governmental agencies, 22% were neutral, and 24% agreed.
Otherwise the survey indicated overall satisfaction with the existing operation. Only 35% of respondents cited better supervision of examiners as likely to improve operations. Similarly, only 46% thought better training of examiners was necessary for quality to be significantly improved. Upgrading administrative support operations appears to be a higher priority, with only 8% of respondents disagreeing with the need for upgrading. Similarly by a margin of 65% agreeing and 7% disagreeing, respondents supported the need for improved examiner searching resources to significantly improve quality.
Trademark practitioners have an overall positive assessment of the trademark operations in the PTO. The findings on the trademark side of the PTO operations stand in marked contrast to the survey results on the patent side.
While both operations are amenable to improvement through government corporation status, the trademark operation survey results do not support that need. However, the membership of AIPLA strongly favor continuing the administration of the patent and trademark laws in the same government operation as has been the case since 1870.
C. APS Management as a Symbol of PTO Quality Deficiencies
The Automated Patent System (APS) as originally proposed in 1982 included automated searching of U.S. and foreign patents and technical literature, electronic filing of patent applications, and electronic (or paperless) patent files and file management. The Commissioner reported to Congress that the APS would be completed in 1990 at a cost of somewhat less than $300 million to be offset, in that period, by nearly $200 million in cost savings and avoidance.
In 1992, the APS has progressed to the point where all U.S. patents have been captured or loaded into a digital image database. Approximately 10% of patent examiners are using the full APS to search. The foreign patent information in digitized form obtained from the Japanese and European Patent Offices is largely unused. The public does not have access to the APS image database nor do 90% of the patent examiners. The electronic patent application filing and electronic case file management has not yet reached the earliest planning stages, and no funding will be available for it during fiscal years 1993 and 1994.
The PTO has already spent nearly $400 million through fiscal year 1992 on APS and the management of APS and, according to the 1991 submission to Congress, intends to spend more than $100 each year for the next three years as APS enters the "deployment" stage. Reliable cost estimates for the completion of APS as planned are not available, but will certainly reach $800 million before the APS is completed. The date of completion is estimated to be sometime in late 1990's. Since 1991, the huge annual cost for the APS has been entirely underwritten by patent user fees. Once the APS is fully deployed, there will be significant costs to maintain the system, but those annual costs are not known. What is known is that those costs will be paid by users, who will also be required to pay a high hourly cost to use the APS for themselves.
After a decade of redesigns, delays, cost-overruns, and scale-backs, the AIPLA Information Retrieval Committee surveyed the PTO's plans for further APS spending (See Appendix IV) and found essentially only wreckage remaining:
[T]he APS is based on functional design requirements that are practically
While committed to an aggressive technological design that assures huge costs, the benefits have been scantily documented at best. In an April, 1990, report entitled APS Decision Paper: "Cost Benefit Analysis", the PTO cost-justifies the entire APS system largely on the