oversight

Intellectual Property: Comparison of Patent Examination Statistics for Fiscal Years 1994 and 1995

Published by the Government Accountability Office on 1997-03-13.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                 United States General Accounting Office

GAO              Report to the Chairman, Committee on
                 the Judiciary, U.S. Senate



March 1997
                 INTELLECTUAL
                 PROPERTY
                 Comparison of Patent
                 Examination Statistics
                 for Fiscal Years 1994
                 and 1995




GAO/RCED-97-58
                   United States
GAO                General Accounting Office
                   Washington, D.C. 20548

                   Resources, Community, and
                   Economic Development Division

                   B-276028

                   March 13, 1997

                   The Honorable Orrin G. Hatch
                   Chairman, Committee on the Judiciary
                   United States Senate

                   Dear Mr. Chairman:

                   Our July 15, 1996, report provided you with statistics on “patent
                   pendency,” or the amount of time the U.S. Department of Commerce’s
                   Patent and Trademark Office (PTO) takes to examine a patent application.1
                   We also discussed the statistics on patent pendency in a statement for the
                   record that we provided for a hearing on intellectual property that you
                   held on September 18, 1996.2 The statistics in the report and statement for
                   the record relied on fiscal year 1994 data from PTO’s automated database;
                   these data were the most recent and complete fiscal year data available at
                   the time of our review.

                   At your request, we currently are conducting a review on intellectual
                   property fees. In carrying out this work, we again queried PTO’s automated
                   database to obtain data for both fees and pendency, this time analyzing
                   information for fiscal year 1995. Following discussions with your office,
                   you requested that we update the statistics in our July 1996 report to
                   compare pendency for fiscal years 1994 and 1995. Detailed information on
                   this comparison is provided in appendix I. Similar to our July 1996 report,
                   this report provides you with information on overall pendency; patent
                   pendency by examination groups, secrecy orders,3 foreign applications,
                   and current and original application dates; and patent pendency
                   attributable to applicants. More details on our scope and methodology are
                   included in appendix II.


                   Patent pendency declined slightly in fiscal year 1995 in comparison with
Results in Brief   fiscal year 1994. Overall average pendency in fiscal year 1995 was 19.8
                   months, or 0.4 month less than the 20.2-month average for fiscal year 1994.
                   Similarly, pendency declined somewhat for 8 of the 17 examination groups
                   and for foreign applications. Pendency remained about the same when the

                   1
                    Intellectual Property: Enhancements Needed in Computing and Reporting Patent Examination
                   Statistics (GAO/RCED-96-190).
                   2
                    Intellectual Property: Patent Examination and Copyright Office Issues (GAO/T-RCED/GGD-96-230).
                   3
                    Patent applications for inventions that could affect national security interests can be placed under a
                   secrecy order by PTO if the applicable federal agency determines that such protection is necessary.



                   Page 1                                                       GAO/RCED-97-58 Intellectual Property
             B-276028




             original rather than the current application filing date was used for the
             calculation. Pendency for applications subject to secrecy orders increased,
             but these applications were so few in number that they had virtually no
             effect on overall pendency. We also found that the average amount of
             pendency attributable to the applicant increased from 7.4 months in fiscal
             year 1994 to 8 months in fiscal year 1995.


             A patent is a grant, given by a government to an inventor, of the right to
Background   exclude others for a limited time from making, using, or selling his or her
             invention. In the United States, the sole granting authority for patents is
             PTO.


             Within PTO, the patent application examination process consists of several
             progressive phases. First, an applicant files a patent application with PTO,
             where it is subjected to reviews for accuracy and completeness during a
             preexamination phase. Following preexamination, the application is
             assigned, or “docketed,” to an examiner within an examination group that
             has expertise in a specific field, such as computer systems or
             biotechnology.

             At this point, the examiner begins the process of determining whether the
             invention is a new and useful process or product that should receive a
             patent. Usually, early in the process, the examiner makes a preliminary
             decision, or “first action,” which may then be followed by a series of
             contacts with the applicant to resolve questions and/or obtain additional
             information. Possibly after a number of actions by the examiner, PTO will
             decide whether to issue a patent. If PTO decides to issue a patent, termed
             an “allowance,” then the agency informs the applicant and, upon the
             payment of the necessary fees, issues the patent. The application may be
             abandoned during any of these stages.4

             PTO defines patent pendency as the period from the date when an
             application is filed until the date when a patent is issued or the application
             is abandoned. Pendency as reported by PTO excludes applications that
             have been filed but not yet issued or abandoned. PTO computes average
             pendency as the total number of months for all patents issued or
             abandoned over a particular period, divided by the total number of
             applications for that period.



             4
              As used by PTO, an “abandoned” application is any application that does not result in an issued patent
             and is eventually taken out of the examination process by the applicant or by PTO.



             Page 2                                                      GAO/RCED-97-58 Intellectual Property
                          B-276028




                          As discussed in our earlier report, patent pendency has taken on an
                          increased importance because of 1994 legislation affecting the term of
                          most patents. Public Law 103-465 changed the patent term for most new
                          applications from 17 years from the date of the patent’s issuance to 20
                          years from the filing of the original application on the invention.5 Any time
                          spent by PTO in examining a patent application subject to the new law
                          reduces the effective patent term left to the inventor.


                          In comparing patent pendency in fiscal year 1995 with that experienced in
Minor Changes in          fiscal year 1994, we found minor variations from what was reported in our
Pendency Occurred in      July 1996 report. We analyzed changes in total pendency, pendency by
Fiscal Year 1995          examination groups, pendency for patents under secrecy orders, pendency
                          for foreign applications, pendency using current and original application
                          filing dates, and the applicants’ impact on pendency.


Total Pendency            As shown in table I.1, overall patent pendency was 19.8 months in fiscal
                          year 1995—a decrease of 0.4 month, or 2 percent, from the 20.2-month
                          average pendency in fiscal year 1994. This decrease was evident in the
                          average pendency for both issued patents, which decreased from 21.3 to
                          21 months, and abandoned applications, which decreased from 18.3 to 17.9
                          months.

                          The total number of patents issued and applications abandoned decreased
                          slightly from fiscal year 1994 through fiscal 1995, dropping from 187,633 to
                          186,195, or about 0.8 percent. The primary reason for this decrease was a
                          decline in abandoned applications, which fell 3.2 percent, from 73,949 to
                          71,553. The number of patents issued increased by 0.8 percent, from
                          113,684 to 114,642.


Pendency by Examination   As shown in tables I.2, I.3, and I.4, pendency continued to vary widely
Groups                    among the individual examination groups in fiscal year 1995. The highest
                          pendency again was for computer systems, where it was 26.2 months in
                          total, 27.6 months for issued patents, and 24.4 months for abandoned
                          applications. The lowest pendency continued to be for solar, heat, power,


                          5
                           Under P.L. 103-465, the term of a design (configuration, shape, or surface ornamentation) patent—14
                          years from the date of issuance—remains unchanged. Utility (process, machine, manufacture, or
                          composition of matter) and plant (asexually propagated) patents had a term of 17 years from the date
                          of issuance under the old law and 20 years from the date of the earliest filing under the new law.
                          Reissued patents (replacement of defective patents) are for the unexpired part of the term of the
                          original patents.



                          Page 3                                                     GAO/RCED-97-58 Intellectual Property
                       B-276028




                       and fluid engineering devices, where the average was 17.4 months in total,
                       18.4 months for issued patents, and 14.6 months for abandoned
                       applications.

                       Among the 17 examination groups for which we calculated statistics, 9
                       groups had an increase in overall average pendency, and 8 groups had a
                       decrease. In most cases, the variations in pendency from fiscal year 1994
                       through fiscal 1995 were small; only three groups had a change of more
                       than a month in overall pendency. The largest change was for special
                       designs, where overall pendency decreased by 3.6 months in total, 3.3
                       months for issued patents, and 4.6 months for abandoned applications.


Pendency for Patents   As shown in table I.5, fewer patents were issued or applications
Under Secrecy Orders   abandoned in fiscal year 1995 for those applications that had been subject
                       to secrecy orders at one time. Overall, the number declined from 464 in
                       fiscal year 1994 to 396 in fiscal year 1995—a decrease of 14.7 percent.

                       Pendency for applications subject to secrecy orders increased significantly
                       from fiscal year 1994 through fiscal 1995. Average pendency for
                       applications subject to secrecy orders at one time increased from 62.9
                       months to 75.3 months overall, or an increase of 12.4 months per
                       application. The average increase varied from 8.0 months for issued
                       patents to 23.2 months for abandoned applications.

                       As in fiscal year 1994, the high level of pendency for applications subject
                       to secrecy orders had no significant effect on overall pendency, since
                       these cases accounted for only 0.2 percent of the total patents issued and
                       applications abandoned in fiscal year 1995. In fact, those applications not
                       subject to secrecy orders had an overall pendency of 19.7 months
                       compared with an overall pendency of 19.8 months for all applications.


Pendency for Foreign   As shown in table I.6, the average pendency for foreign patent applications
Applications           decreased in fiscal year 1995.6 The overall pendency for foreign
                       applications was 20.6 months in fiscal year 1995 compared with 20.9
                       months in fiscal year 1994—a decrease of 0.3 month. Pendency on
                       domestic applications decreased an average of 0.4 month, from 19.7
                       months in fiscal year 1994 to 19.3 months in fiscal 1995.



                       6
                        PTO considers a patent application to have originated in a foreign country if the first applicant named
                       in the application is a foreign resident.



                       Page 4                                                      GAO/RCED-97-58 Intellectual Property
                           B-276028




Pendency Using Current     According to PTO officials, a patent application may spawn other
and Original Application   applications during the examination period. Several generations of
Filing Dates               applications are possible from one invention. The new, or current,
                           application is referred to by PTO as the “child,” and the earlier application
                           is referred to as the “parent.” In our July 1996 report, we reported that
                           pendency would be greater if PTO were to use the filing date of the original,
                           or parent, application to compute pendency rather than the filing date of
                           the current, or child, application. As shown in table I.7, in fiscal year 1995,
                           applications with a parent continued to constitute a significant
                           portion—30.2 percent—of the patents issued and applications abandoned.

                           Using the original filing date for the patents issued and applications
                           abandoned in fiscal year 1995 that actually had a parent, the overall
                           pendency would have been 47.2 months compared with 17.8 months using
                           the current filing date. This difference was about the same as it was in
                           fiscal year 1994, when pendency on applications with a parent would have
                           been 47.7 months using the original filing date and 17.9 months using the
                           current filing date.

                           When the original filing date is used, the impact on pendency for all
                           applications in fiscal year 1995—rather than just those with a
                           parent—showed slight differences compared with the impact in fiscal
                           1994. Had the original application date been used for all calculations, the
                           overall pendency for fiscal year 1995 would have been 28.7 months rather
                           than 19.8 months. In comparison, the use of the original filing date
                           uniformly in fiscal year 1994 would have resulted in an overall pendency of
                           28 months rather than 20.2.


Applicants’ Impact on      In our July 1996 report, we noted that the applicants themselves can be
Pendency                   responsible for a portion of the pendency. We included statistics on one
                           element—the amount of time spent by applicants in responding to PTO
                           office actions during examination. In commenting on our 1996 report, PTO
                           agreed that applicants often are responsible for pendency’s being higher
                           and that there were numerous other reasons for higher pendency beside
                           the responses to PTO’s queries. PTO provided us with its own analysis of
                           overall delays caused by applicants. We referred to these in our 1996
                           report but did not include the details of PTO’s analysis.

                           In preparing our updated statistics, we asked PTO to provide us with an
                           updated analysis of applicant-caused delays using fiscal year 1995 data.
                           The results of PTO’s analysis are shown in table I.8. Consistent with our



                           Page 5                                        GAO/RCED-97-58 Intellectual Property
                     B-276028




                     July 1996 report, we have presented the data as provided to us by PTO
                     rather than conducting our own analysis from the fiscal year 1995
                     database. Although we did not verify the accuracy of PTO’s computations,
                     in the one area where we could compare results—applicants’ response
                     time to PTO office actions—our statistics were within 0.05 month of PTO’s
                     statistics. This one area accounted for nearly one-half of the overall
                     pendency attributable to applicants.

                     PTO identified seven areas where applicants create delays. In total, these
                     areas accounted for 8 months of the 19.8 months in overall pendency
                     during fiscal year 1995. In comparison, 7.4 months were attributable to
                     applicants’ delays in the 20.2 months of overall pendency during fiscal year
                     1994. In both years, the single largest contributor to delays was the
                     applicant’s response time to PTO office actions, which was 3.7 months in
                     fiscal year 1995 compared with 3.6 months in fiscal 1994.


                     We transmitted a draft of this report to the Department of Commerce for
Agency Comments      its review and comment. Generally, the Department agreed with the
and Our Evaluation   information in the draft report. The only area where the Department
                     recommended changes related to table I.7, which compared pendency
                     using current and original application dates. The Department said that its
                     own data showed no significant differences between the statistics for
                     fiscal years 1994 and 1995, while our statistics showed a decrease in
                     pendency for fiscal 1995.

                     In follow-up discussions with PTO, we found that the data that PTO had
                     provided us with—and from which we had made our calculations—on
                     original application filing dates were incomplete. PTO later provided us
                     with the complete data, and we revised our calculations. These new
                     calculations are shown in table I.7. They indicate there was no substantial
                     difference in pendency for fiscal years 1994 and 1995.

                     The Department raised two other points in its comments, neither of which
                     required any changes in the report. The first point addressed the pendency
                     of applications subject to secrecy orders. PTO noted that it can take no
                     final action until the classifying agency has declassified the invention. We
                     agree and made this same point in our earlier report on pendency that was
                     issued in July 1996.

                     The Department’s second point was that its own pendency statistics (1) do
                     not include design patents and (2) actually report pendency for the fiscal



                     Page 6                                      GAO/RCED-97-58 Intellectual Property
B-276028




year on the basis of statistics at the end of the fourth quarter. As in our
earlier report, we believe that our statistics, which include design patents
and calculate pendency for all patents issued and applications abandoned
during the fiscal year, provide a better appraisal of patent pendency. The
full text of the Department’s written comments appears in appendix III.


We will send copies of this report to the appropriate House and Senate
committees; interested Members of Congress; the Secretary of Commerce;
the Assistant Secretary of Commerce and Commissioner of Patents and
Trademarks; the Director, Office of Management and Budget; and other
interested parties. We will make copies available to others on request. If
you or your staff have any questions or need additional information, please
call me at (202) 512-3841. Major contributors to this report are listed in
appendix IV.

Sincerely yours,




Allen Li
Associate Director, Energy, Resources,
  and Science Issues




Page 7                                      GAO/RCED-97-58 Intellectual Property
Contents



Letter                                                                                            1


Appendix I                                                                                       10

Statistics on Patent
Pendency, Fiscal
Years 1994 and 1995
Appendix II                                                                                      16

Scope and
Methodology
Appendix III                                                                                     18

Comments From the
Department of
Commerce
Appendix IV                                                                                      22

Major Contributors to
This Report
Tables                  Table I.1: Comparison of Patent Pendency for Patents Issued or           10
                          Applications Abandoned During Fiscal Years 1994 and 1995
                        Table I.2: Comparison of Patent Pendency by Examination Group            11
                          for Patents Issued or Applications Abandoned During Fiscal
                          Years 1994 and 1995
                        Table I.3: Comparison of Patent Pendency by Examination Group            12
                          for Patents Issued During Fiscal Years 1994 and 1995
                        Table I.4: Comparison of Patent Pendency by Examination Group            13
                          for Applications Abandoned During Fiscal Years 1994 and 1995
                        Table I.5: Comparison of Patent Pendency for Applications at             14
                          One Time Subject to Secrecy Orders—Patents Issued and
                          Applications Abandoned During Fiscal Years 1994 and 1995
                        Table I.6: Comparison of Patent Pendency for Foreign Patents             14
                          Issued and Applications Abandoned During Fiscal Years 1994 and
                          1995




                        Page 8                                  GAO/RCED-97-58 Intellectual Property
Contents




Table I.7: Comparison of Patent Pendency Using Current and                15
  Original Application Filing Dates for Patents Issued or
  Applications Abandoned During Fiscal Years 1994 and 1995
Table I.8: Comparison of Patent Pendency Attributable to                  15
  Applicants for Patents Issued and Applications Abandoned
  During Fiscal Years 1994 and 1995




Abbreviations

GAO        General Accounting Office
PALM       Patent Application Location and Monitoring (system)
PTO        Patent and Trademark Office


Page 9                                   GAO/RCED-97-58 Intellectual Property
Appendix I

Statistics on Patent Pendency, Fiscal Years
1994 and 1995

Table I.1: Comparison of Patent
Pendency for Patents Issued or                                  Number of applications              Average pendency in months
Applications Abandoned During Fiscal   Applications              1994         1995      Change          1994         1995      Change
Years 1994 and 1995
                                       Issued                 113,684      114,642           958         21.3         21.0             –.3
                                       Abandoned               73,949       71,553       –2,396          18.3         17.9             –.4
                                       Total                  187,633      186,195       –1,438          20.2         19.8             –.4
                                       Source: Patent Application Location and Monitoring system, Patent and Trademark Office (PTO);
                                       GAO’s computations.




                                       Page 10                                                 GAO/RCED-97-58 Intellectual Property
                                               Appendix I
                                               Statistics on Patent Pendency, Fiscal Years
                                               1994 and 1995




Table I.2: Comparison of Patent Pendency by Examination Group for Patents Issued or Applications Abandoned During
Fiscal Years 1994 and 1995
                                                  Number of applications                 Average pendency in months
Group          Description                                1994           1995         Change             1994            1995        Change
1100           General, metallurgical,                   13,477        12,835            –642             19.7            19.2         –0.5
               inorganic, petroleum and
               electrical chemistry and
               engineering
1200           Organic chemistry drug, etc.               9,253         9,473             220             18.8            19.3          0.5
1300           Specialized chemical                       8,239         8,635             396             19.3            19.4          0.1
               industries, etc.
1500           High polymer chemistry,                   15,550        14,079          –1,471             20.2            19.4         –0.8
               plastics, coating,
               photography, etc.
1800           Biotechnology                             13,094        12,605            –489             21.5            21.6          0.1
2100           Industrial electronics,                   10,374        10,232            –142             20.5            20.9          0.4
               physics, etc.
2200           Special laws administration                4,220         5,429           1,209             24.7            24.4         –0.3
2300           Computer systems, etc.                     9,181         8,701            –480             27.6            26.2         –1.4
2400           Packages, cleaning,                       10,507         8,006          –2,501             17.2            18.9          1.7
               textiles, and geometrical
               instruments
2500           Electronic/optical systems,               14,493        15,431             938             20.6            19.6         –1.0
               etc.
2600           Communications,                           13,371        13,463                92           22.7            22.1         –0.6
               measuring, testing and
               lamp/discharge group
2900           Special designs                           17,036        16,134            –902             23.0            19.4         –3.6
3100           Handling and transporting                  8,501         9,121             620             17.8            17.5         –0.3
               media
3200           Material shaping, tools, etc.              8,646         9,132             486             17.0            17.7          0.7
3300           Medical technology,                       12,056        12,186             130             18.2            18.4          0.2
               sporting goods, etc.
3400           Solar, heat, power and fluid               8,424         9,401             977             16.9            17.4          0.5
               engineering devices
3500           Construction, petroleum                    9,764        10,325             561             18.4            18.7          0.3
               and mining engineering
               Not determined                             1,447         1,007            –440             N/A             N/A
Total                                                 187,633         186,195          –1,438             20.2            19.8         –0.4
                                               Source: Patent Application Location and Monitoring system, PTO; GAO’s computations.




                                               Page 11                                                GAO/RCED-97-58 Intellectual Property
                                               Appendix I
                                               Statistics on Patent Pendency, Fiscal Years
                                               1994 and 1995




Table I.3: Comparison of Patent Pendency by Examination Group for Patents Issued During Fiscal Years 1994 and 1995
                                                  Number of applications                 Average pendency in months
Group          Description                                1994           1995         Change             1994            1995        Change
1100           General, metallurgical,                    8,346         8,081            –265             20.7            20.3         –0.4
               inorganic, petroleum and
               electrical chemistry and
               engineering
1200           Organic chemistry drug, etc.               5,234         5,271                37           20.0            20.9          0.9
1300           Specialized chemical                       4,698         4,886             188             20.3            20.9          0.6
               industries, etc.
1500           High polymer chemistry,                    8,360         7,647            –713             21.4            20.8         –0.6
               plastics, coating,
               photography, etc.
1800           Biotechnology                              4,209         4,207                –2           25.0            25.5          0.5
2100           Industrial electronics,                    7,093         6,903            –190             21.4            21.8          0.4
               physics, etc.
2200           Special laws administration                2,964         3,714             750             25.8            25.4         –0.4
2300           Computer systems, etc.                     4,960         4,704            –256             29.0            27.6         –1.4
2400           Packages, cleaning,                        6,364         5,299          –1,065             18.9            19.6          0.7
               textiles, and geometrical
               instruments
2500           Electronic/optical systems,                9,819        10,308             489             21.4            20.5         –0.9
               etc.
2600           Communications,                            7,932         7,697            –235             24.4            23.8         –0.6
               measuring, testing and
               lamp/discharge group
2900           Special designs                           11,142        11,664             522             23.2            19.9         –3.3
3100           Handling and transporting                  5,940         6,281             341             19.0            18.7         –0.3
               media
3200           Material shaping, tools, etc.              6,106         6,264             158             18.0            18.8          0.8
3300           Medical technology,                        7,273         7,632             359             19.9            20.1          0.2
               sporting goods, etc.
3400           Solar, heat, power and fluid               6,447         6,887             440             17.8            18.4          0.6
               engineering devices
3500           Construction, petroleum                    6,792         7,186             394             19.6            20.0          0.4
               and mining engineering
               Not determined                                5              11                6           N/A             N/A
Total                                                 113,684         114,642             958             21.3            21.0         –0.3
                                               Source: Patent Application Location and Monitoring system, PTO; GAO’s computations.




                                               Page 12                                                GAO/RCED-97-58 Intellectual Property
                                               Appendix I
                                               Statistics on Patent Pendency, Fiscal Years
                                               1994 and 1995




Table I.4: Comparison of Patent Pendency by Examination Group for Applications Abandoned During Fiscal Years 1994
and 1995
                                                  Number of applications               Average pendency in months
Group          Description                                1994           1995         Change             1994            1995        Change
1100           General, metallurgical,                    5,131         4,754            –377             18.2            17.3         –0.9
               inorganic, petroleum and
               electrical chemistry and
               engineering
1200           Organic chemistry drug, etc.               4,019         4,202             183             17.2            17.3          0.1
1300           Specialized chemical                       3,541         3,749             208             18.0            17.5         –0.5
               industries, etc.
1500           High polymer chemistry,                    7,190         6,432            –758             18.8            17.9         –0.9
               plastics, coating,
               photography, etc.
1800           Biotechnology                              8,885         8,398            –487             19.9            19.7         –0.2
2100           Industrial electronics,                    3,281         3,329                48           18.6            19.1          0.5
               physics, etc.
2200           Special laws administration                1,256         1,715             459             22.3            22.3          0.0
2300           Computer systems, etc.                     4,221         3,997            –224             26.0            24.4         –1.6
2400           Packages, cleaning,                        4,143         2,707          –1,436             14.7            17.5          2.8
               textiles, and geometrical
               instruments
2500           Electronic/optical systems,                4,674         5,123             449             18.9            17.8         –1.1
               etc.
2600           Communications,                            5,439         5,766             327             20.2            19.7         –0.5
               measuring, testing and
               lamp/discharge group
2900           Special designs                            5,894         4,470          –1,424             22.5            17.9         –4.6
3100           Handling and transporting                  2,561         2,840             279             15.1            14.8         –0.3
               media
3200           Material shaping, tools, etc.              2,540         2,868             328             14.6            15.4          0.8
3300           Medical technology,                        4,783         4,554            –229             15.6            15.6          0.0
               sporting goods, etc.
3400           Solar, heat, power and fluid               1,977         2,514             537             14.1            14.6          0.5
               engineering devices
3500           Construction, petroleum                    2,972         3,139             167             15.4            15.7          0.3
               and mining engineering
               Not determined                             1,442           996            –446             N/A             N/A
Total                                                    73,949        71,553           -2,396            18.3            17.9         –0.4
                                               Source: Patent Application Location and Monitoring system, PTO; GAO’s computations.




                                               Page 13                                                GAO/RCED-97-58 Intellectual Property
                                        Appendix I
                                        Statistics on Patent Pendency, Fiscal Years
                                        1994 and 1995




Table I.5: Comparison of Patent
Pendency for Applications at One Time                                      Number                   Average pendency in months
Subject to Secrecy Orders—Patents       Applications               1994         1995     Change          1994        1995     Change
Issued and Applications Abandoned
                                        Subject to secrecy
During Fiscal Years 1994 and 1995
                                        orders
                                              Issued                 330         289          –41        67.5         75.5       8.0
                                              Abandoned              134         107          –27        51.6         74.8      23.2
                                        Total                        464         396          –68        62.9         75.3      12.4
                                        Not subject to
                                        secrecy orders
                                              Issued            113,354      114,353          999        21.2         20.9      –0.3
                                              Abandoned          73,815       71,446      –2,369         18.3         17.8      –0.5
                                        Total                   187,169      185,799      –1,370         20.1         19.7      –0.4
                                        All
                                              Issued            113,684      114,642          958        21.3         21.0      –0.3
                                              Abandoned          73,949       71,553      –2,396         18.3         17.9      –0.4
                                        Total                   187,633      186,195      –1,438         20.2         19.8      –0.4
                                        Source: Patent Application Location and Monitoring system, PTO; GAO’s computations.



Table I.6: Comparison of Patent
Pendency for Foreign Patents Issued                                        Number                   Average pendency in months
and Applications Abandoned During       Applications              1994         1995     Change          1994         1995     Change
Fiscal Years 1994 and 1995
                                        Foreign
                                              Issued            42,774       42,563         –211         21.9         21.5       –.4
                                              Abandoned         26,188       24,620       –1,568         19.2         19.1       –.1
                                        Total                   68,962       67,183       –1,779         20.9         20.6       –.3
                                        Domestic
                                              Issued            70,910       72,079        1,169         21.0         20.7       –.3
                                              Abandoned         47,761       46,933         –828         17.8         17.2       –.6
                                        Total                  118,671      119,012          341         19.7         19.3       –.4
                                        All
                                              Issued           113,684      114,642          958         21.3         21.0       –.3
                                              Abandoned         73,949       71,553       –2,396         18.3         17.9       –.4
                                        Total                  187,633      186,195       –1,438         20.2         19.8       –.4
                                        Source: Patent Application Location and Monitoring system, PTO; GAO’s computations.




                                        Page 14                                                GAO/RCED-97-58 Intellectual Property
                                          Appendix I
                                          Statistics on Patent Pendency, Fiscal Years
                                          1994 and 1995




Table I.7: Comparison of Patent Pendency Using Current and Original Application Filing Dates for Patents Issued or
Applications Abandoned During Fiscal Years 1994 and 1995
                                                                                  Pendency in months
                               Number of applications                      Current filing date                       Original filing datea
Applications                    1994          1995      Change           1994           1995    Change              1994          1995      Change
All applications
  Issued                     113,684    114,642              958          21.3          21.0         –0.3           28.0          28.5               0.5
  Abandoned                   73,949      71,553         –2,396           18.3          17.9         –0.4           28.1          29.0               0.9
Total                        187,633    186,195          –1,438           20.2          19.8         –0.4           28.0          28.7               0.7
Applications that had
parent applications
  Issued                      27,526      31,683           4,157          19.4          19.2         –0.2           46.9          46.4          –0.5
  Abandoned                   22,160      24,518           2,358          16.1          15.9         –0.2           48.5          48.2          –0.3
Total                         49,686      56,201           6,515          17.9          17.8         –0.1           47.7          47.2          –0.5
                                          a
                                           Original parent application filing date if application had a parent; current application filing date if
                                          there was no parent.

                                          Source: Patent Application Location and Monitoring system, PTO; GAO’s computations.



Table I.8: Comparison of Patent
Pendency Attributable to Applicants                                                                           Pendency in months
for Patents Issued and Applications       Actions contributing to patent pendency                           1994              1995          Change
Abandoned During Fiscal Years 1994
                                          Actions attributable to applicants
and 1995
                                               Response to office actionsa                                    3.6               3.7                  0.1
                                               Abandonment to revivalb                                        0.1               0.1                  0.0
                                                                                    b
                                               Incomplete/informal to complete                                0.6               0.8                  0.2
                                               Notice of allowance to payment of issue
                                               fee/ drawing correctionb                                       1.6               1.6                  0.0
                                               Office action to notice of appealb                             0.2               0.3                  0.1
                                                                                    b
                                               Notice of appeal to appeal brief                               0.1               0.1                  0.0
                                               Office action to abandonmentb                                  1.2               1.4                  0.2
                                          Subtotal                                                            7.4               8.0                  0.6
                                          Other                                                             12.8              11.8              –1.0
                                          Total                                                             20.2              19.8              –0.4
                                          a
                                           These statistics were based on our analysis of PTO’s patent application database for fiscal years
                                          1994 and 1995. PTO performed an independent analysis of responses to office actions for fiscal
                                          year 1995 alone and calculated a delay of 3.61 months compared with our calculation of 3.66
                                          months—a difference of only 0.05 month.
                                          b
                                              These statistics were provided directly by PTO. We did not verify their accuracy.

                                          Source: Patent Application Location and Monitoring system, PTO; GAO’s computations.




                                          Page 15                                                       GAO/RCED-97-58 Intellectual Property
Appendix II

Scope and Methodology


              To update the fiscal year 1994 patent pendency statistics in our report
              entitled Intellectual Property: Enhancements Needed in Computing and
              Reporting Patent Examination Statistics (GAO/RCED-96-190; July 15, 1996) and
              to compare them with fiscal year 1995 statistics, we relied on data
              reported through the Patent and Trademark Office’s (PTO) Patent
              Application Location and Monitoring (PALM) system. This system contains
              background information on each patent application, as well as a
              “prosecution history” that shows the date when key actions were taken on
              each application during examination.

              To determine the fiscal year 1995 statistics, we used the same
              methodology developed for the fiscal year 1994 pendency statistics
              included in our July 1996 report. Under this methodology, we first
              analyzed the periodic reports that PTO produces from the PALM system.
              While these reports previously proved useful in learning how the
              examination process works and what data were available from the
              automated system, they did not allow us to compare pendency over a full
              fiscal year for the individual categories of issued patents and abandoned
              applications. For this reason, we performed our own analysis of the
              automated data. We asked PTO to provide us with certain background
              information and prosecution histories from the PALM system for all patents
              issued and applications abandoned during fiscal year 1995. We designed
              our own automated program for analyzing PTO’s data. In this regard, we
              obtained the file layouts for one of PTO’s own automated reports (PALM
              3515) and held discussions with PTO officials familiar with the PALM system
              to ensure that we were using the same data fields to extract information
              by examination phases, examination groups, types of applications, secrecy
              orders, foreign applications, et cetera. We then extracted data and
              computed the number of applications, the average pendency, and the
              pendency range for the various subsets of information shown in the tables
              in appendix I of this report.

              Our analyses of pendency are based on PTO’s own data. We did not
              independently verify or validate the PALM system or the data we extracted
              from the system. We did, however, discuss with officials in PTO’s Search
              and Information Resources Administration office the layout of the PALM
              system, the manner by which information is added to the system, and our
              plans for extracting, collating, and analyzing the data we obtained from the
              system. We also discussed the results of our analysis of pendency with
              various PTO officials. Where possible, we compared aggregate data with
              data produced by PTO in other reports and discussed with PTO officials the
              potential reasons for any discrepancies.



              Page 16                                     GAO/RCED-97-58 Intellectual Property
Appendix II
Scope and Methodology




In commenting on our earlier report, PTO officials had provided us with
additional statistics on pendency caused by filers’ delays. While we did not
include these statistics in the pendency tables in the earlier report, we did
address them in our narrative on filers’ delays. For this report, we asked
PTO to provide us with similar data for fiscal year 1995. While we did not
verify PTO’s statistics, we did compare the data in the one
field—applicants’ responses to office actions—where we had made an
independent analysis and found that we differed by only 0.05 month.

We conducted our review from December 1996 through February 1997 in
accordance with generally accepted government auditing standards.




Page 17                                     GAO/RCED-97-58 Intellectual Property
Appendix III

Comments From the Department of
Commerce




               Page 18       GAO/RCED-97-58 Intellectual Property
Appendix III
Comments From the Department of
Commerce




Page 19                           GAO/RCED-97-58 Intellectual Property
Appendix III
Comments From the Department of
Commerce




Page 20                           GAO/RCED-97-58 Intellectual Property
Appendix III
Comments From the Department of
Commerce




Page 21                           GAO/RCED-97-58 Intellectual Property
Appendix IV

Major Contributors to This Report


                       Frankie Fulton
Resources,             John P. Hunt, Jr.
Community and          Mitchell Karpman
Economic               Paul Rhodes
                       Julie Schneiberg
Development Division   Mindi Weisenbloom




(141020)               Page 22             GAO/RCED-97-58 Intellectual Property
Ordering Information

The first copy of each GAO report and testimony is free.
Additional copies are $2 each. Orders should be sent to the
following address, accompanied by a check or money order
made out to the Superintendent of Documents, when
necessary. VISA and MasterCard credit cards are accepted, also.
Orders for 100 or more copies to be mailed to a single address
are discounted 25 percent.

Orders by mail:

U.S. General Accounting Office
P.O. Box 6015
Gaithersburg, MD 20884-6015

or visit:

Room 1100
700 4th St. NW (corner of 4th and G Sts. NW)
U.S. General Accounting Office
Washington, DC

Orders may also be placed by calling (202) 512-6000
or by using fax number (301) 258-4066, or TDD (301) 413-0006.

Each day, GAO issues a list of newly available reports and
testimony. To receive facsimile copies of the daily list or any
list from the past 30 days, please call (202) 512-6000 using a
touchtone phone. A recorded menu will provide information on
how to obtain these lists.

For information on how to access GAO reports on the INTERNET,
send an e-mail message with "info" in the body to:

info@www.gao.gov

or visit GAO’s World Wide Web Home Page at:

http://www.gao.gov




PRINTED ON    RECYCLED PAPER
United States                       Bulk Rate
General Accounting Office      Postage & Fees Paid
Washington, D.C. 20548-0001           GAO
                                 Permit No. G100
Official Business
Penalty for Private Use $300

Address Correction Requested