The U.S. Patent and Trademark Office recently released its Performance and Accountability Report for Fiscal Year (FY) 2014.  In contrast with last year's report, the 2014 report notes that the Office issued a new strategic plan last year:  the 2014-2018 Strategic Plan.  The report indicates that the 2014-2018 Strategic Plan "demonstrates the progress made to date by building on the tangible successes of recent years with a focus on achieving the USPTO's vision as a global IP leader by:

• Establishing the optimal pendency and quality levels for both patents and trademarks that will enable the USPTO to operate efficiently and effectively within the expectations of the IP community;
• Effectively administering the provisions of the AIA;
• Continuing to transform the USPTO with next-generation technology and services;
• Maintaining a strong and diverse leadership team, agile management structure, and a diverse and engaged cadre of employees in achieving the agency’s mission and vision;
• Continuing to work with other government agencies, Congress, and USPTO's global partners to establish IP systems that benefit innovation, create jobs, and lead to strong economies around the world; and
• Recruiting and retaining the highest quality employees to accomplish the agency’s important work."

As in the previous 2010-2015 Strategic Plan, the Office's 2014-2018 Strategic Plan sets forth three strategic goals and one management goal in support of the Office's mission to foster innovation, competitiveness and economic growth, domestically and abroad by delivering high quality and timely examination of patent and trademark applications, guiding domestic and international intellectual property policy, and delivering intellectual property information and education worldwide, with a highly-skilled, diverse workforce.

The 2014-2018 Strategic Plan specifies eleven performance outcome measures for which the Office has developed annual performance targets.  According to the report, the Office met its annual performance targets for eight of the eleven performance targets.  Unfortunately, all three of the targets that were missed fell within the first strategic goal, which concerns the optimization of patent quality and timeliness.  In particular, average first action pendency was 18.4 months (higher than the 17.4 month target), average total pendency was 27.4 months (higher than the 26.7 month target), and patent quality composite score was 75.0 (lower than the 83 to 91 target).

The last performance target is new to the report, replacing the percent of patent applications that were filed electronically (in the 2013 report, the Office noted that 98.1% of patent applications were filed electronically, which left little room for improvement).  The 2014 report notes that the Patent Quality Composite Score is a quality metric composed of seven total factors that take into account stakeholder comments.  In particular, the seven factors measure:

(a) the quality of the action setting forth the final disposition of the application; (b) the quality of the actions taken during the course of the examination; (c) the perceived quality of the patent process as measured through external quality surveys of applicants and practitioners; (d) the quality of the examiner’s initial search; (e) the degree to which the first action on the merits follows best examination practices; (f) the degree to which global USPTO data are indicative of compact, robust prosecution; and (g) the degree to which patent prosecution quality is reflected in the perceptions of the examination corps as measured by internal quality surveys.

Table 3 of the report provides data for the patent-related performance targets for FY 2010 to FY 2014 (click on any table to expand):

The report also presents data for the following patent-related performance targets:  patent average first action pendency for FY 2009 to FY 2014 (upper panel) and patent average total pendency for FY 2009 to FY 2014 (lower panel) (as for the third patent performance target, the report notes that because the Patent Quality Composite Score has only three years of recorded results, "the measure is presently unsuitable for trend analysis"):

The report notes that the number of applications filed increased from 601,464 in FY 2013 to 618,330 in FY 2014, which constituted a 2.7% increase in filings.  This followed a 6.0% increase in application filings in FY 2013.

Although the Office accepted more than 600,000 patent applications for the second straight year and topped 500,000 applications for the fifth consecutive year (see Table 2 below), the number of applications awaiting action also increased from 616,409 in FY 2013 to 642,949 in FY 2014 (see Table 3 below).  Prior to FY 2014, the number of applications awaiting action had dropped in five consecutive years.  The total number of pending applications, however, decreased from 1,148,823 in FY 2013 to 1,127,7013 in FY 2014.

Utility patent issuances were up significantly in FY 2014, rising from 265,979 in FY 2013 to 303,931 in FY 2014.  It was the fifth straight year that the Office issued more than 200,000 utility patents (having issued 207,915 patents in FY 2010, 221,350 patents in FY 2011, and 246,464 patents in FY 2012), and the fifth straight increase.

As noted above, with respect to first action and total pendency, the results in FY 2014 were below the Office's targets and the goals for FY 2015 and FY 2016 present even tougher challenges.  For first action pendency, the annual performance target drops from 17.4 months for FY 2014 (which the Office failed to meet) to 16.6 months for FY 2015 and 14.6 months for FY 2016, and for total pendency, the annual performance target drops from 26.7 months in FY 2014 (which the Office also failed to meet) to 27.8 months in FY 2015 and 24.6 months in FY 2016.

For biotechnology and organic chemistry applications, average first action pendency reversed last year's gains, rising from 13.4 months in FY 2013 to 15.0 months in FY 2014 (average first action pendency for these applications was 23.8 months in FY 2011 and 17.8 months in FY 2012).  Total average pendency for biotechnology and organic chemistry applications, however, once again improved, falling from 27.5 months in FY 2013 to 26.2 months in FY 2014 (total average pendency for these applications was 33.6 months in FY 2011 and 30.0 months in FY 2012).  Both pendency measures for biotechnology and organic chemistry applications for FY 2014 were below the Office's overall averages of 18.4 months and 27.4 months, respectively.  No other Technology Center posted a better first action pendency or total average pendency than TC 1600.

For additional information regarding this and other related topics, please see:

• "USPTO Releases Performance and Accountability Report for FY 2013," January 9, 2014
• "USPTO Releases Performance and Accountability Report for FY 2012," November 28, 2012
• "USPTO Releases Performance and Accountability Report for FY 2011," November 30, 2011
• "USPTO Releases 2010 Performance and Accountability Report," November 17, 2010
• "USPTO Announces 'Highest Performance Levels in Agency's History' in 2008," November 18, 2008
• "USPTO Announces 'Record Breaking' 2007 Performance," November 15, 2007
• "Patent Office Announces Record-Breaking Year," December 27, 2006