1. THE USPTO 21 ST CENTURY STRATEGIC PLAN – A BRIEF REVIEW AND UPDATE RICK D. NYDEGGER PRESIDENT-ELECT AMERICAN INTELLECTUAL PROPERTY LAW ASSOCIATION NICE, FRANCE – APRIL 9, 2003

2. THE USPTO’S 21 ST CENTURY PLAN – JUNE 3, 2002 A NEW MULT-TRACK EXAMINATION SYSTEM OUTSOURCING PRIOR ART SEARCHES A STATUTORY DEFERRED EXAMINATION PROCEDURE A NEW “FLEXIBLE FEE” SYSTEM DESIGNED TO DISCOURAGE CERTAIN KINDS OF APPLICANT BEHAVIORS

3. WHERE ARE WE NOW?

4. MAJOR CHANGES ANNOUNCED IN THE FEB. 3, 2003 VERSION MULT-TRACK EXAMINATION – NOW HAS FIVE TRACKS RATHER THAN FOUR – THE MICRO-ENTITY TRACK NO LONGER EXISTS – THE REQUIREMENT FOR “MANDATORY IDS” IS GONE OUTSOURCING THE PRIOR ART SEARCH – USPTO WILL CONTRACT WITH PRIVATE SEARCH FIRMS (“CSS”) IN LIEU OF PREVIOUSLY PROPOSED REQUIREMENT FOR APPLICANT-COMMISSIONED SEARCH REPORTS DEFERRED EXAMINATION – THE PLAN NOW ENVISIONS AN “ADMINISTRATIVE ALTERNATIVE” TO THE PREVIOUSLY PROPOSED STATUTORY DEFERRED EXAMINATION SYSTEM NEW ACCELERATED EXAMINATION OPTION FEES – ARE PROPORTIONAL TO INCREASED PROCESSING COSTS FOR ADDITIONAL CLAIMS AND LONG SPECIFICATIONS; “PUNITIVE” FEES ELIMINATED

5. Multi-Track Examination – Tracks 1 & 2 No Previous Search Done, or No Previous Search Done that can be Exploited Both Tracks – US Non-provisional, no previous search that can be exploited – National Stage of PCT, no previous search that can be exploited, e.g., U.S. national stage entry prior to ISR/IPRP or ISR/IPRP by an ISA not having a bilateral agreement with USPTO. ISR/IPRP treated as an IDS in this instance Track 1: USPTO examiner does search/examination – Serves as a transition track until Track 2 processing becomes predominant. Track 2: USPTO subcontracts search to CSS, examiner completes examination; search fee set to recover average USPTO search cost. – Applicant to get copy of CSS results prior to examination, may expressly abandon before examination. – Reliance on CSS searches will be tested and piloted for proof of concept

6. Multi-Track Examination-Track 3 US Non-Provisional Application, Previous Search Done that can be Exploited Track 3: USPTO examiner exploits to the greatest extent possible the previous search, updating and supplementing the search where necessary, with supervisory approval; examiner then does examination using these search results – US Non-provisional, or – 1 st filing in foreign IPO with U.S. 2 nd filing under Paris Convention, and U.S. has bilateral search exchange agreement with foreign IPO – Exploitation of foreign IPO searches will be tested and piloted for proof of concept (Limited search reliance pilot program with EPO/JPO – started 1/2003)

7. Multi-Track Examination - Tracks 4 & 5 Multi-Track Examination - Tracks 4 & 5 PCT Applications, International Stage and National Stage Entry Both Tracks: U.S. international/national stage entry after ISR/IPRP; USPTO examiner exploits to the greatest extent possible the previous search, updating and supplementing the search where necessary, with supervisory approval; examiner then does examination using these search results – For Track 4 - USPTO does ISR/IPRP or IPER (but note that the USPTO is pursuing contracting out ISR/IPRP); fee to be reduced if there was a prior filed US Non-Provisional application that the USPTO has already searched – For Track 5 - ISR/IPRP or IPER done by IPO having a bilateral search exchange agreement with USPTO

8. ADMINISTRATIVE ALTERNATIVE TO THE DEFERRED EXAMINATION PROCEDURE APPLIES TO ALL TRACKS SEARCH – PRIOR TO 18 MONTH PUBLICATION, PTO WILL REQUIRE APPLICANT TO CONFIRM WHETHER SEARCH IS TO BE DONE; IF NOT, PARTIAL REFUND OF SEARCH AND EXAMINATION FEES – IF SEARCH IS TO BE DONE, PTO WILL ATTEMPT TO CONDUCT SEARCH SO THAT IT IS AVAILABLE FOR 18 MONTH PUBLICATION TRACK 1 – DONE BY US EXAMINER (18 MO. PUB. COULD BE A PROBLEM FOR THIS TRACK DEPENDING ON BACKLOG) TRACK 2 – DONE BY CSS TRACK 3 – DONE BY FOREIGN IP OFFICE TRACKS 4 & 5 – DONE BY ISA (EITHER US (TRACK 4) OR QUALIFIED ISA WITH BILATERAL AGREEMENT WITH US (TRACK 5)

9. ADMINISTRATIVE ALTERNATIVE TO PROCEDURE FOR DEFERRED EXAMINATION – cont. EXAMINATION – SEARCH RESULTS SENT OUT TO APPLICA NT PRIOR TO EXAMINATION – DEPENDING ON BACKLOG IN EACH GROUP ART UNIT, PTO WILL SEND OUT REQUEST FOR APPLICANT TO CONFIRM WHETHER EXAMINATION IS TO BE CONDUCTED, SOMETIME AROUND 3 MONTHS PRIOR TO WHEN FAOM IS EXPECTED – IF APPLICANT ELECTS TO WITHDRAW FROM EXAMINATION, PARTIAL REFUND OF EXAMINATION PORTION OF THE FEE PAID AT FILING, OTHERWISE, EXAMINATION PROCEEDS

10. NEW ACCELERATED EXAMINATION OPTION (“ROCKET DOCKET”) IN ADDITION TO THE MULTI-TRACK EXAMINATION SYSTEM THE CURRENT PLAN ALSO ADDS AN “ACCELERATED EXAMINATION” OPTION (“ROCKET DOCKET”) – PENDENCY WILL NOT EXCEED 12 MONTHS FROM FILING – WILL REQUIRE A SUBSTANTIAL FEE (NOT PART OF CURRENT FEE BILL) IN ORDER TO LIMIT OVERALL NUMBER OF APPLICANTS TO NOT MORE THAN ABOUT 5% ELECTRONIC FILING AND PROSECUTION (2 MONTH SHORTENED RESPONSE TIMES, NO EXTENSIONS) PRE-EXAMINATION SEARCH BY APPLICANT NO MORE THAN 20 CLAIMS TOTAL, 3 INDEPENDENT CLAIMS

11. CURRENT FEES NOW LOOK LIKE THIS

12. WHERE ARE WE GOING FROM HERE?

13. USER RESPONSE TO THE USPTO’S CURRENT VERSION OF THE 21 ST CENTURY PLAN NOV. 22, 2002 –JOINT STATEMENT BY VARIOUS OF THE USER GROUPS TO OMB AND DOC – “While previously expressing reservations about certain aspects of the Strategic Plan... in light of proposed refinements... we whole-heartedly endorse the Plan.” – “We are fully prepared to support a statutory fee increase of this magnitude [e.g., $1.5 Billion] to implement the Plan... based upon the assumption that the Bush Administration will effectively address the issue of diversion.”

14. WHAT IS THE STATUS OF THE FEE BILL? THE BIGGEST PROBLEM CONTINUES TO BE FEE DIVERSION – IN A PRESS RELEASE ISSUED WITH THE PRESIDENT’S FY04 BUDGET, DOC MADE THIS STATEMENT “The President has reduced the annual practice of "fee diversion,”....This bold step is being taken as part of Secretary Evans' efforts to create the conditions for economic growth and continued technological leadership by working to eliminate the practice of using USPTO revenues for unrelated federal programs.” – HOWEVER, THE CURRENT FEE BILL STILL CONTAINS $100 MILLION IN DIVERTED FEE REVENUE FOR FUNDING NON-PTO USES, SUCH AS HOMELAND DEFENSE ETC.

15. THANK YOU!