1. Application Filings and Examiner Production

2. UPR Applications Filed 0 50000 100000 150000 200000 250000 300000 350000 400000 19951996199719981999200020012002200320042005  FY 05 plan 375,080 (5.5% above FY 04)  FY 05 actual 384,228 (8.1% above FY04)  2.6% over plan 9

3. Production 1 “ UPR” = Utility, Plant, and Reissue Applications. 2 “ FAOM” = First Action on the Merits – first action count by an examiner after the filing of an application (does not include restrictions or other miscellaneous actions). 3 “ Disposal” = An examiner allowance, abandonment, or disposals following a board decision. 4 “ Production Unit” = First action count plus disposal count divided by 2. 5 “ PCT” = Patent Cooperation Treaty. PCT applications are processed differently and tracked separately from US National stage applications. For FY 05, 15,147 PU’s is 35,389 processed applications. 22,916 296,535 295,456 297,614 FY 05 Target 288,316287,752UPR Production Units 4 15,147 279,345 297,287 FY 05 16,882PCT Production Units 5 FY 04 288,315UPR 1 FAOM 2 287,188UPR Disposals 3 10

4. ... vs the Backlog PENDENCY

5. First Action Pendency by Art Areas 30.9 52.1 24.3 50.4 39.7 30.8 27.7 Pendency 1 (months) 3723 – Tools & Metal Working 3612 – Land Vehicles 2833 – Electrical Connectors 2651 – Dynamic Information Storage & Retrieval 2125 – Manufacturing Control Systems and Chemical/ Mechanical/Electrical Control 1752 – Radiation Imagery 1620 – Heterocyclic Compounds and Uses Low Pendency Art Areas 10.9 12.0 8.8 16.1 20.0 12.1 16.9 Pendency 1 (months) 3731 – Surgery: Cutting, Clamping, Suturing 3628 – Finance & Banking, Accounting 2836 – Control Circuits 2617 – Interactive Video Distribution 2123 – Simulation and Modeling, Emulation of Computer Components 1743 – Analytic Chemistry & Wave Energy 1640 – Immunology, Receptor/ Ligands, Cytokines, Recombinant Hormones, and Molecular Biology High Pendency Art Areas 1 “Average 1 st action pendency” is the average age from filing to first action for a newly filed application, completed during October-December 2005. 12

6. Inventory by Art Examples 38-47 25-130 22 111 46 34 38-51 Months of Inventory* 3742 – Thermal and Combustion Technology 3651 – Conveying 2831 – Electrical Conductors 2651, 2653 – Information Storage and Retrieval 2125 – Manufacturing Control Systems and Chemical/ Mechanical/Electrical Control 1734 – Adhesive Bonding and Coating Apparatus 1620 – Organic Chemistry Low Inventory Art Areas 8 12 8 10 15 Months of Inventory* 3731 and 3737 – Medical Instruments, Diagnostic Equipment 3620 – Business Methods 2836 – Control Circuits 2611 – Interactive Video Distribution 2127 – Computer Task Management 1753 – Radiation Imagery 1614, 1615, and 1617 – Drugs, Bio-affecting and Body Treatment High Inventory Art Areas * The number of months it would take to reach a first action on the merits (e.g., an action addressing patentability issues) on a new application filed in July 2005 at today’s production rate. Today’s production rate means that there are no changes in production due to hiring, attrition, changes to examination processing or examination efficiencies, and that applications are taken up in the order of filing in the given art unit/area. Of course, USPTO is taking aggressive steps to ensure changes that will significantly lower the inventory rates in high-inventory art areas. 13

7. TC Application Inventory 1 “ New Application inventory” is the number of new applications designated or assigned to a technology center awaiting a first action. 2 “ Overall Pending Application inventory” is the total number of applications designated or assigned to a technology center in an active status. Includes new applications; rejected awaiting response; amended; under appeal or interference; suspended; reexams and allowed applications awaiting grant publication. *Total inventory includes applications not assigned to a particular TC, awaiting processing either pre- or post-examination. 27,599809,323108,039101,097137,458138,822102,440105,44795,006 Overall Pending Applications 2 9/30/2004 18,451508,87865,00556,73877,65197,38071,77863,92355,402 New Applications 1 9/30/2004 38,104932,300130,168117,045159,687167,721117,728120,767107,647 Overall Pending Applications 2 9/30/2005 24,534586,58083,22570,35494,425115,58576,52972,69762,644 New Applications 1 9/30/2005 3700Total*Design36002800260021001700160014

8. Patent Quality (Shared Responsibility)

9. Quality of Products – FY 05 *Compliance and error rates as measured by OPQA. 1 Compliance is the percent of office actions reviewed and found to be free of any in-process examination deficiency (an error that has significant adverse impact on patent prosecution). 2 Patent allowance error rate is the percent of allowed applications reviewed having at least one claim which is considered unpatentable on a basis for which a court would hold a patent invalid. “Allowance” occurs before a patent is issued, so these errors are caught before any patent is actually granted. 5.32% 82.0% FY 04 Fiscal Year 2005 4.55% 86.2% FY 05 4.0% 84.0% FY 05 Target 1.6%6.43%4.94%4.43%2.25%3.56%6.46%4.88% Patent Allowance Error Rate 2* 94.3%86.6%84.4%90.9%84.7%88.1%82.9%81.7% Patent In-Process Examination Compliance Rate 1* 3700Design260028003600210017001600 16

10. Re-Work

11. Technology Centers Rework* Statistics * Rework first actions are those actions that are in a Continuing (CONs and CIPs), RCE, CPA or 129(a) applications (excludes Divisionals). 18

12. Hiring and Retention

13. Hires and Attritions 1600170021002600280036003700CorpsDesign FY 04 Hires753511511631264544315 FY 04 Attritions302658825843393364 FY 05 BOY Examiner Staff 417440563658742422439368172 FY 05 Hiring101582251691849113195919 FY 05 Attrits4239939254555042510 FY 06 Hiring Goal7535256 178100 100020 FY 06 hires (1/25/06)301975624022212690 FY05 Hires as a Percent of Examiner Staffing in the TC 24%13%40%26%25%22%30%26% 20

14. Markush Practice

15. 1.A cell adhesion protein of formula (1), A-(B)-(C)-(D) n -E or a pharmaceutically acceptable derivative thereof, wherein... Markush Practice 22

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21. Production We Can Not Hire Our Way Out !!!

22. 200,000 250,000 300,000 350,000 400,000 450,000 500,000 550,000 600,000 200220032004200520062007200820092010 Without Strategic Plan 1,000 Hires & Lower Attrition Rate Plus Claims & Continuation Limits Plus Patentability Reports Historic Production 29

23. Contact Information John Doll Commissioner for Patents e-mail:john.doll@uspto.govjohn.doll@uspto.gov Phone: 571 272 8250 30

24. John Doll – Commissioner for Patents February 1, 2006

25. Pendency Projections

26. Pendency Using FY 2005 Actual Filings at 8.1% 5050

27. 5151

28. 5252

29. 5353

30. 5454

31. Stats and Stuff

32. Total Continuation Filing Rates *Straight Continuations 37 CFR §1.53 (b)(1) – No Divisionals or CIPs – as of 1/17/06 56

33. Distribution of Independent Claims at Filing 0% 10% 20% 30% 40% 50% 1 2~34~6 7~10 11~20 21+ FY 2004FY 2005 57

34. Distribution of Total Claims at Filing 0% 10% 20% 30% 40% 1~10 11~2021~2526~3031~4041~5051~60 61~100 101+ FY 2004FY 2005 58

35. Total Claims at Filing and Issue FY 1990FY 1999FY 2005 0 3,000,000 6,000,000 9,000,000 0 8 16 24 Claims FiledClaims IssuedAverage Claims Filed 59

36. Distribution of the Number of References Cited in Applications 0 500 1,000 1,500 2,000 2,500 3,000 3,500 None 1~34~5 6~10 11~2021~3031~40 >40 Sampling done April-June 2005 60