Patent and Trademark Office Needs To Better Manage Automation of Its Trademark Operations

IMTEC-85-8: Published: Apr 19, 1985. Publicly Released: Apr 19, 1985.

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GAO reviewed the automation of trademark operations at the Department of Commerce's Patent and Trademark Office (PTO), focusing on: (1) system user requirements; (2) a 1982 trademark automation cost/benefit analysis; and (3) contracting practices and procedures for acquiring the automated trademark systems.

GAO found that, in its 1982 Automation Master Plan, PTO established major goals for its trademark automation system that included improved registration quality, cost-effectiveness, and reduced application processing time. PTO acquired its automatic data processing (ADP) services and equipment through monetary procurements; however, it acquired the associated databases through nonmonetary arrangements, called exchange agreements, with firms that provide trademark-related services. Management problems have hindered PTO in reaching its goals, because it did not: (1) thoroughly analyze or develop the functional requirements for the use of its three automated systems; (2) adequately assess the costs and benefits of the automated systems; (3) properly manage the three systems; and (4) fully test the search and retrieval system before accepting it from the contractor. Although PTO has attempted to correct some problems through exchange agreement renegotiation, GAO is concerned that PTO may choose to execute future exchange agreements without complying with applicable procurement regulations and, therefore, evade the procedures designed to ensure maximum competitiveness and cost-effectiveness in its procurement actions.

Matter for Congressional Consideration

  1. Status: Closed - Implemented

    Comments: Commerce implemented the exchange agreement recommendations.

    Matter: If PTO does not take steps to implement the recommendations regarding exchange agreements, Congress should consider withdrawing the PTO exchange agreement authority for ADP resource acquisitions.

Recommendations for Executive Action

  1. Status: Closed - Implemented

    Comments: PTO will maintain its paper files in 1986 and has requested funds to maintain them for 1987. Commerce stated that the paper files will be maintained until the user fee issue is resolved.

    Recommendation: The Secretary of Commerce should direct PTO to maintain its manual trademark system until the capabilities of its automated systems are at least equal to the manual system.

    Agency Affected: Department of Commerce

  2. Status: Closed - Implemented

    Comments: Commerce implemented the exchange agreement recommendations. In addition, the Office of the Secretary is monitoring PTO automation procurements.

    Recommendation: Until the Secretary of Commerce is satisfied that PTO has appropriately reanalyzed the costs and benefits of the PTO trademark automation and reviewed the system's specifications, he should require that any significant procurement actions regarding trademark automation efforts, including new procurements as well as modifications to or renewals of existing procurements, undergo departmental review and approval. This should include exchange agreement procurements.

    Agency Affected: Department of Commerce

  3. Status: Closed - Implemented

    Comments: Commerce implemented the exchange agreement recommendations.

    Recommendation: To ensure appropriate oversight, the Secretary of Commerce should review and approve PTO responses to the recommendations regarding exchange agreements to ensure that they are properly implemented.

    Agency Affected: Department of Commerce

  4. Status: Closed - Implemented

    Comments: On October 22, 1985, Commerce's Deputy Secretary established guidelines for PTO to follow.

    Recommendation: To help ensure that automation goals and appropriate procurement practices are met, the Secretary of Commerce should direct the Acting Commissioner of Patents and Trademarks to establish criteria for determining when future ADP resource exchange agreements should be used and develop procedures to ensure that these exchanges comply with applicable federal procurement regulations. Such criteria and procedures should also require that PTO thoroughly analyze the value of future agreements and fully assess their impacts on PTO and the public.

    Agency Affected: Department of Commerce

  5. Status: Closed - Implemented

    Comments: Commerce implemented the exchange agreement recommendations.

    Recommendation: To help ensure that automation goals and appropriate procurement practices are met, the Secretary of Commerce should direct the Acting Commissioner of Patents and Trademarks to make all reasonable efforts to expeditiously and economically acquire unrestricted ownership of the trademark databases obtained through the exchange agreements.

    Agency Affected: Department of Commerce

  6. Status: Closed - Implemented

    Comments: Revised system specifications were finished with the completion of two documents: (1) January 1986, Second Edition, Automation Master Plan; and (2) March 1986, Functional Requirements Document.

    Recommendation: To help ensure that automation goals and appropriate procurement practices are met, the Secretary of Commerce should direct the Acting Commissioner of Patents and Trademarks to review and, if necessary, revise PTO systems specifications to ensure that all key requirements to support the systems' use by PTO personnel and by the public are met.

    Agency Affected: Department of Commerce

  7. Status: Closed - Implemented

    Comments: In January 1986, PTO completed its revised cost/benefit analysis and included it in its Second Edition, Automation Master Plan.

    Recommendation: To help ensure that automation goals and appropriate procurement practices are met, the Secretary of Commerce should direct the Acting Commissioner of Patents and Trademarks to reanalyze thoroughly the cost benefits of PTO trademark automation activities and ensure that any additional expenditures are justified. This analysis should: (1) include updated cost information estimated according to standard practices; (2) incorporate the views of PTO officials; and (3) include support for the key assumptions.

    Agency Affected: Department of Commerce

 

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