Original: english

PROGRAM 5 THE PCT SYSTEM

OVERVIEW OF PROGRESS IN 2014

1. 
   The International Bureau (IB) received approximately 217,700 record copies in 2014, representing an increase of seven per cent compared to 2013. The share of fully electronic filings continued to increase in 2014 and now represents 91 per cent of total filings. While English accounts for the majority of filings with 51.6 per cent in 2014, the shares of Asian languages have increased over the past decade. The combined share of the PCT applications filed in Japanese, Chinese and Korean has increased from 29.5 per cent in 2009 to 34.5 per cent in 2012, and has remained stable from 2012 to 2014. 
   

2. 
   Use of the ePCT system increased significantly in 2014, as applicants and Offices became increasingly aware of the system. The ePCT-filing functionality, which in 2013 was only available to the receiving Office of the IB, was made accessible in 2014 to all receiving Offices willing to receive and process international applications--by the end of 2014, 10 receiving Offices had received applications filed via ePCT filing, including from developing countries such as Brazil, India, and Malaysia. Other countries were in various stages of testing, while many of the receiving Offices and International Authorities allowed for submission of post-filing documents via ePCT.
   

3. 
   At its seventh session, held in June 2014, the PCT Working Group continued its discussions on a number of proposals aimed at improving the functioning of the PCT system, in line with the recommendations, endorsed by the Working Group at its third session. Particular achievements in 2014 included agreement on new eligibility criteria for fee reductions for applicants from certain countries, which expanded the number of developing countries and LDCs benefitting from such fee reductions. Member States further concluded their discussions on possible fee reductions for small and medium-sized enterprises (SMEs), agreeing that there was no clear way forward and that no further work on this issue would thus take place until a Member State would make a concrete proposal. It was agreed that Discussions among Member States on possible fee reductions for universities and not-for-profit research institutes, especially but not limited to those from developing countries and LDCs, would continue in 2015.
   

4. 
   In addition, Member States agreed on a revised procedure for the appointment of new International Searching and Preliminary Examining Authorities and advanced discussions on how to improve quality and timeliness of PCT work products (international search and preliminary examination reports). They also noted progress towards acceptance of metrics for measuring the overall performance of the PCT system, and in particular, as to the quality of PCT work products.
   

5. 
   The Program continued to devote an important part of its work and resources to technical cooperation and assistance to developing countries and LDCs. Training and capacity building activities were conducted with the goal of assisting Member States to strengthen national capacity for protection of national creativity and innovation, in accordance with the DA. The activities were demand-driven, development-oriented and transparent. They were developed in coordination with the local organizers, taking into account the level of PCT awareness, technical knowledge, and PCT-related skills of the participants. These activities contributed to strengthening the capacities of PCT Member States and States considering accession to the PCT by enhancing local knowledge of and skills in utilizing the PCT System.
   

6. 
   Awareness of the PCT among users and potential users was enhanced in 2014 through a variety of training and outreach activities (53 seminars, 54 presentations, 17 webinars and 33 user visits). In addition, the IB responded to 12,426 PCT-related inquiries from PCT users and potential users (an average of 50 inquiries per day) and resolved 1,233 “special handling” cases during the year.
   

7. 
   The IB continued to improve and expand automation of certain processes relating to formalities examination of PCT international applications. In addition to the applications filed electronically in XML and PDF format, the IB made significant progress in automatically processing the International Search Reports and Written Opinions received from China and the European Patent Office in XML format. This noticeably improved the productivity and the quality of the formalities examination of PCT international applications, which enabled the IB to absorb the continued workload increase with the same or fewer staff, while maintaining a high quality of service. Productivity, measured by the number of PCT publications divided by the number of staff, increased by 18 per cent in 2014 over 2013, and the overall quality, as measured by the aggregate index, improved markedly from 87.5 per cent in 2013 to 93.1 per cent in 2014.
   

8. 
   The IB also made progress in making translation workflow management more flexible and secure as well as promoting translation reuse and automating translation distribution.
   

PERFORMANCE DATA

RESOURCE UTILIZATION

A. Budget after Transfers 2014/15

9. 
   The overall decrease in the Budget after Transfers is primarily due to:
   

• 
  an increase in productivity that resulted in efficiency gains and lower overall costs for the processing of international applications;
  
• 
  more efficient use of non-personnel resources through enhanced processing of financial commitments for the outsourcing of translation services; and,
  
• 
  the transfer of resources to Program 25 to fund developments for the WIPO Pearl Terminology database.
  

10. 
    The adjustments in the Budget after Transfers between Results are mainly due to reallocation of personnel resources.
    

B. Budget utilization 2014

11. 
    Budget utilization is within the expected range of 40-60 per cent for the first year of the biennium and is on track.
    

Program 5 Annex: Indicators of PCT Operations

PERFORMANCE INDICATORS FOR THE EXPECTED RESULT

1. 
   As background for the performance indicators for the expected result “improved productivity and service quality of PCT operations”, the evolution of the following factors need to be considered:
   

• 
  The PCT workloads;
  
• 
  The language distribution of those workloads;
  
• 
  The number of staff assigned to process those workloads; and
  
• 
  The level of automation.
  

2. 
   The workloads are tracked on the basis of the yearly number of record copies received by the IB¹⁰.
   

• 
  The IB received approximately 217,700 record copies in 2014, representing an increase of 7 per cent compared to 2013.
  
• 
  The share of fully electronic filing methods kept increasing in 2014 and now represents 91 per cent of total filings.
  

3. 
   One fundamental development driving change in the IB is the increasing language diversity of filings, resulting, in particular, from continued increased usage of the PCT System in East Asian countries.
   

4. 
   As can be observed, while English accounts for the majority of filing, with 51.6 per cent of filings in 2014, the shares of Asian languages have increased over the past decade. The combined share of the PCT applications filed in Japanese, Chinese and Korean has increased from 29.5 per cent in 2009 to 34.5 per cent in 2012. This share has remained stable from 2012 to 2014. Zooming in on languages other than English provides the following picture:
   

5. 
   The sharp increase of applications filed in Asian languages in the last five years put a considerable strain on the IB due to the limited number of staff resources able to work in these languages. Mitigation for this issue is automation of certain tasks and recruitment of staff able to work in these languages.
   

6. 
   The chart below shows the number of PCT Operations staff since 2001, in Full Time Staff Equivalent (FTSE  total number of full-time staff plus the full-time equivalent of part-time staff).
   

• 
  The PCT Operations Division’s personnel further decreased in 2014.
  

7. 
   The IB’s productivity in processing PCT applications can be measured by the unit cost of processing, defined as the average total cost of publishing a PCT application. Average total cost is determined by total direct PCT system expenditure (expenditure incurred by the IB in the administration of the PCT system and related Programs), plus a proportion of indirect expenditure on support and management activities (e.g., buildings and information technology, among others). Indirect costs are weighted to take into account only the share attributable to the PCT system. The unit cost thus includes the cost of all PCT activities, including translation, communication, management and others.
   

8. 
   The methodology to compute the unit cost was revised in 2013 in order to align it with other WIPO unit/union cost calculations and to better capture a fast changing environment. For example, the old method, which was designed in 2007, included a cost of storage (over 30 years) in warehouses, whereas paper filings (including PCT EASY filings) accounted for less than 10 per cent of filings in 2013. The 2012 PCT unit cost has been calculated using both methods. The 2012 unit cost amounted to 680 Swiss francs using the old method and to 712 Swiss francs using the new method. The 32 Swiss francs difference is due to the new method for allocating indirect costs.
   

9. 
   Formally, unit cost is defined as:
   

10. 
    The graphs below depict the evolution of the unit cost of processing from 2004 to 2012 using the old method and from 2012 to 2014 using the new method, including a breakdown of the contribution of direct and indirect costs.
    

Old method	New method

• 
  The average cost of processing a published PCT application was 662 Swiss francs in 2014, representing a decrease of 8.3 per cent compared to 2013. This decrease is due to various efficiency measures including automation.
  

• 
  The average cost of processing a published PCT application calculated by the old method decreased by an average of 5 per cent per year from 1,042 Swiss francs in 2004 to 680 Swiss francs in 2012.
  

11. 
    The definition of staff productivity is output (i.e., the number of PCT publications) divided by the number of staff for formalities examination.
    

• 
  Historically, productivity of formalities examination has increased, mainly due to automation which has permitted the processing of much larger workloads with less or equal staff.
  

12. 
    In order to measure the quality of the work performed by the IB in a simple and comprehensive manner, the IB has developed an aggregate quality index, calculated as the average of four lead quality indicators. Three of these indicators are based on the timeliness of key transactions: acknowledgement of receipt of the PCT application, publication, and republication. The fourth indicator reflects errors made during the processing of PCT applications.
    

• 
  The overall quality, as measured by the aggregate index, improved markedly from an average of 81 per cent in 2007 to 93.1 per cent in 2014.
  

• 
  The remarkable increase of the quality index in 2014 is mainly due to improved timeliness in performing formalities examination as well as reduced delays in republishing applications with the ISR. The delay in formalities examination and republication mainly explained the decrease of the quality index observed during the 2010–2013 period.
  

13. 
    This indicator reflects in more detail one of the components of the aggregate quality indicator, namely the time required by the IB to issue Form 301. This form is issued after the formality examination of the application has been completed. Applicants appreciate receiving this Form as soon as possible because it acknowledges receipt of the application at the IB and allows them to know whether their application has any formal defects.
    

14. 
    This indicator reflects in more detail one of the components of the aggregate quality indicator, namely the time required by the IB to publish the application. Article 21 (2) (a) of the PCT states that the “… international publication of the international application shall be effected promptly after the expiration of 18 months from the priority date of that application.”
    

15. 
    This indicator reflects in more detail one of the components of the aggregate quality indicator, namely the time required by the IB to republish the application with the ISR. Due to delays in the communication of ISRs by ISAs, a number of international applications are published without the ISR. When the ISR becomes available, the international application needs to be republished with the ISR as soon as possible, so as to complete the international publication.
    

16. 
    Statistically calculated numbers of documents are selected at random from translations of abstracts and patentability reports prepared under the responsibility of the IB for quality control. The evaluation determines whether a translation is “acceptable” or “not acceptable”. This indicator aggregates the results of such quality control performed by the IB across all language combinations and document types. Relationships with any agencies that consistently have less than 80 per cent of their translations deemed “acceptable” are discontinued.
    

17. 
    This indicator provides information on the timeliness with which patentability report translations are made available by the IB to applicants and Offices. The share of patentability report translations delivered at 30 months from the priority date of the international application has steadily increased since 2010. In 2014, 82.5 per cent of patentability report translations were delivered at 30 months from the priority date.
    

18. 
    The quality of software development (QSD) indicator provides a measure of the quality of major software releases for eDossier and ePCT projects. The QSD reflects the share of the time spent delivering new functionality in the release (i.e. work) out of the total time spent (i.e. work + rework). Rework is the time spent correcting defective work that was detected in the production environment.
    

19. 
    Under this approach, development outputs that contain low levels of rework are deemed high quality as it reflects the extent of value added to the product through the delivery of new features.
    

20. 
    The QSD is defined as:
    

21. 
    In 2014, the quality of major releases, as defined by the QSD, was 94.3 per cent. This share is nearly five percentage points higher than in 2013.
    

22. 
    The performance indicator entitled information systems service levels (ISSL) reflects the performance of the service provided by the PCT information systems service to users, based on its ability to meet agreed targets.
    

23. 
    This composite indicator is calculated using the weighted average of five target-based performance indicators¹¹. Each indicator is expressed as the percentage of the target actually attained.
    

24. 
    In 2014, overall service level was 95.3 per cent towards meeting the target performance levels.
    

25. 
    This table presents PCT filings by the top ten receiving offices over the past five years to 2014. In principle, a PCT application is filed at the national patent office of the applicant’s home country or at a regional patent office acting for the applicant’s home jurisdiction. The IB is a competent receiving office (RO/IB) for applicants from all PCT contracting states. The evolution of the filings at the RO/IB, its ranking in terms of the number of filings among other receiving offices, as well as its market share can be observed in this table.
    

26. 
    In the Program and Budget 2014/15, the following two performance indicators were added for the RO/IB:
    

27. 
    This indicator reflects the time required by the RO/IB to issue Form 105. This form is issued after the international filing date has been accorded. Applicants appreciate receiving this form as soon as possible, because an international application has the effect of a regular national application in each designated State as of the international filing date, which date shall be considered to be the actual filing date in each designated State.
    

28. 
    This indicator reflects the time required by the RO/IB to transmit the search copies to the ISAs. The search copy is to be transmitted promptly after payment of the search fee, so that the ISA can establish the ISR within the deadlines stipulated by the PCT regulatory framework. Delays in paying the fee will delay the transmission of the search copies to the ISAs and therefore negatively impact upon the ability of ISAs to meet these deadlines.