House Judiciary subcommittee questions Lee on preventing time and attendance abuse at USPTO

By Steve Brachmann
September 14, 2016

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Michelle K. Lee, USPTO Director

On the afternoon of Tuesday, September 13th, the intellectual property subcommittee of the U.S. House of Representatives Judiciary Committee convened for a hearing on oversight of practices and procedures operating at the U.S. Patent and Trademark Office. The day’s sole panelist was USPTO director Michelle K. Lee. The day’s discussion focused on recent reports from federal governmental agencies regarding issues at the USPTO surrounding patent litigation as well as time and attendance abuses among USPTO examiners.

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Congressman Darrell Issa (R-CA)

A press release posted in advance of the hearing and containing statements from both House Judiciary Committee chairman Bob Goodlatte (R-VA) and Courts, Intellectual Property, and the Internet subcommittee chairman Darrell Issa (R-CA) provided a good indication of the direction the hearing would take. Both statements reflected a wariness regarding timesheet abuses among USPTO employees. “The amount of wasted man-hours that could have been spent reducing the patent backlog is astounding, not to mention the millions of taxpayer dollars that were wasted paying USPTO employees for work they were not doing,” Goodlatte’s statement read. Issa added, “If the PTO can’t even guarantee sufficient oversight of its employees timecards, how can we be assured patent examiners aren’t just rubberstamping ideas without oversight as well?”

The concerns of both Congressmen stem from an examiner time and attendance report issued August 31st by the Office of the Inspector General (OIG) within the Department of Commerce. The commerce department’s OIG found 288,000 unsupported hours of work claimed by examiners over a 15-month period, which was equated to more than $18.3 million in potential waste. The OIG report also found multiple weak points in USPTO policy which limits the agency’s ability to detect fraud, including no requirement for teleworking examiners to log into computers during workdays as well as no requirement for workers with average or high performance ratings to provide supervisors with work schedules.

The testimony delivered by Lee to the House judiciary subcommittee spoke to the results of the OIG report and the work which had been undertaken at the USPTO to meet the recommendations of that report. The agency, Lee reported, had taken many actions consistent with OIG recommendations, including a new policy requiring all supervisors and teleworkers to remain logged into the USPTO’s IT system during working hours, the use of collaborative tools like instant messaging and presence indicators, as well as guidance handed down to supervisors instructing them to review employee-specific data to monitor production and timeliness performance.

“My team and I do not tolerate time and attendance abuse,” Lee told the subcommittee. While she did note that the USPTO had taken disciplinary actions against examiners that have abused time and attendance reports, such actions ranging from counseling to expulsion and repayment for hours not worked, she added that there was evidence that instances of time and attendance abuse were not widespread. She cited a report on the USPTO’s telework program issued by the National Academy of Public Administration (NAPA) in July 2015. The report found that “It would appear to be unlikely that [time and attendance] abuse is widespread or unique to teleworkers, and it does not appear to reflect the actions of the workforce as a whole.” Additionally, the report indicated that the agency’s telework program saved the agency $7 million each year on average by allowing examiners to continue working in spite of government shutdowns caused by weather or other reasons.

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Congressman Jerrold Nadler (D-NY)

The methodology used during the OIG’s study on time and attendance abuse was also questioned by Congressman Jerrold Nadler (D-NY). Nadler’s prepared remarks noted that the unsupported work hours identified in the OIG’s report amounted to less than 2 percent of all hours worked by examiners during the 15-month period of the study. “In fact, the IG acknowledges that after the USPTO instituted certain reforms to its telework policy, six months into the study, the percentage of unsupported hours dropped to just 1.6%, an efficiency rate that most employers would boast about,” Nadler’s prepared remarks stated. “But, the IG buried this fact in a footnote deep in the report.” During questioning, Nadler argued that the OIG’s methodology was unlikely to identify all hours that examiners worked. For example, the OIG’s findings relied upon a digital footprint created by teleworkers when they logged in remotely to the USPTO’s network, which would not account for any work performed offline, such as would be the case if a teleworker printed prior art examples to study without being logged into the USPTO’s network.

Lee discussed digital tools provided by the USPTO to supervisors which provide for more effective management of examiners, especially an online dashboard for examiner work. The dashboard allows supervisors to see when work products land on a specific examiner’s desk, when that work has been picked up and whether that work was on schedule. When used in conjunction with collaborative messaging tools and presence indicators, these digital tools give supervisors an accurate idea of the actual time being spent by an examiner on work, Lee said.

Members of the House judiciary IP subcommittee were also piqued by a report published this June by the U.S. Government Accountability Office (GAO). The GAO’s report connected a rise in patent litigation, which increased from about 2,000 lawsuits in 2007 to more than 5,000 lawsuits in 2015, with low patent quality. “Several stakeholders told GAO that it is easy to unintentionally infringe on patents associated with [software-related and computer and communications] technologies because the patents can be unclear and overly broad,” the GAO’s report states.

Despite these issues, Lee maintained that the USPTO was doing a good job of addressing problems while improving the quality of issued patents. Lee mentioned that the USPTO expects to receive more than 600,000 patent applications during this fiscal year, a figure representing an average annual increase in patent application filings of 4 percent. Despite increased patent application numbers, the agency has been able to reduce its backlog of unexamined patent applications from 750,000 in 2009 down to about 550,000 currently. First action pendency was reduced from an average 25.9 months in January 2009 down to 16.1 months this July, and average total pendency dropped from 33.8 months to 25.6 months during the same time period, according to Lee.

The Patent Trial and Appeal Board (PTAB) was brought up by Lee as a critical piece of the system for ensuring that high quality patents were being issued. The USPTO is also engaged in various initiatives to improve patent quality, according to Lee, including the Enhanced Patent Quality Initiative. This program is designed to enhance examiner training, prosecution and post-examination processes. Lee also lauded an improved prior art search tool developed in conjunction with multiple foreign patent offices which improve USPTO examiners’ ability to see prior art references and other invalidating references determined by examiners in foreign offices, noting that it can be difficult to find such references without a personal knowledge of the foreign language.

During questioning, Goodlatte harped upon issues of incremental innovation, specifically citing the example of the EpiPen, which Goodlatte believed only enjoyed patent protection covering a safety cap on the autoinjector’s needle. Goodlatte wondered aloud if such an invention met patentability standards for obviousness. “We’re not talking about the lightbulb here,” he stated. He asked if an inter partes review (IPR) proceeding had been filed upon the EpiPen patent and Lee responded that she did not know, but that PTAB proceedings were open to anyone who wanted to file such an IPR. Later, a line of questioning by Issa seemed to support such patenting for so-called incremental innovation, especially in the biopharma industry. In one hypothetical example, he mused upon the patentability of processes of preparing and using various combinations of opiates. “If efficacy is unknown for any substance and efficacy for a dosage in combination with something is discovered separate from other things,” Issa opined, “don’t we have a fundamental advancement in science that Congress could choose to write patent law to allow that to be patentable without being inconsistent with the Founding Fathers?”

The issue of venue shopping was also brought up by members of the subcommittee. Issa, who noted the high percentage of patent infringement cases going through the U.S. District Court for the Eastern District of Texas (E.D. Tex.), asked about the implications of In re TC Heartland currently in front of the U.S. Court of Appeals for the Federal Circuit (Fed. Cir.). Lee noted that the USPTO was considering filing an amicus brief in that case but was awaiting further guidance from the U.S. Department of Justice before doing so.

The day’s hearing also touched upon pre-GATT patent applications, or so-called submarine patent applications, which have been pending in some cases for decades. While Lee argued that it would be hard to consider an absolute time limit on patent applications, the USPTO had been able to reduce the number of pre-GATT patent applications by 80 percent down to 20 such applications.

At the end of the hearing, Lee implored the subcommittee to consider extending the agency’s fee setting authority, which is set to expire in 2018. Lee noted that the ability to set fees for services at the USPTO, which funds its activities through the collection of such fees, has been incredibly helpful to the agency in recent years.

The Author

Steve Brachmann

Steve Brachmann is a writer located in Buffalo, New York. He has worked professionally as a freelancer for more than a decade. He has become a regular contributor to IPWatchdog.com, writing about technology, innovation and is the primary author of the Companies We Follow series. His work has been published by The Buffalo News, The Hamburg Sun, USAToday.com, Chron.com, Motley Fool and OpenLettersMonthly.com. Steve also provides website copy and documents for various business clients.

Warning & Disclaimer: The pages, articles and comments on IPWatchdog.com do not constitute legal advice, nor do they create any attorney-client relationship. The articles published express the personal opinion and views of the author and should not be attributed to the author’s employer, clients or the sponsors of IPWatchdog.com. Read more.

Discuss this

There are currently 15 Comments comments.

  1. Anon September 14, 2016 12:48 pm

    Aside from the “prepared” statements of Congressman Nadler (evidencing similar lack of understanding that you cannot spread out over all examiners – or impugn all examiners – the very fraud committed by an identified subset), the remarks by Lee are entirely incongruent with the vocal responses (mostly, but not entirely) by examiners that would seek to diminish the acts of fraud.

    For those wanting to diminish the situation, Such a careless attitude to take when millions of innovator supplied funds are in question is simply reprehensible. For Lee, who appears disconnected from what the “troops” may actually believe, it speaks ill of any of her “efforts” to control the situation.

  2. John White September 15, 2016 10:14 am

    This is an instance when I sincerely believe Lee is trying to do what is right vis-a-vis the peculiarity(s) of the PTO, its unique telework set up and the nature of patent examination. Unlike many jobs, a considerable amount of time an examiner expends is in thinking. This does not amount to inactivity. It amounts to doing their job. Logged in or not, key stroking or not, work is being done. I think the IG is wrong; plain and simple. The metric the PTO and union track, ie, production and backlog are improving.
    I think this is another PTO witch hunt and, despite the awfulness of its IPR implementation, is undeserving in this case. Examining is not like any other job. Hours logged in simply do not reflect hours worked.

  3. To the board we go...... September 15, 2016 12:54 pm

    I agree somewhat with John. I wrote a long comment in the other article on this website about this issue. To expand a little here….

    If I remember the report correctly, after changes were made on examiner requirements, the number of unaccountable hours dropped 20% from 2% to 1.6%. Taking into account sloppiness in time keeping, which was mentioned by director Lee in her testimony, I think this 1.6% would drop even more.

    Moreover, it appears a very small number of examiners are accounting for a large percentage of unaccountable hours. This should be easy to fix.

    I watched the entire hearing, and I think director Lee did a good job stressing that any unaccountable hour is not acceptable, that the PTO has already taken action against certain examiners, and that the PTO will continue to find ways to reduce unaccountable hours. BTW..I am not a fan of hers, but just trying to be neutral in this subject.

    Plus, POPA has been sounding the alarm that the number of investigations into examiner’s time and attendance has been increasing. So, I think this shows that the PTO is taking this issue seriously.

    I did find it interesting when rep. Chaffetz questioned her about the state of the PTO’s IT infrastructure. She didn’t seem to handle that well.

  4. Benny September 15, 2016 4:27 pm

    One wonders if attorneys sometimes bill unaccounted hours, which John White calls time spent thinking.

  5. Anon September 15, 2016 5:05 pm

    Mr. White,

    Perhaps what you say as to the nature of the work is true – but such does not change either the metrics used by the Office, nor the pay system (overtime) that the Office turns around and distributes those funds collected from innovators using the patent system.

    Until these items change, the necessity of accountability of not only work product, but of time remains.

  6. Anon September 15, 2016 5:21 pm

    Benny,

    See my reply to Mr. White at 5 – and note that attorneys are NOT constrained as are the civil servants that make up the examiner corp.

  7. To the board we go..... September 15, 2016 6:55 pm

    Anon…

    In defense of John, I think he makes a good point about hours worked does not necessarily mean hours typing at the keyboard, and therefore the IG report has some flaws. While the PTO requires examiners to be logged onto the internal system, the PTO has no specific requirements for examiners to be active on their computers. We just can’t set our communicator to Do Not Disturb. This doesn’t mean an examiner can be inactive 8 hours a day, 5 days a week.

    Here is an another interesting point. The new SOHO routers issued to examiners are always logged onto the PTO’s internal network, whereas the old VPN system requires logging on every 24 hours.

    So, the real question is, what other metrics can be used to determine if an examiner is working if their computer is logged on to the PTO’s internal network, but not active?

    When I’m reading prior art or mapping claims, I try and remember to unlock my computer often to see if I have any messages; mostly because I’m a quality nominee for my work group and need to be available for examiner’s questions. However, there may be times when several hours pass when I’m not active on the computer but still working. Other examiners have no such responsibility and therefore may not have any reason to check messages every hour.

    The point I, and others are trying to make, even if not eloquently, is that there is fraud, but the IG report seems to be inaccurate because it doesn’t adequately take into consideration common practices of working examiners.

  8. To the board we go...... September 15, 2016 7:04 pm

    …..that last sentence should say “common, ACCEPTABLE practices of working examiners.”

  9. Benny September 15, 2016 11:08 pm

    Anon at 6, look up the word sarcasm in a dictionary. Can’t you tell when someone isn’t being serious?

  10. Anon September 16, 2016 6:17 am

    Benny,

    Your sarcasm is misplaced. And the post follows your typical posts in missing the point, so this is just not a matter of me not being able to tell when someone isn’t being serious.

  11. Benny September 16, 2016 6:22 am

    Anon, I am competely at a loss to understand how sarcasm can posiibly be misplaced. I do realize, of course, that sarcasm and cynicism sometimes goes over some peoples heads. This is a comments forum here, not a legal document. Loosen up.

  12. Anon September 16, 2016 9:24 am

    You being completely at a loss helps explain why your sarcasm is misplaced.

    This is not a matter of “lighten up.” “Lightening up” is not at issue with your attempts at sarcasm. Your sarcasm is simply off.

  13. Gene Quinn September 16, 2016 11:07 am

    Everyone-

    Stay tuned. I have a column coming out early next week on this topic again. In the meantime, don’t forget how the examiners who visited us here and commented defended their time sheet practices. They explained that if they can do a project in half the time allocated they should be able to write down on their time sheet the FULL time allocated. That, ladies and gentlemen, is fraud.

    The other big story (I think) is that the USPTO has absolutely no way of knowing who is actually working. I realize (and do truly believe) that the vast majority of patent examiners are hard working professionals who take their jobs very seriously. Having said that, with 8,400 examiners in an agency of well over 10,000 employees, not having systems in place to know what is really happening strikes me as managerially inexcusable.

    -Gene

  14. To the board we go...... September 16, 2016 12:23 pm

    Gene…..

    Please consider that not every examiner on here is advocating/defending claiming hours not worked. And the ones that are are not any kind of statistical representation of the corps.

    Also, I agree that the larger issue is not knowing if an examiner is actually working. However, I think this means more that an examiner is working when it doesn’t look like it, rather than committing fraud. I also hope in your article you are able to present ideas of how to change this, rather than just attacking the PTO.

    For example, in your article you write next week, maybe you could briefly discuss the PTO having a purely based production system, where an examiner gets paid for actual work done, and not a salary. I think this would be an interesting idea. Of course there would have to be quality controls to ensure examiners are not submitting subpar work for the money. However, I am not sure the PTO has the legal authority to change to a purely production for pay system.

    The subjectiveness of examining, the different time allotted to different work groups, and the work pace of different examiners makes any determination of working very difficult.

    Finally, as you said, very few examiners are taking advantage of the system. Close to all of us are working diligently to perform our duties.

  15. Gene Quinn September 16, 2016 2:18 pm

    To the board we go…

    You say: “Please consider that not every examiner on here is advocating/defending claiming hours not worked. And the ones that are are not any kind of statistical representation of the corps.”

    I understand that, but the fact that there were multiple different examiners justifying their time sheet practices in this way suggests there is a problem on some level. The fact that the USPTO cannot know whether, when or even if patent examiners are working is a problem. They didn’t even know that Examiner A was bilking the Office for 730 hours of unworked time. These abuses give all examiners a bad name even if they are small in number, which they probably are. Having said that, it is interesting that the IG report noted that nearly half of the suspicious hours they identified were claimed by 5% of examiners. That suggests that there is a problem and the Office absolutely should investigate. There is no reason to be paying anyone, even a single examiner, who is not working. I similarly think there is no justification to pay an examiner who hasn’t issued a patent in years, but that is another story for another day.

    You say: “very few examiners are taking advantage of the system. Close to all of us are working diligently to perform our duties.”

    I agree with that. Unfortunately, there are a small but meaningful number of patent examiners that do whatever they want, whenever they want. They ignore Office rules, they ignore the Federal Circuit, the issue bogus rejections, they refuse to issue patents. It isn’t shocking that some would also engage in workplace fraud of an economic variety.

    Because these bad acting patent examiners call into question the integrity and work of all examiners at some point the majority of professional, hard working patent examiners are going to have to stand up and do something to help root out those that abuse the system — however they abuse the system. The union should not allow 95% (or more) of examiners to be blamed for the problems created by a select few miscreants who hate patents, hate inventors and obviously aren’t beyond committing fraud on their time sheets. The union should stand up for the vast majority of patent examiners. That would dramatically help the patent system.

    -Gene