House oversight subcommittee grills USPTO on patent examiner time and attendance abuse

By Steve Brachmann
December 18, 2016

Rep. Mark Meadows, Chairman, Subcommittee on Government Operations

Rep. Mark Meadows, Chairman, Subcommittee on Government Operations

On the afternoon of Wednesday, December 7th, the U.S. House Committee on Oversight and Government Reform’s Subcommittee on Government Operations convened a hearing to look into patent examiner time and attendance abuse issue and what steps have been taken by the U.S. Patent and Trademark Office to address the problem. The day featured some heated lines of questioning which reflected no small amount of frustration on behalf of some subcommittee members on the current progress of operations at the USPTO in light of charges regarding examiner timesheet fraud.

The hearing (see full video above) follows a series of investigative reports on patent examiner activity at the USPTO conducted by the U.S. Department of Commerce’s Office of the Inspector General (OIG). In August 2015, OIG released an investigative report probing the activities of an anonymous Examiner A which found that the examiner defrauded American taxpayers out of $25,500 during 2014’s fiscal year by fraudulently claiming 730 work hours. This August, OIG released another investigative report which found that 8,067 covered examiners had claimed 137,622 hours of work unsupported by evidence over the course of a 9-month period. Over a 15-month period, OIG also found that 43 percent of unsupported work hours were claimed by a total of 415 examiners, each of which had more than 10 percent of their claimed work hours unsupported by evidence.

As Rep. Mark Meadows (R-NC), the chairman of the House government operations subcommittee, noted in his opening remarks, the numbers provided by the OIG reports are conservative estimates that took an open-minded view on what constituted supporting evidence for actual hours worked. Meadows said that some less conservative estimates claimed nearly twice the number of unsupported work hours. “When we have this, there’s a chilling effect on other people in the workforce,” Meadows said. “Some argue that the total amount of unsupported hours is less than 2 percent, but even one unsupported hour is too many.”

Russell Slifer, USPTO

Russell Slifer, USPTO

Speaking on behalf of the USPTO and the steps it was taking to curb time and attendance abuses was Russell Slifer, Deputy Under Secretary of Commerce for Intellectual Property. Of the 8,300 patent examiners working at the agency, Slifer maintained that “the overwhelming majority are hard-working, highly educated and perform their jobs with the utmost integrity.” Slifer cited new IT dashboard tools and employee review procedures designed to curtail potential abuses. “Any hour of time claimed and not worked is not acceptable,” Slifer said.

“[Time and attendance abuse] may not be widespread, but the data established that claiming hours not worked is a problem at the [USPTO],” said David Smith, Acting Deputy Inspector General of the U.S. Department of Commerce. Smith cited falsified hours from paralegals working at the Patent Trial and Appeal Board over the course of years led to more than $5 million in wasted taxpayer funds. As for the telework program, which at times has been closely associated with the time and attendance abuse scandal, Smith noted that while OIG recognizes that patent examiners can accomplish work offline, but the OIG also noted that certain patent examiners had no computer activity for 48 or more hours on 1,300 days over the course of the study. Further, Smith testified that 56 of the 415 identified examiners with large percentages of unsupported hours only averaged about 24 hours of supported work per 80 hours of analyzed work time. That’s about three working days within a two week work period.

Representing the interests of USPTO patent examiners was Lisa Schwartz, President of the Patent Office Professional Association (POPA). She criticized the OIG reports for being based on what she called “flawed methodology” that didn’t capture all of the work performed by examiners. She argued that unreported and uncompensated overtime, which examiners regularly worked to meet their production goals, far exceeded the nearly 2 percent of total hours which were unsupported by work evidence. Schwartz said that, per pay period, the average examiner worked five to 10 hours of uncompensated time. She also noted the cost-effectiveness of the telework program and how it saves the agency more than $100 million each year, including $38 million in real estate costs. In 2015, the 2,000 full-time teleworkers were 6 percent more productive in terms of annual production units.

A review of how well the USPTO was incorporating the recommendations of the OIG was proffered by Dr. David Chu, representing the National Academy of Public Administration (NAPA). His testimony identified a number of recommendations for USPTO to implement to strengthen the telework program including stronger supervisor tools and requiring examiners to use presence indicators online for all examiners, not just those in the telework program. He also called for more attention to patent quality. “The ability to protect IP correctly is a foundational element for the success of the American economy, and that hinges on the quality of patents granted,” Chu said.

“There’s no human problem that cannot be improved with another hearing,” mused Rep. Gerry Connolly (D-VA). Connolly argued that, while time and attendance abuse is unacceptable, proof of actual misconduct was not available through OIG reports. “Any amount of fraud is unacceptable if proved true,” Connolly said. A co-sponsor of the Telework Enhancement Act of 2010, Connolly said that despite the association of time and attendance abuses with the USPTO’s telework program, OIG did not make a comparison between on-campus examiners and those in the telework program. He also raised the question of why a high number of unsupported work hours were attributable to patent examiners who were identified for high levels of performance.

The day’s hearing quickly turned contentious once Rep. Jim Jordan (R-OH) began his questioning. He appeared to try to undermine the reputation of NAPA, represented on the panel by Chu, as a reputable outside authority by blasting the organization for awarding its 2016 Elliot L. Richardson Prize for distinguished public service to John Koskinen, the current Commissioner of the Internal Revenue Service (IRS) who had been targeted in impeachment proceedings by Republicans on Capitol Hill for allegedly withholding emails important to a Congressional investigation into the IRS. “You understand that 422 backup tapes containing 24,000 emails were destroyed under his watch?” Jordan asked Chu. Later during a second round of questioning, Jordan continued: “The NAPA report is used to support that something’s not a problem, by an organization that gave an award to a guy who was censured by this very committee… If that’s not a story line, I don’t know what is.” Koskinen was quickly defended by Connolly, who said that “no amount of innuendo or smear will tarnish his reputation.” Elsewhere, Rep. Eleanor Holmes Norton (D-DC) openly questioned why Koskinen would be brought up in this hearing at all given the fact that impeachment proceedings ended after referral to committee.

David Smith, Commerce Department OIG

David Smith, Commerce Department OIG

IPWatchdog coverage of examiner time and attendance abuse was mentioned by Smith in response to questioning from Connolly on the Congressman’s insistence that there was no proof of examiner time and attendance abuse outside of Examiner A. Smith cited comments from patent examiners in an article published by IPWatchdog on patent examiner time and attendance abuse as proof that such abuse was actually ongoing. “One said he or she can do [20 hours of work in 10 hours]… and was completely justified in claiming all 20 hours worked on a timesheet,” Smith said. Connolly asked why Smith didn’t take that information to the authorities, and Smith noted that OIG’s hands were tied in that regard by the Computer Matching and Privacy Protection Act of 1988. As Norton added later, 43 percent of the unsupported work hours were contributed by examiners who were also identified by USPTO as being highly productive, which to her underscored a need to revise production goals that hadn’t been done by art unit since the 1970s.

In his questioning, Meadows took exception to the USPTO representatives’ charges that the problem is not widespread despite more than 400 patent examiners being identified in the OIG report as having unsupported work hours. “Here’s my problem,” Meadows said. “You’ve got 8,000 great employees, but there’s 400 or so taking advantage of the system and suggesting that it’s okay not to login to their computer for two days and actually they’re doing work.” Slifer acknowledged that such two-day periods of computer absence were not a best practice. “What I find in the [OIG] report is that there’s no logical conclusion you can come to other than that someone is gaming the system,” Meadows said. Slifer noted that 30 patent examiners had faced disciplinary action through internal controls at USPTO but that nobody had been terminated as a result of the most recent OIG report.

“Shocking, shocking, shocking,” said Rep. Glenn Grothman (R-WI) in response to what he felt was the USPTO’s poor methodology in obtaining evidence that examiners were working. “It confirms what a lot of people think about the Washington, DC work ethic,” he said. He noted that OIG’s report methodology considered badge swipe-ins as evidence of a full day’s work when there were no other assurances that an employee was actually working and not playing video games, to give one example provided by Grothman.

Joining the day’s hearing was Rep. Jody Hice (R-GA), not a member of the government operations subcommittee but a member of the larger House oversight committee. Hice was mainly interested in grilling Schwartz on her work with the professional union representing USPTO employees, noting that Schwartz was hired as a patent examiner for chemical engineering patents but that she had focused on solely union work for about eight years despite the fact that American taxpayers still pay her salary. “I’m not attacking the union or union work, the problem I have is that you’re using time the American taxpayer pays to examine patents and you’ve done none of that in eight years,” Hice said. Norton would later argue that such time paid for union work isn’t a “gift” to Schwartz or the union, but rather a reflection U.S. labor law. She added that, because Schwartz’s work involved taking care of grievances during official time, it actually saved the government money on the overtime required to handle such matters.

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 10 Comments comments.

  1. Charles Ankner December 18, 2016 10:34 am

    It takes time to sew together all those tens of thousands of improper combination 103 rejections. Improper combinations forcing examinations into RCE and Appeal is the PTOs bread and butter.

    However, unethical and greedy patent attorneys and agents who allow or purpose applications and examinations to slide into after final rejections, knowing they could have prevented such but do not file competent applications and responses…just to collect billable hours… may indeed be the crux of the matter.

    Lets look in the mirror as well as examining the Office.

    https://www.linkedin.com/pulse/what-patents-charles-ankner?trk=mp-reader-card?

  2. step back December 18, 2016 11:45 am

    What about uncompensated inventor time?

    When an inventor works almost a whole lifetime to develop an invention and then some bureaucrat summarily dismisses the whole thing with aid of his secret Alice decoder ring, what then?

    Where is the fake Congressional outrage over that?
    Silence.

  3. me December 18, 2016 12:56 pm

    I have copies of the posts. They were posted, both of them.

  4. Vefewok December 18, 2016 6:11 pm

    The only expert witnesses that should have been there were someone to represent the USPTO and someone to represent the Department of Commerce. The other two were just there creating noise and obfuscating the real issue: currently, the USPTO has no idea of how to protect the institution against these 400 mafia “examiners”. Mr. Slifer was relieved every time the questions targeted either NAPA or POPA, to discuss problems about awards or the salary/calendar of POPA’s president, which has nothing to do with the problem that needs to be fixed. The problem is in the PTO, which is where these “examiners” work.

  5. To the board we go.... December 18, 2016 10:04 pm

    If there was a better way to ensure quality, I think getting paid for counts would be an interesting idea. Not sure if federal law would even allow for that. But at least then you wouldn’t have to worry about tracking time. I fear quality may go down though if that were the case.

  6. Ternary December 19, 2016 8:47 am

    “In 2015, the 2,000 full-time teleworkers were 6 percent more productive in terms of annual production units.”

    Productive of course means better at “rejecting.” And being “more productive” means that it is now extremely easy for Examiners to reject. An Examiner basically cannot go wrong by rejecting.

    What seems to be increasingly popular and unchecked in Examining is the “dictionary” approach. That is: pick apart the claim aspects, find for each claim term that same term in prior art, provide some generic reason to combine (“making the apparatus/method more efficient” is a popular one) and then reject over 103. It is as easy as using a technical dictionary and looking up the terms.

    It is also extremely hard to break through these rejections without going into Appeal. That makes so many Examiners so productive. (With apologies to Examiners who really dig into the specification and try to allow. I am happy to say that there are still some of those.)

  7. Night Writer December 19, 2016 9:00 am

    This really isn’t much of an issue. And they will just yap in Congress like they always do and do nothing.

  8. Gene Quinn December 19, 2016 11:46 am

    Night-

    I disagree that this isn’t much of an issue.

    The good news is that 95% of the examiners seem not to be engaging in this kind of time and attendance abuse. 5% seem to be conducting their professional business in ways that at a minimum beg for additional inquiry. And 56 examiners — roughly .7% — seem to be engaging in activity that is hard to reconcile without calling it fraud.

    .7% isn’t that big and I won’t make it seem as such, and maybe even 5% isn’t that big. But what makes this problem a real issue is that the USPTO seems to have had no clue it was going on. In fact, some of these examiners were receiving excellent performance reviews. How is that possible?

    We know in some Art Units and Tech Centers there is a fundamental breakdown in leadership. This episode suggests that the breakdown in leadership at the Art Unit and TC level goes beyond the “no patent for you” ideology but goes much deeper. How is it possible that no front line managers knew that 1 out of 20 employees were engaging in conduct that at a minimum begs for further inquiry? And this is after the Office implemented whatever the implemented in the aftermath of the Examiner A debacle?

    I think this needs much further investigation. It seems all the Inspector General knows is that for days at a time certain patent examiners were not logged into their computers but were still submitting time as if they were working. But how many patent examiners actually logged into their computers from home and then didn’t proceed to do much, if any, work?

    In TC 3600 what passes for an Office Action could easily be thrown together in a matter of minutes. “No patent for you because you are claiming ‘INSERT RIDICULOUS CHARACTERIZATION OF CLAIM 1 PREAMBLE’ which is merely an abstract idea because it ‘re-INSERT SAME RIDICULOUS CHARACTERIZATION OF CLAIM 1 PREAMBLE’ which, of course is an abstract idea.”

    -Gene

  9. Eric Berend December 19, 2016 5:20 pm

    Notice, how the paralegals got right up to speed on the culture of corrupt exploitation that pervades the USPTO. Why hold to any notion of law, principle, integrity or even mere “work rules”; when there’s a strong chance you will be harassed or penalized for ‘doing the right thing’? Just find a way to become a fellow racketeer exploiter and fit right in.

    NOT, when: there’s a whole class of genuine Inventor ‘suckers’ to be drained dry of resources and motivation, cleaned out and tossed on the ‘ash heap of history’, while being praised by others for doing so?

    Why NOT just go on, using the fuel of destroyed inventor’s fortunes and lives, as long as the supply lasts?

    And; wasn’t it the diversion of fees collected from Inventors ourselves, that engendered the decline and essential derogation of patent examination quality, which helped to lay the foundation for whatever patent infringement notification abuses ensued by LEGALLY-BASED actors and NOT Inventors (the so-called “patent troll” phenomenon, to whatever extent it truly existed)?

    So, now it becomes more obvious, what this giant USPTO/CAFC/SCOTUS/U.S. Congress racket’s *modus operendi* truly has become: take the inventor ‘suckers’ COMING and GOING, and take away from them AS MUCH AS POSSIBLE, as MANY TIMES AS POSSIBLE, until the ‘sucker’ becomes exhausted. Then look for another exploitation target to become attracted to your exploit through your misrepresentations, obfuscations and outright barefaced lies; yet again and again and again. “Lather, rinse, repeat” – and keep hitting the ‘repeat’ button.

    The United States of America’s innovation capability is IRREPARABLY BROKEN, for at least the next full generation, going forward. Present public ideas of so-called “INNOVATION” are taken at face value directly from the exploiters’ representatives. Actual, real-life inventors, are SUMMARILY IGNORED.

    MOBS of the ill-informed proclaim their enthusiastic ALLEGIANCE to this cabal. Advocates directly employed by the most egregious racketeers are actually appointed to head the VERY ORGAN OF GOVERNMENT ENTRUSTED WITH THE U.S. PUBLIC INTEREST, in this regard.

    TOTALITARIAN DICTATORS’ REGIMES now act in greater recognition of the essential role of the Inventor to the technological developmental process (e.g., CHINA). HOW CAN THIS END UP IN ANY POSSIBLE WAY – BUT DISASTROUSLY – FOR THE U.S.A.?

    It can be observed that the divorce industry (and by corollary, the marriage industry, as well) was near the brink of depression if not outright collapse from the overwhelming success of its ruthless exploits against, by far, primarily men; in the nefarious conspired racket of ex-parte hearings, restraining orders based on mere hearsay by incentivized actors and fraudulent misrepresentation of ‘imputed income’; so as to empower the compulsion of their forced labor for the enrichment of the States, various agencies of the U.S. Government and their former wives.

    Thus, providing strong motivation for abrupt about-face “flip-flopping” on the issue of official establishment and recognition of non-traditional marriages before U.S. law, by a veritable slew of traditional so-called “conservative” pundits and politicians – and so: a whole new tranche of exploit opportunities in the same vein was opened up – and, thereby: the giant divorce racket was saved from the increasing trend of beating dead horses, so to speak, risking imminent collapse; thus, new ‘horses’ for said ruthless exploitation, were imported.

    There is no similar such ‘ersatz’ substitute for genuine inventors. As an increasing dearth of Inventors deceived or willing to chance being exploited ‘fuel’ for this raging, indubitably feudal exploit becomes apparent, the specter of ‘beating a dead horse’ will rise.

    Personally, I wonder: what will be utilized to prop up this ‘yet-another’ gigantic (Federally-based) racket, this time around? Having run all of the smaller entities off the field, does the industry become a mere savage zero-sum game between the few, remaining, bruisingly large “Big Tech” players? Can they make a growing business based upon cannabalizing each others’ IP assets? How does that affect the future course of U.S. economic fortunes? Does anyone with any sense, really believe that this is, in any way, a sustainable model?

  10. Night Writer December 19, 2016 9:26 pm

    @8: Maybe Gene. I just think from speaking with friends of mine that are examiners that much of this is just either people that can get their work done well in less time or just a few trouble makers.

    But, I am agree that further investigation is warranted.