Hearing on Examiner Fraud Leaves No Resolution
In mid-September, the House Judiciary Committee held what seemed like it was going to be an oversight hearing to address the allegations of timekeeping fraud by patent examiners made in the Inspector General’s recent report. Prepared statements released in advance of the hearing talked tough, but that was pretty much it. Insofar as getting to the root of the problems identified in the IG report the hearing turned out to be a big, fat nothing.
Congressman Jerrold Nadler (D-NY) (pictured left at the hearing) defended the Office in his prepared remarks, explaining that there were flaws with the methodology of the IG study, which make the conclusions unreliable. For example, it is entirely possible that patent examiners were indeed working while they were not logged into the Patent Office computer systems. After all, examination is a job that requires a lot of reading and contemplation, much of which might occur without being logged into the server. Of course, that, at best, means there is no way to know whether patent examiners are working or not, which is why the IG report recommended the sensible step of requiring patent examiners to log into the Office computer systems whenever they are working.
USPTO Director Lee testifies before House Judiciary Committee
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 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.
A press release posted in advance of the hearing contained 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 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.”
“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.”
09.19.16 | Patent Issues, USPTO | Gene Quinn
House Judiciary Nixes CBM Extension
On Thursday, June 11, 2015, the House Judiciary Committee held a hearing for the purpose of marking up “the Innovation Act.”
One of the issues that took up a significant amount of time during the first half of the hearing was an amendment submitted by Congressman Darrell Issa regarding a proposed extension of covered business method (“CBM”) review. Those familiar with the America Invents Act (AIA) will undoubtedly recall that CBM reviews were ushered in as one of the three new post grant proceedings that could be used to challenge issues U.S. patents. The program was conceived to be temporary, and is scheduled to sunset on September 16, 2020. Issa’s amendment would have postponed the termination date of the program until December 31, 2026.
Unlike inter partes review (“IPR”), a petition for a CBM may NOT be filed unless the real party-in-interest or privy has been sued for infringement of the patent or has been charged with infringement under that patent. “Charged with infringement” means “a real and substantial controversy regarding infringement of a covered business method patent such that the petitioner would have standing to bring a declaratory judgment action in Federal court.” 37 CFR 42.302(a). Additionally, unlike with IPR, a CBM proceeding can raise issues surrounding both patent eligibility under 35 U.S.C. 101 and sufficiency of disclosure under 35 U.S.C. 112.
Issa stated during the hearing that, at the time Congress passed the AIA, the idea was to create CBM review for a trial period and the program would be extended if successful. Issa is mistaken. The complete name of the process even has the word “transitional” in the title. The entire purpose of CBM review was to allow for challenges to certain financial business method patents in a post grant proceeding that could raise patent eligibility and sufficiency of disclosure. Those issues are off the table in IPR. They can be raised in Post Grant Review (PGR), but PGR is only available to challenge patents that were examined under the first-to-file provisions of the AIA. Thus, Congress wanted to allow for a form of PGR for financial business method patents granted under pre-AIA first-to-invent rules. Thus, there is a time limit to the useful period of this special variety of post grant review.
“We should be ending [CBM] rather than extending it,” Congressman John Conyers (D-MI) stated in response.
Congressman Collins (R-GA) also explained that he cannot support extending CBM, saying that “a property right should be a property right.” Collins also expressed confusion regarding why this matter is pressing at the moment, saying: “I am confused as to why we are considering the extension of a program that is scheduled to sunset in 2020. Why are we debating this here today… do we really know how CBM will affect our economy… we should be having this debate in 2020.” Ultimately, Collins urged his colleagues to oppose this “premature amendment.”
Congresswoman Suzan DelBene (D-WA) echoed the comments of Collins, but also took issue with earlier comments of those in support of the amendment who said that there was no evidence that CBM has been inappropriately expanded beyond financial services patents. DelBene pointed out that there have, indeed, been instances where the Patent Trial and Appeal Board (PTAB) has been accused of expansively interpreting its own jurisdiction beyond what Congress envisioned when the AIA was passed.
The amendment to extend CBM was defeated by a vote of 18-13. At least for now, it is not in the House bill. If and when the bill gets considered on the floor of the House, extension of CBM could resurface in one way or another.
06.26.15 | Patent Issues, Patent Reform | Gene Quinn
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10.11.16 | Congress, Patent Issues, USPTO | Gene Quinn