Inspector General Discovers $5 Million in Waste at Patent Office

According to a new report from the inspector general (IG) at the Department of Commerce, paralegals and attorneys at the Patent Trial and Appeal Board wasted more than $5 million receiving pay and benefits while doing their laundry, walking their dogs, or shopping online. Managers were aware of the problem, but did little to stop it, telling investigators that they believed it would resolve itself.

The report, released in July, found that employees wasted as much as 90 percent — or 72 hours — of an 80-hour work week on personal business. In addition to their regular salaries, these employees also received bonuses worth several thousand dollars.

During this same period of time, the department had a backlog of over 26,000 cases, meaning that while employees where wasting taxpayer dollars, cases were stacking up.

“Our investigation uncovered substantial, pervasive waste at the PTAB that endured for more than four years and resulted in the misuse of federal resources totaling at least $5.09 million,” the report said.

The inspector general’s investigation was the result of several whistle-blower complaints that date back to the beginning of 2013.

The report continued, saying that the PTAB went so far as to use billing codes that would hide the severity of the problem, billing much of the paralegal’s unproductive time as “Other Time.” Employees within the office would joke about the practice, saying that “Other Time” is really “I don’t have work but I’m going to get paid code.”

“Governments are almost by their nature wasteful. When resources are not owned by particular individuals who profit or lose depending on their use, waste will occur,” says Dr. Edward Hudgins, senior scholar at The Atlas Society. “Rewards in government are based on political appropriations, not performance. Bad performance is often rewarded with higher appropriations, throwing money at the problem.”

This supports the IG’s findings that managers believed that simply hiring more judges would be the answer, but it wasn’t.

“PTAB management ignored the problem because they believed that hiring new judges would resolve the problem. But the problem persisted for years. PTAB managers periodically considered ‘special projects’ to give paralegals more work. These efforts, however, were feeble, half-hearted, and ineffective at addressing the problem,” the IG’s report said.

It also added that managers were concerned that any attempt to rectify the problem would cause problems with the employee’s labor union.

Part of the problem rests with the PTAB’s telework program, which did little to help the problem and likely made it worse. The program allowed employees to work from home, further increasing the potential for abuse since they had no direct supervision and prolonged the problem by keeping it from coming to light sooner.

Hudgins says the problem comes down to bureaucracy.

“Government monitoring of worker performance differs fundamentally from private sector mechanisms,” he said. “Following procedures and filling in all the right forms rather than risk-taking and innovation dominates government. Further, it is difficult to monitor and discipline much less dismiss workers who break rules because rules and procedures dominate this part of the employment process as well.”

It seems that, once again, the federal government just can’t seem to get out of its own way. Given the massive budget shortfalls that the government has to resolve, it seems particularly egregious that employees would waste tax dollars in such a flippant manner and simply pass the buck when it comes to responsibility.

“Granting patents and trademarks is one of the few legitimate functions of government, established as a federal prerogative in the Constitution. Thus, waste of resources and politicization in this case are particularly disturbing,” Hudgins said.

The IG’s report listed several recommendations, including a review of the telework program and management structure of the PTAB, retraining of employees, and working with the employees’ union to recover bonuses that were not earned.

It is unclear if or when any of these recommendations will be implemented.

Photo Source: AP