Lawmakers Press Patent Office for Crackdown on Timecard Abuse

The Patent and Trademark Office came under fire on Wednesday by lawmakers and an inspector general who retain their past skepticism that the agency—with its famed telework program-- is doing enough to curb time-card abuse by some examiners.

While the agency delivered an upbeat progress report and the union leader defended the productivity of “highly educated” patent specialists, a watchdog warned that a computer audit continued to document phantom hours, while Republican lawmakers demanded information on disciplinary actions and the union’s use of  “official time.”

The hearing held during the final days of the 114^th Congress was built around a report from the Commerce Department inspector general released in August. It documented 288,479 “unsupported hours” reported by some 415 patent examiners over 15-months, equaling $18.3 million in potential waste. Some performance goals, the subcommittee learned, were set as long ago as 1976, an altogether different world of technology.

“The results are shocking,” said Rep. Mark Meadows, R-N.C., chairman of the House Oversight and Government Reform Government Operations Subcommittee. “What is most troubling is the numbers provided by the OIG are a conservative estimate….By some less conservative assumptions, we could push the amount of unsupported hours to be nearly twice as high as the OIG reported.”

Meadows acknowledged that the problem may not be widespread. But he bore into the Patent Office representative, saying, “I can go to a federal agency and find we have 8,000 great people but 400 or so are taking advantage of the system, giving a bad taste for telecommuting.”

More skeptical was Rep. Gerry Connolly, D-Va.., though he agreed that any amount of timecard fraud is unacceptable. “The IG found that 1.6 percent of the total hours that PTO examiners claimed they worked during a nine-month period in 2015 lacked supporting computer evidence of work activity,” said Connolly, a backer of telecommuting. “The IG concluded that this could have resulted in potential waste of $8.8 million. The IG also looked at an overlapping 15-month period and concluded that the unsupported hours could have resulted in potential waste of $18 million. However, the IG has found no proof of actual misconduct.”  

Defending the agency was Russell Slifer, deputy undersecretary of Commerce for intellectual property and the USPTO’s No. 2, who testified, “We take seriously any allegation of abuse in our workplace. Any abuse of time and attendance by an employee is unfair to our stakeholders who rely on our agency and to other employees who abide by the rules.”

He outlined a series of steps taken by management, among them new restrictions on overtime pay claims, improved supervisory mentoring of patent examiners with low or inconsistent production levels, and “recent recertification of agreements with all our teleworking employees.” 

But already, the incentives for examiners have helped cut the patent application backlog from 700,000 to 500,000 hours, Slifer said. “Many don’t have time [enough] within the full 80 hours [per pay period],” he added, suggesting that some who actually work 10 hours for four days may be billing for five days at only eight hours. “We are making them accurate so we can identify time fraud.”

David Smith, the deputy inspector general at the Commerce Department, said, “Most examiners appeared to be working the hours certified on their time sheets,” but 415 examiners accounted for 45 percent of the 124,000 unsupported hours. About 3 percent of those 415 got performance bonuses, he said, and as much as 30 percent of the unsupported hours, were for overtime.

Reading from an intellectual property newsletter, Smith said he had “a confession” from an examiner who admitted to committing fraud because he “is so talented he is capable of doing the job in faster time than the agency thinks it takes.” He said he presented some abuse cases to U.S. attorneys, but they rejected prosecution because of the need to compile evidence hour by hour. 

The deputy IG defended his auditors’ methodology of using computer monitoring to count actual time at work, while noting that the computer privacy law prevents him from addressing individual examiners. “If POPA and the other unions would encourage their members,” he said, “we would be happy to interview them.”

Pamela Schwartz, president of the Patent Office Professional Association, said the IG report “contains incomplete and inaccurate information and reached conclusions that contradict those reached” by the Government Accountability Office and the National Academy of Public Administration.

 “The OIG’s own report reveals that reliance on turnstile, VPN and workstation records does not reliably capture all the work performed by the examiners,” she said, citing “extraordinary productivity gains in a USPTO pilot program. “Even if a teleworker was not connected to the agency’s computer system (VPN), this doesn’t mean that he wasn’t working – as described above many aspects of an examiner’s jobs can be done off line,” like working from printed applications and reading related literature. 

Schwartz was challenged by Rep. Jody Hice, R-Ga., who elicited the fact that while she was hired as an examiner of chemical engineering patent applications, for the past eight years she had been performing official time union administrative work. “It’s astounding that you’re not doing the work you were hired to do, and the American people are subsidizing union work,” he said. 

Schwarz replied that “a lot of what I do is assisting the agency in meeting its mission, its programs.” She agreed to Hice’s request that she provide her daily work calendar for the past six months.

Del. Eleanor Holmes Norton, D-D.C., said she was “astonished” that USPTO was still using goals set in the 1970s “when I wasn’t even thinking about coming to Congress.”

Slifer said the agency is reworking the goals to reflect modern technology and individual employee experience. “We’re close to implementing all the recommendations, but it requires significant resources,” he added, “some in the multi- millions.”

Meadows wasn’t satisfied. “I find this fascinating that you testify you do not have a problem,” he said. “How many people have you let go?”

“Zero,” Slifer replied. “We’re not allowed” to fire people because of an IG report. “Every agency of our size will have problem employees,” he said, adding that about 30 have been terminated or disciplined using processes independent of the report.

Meadows demanded a list of the 30, though Slifer said he wasn’t sure privacy laws would permit him to comply. 

“One assumption” from the IG report’s count of unsupported hours, he added, “is that the examiners are not working. Another assumption is that they’re putting in extra time reading documents.” The agency’s existing incentive program for examiners to raise productivity is “paying dividends,” Slifer said. He reported that it has saved 1.1 million hours a year “without having to hire 1,500 additional examiners.”