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OIG: ‘Pervasive waste’ at Patent Trial and Appeal Board

BY: Elizabeth Harrington
August 4, 2014 2:37 pm

Paralegals hired to work in the U.S. Patent and Trademark Office were “paid to do nothing,” passing their time watching television, doing laundry, and shopping online, according to the Commerce Department’s Office of Inspector General (OIG).

The OIG released an audit last week that revealed “deeply disturbing” abuse within the Patent Trial and Appeal Board (PTAB), resulting in the waste of millions of taxpayer dollars in pay and bonuses to paralegals that had no work to do.

The office, which recently cancelled several Washington Redskins’ trademarks, hired 19 additional “Paralegal Specialists” in 2009, despite a lack of judges for them to work for. Management was aware of the problem, and instructed paralegals to bill hours spent watching TV or walking their dog as “Other Time.”

A senior manager described billing as “Other Time” as the “I don’t have work but I’m going to get paid code.”

“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 OIG said.

“Many were frequently paid to do nothing, despite the fact that PTAB’s backlog was growing rapidly at the same time,” it said.

The report noted that most paralegals spent their work days at home, getting paid to watch television, surf the internet, use Facebook, exercise, read books and magazines, shop online, or catch up on household chores such as laundry and cleaning dishes.

Paralegals were then rewarded with performance bonuses.

“The evidence established that PTAB managers were completely aware of the volume of Other Time hours during the relevant time frame and took little action to prevent such waste,” the report said. “Worse, PTAB managers rewarded these paralegals—including those with extensive Other Time hours—with performance bonuses of thousands of dollars apiece.”

“Paralegals who logged more than 50 percent of their hours received between $2,000 and $3,500 in performance awards each year,” the report said. In all, they received $561,195.91 in bonuses between 2009 and 2013, an average of $2,922.90 per bonus.

The report noted that managers continued doling out the bonuses because they “felt constrained by the paralegals’ labor union, believing that any steps to address the Other Time issue would create conflict with the Union.”

A senior manager told the OIG that management “elected to pay bonuses to avoid litigation or Union conflicts.”

“This senior manager further stated that management had not considered the argument that the Paralegal Specialists should not have received bonuses in light of the fact they were already getting full-time pay to essentially work part-time,” the report said.

Unproductivity also cost $4.3 million in wages. The OIG said many were to blame, including senior managers who told auditors that they would not have been “a bit surprised if there were people who were going out to the golf course.”

Another senior manager said he believed paralegals were “probably playing poker,” while being paid full salaries.

A Lead Paralegal Specialist at the Patent and Trademark Office earns roughly $74,872 to $97,333 a year.

“What is most egregious, however, is the conduct of numerous federal employees at the PTAB in connection with this waste,” the OIG said. “Although the Other Time problem was widely known throughout the PTAB organization, no one seemed to take ownership of the issue. In the worst cases, paralegals seemed content to have extensive idle time while collecting full salaries and benefits, and PTAB management seemed to sit on their hands, anticipating the arrival of judges at some unknown date in the future.”

The problem was only addressed after several whistleblowers came forward last year, including one paralegal that said they “did not want to sit on the clock for 60 to 70 hours while doing nothing.”

The OIG found that the number of wasted work hours was “remarkably high and troubling” between 2009 and 2013, with some paralegals charging more than half of their hours as Other Time. A total of 27,000 hours were billed in 2011, followed by 26,000 in 2012.

The report also noted that the board’s telework program was “vulnerable to abuse,” and recommended that the agency make clearer rules for what activities are acceptable.