Patent Office Insider Funnels $500k To Minister

from the ah,-the-uspto dept

This certainly isn't a condemnation of the USPTO itself, but apparently a financial analyst within the PTO worked with a minister to steal more than $500,000. The minister has plead guilty, but the PTO employee is still just under investigation:
One of the patent employee's tasks was to process requests for funds from customers who had completed the application process, documents said. In his guilty plea, Reid said the patent office employee identified accounts that had gone dormant. She then changed the name on the accounts to Redeemed Music House and wired the cash to the company's bank account.

Court documents show that the patent worker stole a total of $534,338 over 32 transfers, 27 of which were to Reid. It is unclear from documents where the other $80,000 went.
This is obviously a scam by a corrupt employee, but a couple folks submitted it, noting that with so much interest in the USPTO around these parts, some folks might be interested. It's certainly not a condemnation of the USPTO (it does plenty of things officially for that), as it's pretty clearly a bad employee scamming money.

Reader Comments (rss)

(Flattened / Threaded)

  1. identicon
    Kazi, Aug 19th, 2009 @ 7:48pm

    "She then changed the name on the accounts"

    Oooo, devil-woman!

    reply to this | link to this | view in thread ]

  2. identicon
    !nterroban?, Aug 19th, 2009 @ 8:01pm

    did the employee apply for a patent on a mtheod for procurring unearned sums?

    reply to this | link to this | view in thread ]

  3. icon
    Fred McTaker (profile), Aug 20th, 2009 @ 12:06am


    You mean an organization specifically set up to hand out monopolies, can be corrupted by outside money interests? An organization that can basically hand out "limited time" monopolies, which last longer than the academic career of most Ph.D's, can be corrupted? How could that happen? Don't they pay them enough not to be tempted?

    reply to this | link to this | view in thread ]

  4. identicon
    Doctor Strange, Aug 20th, 2009 @ 1:07am

    Re: Corruption?!

    I didn't realize you could derive causation from correlation like that! You're some kind of genius! Just wait until you hear my theory about how pirates prevent global warming!

    reply to this | link to this | view in thread ]

  5. icon
    Chronno S. Trigger (profile), Aug 20th, 2009 @ 5:08am

    Re: Re: Corruption?!

    "theory about how pirates prevent global warming!"

    I think I heard that before.

    I also have a theory about how copyright and patents are causing terrorism.

    PS: I think Fred was being sarcastic.

    reply to this | link to this | view in thread ]

  6. identicon
    Jake, Aug 20th, 2009 @ 6:51am

    Methinks He Doth Protest Too Much

    The central thrust of this article seems to be that compared to the complete disregard for the spirit of the Constitution and basic common sense for which the USPTO is not-unjustly infamous, a few backhanders aren't really that important. Your logic is kind of difficult to fault there, but why devote an entire article -albeit a short one- to telling everyone it's not really newsworthy?

    reply to this | link to this | view in thread ]

  7. identicon
    Kazi, Aug 20th, 2009 @ 7:43am

    Re: Methinks He Doth Protest Too Much

    You're confusing a blog with an article.

    Blogs are more intendent for interesting things for people who might be following it - whether newsworthy or not - with some additional information. The additional information can be newspaper worthy investigation or general opinions or just general facts to say "look!".

    This is something interesting that people reading TechDirt might be interested in. Furthermore, it isn't really newsworthy because people steal, period. Find a workplace where someone hasn't stolen in ther lifetime and I'll give you a prize. Yes, taking a pen from work home is considered stealing if it's a pen from work but not on the same scale as stealing $500,000.

    reply to this | link to this | view in thread ]

  8. icon
    Fred McTaker (profile), Aug 20th, 2009 @ 10:59am

    Re: Re: Re: Corruption?!

    I know sarcasm doesn't translate well to text, but I hoped the combination of '?' and '!' might be a clue. Putting everything in the form of a question should also make it less declarative. I'm glad Chrono got the joke at least. I have that pirates/global-warming chart on a coffee mug, praise noodles.

    As far as questions about causation go, you don't have to look very hard for instances of bribery in the USPTO leading to illicit granting of far reaching monopolies. These include monopolies and Oligopolies that manage to extend beyond the initial patent term, with the help of an outrageous 25-year head start. Lax concerns from regulators like the SEC and FTC, especially about "vertical" market integration and consolidation, also creates a situation where a monopoly in one small part of a market leads to total integrated market control. This case wasn't one of those, as it didn't involve a patent examiner, but it should still help provide a clue to issues inside the USPTO, to those who are less versed in its long and painful history.

    To answer my own question, no one is paid enough to avoid temptation. Temptation has a higher exchange rate than ethics.

    reply to this | link to this | view in thread ]

  9. icon
    Ronald J Riley (profile), Aug 20th, 2009 @ 3:45pm

    Examiners not the real problem.

    From what I can tell most examiners are decent hard working people who are in a hell hole of a bureaucracy. No examiner has the authority to get a patent issued without others reviewing it.

    Management is another issue. There is reason to believe that they use bureaucratic manipulations to do the bidding of big companies. I have long suspected that this is motivated by post USPTO employment opportunities.

    We really need an upper management housecleaning at the USPTO.

    There is nothing wrong with the underlying patent system. There is plenty wrong with USPTO management.

    Ronald J. Riley,

    Speaking only on my own behalf.
    President - - RJR at
    Executive Director - - RJR at
    Senior Fellow -
    President - Alliance for American Innovation
    Caretaker of Intellectual Property Creators on behalf of deceased founder Paul Heckel
    Washington, DC
    Direct (810) 597-0194 - (202) 318-1595 - 9 am to 8 pm EST.

    reply to this | link to this | view in thread ]

  10. identicon
    ..., Aug 20th, 2009 @ 8:36pm

    "There is nothing wrong with the underlying patent system. There is plenty wrong with USPTO management."

    You say that with such conviction.
    But isn't your statement contradictory? Clearly, management is part of that system.

    reply to this | link to this | view in thread ]

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