U.S. PTO launches Green Technology Pilot Program to fast track processing of green patents
Co-authored with Cyrus Frelinghuysen.
On December 7th, just hours before the United Nations Climate Change Conference was set to begin in Copenhagen, the U.S. Patent and Trademark Office (PTO) announced the launch of its Green Technology Pilot Program to speed the processing of green patents. The Program is initially set to run for only twelve months. At the end of that period, the PTO will determine whether to extend the program based both on the efficacy of the program and on feedback from participants. In addition, under the program, the PTO will accept a maximum of 3000 applications, but will reevaluate the resources needed to extend the program should the PTO receive more than 3000 applications.
The announcement was made at a joint event held by the Department of Commerce and the Department of Energy. At the event, Department of Energy Secretary Steven Chu also announced that $100 million in funding from the American Recovery and Reinvestment Act, which President Obama signed into law in February, will be made available to accelerate innovation in green technology, increase America’s competitiveness, and create jobs.
Regarding the new Green Technology Pilot Program, U.S. Commerce Secretary Gary Locke explained that, “American competitiveness depends on innovation, and innovation depends on creative Americans developing new technology. By ensuring that many new products will receive patent protection more quickly, we can encourage our brightest innovators to invest needed resources in developing new technologies and help bring those technologies to market more quickly.” Echoing that view, PTO Director David Kappos declared, “Every day an important green tech innovation is hindered from coming to market is another day we harm our planet and another day lost in creating green businesses and green jobs. Applications in this pilot program will see a significant savings in pendency, which will help bring green innovations to market more quickly.”
Ordinarily, the PTO processes patent applications in the order the applications are received. Under the new Green Technology Pilot Program, however, applications related to “green technologies,” i.e., applications pertaining to environmental quality, energy conservation, development of renewable energy resources, or greenhouse gas emission reduction, will be granted accelerated examination, provided those applications meet the program’s requirements. Secretary Locke told reporters that the goal of the program is to reduce the time it takes to review an application from 40 months to 12 months, allowing inventors to secure funding and launch businesses more quickly.
Reaction to the launch of the Green Technology Pilot Program has been generally positive. Carl Horton, Chief Intellectual Property Counsel of General Electric, said, “We hail this initiative as an excellent incentive to fuel further innovation of clean technology and a terrific mechanism to speed the dissemination of these patented technologies throughout the world.” In Q3 of 2009, General Electric was granted four fuel cell and four wind technology patents, according the to the latest CEPGI report.
According to the most recent Clean Energy Patent Growth Index (CEPGI) report, the PTO granted 271 green patents in Q3 of 2009, bringing the total number of green patents issued in 2009 to 788.
RAT Board to monitor spending of stimulus plan dollars for fraud, waste and abuse
The stimulus package, also known as the American Recovery and Reinvestment Act, signed into law on February 17, 2009, includes a number of initiatives aimed at addressing climate change, including investment in renewable energy. However, companies receiving monies from the stimulus package for clean tech, renewable energy, and other climate-related projects will be subjected to heightened scrutiny, transparency in spending and accountability. Along with the billions of dollars allocated to energy and the environment, the Act created the “Recovery Accountability and Transparency Board,” commonly referred to as the “RAT” Board, which has been given the authority to root-out fraud, waste and abuse in the expenditure of stimulus dollars. Indeed, of the $787 billion to be plowed into the economy, $350 million was allocated to the RAT Board and the offices of Inspector General for many of the major federal agencies.
Based on the composition of the Board, it is patently clear that the RAT Board will have a law enforcement bent. President Obama appointed Earl Devaney as the RAT Board’s first Chairman. Chairmen Devaney is a former Secret Service Agent, who later as the Inspector General of the Interior Department had a hand in uncovering the scope of disgraced lobbyist Jack Abramoff’s corrupt dealings with federal officials. The remaining members of the Board are Inspector Generals from the Departments of Agriculture, Commerce, Energy, Health and Human Services, Homeland Security, Justice, Transportation, Treasury, Tax Administration and Education. The key tool in promoting transparency and accountability will be the RAT Board’s website, which will provide transparency to the public about the manner in which stimulus dollars are spent, and a mechanism for the public to report fraud, waste and abuse. Tips received from the website easily can be referred to sworn federal law enforcement agents within the office of one of the Inspector Generals, the FBI and the United States Attorney’s Office for further investigation and criminal prosecution.
While accountability for the manner in which such significant sums of taxpayer dollars are spent is laudable and necessary, the undefined standard of what constitutes “waste” and “abuse” creates a legal minefield for companies receiving stimulus dollars. When it comes to criminal fraud, there are clearly defined statutes, standards of intent, and constitutional precedents to which the government must adhere when prosecuting a criminal case. Similarly, when bringing a case under the False Claims Act, 31 U.S.C. § 3729 et seq., the government or whistleblower must prove that the defendant acted knowingly, with deliberate ignorance or in reckless disregard of the truth or falsity of the information provided to the government. There is no standard for what conduct constitutes “waste” and “abuse” as used by the RAT Board, and there is no indication of the consequences when there is a finding of waste and abuse that falls short of the defined standards under federal criminal and civil fraud statutes. Compounding the confusion is the reliance the RAT Board appears to be placing on the information received from tipsters through its website. One person’s allegation of waste and abuse can be another’s innovative attempt to solve a highly complex technical problem.
To reduce the risk of becoming a RAT Board target, companies receiving stimulus monies should implement employee training and compliance programs which include standards of conduct. It is recommended that examples of waste and abuse specific to the project be included in the training program so that employees understand and have tangible examples of what constitutes fraud, waste and abuse. Employees should be encouraged to report misconduct, including waste and abuse; and procedures should be instituted to address employee complaints and concerns. If fraud, waste and abuse are detected, companies are encouraged to have a system and structure in-place for reporting the misconduct to the highest levels of management, including in-house counsel, and procedures for self-reporting the conduct to the government. When misconduct is detected, it is highly advisable to enlist the assistance of outside counsel to conduct a thorough internal investigation and provide legal advice on the manner in which the misconduct should be reported to the government.
