WASHINGTON - DECEMBER 9:  Former Fannie Mae CEO Franklin Raines testifies before the House Oversight and Government Reform Committee during a hearing on 'The Role of Fannie and Freddie Mac in the Financial Crisis' on Capitol Hill December 9, 2008 in Washington, DC. The hearing focused on the financial collapse of Fannie Mae and Freddie Mac, their takeover by the federal government, and their role in the ongoing financial crisis.  (Photo by Chip Somodevilla/Getty Images)

Former Clinton and Obama budget adviser Franklin Raines denied having any ownership of the two patents he filed as “inventor” of a key carbon-emissions patent he developed as CEO of the government-sponsored mortgage giant Fannie Mae.

Raines responded in a series of e-mails to WND’s story last week. A Patent Office spokeswoman also reversed earlier statements.

Raines and the Patent Office insisted Fannie Mae, not Raines or his co-inventor partners, stand to make millions of dollars if their patent is used in any carbon-capping scheme implemented by the Obama administration, either through Environmental Protection Agency regulations under the Clean Air Act or through new legislation by Congress.

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“I have no past or continuing financial interest in these patents,” Raines told WND. “[Fannie Mae] and its counsel applied for the patents, before I left and after. My role was merely to sign any documents required as inventor.”

The first patent, No. 6904336, was filed Nov. 8, 2002, and approved June 7, 2005.

On Dec. 21, 2004, Raines accepted “early retirement” as Fannie Mae CEO while Securities and Exchange Commission investigators pursued their inquiry into Fannie Mae accounting irregularities under Raines’ management.

The second patent, No. 7133750, was filed April 28, 2005, four months after Raines left Fannie Mae, and was approved Nov. 7, 2006.

The patents had the same name, “System and Method for Residential Emissions Tracking.”

Prior to publishing the first article last week, WND had made an extensive effort to contact Raines, including phone messages left with his attorney of record. But Raines did not respond.

Patent Office retracts

In response to WND’s article published last week, the U.S. Patent and Trademark Office sent e-mails to WND retracting its earlier statements.

Last week, spokeswoman Jennifer Rankin Byrne told WND that after examining the first and second patents, she concluded that “one application is a continuation of the other,” meaning the two patents are “essentially for the same invention.”

WND asked Rankin Byrne at the time if the second patent superseded the first patent.

“Yes,” she replied, “it would supersede.”

In an e-mail Monday, however, Rankin Byrne retracted her statement.

“My use of ‘supersede’ was a poor choice of words,” she said. “The second patent only ‘supersedes’ in the chronological sense – the second patent does not vacate the first or take its place. Both patents exist together.”

At issue was whether the second patent had ever been assigned by Raines and his co-inventors to Fannie Mae.

In three separate assignments made in April and July 2004, Raines and his associates had filed with the Patent Office the formal documents needed to assign the first patent to Fannie Mae and to CantorCO2e, a London and San Francisco–based international company, self-described as “a leading global provider of financial services to the world’s environmental and energy markets.”

Last week, the U.S. Patent Office had confirmed to WND that there was no record of any assignments for the second patent and that assignments made for first patent do not automatically carry forward to the second.

On Monday, however, Rankin Byrne took a contrary position, stating, “The assignment in the patent issued off the original application (the ‘parent’) is carried forward in the patent issued on the continued application (the ‘child’).”

Similarly, Raines argued, “The [second] patent says on its face that it has been assigned to Fannie Mae.”

Still, neither Rankin Byrne nor Raines could explain why no assignment documents had been filed with the Patent Office on the second patent.

“If no assignment has been filed for the continuation patent, then that is an oversight by [Fannie Mae], but it does not affect their legal right to ownership of the patent,” Raines speculated.

WND asked Raines if he or his co-inventors had any financial interest in CantorCO2e.

“I have no knowledge of CO2e.com,” Raines wrote. “I cannot speak for the co-inventors, but those who were employees of Fannie Mae are covered by the same requirement as I am. It is my understanding that under Fannie Mae, policy patents awarded to employees in the course of their work are the property of the company.”

Fannie Mae has no comment

Last week, in response to a WND inquiry, Fannie Mae spokeswoman Janis L. Smith referred WND to a letter sent by Fannie Mae general counsel Alfred M. Pollard to Reps. Darrell Issa, R-Calif., and Jason Chaffetz, R- Utah, of the House Committee on Oversight and Government Reform, dated May 25, 2010.

In the letter, Pollard explained that the first patent “was granted on June 7, 2005, to Fannie Mae and a joint owner, CO2e.com LLC.”

Pollard’s letter appears aimed at explaining to Issa and Chaffetz why Fannie Mae was pursuing a carbon-emissions patent, an issue apparently outside the authority of the mortgage government-sponsored entity.

Pollard made no reference to the second patent filed by Raines after he left Fannie Mae, evidently unaware of it.

This week, Smith did not respond to WND e-mails requesting again an explanation why the second patent was not referenced in Pollard’s May 25 letter to Congress.


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