There have been many times where some agency or gov't lab has filed for patents with the idea that it prevents some private individual or company from patenting the idea.

The way patents work is that you don't need to have a fully implemented prototype or anything -- just an idea that is sufficiently well documented. When you file your patent application, you have to show when and how you documented your idea, and your patent attorney then makes a search of a) the existing patents in the US, and b) the field of your invention, making sure there is no 'prior art' (ie, someone who had the idea and made it public in documents or manifestation before you).

The government agencies don't specialize in actually getting any new ideas built as prototypes outside the government labs. So when an agency (in this case, the EPA) comes up with this idea, their notion of patenting it is twofold:

1. Generate some revenue by licensing it to some private industry developer, and

2. Making sure that it isn't like the 10's of thousands of other patents that get filed, granted and then shoved into a file cabinet somewhere in private industry and forgotten.

I can't begin to tell you how many ideas I've seen patented (even in software) that were filed, approved and then shelved. They were used to prevent innovation, not spur it. The only time those patents would come out of mothballs was to stop a competitor from using an idea. Competitor would come out with a product and the holder of the patent lets them develop a market for a few weeks, then quietly drops a notice on the innovator's desk saying "Pay our outlandish license fees, or cease and desist, or we take you to court."

This has become far too commonplace in the US patent system.