This morning, the Supreme Court ruled unanimously in Samsung’s favor in a case against Apple involving how damages should be calculated and awarded in design patent cases. In a win for the startup community, the court held that an award for design patent infringement does not necessarily allow the patent holder to obtain damages equivalent to the total profits of a product in which the patented design is used, as the lower court originally ruled. Rather, courts can award design patent damages for the particular components in which the patent was used. The decision may result in the lower court drastically decreasing its original award of almost $400 million to Apple, though the Supreme Court did not rule on how the modified damage amount should be calculated.
On Wednesday, Engine’s Executive Director Evan Engstrom and sixteen other technology industry leaders sent a letter to President-elect Donald Trump outlining a number of growth and innovation-driving principles he should consider as he sets his policy agenda. The letter outlines the impact of the technology industry on economic growth and encourages Trump to tap into the sector’s ingenuity to solve some of America’s biggest challenges. Specifically, the letter recommends investing in an improved technology infrastructure, modernizing the ways laws and regulations govern data, pursuing tax reform, and filling government with people who are committed to working faster and smarter. Read the full letter here.
On Wednesday, Engine’s Executive Director Evan Engstrom and sixteen other technology industry leaders sent a letter to President-elect Donald Trump outlining a number of growth and innovation-driving principles that he should consider as he sets his policy agenda.
DC Grapples with IoT Cybersecurity. The Internet of Things (IoT) has grown exponentially in recent years: there are now approximately 6.4 billion internet connected devices worldwide, a number that is increasing by 5.5 million every single day. While the growing IoT holds tremendous potential, recent cyberattacks have left policymakers increasingly concerned over vulnerabilities in connected devices. On Tuesday, the National Institute of Standards and Technology (NIST) issued a set of guidelines on IoT cybersecurity, while the Department of Homeland Security (DHS) published its own policy principles for securing connected devices. The following day, policymakers on the Hill held a joint hearing to discuss security and cyberattacks on the IoT. There was consensus among panelists around the importance of standards and guidelines like those released by the Administration earlier in the week. However, there was disagreement over whether formal regulations are necessary. While one participant called for government intervention, Rep. Greg Walden (R-OR), who chaired the hearing, noted that regulations would be a "knee-jerk reaction" to recent attacks. We’re tracking.
On Tuesday, Engine joined over 80 startups and entrepreneurial ecosystem leaders in urging Congressional leadership to include the Empowering Employees through Stock Ownership (EESO) Act in any legislative vehicle Congress plans to pass before the end of 2016.
Tech Confronts the Reality of a Trump Presidency. It’s no secret that Donald Trump has been at odds with the tech community throughout his campaign. And while much of the industry is still reeling after Tuesday’s results, startup and tech leaders are beginning to come to terms with the reality of a Trump presidency. While a number of the positions espoused by Trump are antithetical to those held by the tech community (think immigration, encryption, net neutrality, etc.), some tech leaders are approaching President-elect Trump with an open mind and expressing a willingness to work with him. Then, on the other end of the spectrum, there’s VC Sherwin Pishevar calling for California to secede. No one can know exactly what Trump’s presidency will mean for startups and tech, but numerous publications are making predictions. A few of them can be found here, here, here, here, and here.
This week, 84 business executives, both male and female, penned an open letter to our next president detailing the steps that he or she should take to bolster the participation of women in entrepreneurship. They grouped their suggestions into three broad categories: access to financial and human capital, access to local and global markets and networks, and help with the changing-face of technology. The lack of diversity in startups and investments is well documented. But it’s also indisputable that improving the landscape for female entrepreneurs will create positive economic and social impacts. As the group pointed out in their letter, if women and men participated equally in the entrepreneurial ecosystem, the United States’ GDP could rise by $30 billion. The business leaders also noted that women invest 90 percent of their income into their communities, meaning that an investment in their careers could easily benefit society as a whole.
Engine chose to make its home in the Bay Area to be close to some of the most creative and disruptive companies in the country. A place where an innovative internet service provider like Monkeybrains could crowdfund the deployment of gigabit wireless service. Or where a provider like Webpass could build an entirely wireless infrastructure, using super high spectrum frequencies to deliver the fastest internet in the city.
Change in Leadership at the Copyright Office. Last Friday, Maria Pallante was removed from her post as Register of the Copyright Office by the new Librarian of Congress, Carla Hayden. While Pallante was reassigned as a senior advisor on digital strategy, she formally declined the new position, resigning from the Office on Monday. As the 12th Register, Pallante was both a vocal advocate of separating the Copyright Office from the Library of Congress and an early supporter of SOPA—two policies strongly opposed by the startup and tech communities, as well as public interest groups. The abrupt change-up has sent shockwaves through both the tech and entertainment industries, and many believe it is a foreshadowing of the larger copyright reform debate that is expected to occur early in the next Congress. We’re tracking.
For years, the startup and tech communities have been advocating for a pathway that would encourage the most promising immigrant entrepreneurs to start and scale their companies in the U.S. While no program currently allows for this, a recent proposal from the White House could change that. The International Entrepreneur Rule, proposed by the U.S. Citizenship and Immigration Services (USCIS) in August, will allow qualifying foreign entrepreneurs to live in the U.S. to build their startup for up to five years. On Monday, Engine and New York-based technology trade group Tech:NYC submitted comments supporting the rule and recommending a number of targeted modifications, which we believe will allow the Rule to have an even greater positive impact. You can learn more and read the full comments here.
At Engine, we’ve seen firsthand some of the extraordinary contributions that immigrant entrepreneurs have made to the startup economy. One-third of U.S. venture-backed companies that went public between 2006 and 2012 had at least one immigrant founder. Moreover, immigrant entrepreneurs started, in whole or in part, some of the most important technology companies of our time, including Google, Intel, Yahoo!, eBay, and WhatsApp. In fact, the United States was home to almost 2.9 million foreign entrepreneurs who generated $65.5 billion in business income in 2014.
Engine and Tusk Ventures have released our second “Grading the Candidates on Tech” report card, this time focusing on the candidates in some of November's tightest Senate races. We evaluated the candidates in eleven different contests based on their positions on key issues including broadband access and infrastructure, intellectual property, data security and privacy, and talent acquisition. The report card showed there were no overall leaders in the pool of 22 candidates and all but four candidates received an “incomplete” on a key issue on their respective report cards. The grades also reveal that many have failed to outline or champion any tech policies throughout their political careers, with data security and privacy receiving the most “incomplete” grades due to the lack of unbridled advocacy in supporting reforms to U.S. government surveillance laws. View the full analysis here.
Today, Engine Advocacy and Tusk Ventures released their second “Grading the Candidates on Tech” report card, this time grading the positions that candidates for the U.S. Senate are taking with key issues facing startups and the innovation economy. Twenty-two candidates were rated based on their level of support, understanding, and familiarity with technology and the priorities of the nation’s startup community. Final grades reflect candidates' positions on key issues including broadband access and infrastructure, intellectual property, data security and privacy, and talent acquisition.
With a population of almost 3 million (that is growing by 100,000 every year), ten Fortune 500 companies, and a strong network of regional universities, it may be unfair to call Denver a city on the rise. However, Denver residents will be the first to recognize that the city’s environment for early stage entrepreneurs and startup innovation is continuing to develop and there is still a lot of room for the city to grow. The Rise of the Rest tour, with Steve Case at the helm, spent its second day on the road in Denver to learn from the successes and challenges of the ecosystem and inspire the wider business, policy, and educational leaders in the area to support its many entrepreneurs.
In the 1860s, the First Transcontinental Railroad was constructed, connecting Omaha, NE to Sacramento, CA. It was fitting, then, that we kicked off Rise of the Rest’s western tour with a symbolic visit to to Lauritzen Gardens, the original site of the railway. While the rail line was one of Nebraska’s earliest “startups,” today there is a new startup scene taking hold in Omaha and Lincoln—one fueled by growing investment, exceptional local talent and ideas, and a unique culture around support and community.
An Engine-championed bill that would make it easier for startup employees to exercise their stock options cleared important hurdles in Congress this week. Yesterday, the House of Representatives passed the Empowering Employees Through Stock Options Act, and a companion bill cleared the Senate Finance Committee earlier in the week. Even with partisan divisions higher than usual in this contentious election year, Democrats and Republicans came together to support EESO, passing the bill unanimously in the Senate Finance Committee and with substantial bipartisan support in the House. As we’ve written in the past, because employees exercising certain types of stock options must pay an immediate tax upon exercise (even though there is no public market on which to sell some of the newly acquired shares to pay the tax), startup employees are often unable to purchase their shares, making it difficult for startups to attract and compensate top talent. EESO allows employees to defer the tax payment on options for seven years or until the underlying shares are actually sold, providing workers with the flexibility they need to realize the value of their contributions to their companies. We are hopeful that the full Senate will consider the bill as expeditiously as possible so that it can head to the President’s desk before the end of his term.
Today, the U.S. House of Representatives passed the Empowering Employees through Stock Ownership Act (H.R.5719), which will encourage startup growth by making it easier for employees at private companies to exercise their stock options. The following statement can be attributed to Engine Executive Director Evan Engstrom: