For our twenty-first #StartupsEverywhere feature, we talked with Aaron Slodov, Jennifer Stapleton, and Steve McHale, three entrepreneurial ecosystem builders and innovators in the Cleveland, OH region.
Engine Testifies Against Bad Patents at House Judiciary Committee Hearing. On Thursday, Engine’s President, Julie Samuels, testified in front of the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property and the Internet on the impact of bad patents on American businesses. Julie spoke to the weaknesses in the patent system and the progress that has been made to weed out low quality patents by Congress, the courts and the United States Patent and Trademark Office. Patent trolls, armed with low-quality patents, are able to extract settlements from startups and small businesses, adversely impacting the companies that can least afford these threats. Since startups and small businesses are key drivers of innovation and job growth, troll threats against them are particularly stifling to American economic growth and prosperity.
Engine Welcomes Reintroduction of Stock Options Bill. On Tuesday, Sens. Mark R. Warner (D-VA) and Dean Heller (R-NV), along with Reps. Erik Paulsen (R-MN) and Joseph Crowley (D-NY) reintroduced the Empowering Employees through Stock Ownership (EESO) Act, bipartisan legislation that will make it easier for startup employees to exercise their stock options. Engine was joined by more than 70 companies and organizations in sending a letter supporting the legislation. In response to the reintroduction, Engine Executive Director, Evan Engstrom, noted that “The Empowering Employees through Stock Ownership Act will allow more employees to obtain a stake in the companies that they help to build and grow. This policy change is a no-brainer and a win-win for both startups and their employees.” Read more here.
President Trump hosted “Tech Week” this week at the White House. Events held earlier in the week included a meeting with tech company CEOs to discuss a number of policy issues including cybersecurity, tax reform, and updating the government’s technology. CEOs from 18 leading tech companies attended including Apple, Amazon, Google, Microsoft, IBM, Oracle, and Intel. Later in the week, the White House held meetings with investors and executives to discuss emerging technologies like drones, 5G wireless expansion, and artificial intelligence.
The Venue Debate isn’t Over Yet. The House Judiciary Committee held a hearing on the Supreme Court’s decision in TC Heartland v. Kraft Foods LLC. In his opening statement, Chairman Goodlatte stated that he hoped the decision will close the loophole that has allowed patent trolls to haul startups and innovators to the Eastern District of Texas. Several Members of Congress were extremely supportive of the Court’s decision and stated that they hoped startups would see relief from abusive patent litigation. Several of the witnesses testified that the decision will see a substantial curb in forum shopping and will restore order to a broken patent system.
Tech Stages Internet Day of Action for Net Neutrality. In response to the Federal Communications Commission’s (FCC) recent announcement that it intends to roll back Obama-era open internet protections, a number of the tech industry’s biggest names, including Etsy, Amazon, Mozilla, and Kickstarter, have publicly announced that they will hold a national day of action in protest. On July 12, the companies, along with numerous other organizations (including Engine), will change their websites to bring awareness to the FCC’s attempts to undermine the free and open internet. At stake are the rules implemented under a Tom Wheeler-led FCC in 2015 that prohibit internet service providers (ISPs) from blocking or throttling internet users. The effort is reminiscent of the wide-scale internet blackout orchestrated by tech companies in protest against SOPA and PIPA in January of 2012, which would have resulted in significant censorship on the internet. If you or your company are interested in participating, you can sign up here.
Trump Asks Supreme Court to Revive Travel Ban. The Trump Administration has petitioned the Supreme Court to revive his immigration travel ban after yet another court blocked the effort last week. In a 10-3 ruling, a federal appeals court in Richmond, VA upheld an earlier Maryland ruling that suspended key parts of the Executive Order, which would would prevent entry for immigrants from six Muslim-majority countries and ban refugees from around the world. In response, President Trump has filed an appeal and asked the high court to temporarily lift the freeze. Trump will need the votes of five of the nine justices to stay the lower court orders and just four votes to add the case to the court’s docket. The startup community has pushed back against the President’s ban, with more than 300 startups and investors calling the it “morally and economically misguided” in a February letter to the President. We’re tracking.
Supreme Court Delivers Blow to Patent Trolls. The Supreme Court delivered a blow to patent trolls this week by unanimously reversing the Federal Circuit’s decision in TC Heartland v. Kraft Foods Group Brands LLC. The high court ruled that defendants in patent cases can only be sued where they are incorporated or have a regular and established place of business. The decision will make it significantly harder for patent trolls to file lawsuits in jurisdictions that patent-friendly but otherwise unrelated to the claims at issue—most notably the Eastern District of Texas, where almost forty percent of patent cases were filed last year. In a statement reacting to the ruling, Engine Policy Director, Rachel Wolbers, noted, “The Supreme Court’s decision in TC Heartland is another important step to preventing abusive patent litigation tactics that disproportionately impact startups...While this ruling is a significant victory in the in the fight against patent trolls, Congress must continue to work to protect startups from abusive patent litigation...We are thankful for today’s ruling, but know there is much more work to be done.”
Today, the Supreme Court delivered a blow to patent trolls by unanimously reversing the Federal Circuit’s decision in TC Heartland v. Kraft Foods Group Brands LLC. The high court ruled that defendants in patent cases can only be sued where they are incorporated or have a regular and established place of business. The decision will make it significantly harder for patent trolls to file lawsuits in jurisdictions that patent-friendly but otherwise unrelated to the claims at issue—most notably the Eastern District of Texas, where almost forty percent of patent cases were filed last year.
The Federal Communications Commission (FCC) took the first official step in eliminating existing net neutrality protections this week. In a 2-1 party-line vote, the Commission adopted Chairman Ajit Pai’s Notice of Proposed Rulemaking (NPRM), which would reverse the 2015 Open Internet Order and the agency’s Title II classification of Internet Service Providers (ISPs). In a statement reacting to the vote, Engine Executive Director Evan Engstrom noted that “Any effort to undermine existing net neutrality rules would greatly harm the startup ecosystem...We must not remain silent. Now is the time for the startup community to galvanize around meaningful protections.” Y Combinator founder Sam Altman echoed this sentiment in a Wired op-ed published the same day as the vote, arguing that startup founders have a duty to fight for net neutrality. “Without strong net neutrality rules...the cable and wireless companies that control internet access will have outsized power to pick winners and losers in the market,” he writes. The FCC’s vote initiates a public comment period of 90 days.