Startup News Digest: 5/26/17

Our weekly take on some of the biggest stories in startup and tech policy. To receive this weekly digest in your inbox, sign up at

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 are 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.”

Bill Exploring Portable Benefits Introduced in Congress. Senator Mark Warner (D-VA) and Congresswoman Suzan DelBene (D-WA) introduced the Portable Benefits for Independent Workers Pilot Program Act on Thursday. The legislation would give the Department of Labor $20 million to award to states and localities that are experimenting with various portable benefits models for the independent workforce. As the nature of work changes and the on-demand economy grows, an increasing number of Americans are operating outside of the traditional employer-employee relationship and are left without benefits like health insurance, retirement savings plans, and workers compensation. Many have argued that the solution to this problem is to make benefits more portable so that they can move with an individual from job to job (or gig to gig). However, there is some disagreement around the specifics of what that should look like. Warner and DelBene’s legislation would allow states and localities to explore these questions before setting top-down, federal standards. The bill has received support from a number of on-demand startups, including Lyft, Postmates, and DoorDash. 

ICYMI: Kauffman Releases Its 2017 Startup Index. The Kauffman Foundation released its annual Startup Index Report late last week, reflecting data gathered from 2016. This year, new startup creation returned to pre-Recession levels, continuing a general upward trend over the last three years. Some highlights include the fact that 86 percent of entrepreneurs said they founded new startups out of opportunity rather than necessity, and first-generation immigrants now make up nearly 30 percent of American entrepreneurs, its highest level in 20 years. However, the rate of new entrepreneurs did slow down slightly, dropping to .31 percent of the U.S. population, down from .33 percent in 2015. Kauffman also found that California, Texas, Florida, Arizona, and Colorado boast the highest rates of startup development of all U.S. states, and Miami, Austin, Los Angeles, San Diego, and Las Vegas boast the highest rates of startup development among U.S. metropolitan areas. Generally, the report reflected optimism for the future of startup activity in the U.S., with evidence pointing to gains in several regions.  

Engine Voices Support for IPEC Nominee. This week, Engine wrote in support of the Senate Judiciary Committee’s confirmation hearing on Vishal Amin’s nomination to the position of U.S. Intellectual Property Enforcement Coordinator (IPEC). The IPEC is the leading voice in the Administration on intellectual property rights and plays a key role in creating a balanced intellectual property system for the tech economy. As argued in our letter, the startups we represent are responsible for developing some of the most valuable intellectual property in the world but are also particularly vulnerable to frivolous patent and copyright litigation. Engine has worked closely with Mr. Amin over the years and he has been influential in crafting balanced patent and copyright policies that help foster the startup economy. His experience and familiarity with startup issues makes him particularly qualified to help develop a pro-innovation intellectual property agenda. We hope the Committee will promptly approve his nomination, and we look forward to working with him in the coming years.

CA Assembly to Consider Bill Impacting Homemade Food-Sharing Startups. In recent years, a number of startups have popped up in the Bay Area and across the country that help to facilitate the ‘informal food economy,’ empowering home cooks to sell their homemade food to neighbors and others in their community. However, current rules and regulations place limits on what these home cooks are allowed to sell to others. Earlier this year, California Assemblymember Eduardo Garcia introduced the 2017 Homemade Food Act (AB 626), which would permit small-scale food sales from homes in California and improve upon existing regulations to legitimize an important lever of economic empowerment for immigrant, minority, and other vulnerable communities and improve public health safeguards around the existing informal food economy. AB 626 will go to vote next week in the California Assembly. If you’re based in California and would like to express your support for the bill, you can call, tweet, or email your assemblymember here.

This Week’s #StartupsEverywhere Profile: Brett Greene and Red Russak (Greater Seattle, WA). Home to tech giants like Amazon and Microsoft, Seattle has had a thriving technology ecosystem for decades. This week, we talked with Brett Green and Red Russak, co-founders of New Tech Northwest, about how the presence of those established industry leaders has enabled the growth of a thriving startup ecosystem in the region. “In addition to the large tech presence here, there are a lot of other factors that make Seattle an ideal place to build a startup,” Brett argues. “We have an environment of collaboration, a laid-back but focused attitude, connections to multi-national companies, angel groups, venture capitalists, over 300 tech meetups, and a local, world class university, not to mention over 55 colleges and universities across Washington state.” Read the full profile here.

FTC Commissioner McSweeny to Talk Net Neutrality in SF. This coming Wednesday, June 31, from 6:00 - 8:30 pm, Federal Trade Commission (FTC) Commissioner Terrell McSweeny will be discussing what’s next for net neutrality with Jon Sallet, Partner at Steptoe & Johnson and former general counsel at the Federal Communications Commission (FCC). The event will take place at Galvanize in downtown San Francisco. Learn more about the event and register here.