Startup News Digest 1/20/17

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

Five Years Later, Lessons of SOPA/PIPA Still Relevant. This week marked the five year anniversary of the Stop Online Piracy Act (SOPA) and PROTECT IP Act (PIPA) protest—a coordinated blackout of more than 50,000 websites meant to push back against the online censorship that the bills threatened. As Engine Executive Director Evan Engstrom explains in a new blog post, “the bills themselves would have allowed the government, at the behest of copyright owners, to blacklist and functionally deny access to websites accused of hosting infringing content, undermining the fundamental architecture of a free and open internet.” What had previously been assumed to be an easy victory was brought to an abrupt halt, and the political power of the internet community was revealed. In the years since then, the community has come together to influence a number of critical policy debates, including the fight over net neutrality. Heading into a new administration and a new Congress, Engine urges startups and the technology industry to remember their unique role in protecting the freedoms that the internet offers.

DHS Finalizes New Pathway for Foreign Entrepreneurs. For years, the startup community has supported efforts to allow the world’s brightest innovators to start and scale their companies here in the United States. While no visa category currently exists exclusively for foreign entrepreneurs, the International Entrepreneur Rule, which was finalized this week by the Department of Homeland Security (DHS), will make it easier for qualifying immigrant founders to build their startups in the U.S. When the rule was proposed last year, we submitted comments, along with Tech:NYC, applauding the effort and making a number of targeted recommendations that we argued would improve the framework. While not all of our suggested modifications were incorporated into the final rule, a number of them were, including lowering the initial capital investment threshold and lowering the ownership requirement. Read our full take on the final rule here.

Michelle Lee to Stay on as Director of USPTO. In a speech to the tech community on Thursday morning, Rep. Darrell Issa (R-CA) confirmed that the current Director of the U.S. Patent and Trademark Office (USPTO), Michelle Lee, would be staying on under the incoming Trump Administration. In his comments, Issa, chairman of the House’s subcommittee on patents, called Lee “one of the great things to come out of the Obama era.” Evan Engstrom, Executive Director of Engine, also released a statement saying, “startups rely on a well-functioning patent system, and under Director Lee's leadership, the Patent Office has welcomed the startup community to play a role in that debate. We look forward to continuing working with her to ensure that that the patent system promotes rather than hinders innovation."

How Many Patents Are in a Smartphone? It’s estimated that there are as many as 250,000 patents related to a typical smartphone. Until recently, if just one of those many design features was found to be infringing, the patent plaintiff could obtain damages equivalent to the total profits of the product in which the patented design was used. But last December, the Supreme Court ruled in Apple v. Samsung that courts can award partial design patent damages for the particular components in which the patent was used, rather than total profit damages. In a new graphic, we show the dizzying number of components that go into a smartphone, and illustrate why awarding total profits for the violation of a design patent on a single feature of a product makes absolutely no sense in light of this complexity.   

Protecting Startups from Patent Trolls by Getting Rid of Bad Patents. In additional patent-related news, Engine submitted comments to the USPTO on Wednesday regarding the importance the Supreme Court’s ruling in Alice v. CLS Bank, and relatedly, Section 101 of the Patent Act. Combined, Section 101 and Alice have helped to significantly curtail the issuance of low-quality, abstract software patents (a favorite weapon of patent trolls), and have given startups a crucial new tool to push back on spurious claims of infringement that otherwise might have proven to be a real threat. In our comments, we asked that USPTO recognize this and abstain from advocating for any legislative efforts to roll back Section 101 or the Alice ruling. Read the full comments here.

Spectrum Makes Headlines. After almost seven months of bidding, it appears that the end of the ongoing spectrum incentive auction is approaching. Reports surfaced on Wednesday that the auction had only garnered about $18.2 billion, significantly less than the originally projected $80 billion payday. The highly complicated and technical process was designed to free up spectrum from television broadcasters to be utilized by cellular carriers. A previous auction that had closed in early 2015 had attracted almost $45 billion worth of bids. Among the reasons cited for the lackluster results were the limited budgets of carriers and the lower frequency of the television airwaves. In addition to the auction news, spectrum was also a hot topic at Wilbur Ross’ confirmation hearing for Commerce Secretary this week. Expressing a need for increased spectrum in the private sector in his opening remarks, Ross said, “I will try my best to convince those government agencies that have spectrum and don’t really need it to permit it to becoming commercialized. That may be of help to extending broadband to rural communities that are underserved right now.” In addition Ross, Engine has also been a long-time a supporter of increasing access to innovators’ access to spectrum.

This Week’s #StartupsEverywhere Profile: Lucas Lindsey in Tallahassee, FL. The startup scene in Tallahassee, FL has gathered momentum in recent years, capitalizing on local talent, access to capital, and an environment of collaboration and inclusion. This week, we interviewed Lucas Lindsey, the Executive Director of Domi Station, a Tallahassee-based economic development organization that's mission focused on educating and empowering entrepreneurs. He shares insights on what’s been working in Tallahassee, the challenges the ecosystem faces, and which startups he’s keeping an eye on. Read the full #StartupsEverywhere profile here.