More Thoughts on Patent Reform & Building a Pro-Innovation Economy

30 Apr

I wrote about the introduction of the SHIELD Act a few weeks ago and the pressing need for further reform of the U.S. patent system. The bill from Rep. Peter DeFazio (D-OR) and Rep. Jason Chaffetz (R-UT) won’t see the House take action with immigration reform and restructuring of the tax code coming down the pike, but support for the bill is gaining steam. Presently, the Federal Trade Commission (FTC) and Department of Justice (DOJ) are taking public comments on the issue of patent trolls. Groklaw highlights one of the more compelling briefs from Barnes & Noble that sheds light on just how abusive patent trolls are on companies:

The patent system is broken. Barnes & Noble alone has been sued by “non practicing entities”—a/k/a patent trolls—well over twenty-five times and received an additional twenty-plus patent claims in the last five years. The claimants do not have products and are not competitors. They assert claims for the sole purpose of extorting money. Companies like Barnes & Noble have to choose between paying extortionate ransoms and settling the claim, or fighting in a judicial system ill equipped to handle baseless patent claims at costs that frequently reach millions of dollars.

B&N is asserting that the trolls’ litigation free-for-all is something akin to “death by a thousand cuts”. The company is spending tens of millions defending against a tidal wave of litigation and enduring a litany of claims that are without merit. While there are rules permitting groups to seek sanctions and recover attorneys’ fees, these awards are almost always limited to more extreme cases. These tens of millions spend on legal fees could be spent on developing new products, marketing, and other operating expenditures. Further, Mike Masnick at TechDirt highlights a key section of the brief stating that the abusive practice of the trolls directly violates the original intent of patents in the Constitution whose purpose is to promote the progress of useful arts.  B&N contends that since the legal rights afforded to the patent is not used in manner set forth by the Constitution, then it should be seen as unconstitutional:

The Patent and Copyright Clause grants Congress the power “[t]o…promote the Progress of Science and useful Arts,” not science fiction and litigious arts. (Article 1, Section 8, Clause 8 (emphasis added)). But the current system allows trolls to pursue fantastic allegations—claims that would be laughed out of the room in actual scientific or technical circles—in endless litigation that taxes and taxes true innovators while making no meaningful contribution to society.

The B&N filing is worth a read for anyone interested in fixing our innovation system over the long-haul. Further food for thought on the innovation front, the Mercatus Center’s Jerry Brito had George Mason University’s Professor Alex Tabarrok on his ‘Surprisingly Free’ podcast to talk about Tabarrok’s book, Launching the Innovation Renaissance: A New Path to Bring Smart Ideas to Market Fast, and his ideas on how to fix our innovation system.  Tabarrok discusses America’s declining growth rate in total factor productivity, what this means for the future of innovation, and what can be done to improve our long-term economic prospects:

According to Tabarrok, patents, which were designed to promote the progress of science and the useful arts, have instead become weapons in a war for competitive advantage with innovation as collateral damage. College, once a foundation for innovation, has been oversold. And regulations, passed with the best of intentions, have spread like kudzu and now impede progress to everyone’s detriment. Tabarrok outs forth simple reforms in each of these areas and also explains the role immigration plays in innovation and national productivity.

The future of the American innovative economy could be decided in 2013. Passing immigration reform, restructuring the tax code that encourages investment in innovation, the adoption of crowdfunding rules,  and stopping abusive lawsuits that tax our tech companies are four very huge steps towards that reality.


Immigration Reform 2013: A Huge Opportunity to Grow the Economy

30 Apr

The Senate plans to begin mark up on the overhauling the maze that is the American immigration system on May 9. Our immigration system is in dire need of modernization and the 844 page bill [PDF] introduced by the so-called “Gang of Eight” is not lacking in motivation (read a summary here). The Washington Post calls the bill “the most ambitious overhaul of the nation’s immigration system in three decades.” The Senate appears to have majority support for the bill, with some claiming the legislation will sail through the chamber with 70 votes.

All roads for the legislation lead to the uncertain fate when it meets the GOP-controlled House. However, the bill does have key support from Rep. Paul Ryan (R-Wisc.). Rep. Ryan, like many others, makes the argument that reforming immigration is pro-growth economic policy and for the betterment of our long-term prosperity. And he’s right. Modernizing the American system of immigration is as close to a “free lunch” as any public policy issue. The evidence and data supporting comprehensive immigration reform is overwhelmingly positive.

Economic Benefits of Reform:

Immigrant populations will increase the size of economic opportunity by creating new businesses and expanding the scope and quantity of economic production. These activities translate to positive affects on the broader economy. When reform was first introduced in 2007, the Congressional Budget Office analyzed President George W. Bush’s proposed immigration overhaul. The CBO, as Ezra Klein notes, found that modernizing the system would increase federal revenue by $48 billion while costing only $23 billion in increased public services — before even considering the broader economic benefits. There is general consensus across the ideological spectrum that the economic benefits to immigration reform will be a boon for the U.S. economy.

Factoring in broader economic benefits, research from the left-leaning Center for American Progress finds reform would add $109 billion additional tax revenue, create 121,000 jobs due to increased consumer spending, and add $832 billion in U.S. GDP over 10-years. Further, an analysis from the right-leaning American Action Forum illustrates that benchmark immigration reform would raise the pace of economic growth by nearly a percentage point over the near term, raise GDP per capita by over $1,500 and reduce the cumulative federal deficit by over $2.5 trillion. Think tanks compete with numbers and ideas. Finding two on as far on the opposite side of the spectrum as Center for American Progress and American Action Forum in agreement on an issue is a rare occurrence. The data and facts supporting immigration reform simply do not lie.

Contributions of High-Skilled Immigrants & Entrepreneurs:

Numerous studies on entrepreneurship among high-skilled immigrants compliment these findings as well. High-skilled immigrants have provided one of America’s greatest competitive advantages and a consistent source of innovative mojo for our economy. Immigrant entrepreneurs have brought us Chobani, Intel, Google, Yahoo, and others. An analysis of U.S. Fortune 500 companies shows that 40% were started by immigrants or the children of immigrants.

Immigrants have displayed entrepreneurship rates above that of the native born population. Vivek Wadhwa, et al. found that immigrants make up just 12% of the U.S. population yet have started 52% of Silicon Valley’s technology companies, while contributing more than 25% of U.S. global patents. Additional research shows that for every 100 additional foreign-born workers in STEM (science, technology, engineering, mathematics) jobs created 262 additional jobs for native U.S. workers. Nationwide, companies with at least one foreign-born founder employed roughly 560,000 workers and generated $63 billion in sales in 2012 [PDF].

Cost Claims Overstated:

Opponents of reform are leading with claims that costs of the system would be too prohibitive on government programs. The Heritage Foundation, who played a key role in derailing the 2007 effort, is close to releasing a reprise of its costs analysis of the reform. These numbers will certainly serve as the basis for the rallying cry against reform for the opposition. But here’s the problem: Heritage’s 2007 cost analysis relied on a severely flawed methodology producing grossly exaggerated costs to federal taxpayers and significantly undercounting economic contributions. The Cato Institute’s Alex Nowrasteh offers 11 reasons why the Heritage’s analysis is severely flawed. The release of the Heritage analysis is expected to be heavily scrutinized.

Embracing the Next American Economy:

The introduction of comprehensive immigration reform ensures that legacy will endure for our next American economy. The quantitative research and data supporting the case for overhaul is overwhelmingly positive. America has achieved greatness due to the diversity and talents of our population. The American legal system that encourages risk and a culture of innovation are what makes America great. We need the keep the door open to individuals to ensure that continues.

This article first appeared on PolicyMic.

NHL 2013 Stanley Cup Playoffs: 9 Storylines to Watch

29 Apr
The puck drops on the 2013 National Hockey League Stanley Cup Playoffs on Tuesday night for a season that almost didn’t happen.

The Stanley Cup Playoffs is the most magical postseason in sports. Here are nine storylines to watch:

1. Can the Playoffs Help Fans Forget About the Lockout? 

The NHL and NHLPA came off their most successful year ever in 2011-12 and headed into the off-season with the expiration of the collective bargaining agreement looming. Despite the passion for the game exuded by fans, players, and organizations, the lockout was a staunch reminder of the success the league ultimately depends on for its bottom-line. The NHL and NHLPA did little to show its remorse for the strife it put its fans through other than get back on the ice without a peep. Most of us have moved on, but this season will always be marred in controversy regardless of who wins. 

2. Teams Snap Playoff Droughts:

Two historic franchises, Toronto Maple Leafs and New York Islanders, have finally ended playoff droughts. The last time the Leafs made the playoffs Facebook was just founded and President Barack Obama was still an Illinois state senator. The Leafs, the NHL’s most valuable franchise, have the added pressure of the longest streak without winning a Stanley Cup at 44 years. My apologies in advance, Leafs fans.

3. Will Trade Deadline Moves Pay Off? 

Lots of teams made big moves at the trade deadline. The Boston Bruins, New York Rangers, Ottawa Senators, Pittsburgh Penguins, and St. Louis Blues all made key acquisitions that could prove to be pivotal over the long-haul of the playoffs.

4. The Original Six:

The Original Six franchises have all made the playoffs for the first time since 1996. Since the current playoff format was implemented in 1994, this has only happened three times (1994, 1996, and 2013). The NHL’s brass has to be pleased with its longest-standing franchises reunited in the playoffs.

5. Canada’s Cup? 

Not that Canadians need the reminder, but a Canadian franchise hasn’t won the Stanley Cup since 1993 when the Montreal Canadiens hoisted hockey’s holy grail for the 23rd time in franchise history. Canadian teams have came up short in the Stanley Cup final four times in the last nine years: Calgary (2004), Edmonton (2006), Ottawa (2007) and Vancouver (2011). This year, four franchises (Montreal, Ottawa, Toronto, and Vancouver) give hope for Lord Stanley’s trophy to return to the great white north. 

6. Can the Los Angeles Kings Do It Again? 

Winning back-to-back championships in any sport is extremely difficult. The Los Angeles Kings (and their amazing social media team) enter the playoffs as the #5 seed in the Western Conference with the same roster from its unprecedented journey into hockey lore for its first ever Stanley Cup. Not to mention the first-ever 8th seed to win the Cup. They will be a team to watch.  

7. Watch the Hot Teams:

No team is entering the postseason quite like the Washington Capitals. The Capitals were basement dwellers until hockey started making sense again as the team ended the season on a relentless tear winning 11 of their last 13 games. Don’t count out the Detroit Red Wings either, who made a huge push of their own to lock up the  7th seed in the West.

8. Can Anyone Stop Chicago or Pittsburgh?

Chicago started the strike-shortened season off with an unprecedented 24-game streak without a regulation loss and easily locked up the Western Conference by 11 points. Its counterparts in the East, the Pittsburgh Penguins, who ran off a 15-game winning streak of their own, have occupied the #1 seed for much of the season. The Penguins skated top seed without its top player, Sidney Crosby, and injuries to other key players.

9. Injuries:

This is stating the obvious, but teams who stay out of the infirmary usually win. The Penguins have been without Sidney Crosby — the league’s best player — since March 30.  Plagued by a concussion that limited his playing time the past two seasons, Crosby’s injury history has any Penguins fan nervous. The team has proven they can win without him, but his return is crucial to their Cup chances. Likewise for the Ottawa Senators, who will see two marquee players, Erik Karlsson and Craig Anderson, returning to the lineup for the playoffs.

The Stanley Cup Playoffs are most wonderful time of the year for hockey fans across the globe. Here’s the always chilling video montage from CBC’s ‘Hockey Night in Canada’ that gets the heart pumping. Who’s your 2013 Stanley Cup champion?

This article first appeared in the Culture section at PolicyMic.

LetsMoveDown: The App That Gets Fans Closer to the Action

24 Apr

We have all been there before. Heading to the game and then making a move towards more promising vacancies in the lower level shortly after tip-off or first pitch. Squatting in empty seats closer to the court or playing field will usually get you thrown out by an usher or embarrassed by the actual ticketholder. Well, now there’s an app for that.

Launched in November 2012, LetsMoveDown revolutionizes the fan experience by providing in-game seating upgrades and exclusive rewards such as concessions coupons and merchandise discounts directly to iOS- or Android-supported mobile devices. LetsMoveDown generates a new revenue stream back to the home team, helps offset the costs associated with “no-show seats” (seats left empty by ticketholders that don’t show up to the game), and gives the fans at the game an unrivaled experience. LetsMoveDown also allows season ticket holders to sell unusable tickets to fans at the game by simply scanning the barcodes of the tickets through the platform.

Based in Washington, D.C., LetsMoveDown made its debut during the 2012-2013 University of Maryland’s men’s basketball season and has launched with the Memphis Grizzlies and Brooklyn Nets in the NBA this season. LetsMoveDown is focused on creating a unique fan experience during the game, and believes that in-game upgrades are just the beginning. LetsMoveDown also offers fans instant rewards during the game, and is constantly looking for new ways to make the fan experience as enjoyable as possible—even if fans don’t necessarily want to upgrade their seats during the game.

LetsMoveDown co-founder Derek Shewmon explains how LetsMoveDown works: “LetsMoveDown’s mobile app allows teams to sell leftover primary inventory and helps fans sell unusable tickets as in-game upgrades to other fans at the event after the game has started. The platform is incredibly simple, fast and fun to use so that the fan can enjoy the game in a completely new way.”

For fans, prices are set at the beginning of the game by the team, usually around face value or at a slight discount. After the game starts, ticket prices decline based on an algorithm that factors in variables such as seat location, time remaining in the game, day of the week, home team record, away team, and supply and demand of tickets to the game. LetsMoveDown partners with each team to uniquely set the parameters of algorithm. Fans also have the option of entering an “auto-pilot” bid through the app, which sets a maximum price that fans are willing to pay for an upgrade seat in a specific location. If the fan’s bid matches the price being offered for a better seat, the fan is automatically upgraded and receives his or her new tickets directly through the app.

Shewmon says that fans have enthusiastically embraced the product and love how it gives every fan the opportunity to experience a game from a vantage point that they haven’t had before. Likewise, the teams are happy with LetsMoveDown because it generates additional revenue, fills empty premium seats and gives the fans a completely new experience that will hopefully get them hooked on sitting closer to the action.

While there has been lots of positive feedback for LetsMoveDown, like any start-up company, there are still challenges. Shewmon says, “Educating the fan base on the in-game marketplace is a short-term challenge. This is a new concept and a new product, and it takes some time to get the fans familiar with the process of upgrading a seat during the game. There is a lot of joint marketing between LetsMoveDown and the teams to educate the fan on the process, assure them that ushers recognize upgrade tickets and that the team supports this initiative.” Additionally, signal strength with mobile devices is an on-going short-term challenge that teams are working to address.

Matt Monroe, Assistant Athletic Director for Ticket Services at the University of Maryland was emphatic about the partnership with the start-up: “Terp fans enthusiastically embraced the concept of LetsMoveDown after we rolled it out this past season. It’s a huge benefit to our fans and season ticket holders who don’t often have access to seats in the lower bowl without buying them on the secondary market. Now, the diehard fans have the chance to move down to the lower level for big games at cheaper prices. It really maximizes the experience for the fans. The company worked closely with the university and was very flexible in implementing the product for the university. I wouldn’t be surprised to see LetsMoveDown used on college campuses across the country.”

LetsMoveDown is a simple yet revolutionary product that increases the fan experience and allows teams to directly reach their fan base at a more personal level. The company is one of the first to market in a growing space with a very strong product that has been tested and validated by its users. Shewmon and his co-founders are constantly tweaking the LMD platform to give the fans at the game an unrivaled experience and hope that this is just the beginning of new ways to enhance the fan experience at sporting events.

This article was first published on SportTechie.

Tunes: Yo La Tengo :: Tiny Desk Concent @ NPR Music

16 Apr

Putting on a Yo La Tengo record and immersing yourself in the music is a spiritual journey. In January, the band released its 13th album, Fade, to critical acclaim and positive reviews. The album could be one of the best of 2013 when its all said and done. Since 1984, the trio of Ira Kaplan, Georgeia Hubley, and James McNew have paved the way for indie and experimental rock musicians. Many have anointed them the heirs to The Velvet Underground’s lo-fi legacy of sound. As Otis Hart of NPR Music writes:

The band epitomizes, sheepishly, why so many were drawn to indie rock in the 1990s: the casual resolve to be yourself and let everything else sort itself out.

Check out the band playing a lovely set from NPR Music’s Tiny Desk Concert series featuring ‘Is That Enough’, ‘Tears Are In Your Eyes’, and ‘Ohm’.

Quick Fix: FastCompany’s United States of Innovation

15 Apr

FastCompany just released a fantastic new analytical series ranking innovation across 50 states and the District using factors such as entrepreneurial activity, start-up rates, new firm creation, and funding for new companies. The project also features viewpoints from local entrepreneurs across the country to tell us why Florida is excelling, what West Virginia and Oklahoma are doing to catch-up, and the start-up surprises in Alaska. There are also perspectives on entrepreneurial density in the city and in the prairie.

Here’s how they did it:

“We crunched the numbers, beginning by assessing the Bureau of Labor Statistics’ launch rate of all private-sector businesses, as well as the Kauffman Index of Entrepreneurial Activity’s percentage of people who are starting new businesses and how that percentage changed over time. Then, to see the health of young firms in particular, we tallied the percentage of jobs contributed by those less than three years old and how that percentage changed over the past five years. To analyze the self-described startup community, we incorporated the health and growth rate of Startup America members and a tally of AngelList and Fundable members.”

 The overall rankings for the states (and a District) for innovation:

1 // Florida 2 // Texas 3 // Maryland 4 // Arizona 5 // Alaska 6 // California 7 // Colorado 8 // New York 9 // New Jersey 10 // Washington, D.C. 11 // Nevada 12 // Connecticut 13 // Georgia 14 // Delaware 15 // New Hampshire 16 // Missouri 17 // Rhode Island 18 // Utah 19 // South Carolina 20 // Kentucky 21 // Vermont 22 // South Dakota 23 // Wyoming 24 // North Carolina 25 // Montana 26 // Washington 27 // Idaho 28 // Virginia 29 // Hawaii 30 // Maine 31 // New Mexico 32 // Wisconsin 33 // North Dakota 34 // Oregon 35 // Ohio 36 // Indiana 37 // Arkansas 38 // Illinois 39 // Michigan 40 // Tennessee 41 // Massachusetts 42 // Nebraska 43 // Pennsylvania 44 // Alabama 45 // Iowa 46 // Minnesota 47 // Kansas 48 // Louisiana 49 // Mississippi 50 // Oklahoma 51 // West Virginia

Stay tuned for a longer analysis of FastCompany’s project later in the week.

Can We Stop the ‘Trolling’ of the American Innovation System?

12 Apr

This American Life ran a provocative program in 2011, ‘When Patents Attack!’, that brought the parasitic practice of ‘non-practicing entities’ (NPEs) or patent trolls into mainstream awareness. These activities have become a scourge on innovative companies, particularly in the technology sector. Newegg and Twitter have fought successfully against the trolls, and Rackspace is fighting back. But the problem of “patent privateering” is a serious threat to the livelihood of tech companies and the future of start-up community in America. Continue reading