Will #NetNeutrality really create an open and free Internet?

Since 2010 CONNECT, on behalf of our startups and member organizations, has been advocating for an open and free internet. As the FCC gets ready to vote on proposed rules to change the way the internet is currently governed, we need to ask, what does an open and free internet actually mean? The internet that we use today, which has brought us companies like Google, Netflix and Reddit, is an open and free internet. Internet Service Providers (ISPs) such as AT&T and Cox Communications provide the fiber that connects us to peering companies such as Level 3, who then work with content providers (i.e. Netflix) to deliver movies, music, etc. to the consumer. The fiber and hardware provide a web of connectivity that is constantly delivering bits of information from one end point to another, to another, and on and on.

Innovation occurs in every aspect of the internet. ISPs employ next generation engineering to their networks so that content providers can deliver faster and more reliably. The open and free internet, as we know it today, has changed almost every aspect of our lives; we are now more connected to the world than at any other time in our history.

So why all the divisiveness over Net Neutrality? We all want the same thing, to be able to access or provide content for the world to see and use. But on February 26th, the FCC will vote on regulations that will change the way the internet is governed – from an information service to a telecommunications utility service under a section of law called Title II that was written in 1934. How this change in regulation will affect the internet that we know and love today is yet to be seen. Some say that the stricter regulation of Title II will enable equal access to all content at the same speed, without interference from the ISP – leveling the playing field. Others, and CONNECT sits on this side, worry that without the ISP having control over the fiber they laid to connect us, large content providers will dominate the internet highways, squeezing innovative startups out. CONNECT took the position of opposing the reclassification of the internet back in 2010 because we recognized the harmful impact this would have on startups and innovation. CONNECT has always and will continue to put startups first in our advocacy.

The internet has revolutionized the way we work, play and socialize – it has provided for a whole new economy that creates jobs and allows us to communicate with people all over the world. But giving the government the right to control this revolutionary tool will not encourage more innovation – it will deter it. Strict government regulations will inevitably result in higher prices and less service for consumers as well as have an adverse impact on small providers and upstart competitors trying to differentiate themselves in a crowded market. There needs to be balance between the ISPs and the content providers but a restrictive regulatory environment that favors one over the other is not the best approach. ISPs want the ability to bring the internet into our businesses and homes and content providers want the ability to deliver their services free and unfettered. But this is a business arrangement that should be determined in the open marketplace not behind the closed doors of a government agency.

CONNECT, in a letter to the FCC and Congressional leaders, stated “But if there is to be action, it should be Congress – not the FCC – that creates a legal framework to preserve for all players the right to experiment with innovative content delivery methods and business models, rapid technological advancement, evolving consumer demand and Internet usage, demonstrated investment incentives.” As we write this, the FCC still has not released their proposed regulations to the public. At least in Congress, we will have the ability to wrangle out the details in committee hearings with all sides coming together.


Happy 168th Birthday Thomas Edison – Why we should protect our patent system

On this day, February 11, 2015, as we celebrate Thomas Edison’s 168th birthday, we should also celebrate U.S inventors whose creations have made us the most technologically advanced nation and economy in the world. In 1983, President Ronald Reagan designated February 11th as National Inventors’ Day to honor the impact inventors have had on our nation, including Thomas Edison who accumulated 2,332 patents worldwide for his inventions.

Today, as we celebrate invention and innovation, we are also filled with concern for America’s patent system. Congress is currently debating a bill, the Innovation Act by Representative Goodlatte, that will rewrite patent litigation laws. The Innovation Act, as presented, will undermine an inventor’s ability to license and enforce their patents.

Innovation, creativity and hard work form the backbone of The United States, and few people exemplify these traits as strongly as inventors. And inventors depend on a strong patent system to ensure their ideas and innovations are protected.

We urge Congress to take a measured approach to any patent legislation that encourages creativity and innovation.

To read San Diego’s Innovation Ecosystem Representative’s statement on the Innovation Act, click here.

CA Innovation Economy Statement on Anti-Patent Legislation


Feb. 6, 2015

California Healthcare Institute, BayBio, Biocom and CONNECT Statement on Reintroduction of the Innovation Act

La Jolla, San Diego & South San Francisco, Calif., Feb. 6, 2015 – CHI-California Healthcare Institute, BayBio, Biocom and CONNECT issued the following joint statement regarding the introduction of patent litigation reform legislation – H.R. 9, the Innovation Act – in the U.S. House of Representatives this week. This statement may be attributed to Sara Radcliffe, President & CEO, CHI; Gail Maderis, President & CEO, BayBio; Joe Panetta, President & CEO, Biocom; and Greg McKee, CEO, CONNECT.

“On behalf of California’s life sciences and innovative technology communities, we have serious concerns with the Innovation Act (H.R. 9), legislation to alter patent litigation processes and procedures. We represent sectors of our state’s economy that consist largely of small, entrepreneurial, and venture capital-backed firms that often have patents as their most valuable – and sometimes only – asset. The ability of California’s research universities, institutes, and biomedical and technology companies to protect, and when necessary enforce, their patents is a top priority to ensure the continued growth and vitality of these innovative sectors of our state’s economy.”

“Unfortunately, the Innovation Act contains patent litigation-related provisions that would threaten the ability of innovators to protect their patents and fund continued R&D by inadvertently making it more difficult, time-consuming and expensive to enforce legitimate and important IP rights. H.R. 9 is identical to H.R. 3309 – legislation that passed the House in the 113th Congress – and therefore does not take into account many recent developments on the patent litigation landscape – such as the implementation of the America Invents Act, five recent U.S. Supreme Court cases, and key administrative changes at the U.S. Patent and Trademark Office. The legislation introduced this week unfortunately will create additional patent-related uncertainty in the already high-risk life sciences and technology sectors.”

“Patent litigation legislation must appropriately and carefully balance the need to correct abusive ‘patent troll’ practices with the reliance of a full spectrum of industries and sectors on a well-functioning U.S. patent system and the enforcement mechanisms it provides. We respectfully oppose the Innovation Act in its current form, and look forward to working with the bill’s sponsors to improve the legislation so that it is more supportive of our state’s life sciences innovation ecosystem.”

Click here to view the legislation.

About CHI-California Healthcare Institute CHI represents more than 275 leading biotechnology, medical device, diagnostics and pharmaceutical companies, and public and private academic biomedical research organizations. CHI’s mission is to advance biomedical research, investment and innovation through effective advocacy of policies to improve public health and ensure continued vitality of the life sciences sector. CHI’s website is www.chi.org. Follow us on Twitter @calhealthcare, Facebook, LinkedIn and YouTube.

About BayBio BayBio brings together the collective strength and experience of the world’s most innovative and productive life science cluster, helping companies grow, connect and advocate to solve some of humanity’s most pressing challenges. BayBio provides comprehensive support and solutions tailored to the unique needs of nearly 1000 Bay Area life science companies and institutions, delivering tangible value through group purchasing savings, capital access, government affairs & advocacy, networking and best-practice sharing. BayBio also supports the future of bioscience innovation through the BayBio Institute’s work in science education, career development and entrepreneurship.

About Biocom Biocom is one of the largest regional life science associations in the world, representing more than 600 member companies in Southern California. The association focuses on initiatives that position the region’s life science industry competitively on the world stage, and on the development and delivery of innovative products that improve health and quality of life. For more information on Biocom or the Southern California biotechnology and medical device community, please visit the organization’s Web site at http://www.biocom.org or call (858) 455-0300.

About CONNECT CONNECT (www.connect.org) is a premier innovation company accelerator in San Diego that creates and scales great companies in the technology and life sciences sectors. By creating an environment in which entrepreneurs and C-suite executives have access to the people, capital, and technology resources they need for success, CONNECT has assisted in the formation and development of more than 3,000 companies since 1985. Widely regarded as one of the world’s most successful organizations linking entrepreneurs and C-suite executives with the resources they need for the commercialization of innovative products and services; our program has been modeled in more than 50 regions around the world. For further information, contact Claire E. Bula, Esq., Director of Marketing & Communications, at cbula@connect.org or 858.964.1316.

Will Zasadny Manager – Communications; California Healthcare Institute Zasadny@chi.org Phone: (619) 961-8848

“Hands off the Net” Over 40 San Diego Innovation Companies join in asking the FCC and Congress to oppose Title II

Today, CONNECT, along with over 40 of our startups and partners sent a letter to Congressional leadership asking the federal government to maintain a “hands off the Net” approach ahead of the proposed FCC actions regulating the Internet as a public utility. CONNECT and all the signatories’ main concern regarding any regulation of the Internet is to ensure that start-ups receive a fair chance in the competition for quality network services. This is why we oppose Title II as a regulatory approach to reclassify the Internet as if it were a 1930’s communication service.  But if any regulatory change is considered necessary, it should be done by Congress after careful deliberations and input from all parties.  However, we believe a “hands off” approach is best and has worked in allowing the innovation necessary for the Internet to thrive.

To read the letter, click here.

Innovation Policy CONNECTion – January 13, 2015

The 114th Congress Convened on January 6, 2015

When the new Congress convened, the House consisted of 246 Republicans and 188 Democrats, with one seat vacant. The Senate is now 54 Republicans, 44 Democrats and 2 Independents. Approaching deadlines and recently lapsed programs will help drive action in Congress this year. For example, the Export-Import Bank (Ex-Im) supports U.S. exports by providing insurance and loans to help foreign buyers purchase U.S. products. The bank’s charter was extended through June under the continuing appropriations resolution, H.J.Res 124, enacted in September, but unless reauthorized the bank wouldn’t be able to issue new financing. Also, more than 50 temporary tax incentives were renewed for 2014 under H.R.5771, allowing a wide range of businesses and individuals to claim them during the 2015 filing season. These “tax extenders” expired Dec. 31, 2014, less than two weeks after the legislation was signed into law.  Congress may not revisit the issue again until the end of 2015, before the 2016 filing season, which has been the trend for dealing with extenders over the past several years. However, some lawmakers have said the tax breaks should be addressed through a comprehensive overhaul of the tax code. This would provide an opportunity to make some provisions permanent and eliminate others for good, instead of revisiting the issue every year or two.

Intellectual Property

Rep. Darrell Issa just announced that patents will be the subject of one of his panel’s very first meetings this year. He and full Judiciary Committee Chairman Bob Goodlatte plan to reintroduce the Innovation Act “sooner rather than later.” While Rep. Issa is interested in adding a little to the measure, he expects it’ll probably look a lot like the one that the House passed in late 2013. Issa also noted that associations representing universities, technology companies, biotech and pharmaceutical firms are all looking to tweak various rules that govern the patent system and accumulating wish lists could complicate chances for patent reform in the new Congress.  So while Issa believes a patent reform bill that cleared the House last year could be a starting point for addressing frivolous litigation, he also believes the debate easily could dredge up other issues in copyright, like the new war between Google and the movie studios. Issa did say he would try to bring all parties to the table. Issa also blasted the PTO for poor management at a hearing last year and said he may want to tack on provisions aimed at encouraging better management of that agency.

On the positive side, Congressman Scott Peters has just been appointed to the Judiciary Committee, and he has been an ardent opponent of any weakening of the patent system that would adversely affect innovation.

Net Neutrality

FCC Chairman Tom Wheeler has offered his clearest roadmap to date on net neutrality. He’s circulating a proposal among commissioners by Feb. 5, holding vote on Feb. 26 and pretty much backing utility regulation of broadband. However, incoming Senate Commerce Committee Chairman John Thune said that he’d like to move a bill ‘that might be an alternative to Title II’ – and those plans are getting a little firmer. Republicans are likely to drop such a bill next month, in hopes of preempting Wheeler’s official announcement of the new rules.The bill would establish a new ‘Title X’ provision of the Communications Act under which telco’s would be held to strict net neutrality principles – which would supersede any regulation under ‘Title II’. Former Congressman Rick Boucher who chaired the key subcommittee has written a good explanation that can be accessed by clicking here.

Repeal of Medical Device Tax

On January 7, Reps. Paulsen and Kind introduced their bill, the Protect Medical Innovation Act, H.R.160, with 254 cosponsors.  Senators Hatch and Klobuchar introduced their version of repeal legislation today, S.149, the Medical Device Access  and Innovation Protection Act. This version of repeal legislation is supported by a bipartisan group of 10 Senators, with five Republicans and five Democrats. A letter endorsed by a broad, multi-industry coalition of companies advocating for prompt consideration of repeal is being sent to Congressional leadership. CONNECT is a signatory.

Skilled Immigration

Sen. Orrin Hatch is set to reintroduce his high-skilled immigration bill this week. Hatch’s Immigration Innovation – or I-Squared Act would raise the yearly cap on H-1B, or “high-skilled,” visas from 65,000 up to 195,000 and remove limits on the number of high-skilled visas for employees with advanced degrees. Hatch’s bill would also enable visa holders’ spouses to work, increase visa holders’ ability to move between jobs, recapture unused green cards from previous years and eliminate yearly per-country caps for employment-based visa petitioners. The bill already has bipartisan backing, with Democratic Sens. Amy Klobuchar, Chris Coons and Richard Blumenthal, as well as Republican Sens. Jeff Flake and Marco Rubio, as original co-sponsors. The bill is the first tech immigration bill this Congress.

Tax/Small Business Legislation

The House of Representatives voted to make it easier to reduce taxes, passing a rule on the first day of the new session to let lawmakers assume that lower levies boost the economy and cover some of their own budgetary costs. The adoption of so-called dynamic scoring gives Republicans greater leeway to adopt tax policies that otherwise, would have been scored as increasing the U.S. budget deficit.

SBA Seeking Comments on Proposed Rule Amendments to the National Defense Authorization

The SBA is seeking comments from small businesses that contract or subcontract with the Department of Defense. The proposed amendments make changes to regulations relating to the non-manufacturer rule by proposing to allow a joint venture to qualify as a small business for government procurement. Additionally, the SBA is requesting comments regarding procedures for the NAICS code. The deadline to submit comments is February 27, 2015. To read the proposed rules, click here. To submit comments, click here.

$75 Million in State Tax Credits Available

The California Competes Tax Credit is an income tax credit available to businesses that want to come to California or stay and grow in California. The Governor’s Office of Business and Economic Development (GO-Biz) will be hosting a workshop on January 23, 2015 on how to apply for this credit. The tax credits are negotiated by GO-Biz and approved by the California Competes Tax Credit Committee. The application period opened on January 5, 2015 and will close on February 2, 2015. More information can be found on the program here.The online application for the credit can be accessed here.

Workshop Details:

Friday, January 23, 2015 1:30 – 2:30 p.m. San Diego Miramar College Business & Math Building, M110 10440 Black Mountain Road, San Diego, CA 92126

To attend this free workshop, register here

CONNECT Files COMMENT on Net Neutrality with FCC

Today, Connect filed a comment with the FCC on its proposed rulemaking regarding “net neutrality.” CONNECT supports a “hands off the net” market oriented approach that encourages incentives to invest which has been phenomenally successful over the last 20 years. You can see the filing here.

House Judiciary Committee hears from USPTO on Patent Reform

On July 30, the House Judiciary Committee held an oversight hearing on the functioning of the Patent and Trademark Office.  Click for the Committee’s agenda and the prepared statement of acting PTO director Michelle Lee. The key takeaway: she believes there’s still room for ‘legislative reform’ on fee-shifting, even after the Supreme Court decided two high-profile cases on the issue earlier this spring and gave the courts more room to force the losing party in a patent suit to pay the winner’s legal fees. “Companies could benefit from greater certainty about when fees could be shifted and when they could not,” Lee said. Throughout the rest of the hearing, lawmakers rocketed from one major patent policy issue to another – several, including House Judiciary Chairman Bob Goodlatte, took the opportunity to push for the patent reforms they spent the last year working toward. Still others pressed Lee for more information about the agency’s implementation of the Alice v. CLS decision, its IP attache program, its so-called ‘submarine’ patents and even its backlog in cases at the new PTAB appeals board. Lee, the panel’s sole witness, held her own sidestepping tough questions about the controversial business method patent program and the agency’s ongoing implementation of the Alice decision, which is affecting some patents already in the pipeline for approval.