Innovation Review


New York State is rolling out the third round of Regional Economic Development Council Initiatives. START-UP NY focuses on university industry partnerships and commercialization of new technology. Regulations have been published, an interactive portal to contact ESD is live, and the FUZE Hub portal about resources for manufacturers is operational. The START-UP NY program encourages the creation of new jobs in New York State. The initiative creates tax-free zones across the state for new and expanding businesses. If they qualify, businesses can operate 100% tax-free (no business, corporate, state or local taxes, sales and property taxes, or franchise fees) for 10 years. The awards are administered through the regional economic development councils. The full list of 2012 Regional Economic Development Council awards can be found here

More details about the START-UP NY program are outlined in a memorandum prepared by Hiscock and Barclay. Check it out here.

Startup Genome and the Upstate Ecosystem Map

In an effort to dig deep and truly identify what variables make startups successful, or what variables make startups not so successful, three entrepreneurs began a project named “Startup Genome.” The premise is that by compiling data on thousands of startups around the world, a sort of best practices can be established that lays out a list of actions or attributes that influence the potential success or failure of a startup.
This group of entrepreneurs has since released a “Startup Genome Report” that contains 50 pages of analysis. They’ve also opened Startup Genome as a free and open platform for communities everywhere to collect, curate and analyze data about their own startups, entrepreneurs, investors and resources. The platform operates as a map that geographically lays out various startups, resources, and entrepreneurs.

This platform was a logical tool for Upstate Venture Connect (UVC), the Upstate New York organization focused on improving new business outcomes in the Upstate area by providing connections between startups, experienced entrepreneurs and resources. UVC was launched in 2010 to increase collaboration between existing institutions, resources and the human capital available in the area.

“We like Startup Genome precisely because it creates one database for listing assets, while ensuring the information can be easily presented on multiple websites. Our thinking is that the map may actually be the single best way to show all the resources available, without putting them in geographic silos. People interested in a particular geography can just click the mouse to keep drilling down into a region. For instance, in addition to startups and entities that work with them (e.g., law firms, venture firms, incubators, etc.) we are adding all the programs supported by NYSTAR, NYSERDA and various universities and colleges across the region,” explained Nasir Ali, co-founder and CEO of UVC.

For more information or to add to the Upstate Ecosystem Map visit UVC’s webpage.

NYS STLC Research Associates Participate in Pre-Seed Workshop

Law students from the New York State Science and Technology Law Center at Syracuse University College of Law participated in a Pre-Seed Workshop sponsored by Launch New York and hosted by MedTech and CenterState CEO at the Tech Garden in Syracuse October 18th and 25th.   Laura Prestia, a PhD student at Upstate Medical University, who is taking the Center’s Technology Transfers Law class, participated as an “idea champion”, the entrepreneur or inventor exploring the commercialization potential of a new product.  In Prestia’s case, the product is a biomarker for fetal alcohol syndrome developed by Steven L Youngentob, PhD., whose lab she works in at Upstate.

Other NYS STLC members participating were: Justin Burgess, a third-year law student and Senior Research Associate Brian Becker, a second-year law student and Research Associate, and Associate Director Molly Zimmermann.   The Pre-Seed Workshops, developed by Judy Albers and Mark Wilson, condense the issues to be solved by any successful entrepreneur into a series of sessions designed to orient the potential CEO to those issues and potential tools to solve them.  In this respect, the Pre-Seed Workshops are excellent models for Technology Commercialization Law Students and complement the analysis structure of the research reports completed by the NYS STLC for new technologies.

Pre-Seed Workshops are an intense but rewarding two-day experience. For the uninitiated, an overview of the Pre-Seed Workshop experience follows.  Most Pre-Seed Workshop participants are referred from a university technology transfer office or an economic development organization. Teams are built to support the idea champion, and include a business “coach”, an MBA student, an attorney with IP or startup business experience, a tech transfer officer, and an experienced member of the business community.  The work is divided into a series of break-out sessions where teams cover components investors will require answers to and which are essential to successful commercialization.  Topics include:

A) Clearly defining and characterizing the technology.

B) Determining the market(s) that it makes most sense to target, including choosing one to begin with.

C) Defining the “pain” or problem that the technology is designed to solve is subject of a session.

D) Determining the competition and why the new product can be expected to out-compete other options. Many innovators can become so focused on their own technology that they forget to research the landscape.  Investors do not have the same attachment to these ideas will demand the new product has a competitive edge over the status quo. In addition, having a solution to a problem is only worthwhile if it is also cost effective, significantly easier to produce or use, safer, or more reliable. The team creates a comparison matrix listing competing products and their features to provide a visual representation of how the new product is better than the existing products.

E) Identifying the potential users of the new product, and how it is relevant to each. Teams develop a “value proposition” statement that explicitly lays out the various types of users of the product and the specific values or benefits each user stands to gain.

F) Establishing a value proposition and defining a business model to explain how the proposed business will operate. Teams design a supply chain diagram that illustrates how the product gets from manufacturing/production to the specified end user.  The expected profit-per-unit is estimated factoring in estimated facilities and equipment needs. Burgess felt this portion was especially helpful on his team, explaining, “[the idea champion] had done some product testing through several iterations and had briefly looked at the competitive landscape, but did not really know where she needed to move next. We [the team] provided the suggestion of a value added reseller she could use for one of her target markets that would simplify her sales cycle.”


Syracuse University J.D. student Justin Burgess and idea champion Vicki Brackens make some changes in a final presentation slide show.

The final break out session is the assessment of revenue potential. At this stage the idea champion is able to look at a target market, estimate expenses and apprize the size of the opportunity. Teams are advised to keep the math simple, the recommended formula for market size in dollars is to multiply the number of potential buyers per year by the number of units per buyer per year and then by the product price. An easy way to guess for products entering an established market is to find a market research report and multiply it by a percentage that represents a realistic market share that can be captured.

At the end of the first day, homework is assigned for idea champions to complete before the next week’s workshop, This includes the production of a slide deck – template provided by the Pre-Seed organizers – to “pitch” their idea to a panel of experts the following week.  “Alumni” of previous Pre-Seed Workshops wrap up the day with a presentation about the status of their efforts to commercialize their products.

The next week, the workshop commenced with a “football clinic,” the Pre-Seed Workshop’s way of addressing the technology and IP issues. The football is a metaphor for the technology and the product and the intellectual property.  There is also a self-assessment survey to help idea champions evaluate whether they are a good fit for an entrepreneurial career.

The final breakout sessions include building a management team; addressing the eventual organizational structure and specific positions necessary for the development of the product. The next session further explored the technological status of the proposed product. Teams looked at where the product development was at the present time and where it needed to be for a functioning business. A path was outlined that listed necessary tasks as well as an expected timeline. Teams illustrate this with a Gantt Chart, a horizontal bar chart used to illustrate a project schedule, that includes past accomplishments and highlights key activities and milestones going forward.

The final break out session was a culmination of everything that had been done up to that point, a summary assessment of the product that answers the key question, is the idea worth pursuing? A specific Pre-Seed Filter is used to show the relative strength and weakness of each component from the technology to the team and the readiness of the product. This was followed by a industry presentation and information about Launch New York, a sponsor of the workshop.


Syracuse University J.D. student Brian Becker listens to a run through before the final presentation.

A panel of industry experts sat by to provide feedback to each idea champion after their pitch. The panel was: Seed Capital Fund of CNY Executive Director and Upstate Venture CEO Nasir Ali, Brian McIlroy, Healthcare Commercial Development Leader in Healthcare at GE IdeaWorks, Launch NY CEO John Seman, and Josh Stack, attorney and advisor in resilience, biomimicry & sustainability at Northeast Green Building Consulting, LLC. After each pitch the panel was given the opportunity to ask questions and then give feedback.

Burgess observed, “By the end of the second day, I think that the idea champions had a clear view of what thhe needed to do to tackle each of the three market entry points, and what was needed to move forward in terms of being diligent in searching for competitive IP.”  When asked about his time spent in the Pre-Seed Workshop Burgess said, “I think this crash course solidified several central factors necessary for a startup and filled out areas where I was either unfamiliar or only had a very superficial understanding.  What became apparent rather quickly was the necessity of having a significant market demand for the product, preferably one that is unmet.  Making sure you can clearly identify what your product is, what your advantage is, what the pain point is (the problem being solved), and how you can address this need to be second nature to any entrepreneur.”


The final slide of the Pre-Seed workshop lays out potential paths for idea champions to follow.

Both Becker and Burgess thought the process made good use of the skills they’ve learned working with the NYS STLC. “We didn’t focus as much on the IP aspect as was the normal practice in the clinic, but we did make [the idea champion] aware of issues with relying on coders who are not part of the founders group and that she should have some sort of contractual understanding in place relating to the work for hire status of the programmers building the software,” explained Burgess.

“I would recommend the Pre-Seed Workshop to anyone interested in learning more about what it takes to prepare a business for venture capital funding,” added Becker.

For those interested, there are several Pre-Seed Workshops hosted across New York throughout the year. For more information visit the Pre-Seed Workshop website.

FDA Releases Mobile Medical App Guidance

On September 25th, 2013, the FDA released its final draft for Mobile Medical Applications Guidance for Industry and Food and Drug Administration Staff.  The FDA intends to apply its regulatory oversight to mobile apps that meet the definition of medical device and whose functionality could pose a risk to a patient’s safety if the mobile app failed to function as intended. The FDA refers to this subset of mobile apps as mobile medical apps and the purpose of the guidance document is to clarify this subset.  The FDA acknowledges that many mobile apps do not meet the definition of a medical device under the Federal Food, Drug, and Cosmetic Act (the “FD&C Act”) and thus the FDA does not regulate them.

Some apps may meet that definition  but pose a lower risk to the public in which case the FDA states it “intends to exercise enforcement discretion over these devices” indicating it will not be looking to enforce requirements under the FD&C Act in those instances. According to the FDA “mobile medical apps” are determined by their intended use which may be shown by labeling claims, advertising materials, or oral or written statements by manufacturers or their representatives.  Which intended uses lead to classification as mobile medical apps? Those that are for the ”diagnosis of disease or other conditions; the cure, mitigation, treatment, or prevention of disease; or those with “an intended effect on the structure or any function of the body of man”.

A mobile medical app may still avoid FDA imposed regulation requirements if it poses low risks to patients. Apps that refrain from providing specific treatment or treatment suggestions; provide simple tools for organizing and tracking health information; provide easy access to information related to patients’ health conditions or treatments; aides patients in documenting, showing, or communicating potential medical conditions to health care providers; automate simple tasks for health care providers; or apps that enable patients or providers to interact with health record systems such as Personal Health Record (PHR) or Electronic Health Record (EHR) systems are all considered low risk and not subject to enforcement of the FD&C Act at this time.

Mobile apps that are subject to regulatory oversight are identified as apps that transform a mobile platform into a regulated device by using attachments, display screens, sensors, or other methods. These include the following types of apps:

Any apps that are designed as an extension of other medical devices, such as connecting to a medical device to control it or to display, store, analyze, or transmit patient-specific data from the device.

Any apps that transform the mobile platform into a regulated medical device by using attachments, display screens, or sensors or by including functionalities similar to those of currently regulated medical devices. Examples that are given are attachments that act as glucose meter; electrocardiograph (ECG) electrodes to measure, store, and display ECG signals; accelerometers to collect motion information for sleep apnea; or internal or external sensors for creating electronic stethoscope functions.

Any apps that perform patient-specific analysis and provide patient –specific diagnosis, or treatment recommendations. These could be apps that take information about the patient and calculate dosage or create a dosage plan or Computer Aided Detection software (CAD).

The FDA’s Guidance documents provide further information as well as various examples of types of medical apps they will subject to regulatory oversight and examples of apps that will not be subject to regulatory oversight. In addition to FDA regulation, mobile app developers should investigate any other laws and regulations that might apply to their specific app, including but not limited to the Anti-Kickback Statute, the Physician Self-Referral Law (Stark Law), the Americans with Disabilities Act (ADA) & Affordable Care Act (ACA), the National Committee for Quality Assurance (NCQA) Certification, and the Health Insurance Portability and Accountability Act of 1996 (HIPAA).

According to data this year from the Pew Research Center’s Internet & American Life Project, 61% of cell phone owners or 56% of all American adults own a smartphone. As most smartphone users tend to be younger this is sure to be a growing trend that many companies and entrepreneurs have already begun to target. Innovators looking to target these growing smartphone users with apps related to health or medical solutions should be aware that depending on their product FDA regulations may apply.

Information in this article is based on research performed by Syracuse University J.D. student, Garin Murphy in connection with a recent research report.

NYS Regional Economic development

The 2013 Regional Economic Development Council Awards have been announced and the Designated Business Incubators and Innovation Hot Spots have been identified. These Business Incubators and Hot Spots will have a large role in The START-UP NY initiative.

New York State is rolling out the third round of Regional Economic Development Council Initiatives. START-UP NY focuses on university industry partnerships and commercialization of new technology. Regulations have been published, an interactive portal to contact ESD is live, and the FUZE Hub portal about resources for manufacturers is operational. The START-UP NY program encourages the creation of new jobs in New York State. The initiative creates tax-free zones across the state for new and expanding businesses. If they qualify, businesses can operate 100% tax-free (no business, corporate, state or local taxes, sales and property taxes, or franchise fees) for 10 years. The awards are administered through the regional economic development councils. The full list of 2012 Regional Economic Development Council awards can be found here.

More details about the START-UP NY program are outlined in a memorandum prepared by Hiscock and Barclay. Check it out here.

New York State Events

Startup Labs 2.0 Launch Party with UVANY
Monday, January 6th, 2014
5pm to 8pm
The Tech Garden, 235 Harrison St. Syracuse, NY

Last year Syracuse became the first U.S. city to host Startup Labs, an intense 22-day program where regional entrepreneurs work to accelerate their business ideas and compete to win a total of $350,000 in cash and prizes.

January 6th, will mark the beginning of the second Startup Labs Syracuse, with a launch party hosted by UVANY at the Tech Garden.

The event will feature an entrepreneur panel that will discuss the topic of obtaining funding. The panel is moderated by Adam Rombel, Editor-in-Chief of the Central New York Business Journal and will feature Charlie Mulligan, CEO of GiveGab; Nick Nickitas, CEO of Rosie Applications Inc. of Ithaca who won the first Startup Labs Syracuse; and John Ganotis, Founder of Credit Card Insider.

Nasir Ali, Co-Founder and CEO of Upstate Venture Connect, will interview Clint Nelson, Co-Founder of Startup Labs, about developments in the global startup scene. The launch party will also introduce the 2014 Startup Labs Syracuse teams.  For more information or to RSVP visit the Tech Meetup event.

NY Technology Enterprise Meetup
January 22nd, 2014

ReInvent Law NYC
Friday, February 7th, 2014
Cooper Union, New York City, NY

New York State Event

Manufacturing Conference 2013: Resurgence of Manufacturing in New York State
October 4th, 2013
Two sites: Newburgh, NY for Hudson Valley and Utica, NY for Mohawk Valley

October 7th and 8th, 2013
Rochester, NY

Cornell Entrepreneurship Summit
October 11th, 2013
New York City, NY

2013 Electronics Packaging Symposium
October 16th and 17th, 2013
Binghamton, NY

Long Island Solutions Forum
October 17th, 2013
Bethpage, NY

New York Business Expo & Conference (NYXPO)
October 17th, 2013
Manhattan, NY 

Syracuse Pre-Seed Workshop
October 18th and October 25th, 2013
Syracuse, NY

Cornell Technology Venture Forum™
October 24th, 2013
Ithaca, NY

Rochester Pre-Seed Workshop
October 24th, 25th, and November 1st, 2013
Rochester, NY

State Actions on Patent Trolls

Patent troll is a term that has become familiar in recent years. The term refers to patent assertion entities (PAEs) or non-practicing entities (NPEs), companies that buy and assert patents through litigation or requests for licensing fees but do not develop or transfer them. Although the majority of patent litigation news about trolls centers around large companies and corporations, small companies are not immune and the effects can be devastating.

research paper by Santa Clara University School of Law Assistant Professor Colleen Chien found that at least 55% of unique defendants in patent lawsuits by PAEs make under $10 million a year. Small businesses are especially essential to state economic success so it might be inevitable that some states would chose to intervene. Recently Attorney Generals in Vermont, Nebraska, and Minnesota have taken actions to stem what they view as unfair patent assertion practices against small businesses.

On May 22nd, Vermont Governor Peter Shumlin signed into law a bill designed to discourage some of the more egregious patent troll behavior, namely bringing bad faith patent lawsuits against Vermont businesses. Although patent law is under federal jurisdiction Vermont is using its ability to legislate consumer protection laws to defend against possible federal pre-emption challenges. Vermont Attorney General Bill Sorrell is currently pursuing a lawsuit against MPHJ Technology Investments, LLC under Vermont’s pre-existing consumer protection laws.

MPHJ is also the recipient of a cease and desist letter from the Nebraska Attorney General Jon Bruning because of an accused violation of the Nebraska Consumer Protection Act. August 20th, Minnesota Attorney General Lori Swanson announced a settlement with the same company to cease its patent assertion campaign in the state.

MPHJ has been singled out as one of the most blatant examples of patent trolling. The company has been accused of sending hundreds and perhaps thousands of letters nationwide to small businesses that use office scanners to send emails, claiming to own a patent on the process. The letters threaten litigation unless the businesses pay a licensing fee to the company, in some cases up to $1,000 per employee.

While patent protection is an important right of patent holders, these states see a legitimate need for additional protection for businesses. The Vermont law, for example, only applies to companies that send out “bad faith” patent assertion letters. The criteria for the label “bad faith” includes a lack of specific allegeations of infringement in the letter, a demanded license fee due in an unreasonably short period of time, deceptive letters, and reasonable knowledge that a patent infringement claim is meritless.

Currently there is no talk of similar actions by New York State Attorney General Eric Schneiderman. Exact numbers are hard to find as many businesses avoid publicizing the fact that they are being pursued for infringement by patent holders, but it is unlikely New York State businesses are exempt from the attention of “patent trolls.” According to Patent Freedom, a service that assists businesses in assessing patent litigation risk, the number of New York companies sued for patent infringement grew 73% to 288 from 2006 to 2012.

On September 27th of this year, the US Federal Trade Commission announced it is starting an in-depth investigation of alleged abuses of the US patent system. The review will include scrutiny of PAEs like MPHJ. Continued investigation and research may illuminate potential policies at the state and federal level, to encourage protection for intellectual property without unreasonable demands on businesses.