Tuesday, February 11, 2014

Investments in RI Companies Rebound in 4th Quarter, Top $81 Million in 2013

After a slow third quarter, venture capital investments rebounded in the last quarter of 2014, according to the MoneyTree Report by PriceWaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters.

Venture capital investments in New England companies rose to $917 million invested in 106 companies for the 4th quarter, an 7% increase over the 3rd quarter in terms of dollars invested, but a 5% decrease in terms of number of deals.

Three of those 106 companies are in Rhode Island, capturing a total of $27,356,000 in the last quarter.  Over the entire year, venture investments in Rhode Island companies totaled over $81 million, a decrease from the $106 million invested in Rhode Island businesses in 2012.

The increase in investment levels in Rhode Island companies is encouraging, especially after the disastrous third quarter.  Similar evidence of the increased attention to Rhode Island companies was announced recently by the Founders League, to the effect that approximately $140 million was invested in Rhode Island start up companies in 2013. (This number includes investments that are not reported in the MoneyTree survey).

Although those investment levels in Rhode Island companies are improving, they are just starting to approach levels of a decade ago.  The high mark was in 2001, when over $119 million was invested in 11 Rhode Island companies.  In 2002, venture capital investments in Rhode Island companies totaled about $96 million.

Similar trends are seen throughout the United States.   Nationally, venture capitalists invested $8.4 billion in 1077 deals in the fourth quarter, and a total of $29.4 billion in 3955 deals for the entire year.  This represents an increase of 7% in dollars and 4% in deals over 2012 levels. For the year, investments into the software industry (which includes Internet companies) reached the highest levels since 2000 with $11.0 billion invested in 1523 deals.  Internet-specific companies captured $7.1 billion in 2013, marking the highest level of Internet investment since 2001.

Locally, the three companies to receive investments in the fourth quarter of 2013 are:

  • Greenbytes, Inc., of Providence, received a $3,500,000 follow on investment from existing investors Battery Ventures and Generation Investment Management.  Founded in 2007, Greenbytes develops desktop virtualization storage optimization software to maximize the performance and capacity of virtual desktops.
  • Shape Up the Nation, of Providence, received a $3,856,000 investment in November from Cue Ball Group and Excel Venture Management.  Founded in 2006, Shape Up is a leading provider of clinicaly-proven, social networking and incentives-based employee wellness programs that help people exercise more, eat healthier and improve their overall well-being.  Shape Up will use a significant portion of the investment to build upon its existing mobile capabilities and launch its mobile app and device integration infrastructure.  
  • Utilidata, Inc., of Providence, received a Series B financing of approximately $20,000,000 from existing investors Braemar Energy Ventures and American Electric Power, and from new investors  Formation 8 Partners and Saudi Aramco Energy Ventures.  Utilidata is a leading supplier of technology to help reduce energy waste from power lines between electric utilities' substations and their customers.
(Sources:  MoneyTree Report and company websites)

Thursday, February 6, 2014

Quotes in BNA's Cyberlaw Review 2014

Near the end of 2013, Bloomberg BNA asked leading attorneys, government officials, and online experts for their views on the most important legal developments in online law during 2013 and on what policy areas they believed would be the most important to their practices in 2014. The responses were supposed to be short, like tweets or sound bites. BNA complied the contributions into a report, essentially a collection of short thoughts and insights on various aspects of online law, organized by subject matter.

Two of my contributions appear in the Report, which was made available to the public today. One is under the Online Contracts heading, and one under the Digital Copyrights heading.

Thanks to Bloomberg BNA for permission to link to the report.

Tuesday, January 14, 2014

RI TrademarkTracker™ --- 2013 RI Trademark Filings Down 14% Over 2012 Filings

Applicants with Rhode Island addresses filed 172 applications to register trademarks with the U.S. Patent and Trademark Office (PTO) during the fourth quarter of 2013. This represents a 17% decrease over the 208 trademark applications filed by Rhode Island owners during the fourth quarter of 2012, and a 27% decrease over the 235 trademark applications filed for the fourth quarter of 2011.

For the year, Rhode Island applicants filed 908 applications with the PTO. This represents a 14% decrease over the 1053 Rhode Island trademark applications filed in 2012, and a 19% decrease over the 1127 trademark applications filed by Rhode Islanders in 2011.

Nationally, the slight upward trend in filings continues. A total of 73,998 trademark applications were filed with the PTO in the fourth quarter of 2013, representing a 0.6 % increase over the 73,540 trademark applications filed in the fourth quarter of 2012. A total of 319,002 applications were filed with the PTO in 2013, representing a 1.2 % increase over the 315,375 applications filed during 2012.

The most likely explanation for the downward trend in filings in Rhode Island remains the sluggish economy in Rhode Island.  Companies are watching budgets carefully and only filing where necessary to protect their major brands. Nationally, the economy is picking up, but the trend has not really been felt here yet.

The top five Rhode Island filers during October, November and December of 2013 are 3 consumer product companies, one financial services company and one educational institution.  RBS Citizens Financial Group  filed the largest number of applications among Rhode Island applicants with 27 filings.  Providence College was next with 15 applications. CVS Pharmacy, Inc. was third with 10 applications, followed by Hasbro (8 filings) and Alex and Ani  (7 filings).

For the year, the top Rhode Island filer was Hasbro with 61 applications.  RBS Citizens Financial Group was next with 39 applications.  CVS Pharmacy was third with 28 applications.  Alex & Ani, The Big East Conference (now known as The American Athletic Conference), and Wizards of the Coast (a Hasbro subsidiary) each filed 27 applications.

Data supplied by PTO.

Related Posts:

RI Trademark Filings Down 12.9% Through 3rd Quarter 2013 (October 18, 2013)

RI Trademark Filings Decrease 9% in First Half of 2013 (August 15, 2013)

Monday, January 6, 2014

RI IPCaseTracker™ --- 2013 Was a Typical Year


2013 turned out to be a typical year for new intellectual property (patent, trademark and copyright) case filings in the U.S. District Court for Rhode Island.  We got off to a fast start, with 10 new intellectual property case filings in the first six months of 2013 at the, 6 filings in June alone. But filings dropped dramatically in the second half of the year, with only 1 new trademark filing in the fourth quarter.
In the end, 2013 saw 7 new patent case filings, 3 new trademark case filings, and 3 new copyright case filings. This matches the 2011 total of 13 new filings, and just barely exceeds the 2012 total of 12 new case filings.
Let’s hope for more intellectual property case filings in 2014.  Then there will be more cases to highlight here!
These numbers only include cases that have been designated in the court's database as a patent, trademark or copyright case. There are other cases pending where the complaint may include trademark or other intellectual property claims, or where intellectual property counterclaims may have been asserted. But unless the case is designated as such in the court's database, we are not counting it here. 

Related Posts:
6 New IP Cases Filed in RI in June2013

Thursday, January 2, 2014

Is it Software? Is it a Service? It Matters for Purposes of Trademark Registration.



This recent decision highlights the importance of spending some time thinking about whether a mark used in connection with software is being used on a product (software), is being used for “software as a service,” or is merely incidental to the underlying service.
In NetJets, the federal district court cancelled an incontestable, 18 year old registration for INTELLIJET for “computer software for managing aircraft leasing and sales” as void ab initio and as abandoned, even though:

·                 NetJets had used the mark as the name of its internal software since 1995;

·                 NetJets had spent over $20 million to upgrade its software;

·                 NetJets launched a “portal” in 2013 where clients could log in and see the INTELLIJET name displayed on the screen, but the mark was not displayed to non-customers who access the NetJets website;

·                 NetJets included discussion of the IntelliJet’s software functionality in newsletters to owners and in literature provided to passengers on its planes;

·                 NetJets brochures have mentioned the IntelliJets software;

·                 Several magazine articles about NetJets have mentioned the IntelliJets software;

·                 NetJets demonstrates the software for customers and potential customers.

The court determined that NetJets did not have enforceable rights in the INTELLIJET mark because it did not use the mark in commerce as the term “use in commerce” is defined in the federal Lanham Act.  Section 45 of the federal Lanham Act, 15 U.S.C. § 1127, defines “use in commerce,” in relevant part: 
The term “use in commerce” means the bona fide use of a mark in the ordinary course of trade, and not made merely to reserve a right in a mark.  For purposes of this Act, a mark shall be deemed to be in use in commerce – (1) on goods when – (A) it is placed in any manner on the goods or their containers or the displays associated therewith or on the tags or labels affixed thereto; or if the nature of the goods makes such placement impracticable, then on documents associated with the goods or their sale; and (B) the goods are sold or transported in commerce ...
Key factors in the court’s determination that the use of the INTELLIJET mark on NetJets’ software was not a “use in commerce” were:

·                 NetJets is not in the business of selling software;

·                 The IntelliJet software is simply the conduit through which NetJets provides a high level of service to its customers;

·                 NetJets does not promote the software as a separate product, but only as part and parcel of the services NetJets provides;

·                 NetJets does not sell the IntelliJet software separately from the services that NetJets provides.

As a result, the court concluded that NetJets’ use of the INTELLIJET mark is not a “use in commerce” on the software, and cancelled the registration.
As a result of the NetJets decision, and similar decisions in other courts, a trademark owner that uses software in its business should take care in determining whether to file a trademark application at all to cover the software, and what goods or services are covered in any trademark application that is filed.  To be safe, especially in close situations, the trademark owner may want to consider filing separate applications to register the mark for the software and for the underlying services.  This strategy would still provide for registration and protection of the mark for the services in the event that the registration of the mark for software is challenged or cancelled.

Thursday, December 12, 2013

Check Out the Providence Startup Map

Courtesy of the Founders League, we have the first iteration of the "Providence Startup Map."  While there are inevitable omissions, and it is not clear how the creators define a "startup," the map demonstrates the tremendous growth in startups in Rhode Island over the past few years.  Most of the companies appear to have been founded in the last 3 years, although some (like Andera) are longer in the tooth.

To quote from the Founders League announcement:

Just a few years ago, the landscape looked much different, with far fewer companies and entrepreneurs calling Rhode Island home. Several entrepreneurship support programs have also emerged, showing a growing optimism that our progress is sustainable and that we are just at the beginning of our startup revolution.

No one person or organization is responsible for the growth reflected on this map. The startup community is building momentum because many among us are rowing in the same direction and contributing in important ways.

Here's to lots more rowing and contributing over the next few years!!!

Please report any omissions to: info (AT) foundersleague (DOT) co

Friday, November 8, 2013

RI VentureTracker™ --- What Happened? Venture Investments in RI Companies Plummet in Q3 2013


Venture capital investments in New England companies jumped to $870 million invested in 109 companies in the third quarter of 2013, according to the Money Tree Report by PriceWaterhouseCoopers and the National Venture Capital Association based on data from Thomson Reuters.
But only one of those companies is in Rhode Island, netting a total of $499,000.  The third quarter dollar amount represents a 98.5% decrease over investments in Rhode Island companies in the second quarter, when $33,308,000 was invested in 6 deals.
What happened?  A total of $53,508,000 had been invested in 9 Rhode Island companies in the first half of 2013.  This is the lowest investment level in Rhode Island companies since 2007, when only $5 million was invested in the entire year! Is it just a random occurrence?  Or is it a sign that, despite all the hype, Rhode Island government and institutions still are not really invested in creating an environment in which start-up companies can flourish similar to those in Massachusetts and California?
At the same time, investment levels across the U.S. climbed.  Nationally, venture capitalists invested $7.8 billion in 1005 deals in the third quarter.  This represents an increase of 12% in dollars and a 5% increase in deals compared to the second quarter of 2013, when $7.0 billion was invested in 956 deals.  The Software, Biotechnology and Medical Device sectors received the most investment dollars for the quarter.  Investment in Internet companies also held steady, with $1.5 billion being invested in 252 deals.
Locally, the only company to receive an investment in the third quarter of 2013 is:
·                     Neurotech USA, of Cumberland, received a follow-on investment of $499,000 from Versant Ventures Inc., after receiving a $7,000,000 investment in the second quarter.  Neurotech is developing sight saving therapies for chronic retinal disease.