Apple and Bose Settle Patent Dispute

These days, as we are constantly surrounded by noise and seek personal respite, noise cancellation is an increasingly popular – sometimes necessary – technology that subtracts noise in the surroundings from what is heard through a headset. This technology has proven to be “big money.”

Two companies, Beats Electronics (now owned by Apple) and Bose Corporation, are capable of providing this kind of quality sound through their headphones. Unfortunately, they have been at odds with one another and have been in court since July over five patents that control the suppression of background noise in their products.

Both companies manufacture their headphones in China, a key point, since Bose was seeking to prevent Beats from bringing its products into the U.S. Moreover, Bose claimed patent infringement and sought damages as well.

Outside the court case, Bose sought investigation of both Beats and its contractors. It brought its complaint to the U.S. International Trade Commission.

And on top of judicial and administrative action, there are additional items for this story. It turns out that Bose, as an NFL sponsor, was offended when a San Francisco Giants team member wore its competitor’s Beats headset to a postgame event. The effect? Bose’s sponsorship was supporting the advertisement of its competitor!

The word is that Bose and Beats have settled their disagreement. Bose has sought to end all judicial and administrative actions. Officially, the whole thing is “settled,” but details have not been made public.

It has been observed that Apple appears to have more interest in its streaming-music system and not on accessories like Beats with its headphones. Apple really added to its streaming capabilities by purchasing Beats Music, a streaming subscription service, and may not have had so much interest in Beats hardware and this suit.

Massachusetts Emerging as Robotics Leader

In the Commonwealth of Massachusetts, one need not look very hard to find robots under construction, being tested or in action. The state is fast becoming the robotics capital of the country. A long list of companies make their headquarters here including iRobot Corporation, the creators of the Roomba vacuum cleaner. Bluefin Robotics Corporation manufactures underwater units, CyPhyWorks Incorporated designs spying hover crafts and Rethink Robotics creates robots used in manufacturing. Massachusetts also boasts MIT and WPI, both schools that remain on the cutting edge of developing new technology every year.

Altogether, there are 100 robotic companies and 35 research and development facilities that design and manufacture robots for consumer, industrial, law enforcement, medical, military and research purposes. In the past four years alone, 11 new companies emerged. Massachusetts sells and exports more robots than any other location on the planet. Studies estimate that annual sales are close to $2 billion. The industry also currently employs approximately 3,200 people.

Robotics companies are thriving in the state, as manufacturers and other organizations are expressing an ever-growing desire to incorporate the machines into daily operations. While some fear that the automated devices will replace humans in the employment sector, the machines are largely being created to perform the work, not replace worker. In military scenarios for example, robots have the capability of entering dangerous areas, which saves the lives of troops.

The phenomenal growth of robotics also influenced the University of Massachusetts Lowell to construct the New England Robotics Validation and Experimentation Center. The 10,000 square foot facility will serve as the testing grounds for manufacturers desiring to test their robots in a variety of environments. The site will feature indoor and outdoor testing centers that include sand pits and splash pools. The ideal location means that the facility will be readily accessible to dozens of companies.

Massachusetts Technology Leadership Council chief executive Tom Hopcroft believes that robots are becoming common technology and that only a few places in the world make that possible.

Massachusetts is one of them.

Ebola and the Economy

Unless you’ve been under quarantine for the past few weeks, you know that Ebola has once again reared its ugly head, causing widespread concern – bordering on panic in some quarters – about the possibility of a global pandemic. How realistic a possibility is this?  Could it actually happen? Frankly, it’s still too early to say one way or the other. However, it’s not too soon to make some basic predictions about how some businesses will be affected should matters get much worse.

Dr. Bruce Aylward is the Assistant Director General for the World Health Organization (WHO). He recently announced that organization’s prediction that the number of cases is expected to top 9000 by the end of this week, and the fatality rate of the current outbreak has risen from just under 50% to over 70%. When asked how the situation might evolve over the next 60 days, he warned: “We anticipate the number of cases occurring per week by that time to be somewhere between 5,000 and 10,000 per week.”

As in previous instances of global health scares, airlines, theaters, sports arenas, and other locations where large “fraternities of strangers” gather are sure to be the first to suffer the economic consequences of a population frightened into isolation. Participating in purely recreational activities will be weighed against the fear of contagion, and attendance is sure to plummet.  Schools, churches, and other venues where attendance is “less voluntary” will follow suit in very short order if the outbreak is not quickly reigned in.

The WHO announced yesterday that the Ebola epidemic had officially been halted in Nigeria, Africa’s most populous country.  Sadly, Liberia, Sierra Leone, and other nations in the region remain mired in the misery of a highly-contagious, incurable, deadly viral outbreak, and new cases are popping up around the globe on a daily basis.  Should this situation continue, the global economy is sure to take a big hit.

From a business perspective, this could cause a loss of billions of dollars in revenue. On a more personal level, this could very likely fundamentally change the way we socialize. How big a change depends entirely on how long this outbreak takes to be subdued and how much damage it does in the meantime.

Massachusetts Receives $327,000 in AT&T Settlement

Class Action Case No. CV-09-1529 SI never went to court. The two sides – the Federal Trade Commission and AT&T – settled in October, 2014. AT&T, the largest mobile phone service provider in the nation, agreed to pay $105 million for unauthorized cell phone charges in a practice known as “mobile cramming.”

Cramming is when a phone company charges fees for services neither ordered nor requested by the customer. In AT&T’s case, mobile phone customers were charged up to $9.99 per month for third-party wallpapers, ringtones, horoscope text messages, celebrity gossip, and other crumbs of seemingly free information. In the industry, these are called “Premium SMS content.”

Monthly AT&T bills allegedly hid the charges as part of the total balance. They were listed under the nebulous category, “AT&T Monthly Subscriptions,” giving no hint of their third-party status. The Federal Trade Commission alleged that AT&T pocketed 35 percent of the third-party monthly charges.

“Mobile cramming is a major problem that continues to harm consumers in Massachusetts,” said Attorney General Martha Coakley. In 2011 alone, AT&T received approximately $1.3 million customer complaints about the extra fees. The company ended the practice in 2013.

Massachusetts received $327,000 as part of the case settlement. Under terms of the agreement, AT&T must open an $80 million fund, administered by the Federal Trade Commission, to refund customers who were targets of cramming. Customers can request free billing summaries from January 2005 to January 2013 to check for third-party charges, and they are eligible for 100 percent repayment.

“This case underscores the important fact that basic consumer protections – including that consumers should not be billed for charges they did not authorize — are fully applicable in the mobile environment,” said Federal Trade Commission Chairwoman Edith Ramirez.

AT&T is the first major phone service carrier to enter a national settlement involving mobile cramming practices. Negotiations with T-Mobile, Verizon and Sprint for alleged similar practices are ongoing.

Framingham Company Merges with NYC IT Provider

Framingham-based VP Solutions Inc., and another national information technology service company ComputerSupport.com, have confirmed they are merging to better capitalize on market opportunities in the the IT and digital industries. This trend of mergers continues throughout the industry as companies look to acquire and leverage assets they don’t possess internally. As technology continues to evolve and disrupt business practices, companies are compelled to respond quickly and resourcefully to ensure their spot in the marketplace.

VP Solutions has developed its reputation and position in the legal service sector, and is planning to expand its base with a new range of services and products by leveraging the assets and expertise of ComputerSupport.com. If well executed, the synergy produced by the companies joining forces has the potential to transform the industry. This merger will provide customers with improved engineering, customers service, and cloud computing solutions, among other digital innovations and applications.

Naturally, top executives at both firms are hoping for positive results for company shareholders as well as for their respective internal teams. They believe equity members will seek rising growth and value in their ownership stakes. Employees can expect to receive exposure to new knowledge points and innovative skills that will bolster their careers and earnings potential within the company for years to come.

3D Printing – Not for the Masses?

Somerville, MA-based Formlabs, a relatively new company on the scene of 3D printing, stands poised and ready to revolutionize the market. The driving force behind the company’s advancement, Colin Raney, has some ideas about how the technology will change industry in the future, and not all of them are mainstream.

The major advancement made by Formlabs is the creation of a relatively inexpensive and small 3D printer that costs only $3,300 and is of desktop size. This is a sharp departure from the refrigerator-sized earlier models that cost $10,000 or more. Raney said that this will make the advantages of 3D printing far more accessible. He tempered that, however, with a judgment that 3D printing is likely to remain primarily in the professional field. Raney’s reasoning behind this was simple. While 3D printing technology is getting less expensive, it is not yet cheap enough to justify common household use. It would be far more expensive to buy a 3D printer and the resin materials needed to create basic household items than it would be to simply buy those items. Raney suggested that household 3D printing is still a long ways off despite his recent advancements. This view is in contrast to other’s views on the topic and also to much of the hype surrounding 3D printing.

On the other hand, the advantages to the professionals of the more portable and less-expensive 3D printers are great. Raney believes his work will allow professional designers and engineers the ability to work better and faster. It will also be of benefit to smaller design businesses that previously had great ideas and potential but were unwilling to deal with the bulkier and far more expensive earlier models.

3D printing technology allows the creation of structures that would be impossible using any other currently available technology. Raney promises that his technology will allow designers to create incredibly intricate parts without much need for post-processing work. A key advantage to Formlab’s design is the incredible level of detail the device can render, the creation of a 50-foot chain inside a five-inch box being just one example.

While Raney clearly believes his company’s product will bring 3D printing technology to a wider user-base, he also believes the broad-scale commercial potential of such creations will be what revolutionizes the industry and its underlying technology.

Two MA Tech IPOs to Watch

Buzz surrounding the local tech community has been perking up lately with the recent announcement of two IPOs. Just last week, Boston-based online retailer Wayfair announced plans to raise $350 million in an IPO scheduled for the fall.  Now, Cambridge-based HubSpot has indicated that they also have plans to go public with an IPO to raise around $100 million.

Employing 700 people and launched by MIT graduates Brian Halligan and Dharmesh Shah, HubSpot, an inbound marketing solutions provider, offers products based on a subscription business model. Analytics, blogging, SEO, social media, marketing automation and lead generation are offered under a single, centralized application. The company’s main clientele are medium-sized businesses with employed staff ranging anywhere from the teens to 2000 individuals.

Halligan owns 4.9 percent of the company and Shah’s stake is 8.8 percent. The founders believe in a corporate culture that provides employees with numerous ways to grow and informs them about nearly every every detail concerning the business.

David Skok and Larry Bohn, two venture capitalists with ties to the Boston area have a large stake in Hubspot with 17.1 percent held by Skok’s interest and 27.1 percent owned by Bohn’s General Catalyst. Last February, analysts estimated a potential valuation for Hubspot at around $1.3 billion after the IPO is held which was slightly under the marketing automation software company Marketo’s (MKTO) $1.7 billion valuation at that time.

In 2013, Hubspot generated revenue of $77.6 billion with a 50 percent growth rate over 2012. That is lower than the growth of Marketo which was $95.9 million in revenue and 64 percent growth last year. Since Marketo’s initial public offering a year ago, the stock has weathered with a 33 percent downturn in price. Losses for Marketo were $47.4 million in 2013 compared to $34.3 million for Hubspot. In the first half of 2014, losses for Hubspot were $17.7 million. Typically, software subscription companies are running in the red when they decide to sell shares of their company to the public.

According to their S-1 filing, Hubspot will trade on the New York Stock Exchange under the symbol HUBS.

Aaron Portnoy to Speak at Worcester Economic Club

The Worcester Economic Club (WEC) announced today that Aaron Portnoy, a world-renowned computer security expert, has been booked as one of its speakers of the 2014-2015 WEC Speaker Series. Portnoy is featured on the July 21, 2014 cover of TIME Magazine’s “World War Zero: How Hackers Fight to Steal Your Secrets.” In today’s era of privacy concerns and compromised security infrastructure, what Portnoy has to share with the Club is sure to be of interest.As in past years, Worcester Economic Club’s 2014-2015 Speakers Series will feature many of the world’s foremost thought leaders, including nobel laureates, authors, journalists, economists, and business leaders. “I am pleased to announce Aaron Portnoy, one of the world’s leading authorities on cyber-security, will be addressing club in November,” says James J. Paugh, III, CEO of WorkersComp Analytics, LLC and President of the Worcester Economic Club. “Through our prestigious speaker series, we seek to showcase our commitment to promoting insightful, relevant discourse. Portnoy’s Time cover story highlights the security issues facing the economy today.”The 534th club meeting featuring Aaron Portnoy will be held Wednesday, November 19th, 2014 at the College of the Holy Cross in Worcester. Portnoy, who is the vice-president and co-founder of Exodus Intelligence started his career in reverse engineering for vulnerability discovery while still in high school by hacking the network of his school, the Massachusetts Academy of Math & Science in Worcester. Today, he is one of the world’s foremost experts in reverse engineering for vulnerability discovery, having determined major vulnerabilities in the systems of multiple institutions.

About the Worcester Economic Club

Founded in 1903, The Worcester Economic Club remains one of the oldest and largest organizations of its kind in the country. Comprised of professional men and women from the Worcester County area, we are dedicated to providing a forum for the open discussion of economic, civic, educational, and sociological subjects that are of interest to our members. Membership in the Worcester Economic Club is $200 per year with guaranteed access to all events and speakers hosted by the Club. All meetings are networking opportunities with a cocktail hour and formal dinner followed by a speaker. Speakers have included well known public officials, economists, educators, journalists, and business leaders. For more information visit http://www.economicclub.net

Did the $525,000,000 Massachusetts Poured Into Biotech Generate 571 or 17,994 Jobs?

Yes? No? Maybe? The state of Massachusetts has spent $525 million encouraging the development of the state’s biotech industry, just over half of the $1 billion budgeted for this purpose. This public investment is being applied to grants, tax breaks and business loans for companies planning on moving to Massachusetts or expanding their operations in the state, and is intended to encourage a healthier state economy. But, just how many jobs are really being created by this taxpayer investment?

One academic study by Pioneer Institute claims that Massachusetts’ $525 million directly created only 571 new jobs in life science industries. This figure applies to a period starting in 2009 and ending in 2013. In contrast, consider a study from Northeastern University that claims that between 2006 and 2012, life sciences and related industries added 17,944 jobs in the state. While Northeastern’s period of study doesn’t exactly match Pioneer Institute’s, the astounding variance of the results illustrate that questions remain about public investment Massachusetts biotech industry.

Questions need to be answered. Should the government of Massachusetts take tax dollars collected from businesses and individuals and give them to other businesses? Should government be picking industry winners and consequently with businesses that pay taxes but don’t receive tax breaks and cash investment by government losers? If government should take money from some businesses and give it to other businesses, should the alleged investment be made from politicians who are being lobbied by special interests or independent professionals?

Creating new jobs isn’t the only way public incentives can aid select businesses and potentially the economy of Massachusetts. Specifically for a more complete picture of how biotech incentives are working, other questions should be answered. For example, one could ask how much private capital biotech firms have attracted and what kinds of returns backers have seen on their investments.

It is also useful to ask how much extra tax revenues the state may see from capital gains. Until questions like these are answered, it will remain impossible to know just how much Massachusetts has received for its $525 million biotech investment.

President Obama to Speak at High School Graduation

In an effort to draw attention to an educational success story as well as highlight the need for continuing development of a manufacturing and technical workforce, President Barack Obama will be speaking to this year’s Worcester Technical High School graduating class this afternoon.

“The school’s combination of rigorous academics and hands-on learning opportunities characterizes the President’s vision for an education that works for America’s students,” according to a White House official who was speaking on the condition of anonymity in advance of the president’s speech. “He will reiterate his commitment to reforming America’s education system, as well as his challenge to redesign America’s high schools and connect our nation’s learners to high-speed broadband.”

Bill DiBenedetto, President of Uxbridge, MA-based Lampin Corporation commented, “Lampin has been an active supporter of STEM education for quite some time now, and we’re excited to learn that the White House is now promoting technical education in this manner.” He added, “The future of manufacturing and technical operations in this country is the next generation of young people in our schools today. If they are not given a solid educational foundation along with an awareness of the career opportunities in the manufacturing industry, this vital domestic economic sector will ultimately die out as it is exported to other countries.”

Worcester Tech is led by Dr. Sheila Harrity, a National High School Principal of the Year who was recognized last month at the White House. When she took over in 2006, the school was one of the lowest performing schools in the state. However, the school is now ranked among the best in Massachusetts in terms of testing scores. In fact, during her time at Worcester Tech, Harrity has seen the graduation rate grow by 17 percentage points (from 79.3% in 2006 to 96.4% in 2012) and the dropout rate fall from 6.5% in 2006 to 1.5% in 2012.

It’s no wonder that the President of the United States feels that Worcester Technical High School is a great venue at which to speak about the future of education in this country!