TECHdotMN: News about Minnesota Startups

Via News Release

“Yesterday, U.S. Sen. Al Franken (D-Minn.) cosponsored net neutrality legislation to maintain a free and open Internet. The bill (S.74), called the Internet Freedom, Broadband Promotion, and Consumer Protection Act of 2011, comes in the wake of the Federal Communications Commission’s (FCC) recent issuance of net neutrality rules, which Sen. Franken believes are not strong enough to protect today’s open Internet. The legislation was authored by Sen. Maria Cantwell (D-Wash.).

“Net neutrality is one of the most important issues facing our country today,” said Sen. Franken. “The recent FCC ruling on net neutrality does not do nearly enough to protect consumers, and this bill is designed to maintain a free and open Internet. This isn’t just about speech, it’s also about entrepreneurship and innovation, and it’s about our economy.” “

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By Paul Walsh, Star Tribune

“Federal authorities say a Texas hacker stole more than a quarter-million dollars from a subsidiary of Digital River Inc., the Eden Prairie-based e-commerce company, by redirecting electronic payment transfers to his personal account.

In an indictment unsealed Tuesday in federal court in Minneapolis, Jeremey Parker, 35, of Houston, was charged with computer fraud and wire fraud.”

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Ray Bonnabeau is a partner with Hellmuth and Johnson and serves as chair of the IT and eCommerce Practice Group.  Having practiced exclusively in the IT and eCommerce fields for over 15 years, his clients include businesses in the healthcare, financial and insurance industries.  Ray has a wealth of knowledge relating to IT contracts,  software licensing and he’s been an adjunct professor at William Mitchell College of Law teaching courses in both licensing and IP.

Typically, the most valuable asset to the tech startup is software code;  therefore it is important to know just how copyright law works and how ownership of code is determined. I spoke with Ray for just under 30 minutes about these concerns from the developers/founders perspective.

A few of the questions we address:

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By Ernest Grumbles, via Star Tribune

“On June 28, 2010, the U.S. Supreme Court issued its ruling in the biggest patent case in recent years, In re Bilski. The case related to the patentability of business methods (steps in accomplishing a business task) and has been a lightning rod in the intellectual property world (and elsewhere) during its long path to conclusion.  These business method patents, typically directed to financial, Internet commerce, data analysis and business processes, are often written such that the particular machine or system used to perform the method is irrelevant.  Bilski himself had tried to get a patent on various methods of managing hedge fund risk.”

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By Bradley J. Walz

It’s obvious that social media is here to stay as people are rapidly giving and receiving information about everything from companies to products to people. If you are developing social media applications that facilitate this form of interaction (to one degree or another), there’s some practical protections to consider.

Social media has been defined as a group of Internet-based applications that build on the ideological and technological foundations of Web 2.0, and that allow the creation and exchange of user-generated content.  This is not to be confused with social networking which is a social structure made of individuals (or organizations) aka “nodes” that are connected by one or more specific types of common interest-although the two often go hand in hand.

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Via Minneapolis-St.Paul Business Journal

“Piper Jaffray & Co. will pay a $700,000 fine after it failed to save about 4.3 million e-mails sent during a six-year period, the Financial Industry Regulatory Authority (FINRA) said Monday.

FINRA, a non-governmental regulator of securities firms, said the Minneapolis-based investment bank did not disclose that it wasn’t retaining the e-mails. The issue was discovered when FINRA requested documents as part of an investigation into a former Piper employee.”

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Harold Slawik is a Partner with Minneapolis-based New Counsel, PLC, a law firm that is known for it’s work with entrepreneurs and startups in the Minnesota technology industry. Harold has extensive experience with private practice, as in house counsel for Sun Microsystems and with startup companies in both Minnesota and California. Harold is also an investor having started a private equity company that invests in software companies.

Why startups we wondered?

“We both (partner John Roberts) have had a lot of fun, that’s where the most fruitful experiences in our careers have been…it’s where we’ve both developed our experience and expertise. It’s been my exclusive focus since the mind 90′s and while there were a lot of law firms in this town doing tech stuff in the late 90′s during the boom days, after the crash, many of these firms cannot practice it to the degree that we do for the price that we do . There’s a market opportunity at our level.”

Harold shares with us his thoughts about what a startup company needs to do when starting and considering raising debt or equity financing; we’ve outlined the takeaways below:

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Accelerant (n.): a A substance that is used as a catalyst to increase the speed of or to cause sooner than expected.

In an effort to better support Minnesota innovators and entrepreneurs, Minneapolis Law Firm Robins, Kaplan, Miller and Ciresi (RKMC) has developed and launched a suite of targeted legal resources specifically for the “sophisticated pre-money start-up”. The Accelerant program, which is generally limited to highly-skilled entrepreneurs with high-growth business models, aims to provide entrepreneurs with a systematic and cost-effective approach to the necessary legal componentry of their venture.  As RKMC Partner and Accelerant initiator Kevin Spreng describes:

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Kate Andresen is an attorney specializing in information technology and software licensing.

Kate began her own law practice, Andresen Law, PLLC over a year ago, prior to which, she was a partner with Bonnabeau Salyers Stites Doe Andresen (BSSD), a law firm specializing in IT.  Notably, she has authored a treatise entitled The Law and Business of Computer Software.

Kate spoke with us about a few of the basics of contract law and why startup businesses need to pay attention to the legalese.

Here are a few of the questions we address:

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Because many tech startup ventures-and the applications/products created-often begin with one person, or perhaps remain indefinitely owned by a single individual, LLC’s remain popular amongst early stage companies,  Internet-based “lifestyle”, businesses or for-hire technicians.

According to Minnesota Statute , LLC’s can be owned and operated by a single natural person. Here are the basics surrounding the single member LLC in Minnesota:

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