Coalition Calls for Public Input, Comprehensive Analysis, Greater Scrutiny of Cigna-Anthem Merger

A coalition of consumer and medical organizations is calling for greater public input into the Connecticut Insurance Department’s review of the proposed Anthem-Cigna health insurance mega-merger, and is expressing concerns about the potential “negative impact on both the cost and quality of care in Connecticut” of that merger and the proposed Aetna-Humana merger. The groups – Universal Health Care Foundation, Connecticut Citizen Action Group and the Connecticut State Medical Society – formed the “Connecticut Campaign for Consumer Choice” coalition and urged state Insurance Commissioner Katherine Wade to “ensure an open, transparent hearing process in Connecticut, where policy holders, physicians and other interested parties are given maximum opportunity to share their views.”

In a letter to Wade, the organizations urged a series of actions as part of the Anthem-Cigna review “to protect our health care options in Connecticut” – that a public hearing be held at a time and place that “allows for maximum public participation,” that interested parties be granted intervenor status (which would allow witnesses to be called and cross examined), and that a department commission a study that will “analyze the potential impact on cost, access, and the Connecticut economy, including jobs,” as part of the agency’s deliberations on the merger proposal. 

Bloomfield-based Cigna and Indianapolis-based Anthem are two of the nation’s five largest health insurance companies.  It is anticipated that a hearing would be held sometime this spring, but plans have not yet been announced. The coalition leaders indicated that “all eyes from around the country will be on Connecticut,” as home of two of the nation’s leading health insurance companies.

They also launched a new website, www.consumerchoicect.org, which will provide the public with information about the proposed mergers.  The site states that “what’s really happening is that fewer choices mean higher costs for consumers and employers. With fewer insurers for the remaining three national companies to compete against, there will be less of an incentive to keep costs low or develop innovative services to bring in new customers.”

Connecticut Insurance Department spokeswoman Donna Tommelleo said the department "is reviewing the proposed acquisition in accordance with all applicable  Insurance Holding Company Statutes. The Form A application is posted on Home Page of the Department’s Web site for public view and the site is updated frequently as more documents are filed. After the application is fully reviewed and deemed complete by the Department there will be public hearing held within 30 days. The public will be given ample opportunity to provide both written and oral comment."  She indicated that "the Department respects the coalition’s interest in the matter.” The Anthem-CIGNA merger was filed with the state Insurance Department last September.

In advocating for the merger, Anthem has established a website that highlights the company’s views on the benefits of a merged company, at www.betterhealthcaretogether.com  The site indicates that “the combined companies will operate more efficiently to reduce operational costs and, at the same time, further our ability to manage what drives costs, helping to create more affordable health care for consumers.”

Matthew Katz, executive director of the Connecticut State Medical Society, said that the merger “could be the demise of already struggling private practices,” and will adversely impact patient costs and access to care.  "Goliaths will not  benefit consumer choice," he said.   The Society opposes the merger, as do the other organizations in the coalition.  They indicated that a fair, open, transparent review process would make it more difficult for the merger to be approved as being in the public interest.

Noting that Wade serves as chair of the National Association of Insurance Commissioners working group on the Anthem-Cigna mercer, and that the working group’s proceedings are not open to the public, the coalition leaders stressed the importance of an open and comprehensive process in Connecticut.

The letter to Commissioner Wade, dated March 22, was signed by Frances Padilla, president of the Universal Health Care Foundation of Connecticut, Tom Swan, executive director of the Connecticut Citizen Action Group, and Matthew Katz, Chief Executive Officer of the Connecticut State Medical Society.

The Connecticut State Medical Society is a federation of eight component county medical associations, with total membership exceeding some 7,000 physicians. Universal Health Care Foundation of Connecticut is an independent, non-profit philanthropy, supporting research-based policy, advocacy and public education that “advances the achievement of quality, affordable health care for everyone in the state.”  CCAG, founded four decades ago by consumer advocate Ralph Nader,  has "created change on the issues members care about including quality, affordable health care, protection of consumers, the environment, and democracy."

CT Residents Believe Economy, Business Conditions Have Improved, But Uncertain About Future

Connecticut residents are somewhat more upbeat about the state of the state’s economy, but less than convinced that good economic news will keep coming, according to the results of the Connecticut Consumer Confidence Survey for the fourth quarter of 2015, released this week.  The quarterly survey,  by InformCT, a public-private partnership that provides independent, non-partisan research, analysis, and public outreach to help create fact-based dialogue and action in Connecticut, is designed to generate an ongoing measure of consumer confidence in the Connecticut economy. When asked to think about overall business conditions in Connecticut versus 6 months ago, respondents – for the first time in three quarters – said conditions are better now than 6 months ago.  The margin was narrow - with 27 percent saying “better” and 25 percent saying “worse”, but that’s a reversal from the past two quarters, when more people were of the view that business conditions has worsened (22%-24% and 24%-28% in the two previous quarters).

The percentage of respondents who feel that the Connecticut economy is improving increased from 23 percent in the 3^rd quarter to 27 percent in the most recent survey, and the percentage expressing concern that their job, or their spouses’ job, is in jeopardy, has declined in each of the four quarterly surveys, from 38 percent in the first quarter of 2015, to 36 percent, 35 percent and now 33 percent.

Administered for InformCT by the Connecticut Economic Resource Center, Inc. and Smith & Company, the analysis is based on the responses of residents across Connecticut and addresses key economic issues.  The most recent consumer confidence survey also saw an uptick in key indicators, as the percentage who believe:

• there are “plenty of jobs for anyone who wants to work (as compared with 6 months ago)” increased from 10 percent to 13 percent
• the employment situation will be better still in 6 months increased from 15 percent in the 3^rd quarter to 17 percent in the 4^th quarter
• their personal financial situation is better now than 6 months ago increased from 63 percent in the third quarter to 65 percent in the 4^th quarter survey.

Even though Connecticut residents feel conditions are improved, they are increasingly divided when asked if they expect that will continue.

When asked to look ahead six months, respondents have consistently believed business conditions will improve, but by a narrowing margin in each of the past four quarters.  In the beginning of the year, 30 percent thought business conditions would improve, as compared with 19 percent who thought conditions would worsen – an 11 point differential.  In the following three quarters, that differential narrowed to 9 points, then 5, and now 4.

There were other positive outcomes in the final quarterly survey of 2015, as the percentage who anticipate:

• making a major consumer expenditure for furniture or some other product in the next 6 months jumped from 26 percent to 34 percent, reversing a slide from 36 percent in the year’s first quarterly survey.
• buying a new car also increased, from 22 percent in Q3 to 25 percent in Q4, the highest percentage of any of the quarterly surveys on that question.
• taking a vacation outside Connecticut in the next 6 months also rebounded, from 51 percent to 56 percent, reversing a diminishing percentage in each of the past two quarters.

There remain some troubling signs amidst the generally upbeat news.

The percentage who agree that Connecticut is a good place to live and raise a family and dropped slightly, and is under 50 percent for the first time in the quarterly surveys, at 47 percent.   The percentage of respondents who say they are likely to move out of the state in the next five years has increased in three consecutive quarters, from 32 percent to 34 percent to 37 percent, but remains lower than in the first quarterly survey, when it stood at 39 percent.

InformCT is a public-private partnership that currently includes staff from the Connecticut Economic Resource Center and the Connecticut Data Collaborative.  More information about subscribing can be found at informct.org.  Based in Rocky Hill, the Connecticut Economic Resource Center, Inc. is a nonprofit corporation and public-private partnership that provides economic development services consistent with state strategies, leveraging Connecticut’s unique advantages as a premier business location.  Smith & Company LLC, is a Shelton, Connecticut-based market research firm.

CT is Nation’s 5th Most Innovative State, Ranks 4th in Productivity

Massachusetts is the nation’s most innovative state, with California scoring a close second and Washington, New Jersey and Connecticut rounding out the top five states, according to The Bloomberg U.S. Innovation Index, in findings that highlighted the connections between education, research and innovation. "There are some things that state governments can do to make their states more attractive to research and development," including R&D tax credits, Nariman Behravesh, chief economist at IHS Inc. in Lexington, Massachusetts told Governing magazine. "State governments — if they carefully target areas where they think they have a bit of a competitive advantage — they could develop a cluster around their universities, as well."

Bloomberg scored each of the 50 states on a 0-100 scale across six equally weighted metrics: R&D intensity; productivity; high-tech density; concentration of science, technology, engineering and mathematics (STEM) employment; science and engineering degree holders; and patent activity.

Mississippi, West Virginia and South Dakota are the three least innovative states.

Reviewing Connecticut rankings by category, the state ranked 4^th in productivity, 8th in R&D intensity, 10^th in science & engineering degree holders, 11^th in patent activity, 13^th in STEM concentration and 22^nd in high-tech intensity. 

Rounding out the top 10 most innovative states were Oregon, Maryland, Colorado, Delaware and Minnesota.  Among the other New England states, New Hampshire ranked 12^th, Rhode Island was 14^th, Vermont ranked 25^th, Maine finished near the bottom at number 43.

The data analyzed by Bloomberg came from the Bureau of Economic Analysis, Bureau of Labor Statistics, National Science Foundation, StatsAmerica.org and the U.S. Patent and Trademark Office.

No Word on When or Whether WTIC-AM Broadcast License Will Be Renewed by FCC

“This application remains on hold and I cannot say when it will be resolved.”  That is the latest update from the Federal Communications Commission on the pending license renewal application of radio station WTIC-AM in Hartford.  The station filed its license renewal application more than two years ago, on November 27, 2013. As the agency’s Enforcement Bureau considers “an alleged violation of FCC rules,” the agency’s Media Bureau cannot proceed with a decision on whether or not to renew the station’s broadcast license. The application was placed on “enforcement hold,” amidst speculation that the action was related to use of the station’s airwaves by former Governor and station talk show host John Rowland, who was previously and subsequently convicted of federal corruption and campaign-related charges.

The FCC had no comment on whether the delay in making a determination on the license renewal is among the longest in FCC history, and a spokesman this week said that the agency does not comment on the status of the license application.    Although the station’s broadcast license expired on April 1, 2014, more than 22 months ago, WTIC can continue to broadcast until the FCC makes a determination on its license renewal application, which was filed just days before the deadline back in 2013.  Stations in such a status routinely continue to operate without any interruption until a decision on license renewal is made.

If the station’s license renewal is granted, it would be for an 8-year period. There has been no comment by the FCC on specifically when or why the federal agency’s enforcement division placed the application on hold, or when it might be lifted.  FCC officials have indicated that most often enforcement holds are instituted due to a complaint being filed that requires investigation.  The reason for the enforcement hold is only made available to the licensee or their attorney, the FCC has said.

The station is owned by CBS radio, which this month announced that revenues from its radio stations were down 5 percent in the 4^th quarter of 2015.  The website Radio Online attributed the decline to “continued softness in the ad radio ad marketplace and lower political advertising.”  One of the mainstays of the WTIC talk line-up, nationally syndicated Rush Limbaugh, was recently ranked as the second most popular national talk show, behind Michael Savage, which airs in Connecticut on other stations.

When the license renewal application does reach the agency’s Media Bureau, they will consider “how the allegation of violation was resolved,” as well as a range of other factors in deciding whether or not to renew the station’s license.  The other, more routine, factors include whether any other objections have been raised about the station, whether the station has been adequately serving the public in their area of license, their history of compliance with FCC regulations, and their overall performance.

Hartford Attorney Ken Krayeske filed an informal objection on October 1, 2014 to WTIC’s broadcast license renewal, alleging that the station “demonstrated serious malfeasance” and “helped conceal violations of federal law.”

As for the pace at which the FCC finalizes action on pending license applications, one indication came last week, when the FCC announced it had denied an objection to a station license renewal that was filed in October of 2013 in regards to station KKZZ in Port Hueneme, CA.  The AM station’s application for renewal was granted by the FCC on February 9, 2016 – more than two years after it was filed.

Four Connecticut Companies Among Most Innovative in National Rankings

Four Connecticut companies are among the most innovative, according to rankings published by Fast Company magazine.  Harman Industries, Oxford Performance Materials, Priceline Group and GE were named among dozens of the companies, in a range of industries, for noteworthy innovative business practices and systems. Overall, the top 10 most innovative companies of 2016, according to Fast Company, are Buzzfeed, Facebook, CVS Health, Uber, Netflix, Amazon, Apple, Alphabet, Black Lives Matter and Taco Bell.  The next 10 include, Robinhood, Universal Studios, Huawei, Cyanogen, InMobi, Novocure, Bristol-Myers Squibb, Amgen, Spotify and GE.

Fast Company also announced Top 50 lists selecting the most innovative companies in more than two dozen sectors, including architecture, design, automotive, biotech, education, energy, fitness, enterprise software, gaming, healthcare, marketing & advertising, media, retail and robotics.

Stamford-based Harman International Industries reached the list of the most innovative companies in the world for vehicle technology, led by an auto sound system that creates individual “sound zones” within vehicles. Harman ranked seventh on the Fast Company ranking of the 10 most innovative companies in the automotive sector.

According to published reports, Harman’s individual sound zone concept allows drivers and passengers to personalize their own audio experiences with limited disruption or interference from other vehicle occupants, with digital signal processing tuned to the vehicle cabin and speakers to reduce the signals from other zones, regardless of whether they are music, vocal or other sounds. The Harman system utilizes a vehicle’s existing speakers with the addition of headrest and ceiling speakers.

A Connecticut-based biotechnology company, South Windsor-based Oxford Performance Materials (OPM), reached the biotechnology list, ranking seventh.  The company, founded in 2000, was recognized for developing spinal implants. OPM’s founder and CEO is Scott DeFelice.

A pioneer in personalized medicine, OPM Biomedical became the only company to receive FDA clearance to manufacture 3D printed patient‐specific polymeric implants when it received clearance for its cranial prostheses line for surgeons in 2013, the company website points out. The company reports it now has two additional FDA clearances, and is an original equipment manufacturer for maxillofacial implants as well as its first spinal implant line.

In addition, Norwalk-based Priceline Group was recognized by Fast Company among hospitality companies for its Booking.com hotel reservation system. The Priceline Group is the world’s leading provider of online travel & related services, provided to consumers and local partners in over 200 countries through six primary brands:  Booking.com, priceline.com, KAYAK, agoda.com, rentalcars.com, and OpenTable.

https://youtu.be/rTrKd3vPyWk

Federal Transportation Funds to Increase As Connecticut Considers Long-Term Plan

As Connecticut policy makers consider a long-term infrastructure investment in Connecticut’s transportation system, they do so just months after the federal government, after years of inaction, adopted the FAST (Fixing America’s Surface Transportation) Act at year’s end.  It is the first comprehensive transportation law since 2005, according to Connecticut’s Office of Legislative Research (OLR). The act includes $225.2 billion for highway investment, $61 billion for federal transit programs, and $10 billion for the Federal Railroad Administration and Amtrak.  States will get about a 5.1 percent increase in funding in FFY 16 and annual increases ranging from 2.1 percent to 2.4 percent in subsequent years, according to OLR.

State lawmakers are considering Governor Malloy’s proposed $100 billion, 30-year Let's Go CT! program, unveiled earlier this month, which included a call to enact a constitutional amendment creating a financial lockbox to protect transportation funds. Officials have said that 47 percent of state-maintained roadways are in “less-than-good condition”, and 35 percent of Connecticut's bridges are functionally obsolete or structurally deficient.  The Connecticut Business and Industry Association has said that 42 percent of businesses think the state's road congestion hinders their opportunities and growth.

As a result of the FAST Act, Connecticut will receive about $3.5 billion over five years, or about $700 million annually, for highway and transit programs, which is about $62 million more per year than Connecticut received in 2015.  The state Department of Transportation says the act’s importance isn’t in the amount of money it provides, which does not change dramatically from previous levels, but in the predictability and assurance of funding it provides, OLR Principal Analyst Paul Frisman points out in a report to state legislators. 

The FAST Act’s transfer of the $70 billion into the federal Highway Trust Fund (HTF) was essential to keep the fund solvent. The federal government has not increased the federal 18.4 cent gas tax in more than 20 years, and this has reduced the HTF’s purchasing power and reduced its ability to keep pace with rising infrastructure costs and inflation. Decreased revenues because of more fuel efficient vehicles and the popularity of alternative fuel vehicles also cloud the HTF’s future, the report indicates.  There continue to be concerns that if revenues going into the fund are not increased, insolvency may await, as soon as 2020.

The FAST Act also includes two new freight initiatives, including a National Freight Program which authorizes $6.2 billion over five years for national and state projects to improve highway freight transportation. The OLR report indicates that to participate, a state must complete a State Freight Plan, which it must update every five years. The American Road and Transportation Builders Association (ARTBA) has said that participating states will be able to obligate up to 10 percent of this funding to improve freight rail services or ports, which may be of particular interest to Connecticut.  The other new program is aimed at highway, bridge, rail-grade crossing, intermodal, and freight rail projects that cost at least $100 million, improve movement of both freight and people, reduce bottlenecks, and improve connectivity.

The FAST Act also makes changes to several highway funding programs, with a focus on surface transportation, local roads and bridges, transportation alternatives such as bicycling.  To increase efficiency and speed up the project review process, ARTBA reports that the FAST Act encourages the use of a single environmental review document throughout the entire review process, instead of the current practice of having each agency involved in a project conduct a separate review.

The OLR report also indicates that a Federal Highway Administration pilot program permits up to three states to toll existing Interstate highways that they could not otherwise adequately maintain or improve, and increase funding available for public transportation initiatives.  In addition, $2.6 billion is provided to Amtrak’s Northeast Corridor (and $5.4 billion to other Amtrak lines) over five years. It separates the Northeast Corridor, from Boston to Washington, D.C, from other Amtrak accounts to ensure that the amounts assigned to that Corridor are used there, OLR reports.

Even with the additional funding nationwide, transportation officials in Connecticut and around the country continue to warn that “long-term, sustainable funding for transportation is yet to be achieved,” as described by the American Association of State Highway and Transportation Officials.

Corporate Headquarters Headed Back to Cities, But Shrinking, Report Says

The departure of GE’s corporate headquarters for Boston reflects a growing trend for headquarters of major corporations to relocate back to cities, but a recent study indicates they not only move, but shrink, becoming a “reconstituted, smaller version”of their former corporate selves. Analyst Saskia Sassen, author of The Global City, describes such moves, which often consist of “only the most senior people” in the firm as “executive headquarters.”  A feature this month by Crain’s Business Chicago investigates the trend, as it has been evolving in Chicago.  Their report points out that “these headquarters make for great headlines, but they don’t necessarily result in that many jobs,” according to the website newgeography.

“The notion of the corporate headquarters in the ‘Mad Men’ world when there were hundreds or thousands of people in a building with the company logo . . . those days are gone,” says David Collis, a professor at Harvard Business School who studies corporate headquarters.

The Crain’s article points out that “when Chicago landed ADM in 2013, it got 70 executives and white-collar employees, plus a promise of 100 technology jobs that never arrived. Two years later, Decatur still has 4,200 ADM workers.”

The story points to good news and bad news for Chicago.  The bad news, is that a “headquarters ain’t what it used to be. On the other hand, Chicago is winning the battle for them,” and the ripple effect they provide.  These smaller executive headquarters, particularly for major global businesses, benefit from being in a global city, the article explains. Chicago has lured a number of these from out of town, noting that agro-industrial firms are increasingly choosing Chicago: ADM, Con Agra, Mead Johnson Nutrionals, and Oscar Mayer in recent years.

The same may be said for GE and Boston, and the city’s technology-intensive environment. Some fear that Chicago's technology startups, the article reports, are particularly vulnerable to leaving for Silicon Valley, attracted by venture capital and a deep talent pool.  Boston may be in the running for similar relocations.

A similar phenomenon is occurring in Pittsburgh.  After 70 years in a suburban location, Kennametal announced plans last fall to relocate its world headquarters to an urban location. “We’re a global business that’s making changes to stay competitive in a new industrial era,” said the company.  “We have more than 13,000 employees in 40 countries serving customers in more than 60 countries every day. An urban location puts us in closer proximity to major universities and the airport and will enable us to recruit more talent.”

The Wall Street Journal reported last year that online travel agency Expedia Inc. announced plans to relocate its headquarters from a Seattle suburb that it called home for nearly 20 years to the city’s downtown.

“In the late 60s and early 70s, CEOs in places like New York City fled the city and moved to the suburbs, leading to the growth of Westchester County, Stamford and Greenwich, Connecticut,” Ed McMahon, a senior resident fellow for the Urban Land Institute, told the newspaper. “In those days, the determining factor was where the CEO of the company wanted to live.”

Now, the Journal reported, “large companies are moving back into the city in an attempt to attract and retain workers—particularly younger workers who are postponing homeownership and favor renting in walkable neighborhoods with easy access to restaurants, shopping and cultural opportunities.”

“Connecticut has really been hammered by the trend away from suburban campuses,” writes Michael Brendan Dougherty in The Week. “Aetna demolished a 1.3 million-square-foot campus in Middletown in 2011. That site is vacant. Pfizer dumped a research campus in Groton after that. The suburbs around Chicago, which once gladly received Sears' corporate headquarters, may be hit next.”  It seems that they are.

The Crain’s article reports that headquarters began shrinking a decade ago, but the trend has accelerated in the past three years, according to Vinay Couto, a consultant in the Chicago office of Strategy&. In recent years, 16 companies have relocated their main headquarters to the city from the suburbs. Seventeen came from outside the metro area. The phenomenon, he points out, is driven by the outsourcing of shared services such as IT, accounting and human resources, as well as by a mindset borrowed from private equity to cut overhead and make every part of a business count toward profitability.

The website Investopedia defines “corporate headquarters” as “a business' most prestigious location,” adding that it may “bring prestige to the city it is located in and help attract other businesses to the area.”

Moving headquarters can also be a way for companies to break from the past and shed employees and positions, Couto says.  And the loss of a major headquarters doesn't necessarily stifle job gains. When Boeing moved to Chicago, Seattle's economy kept growing, Kevin Hively, founder of Ninigret Partners, a business and economic development strategy consulting firm in Providence, R.I., told Crain’s. In that case, however, the presence of Microsoft and Amazon helped.

Eight CT Companies Among the Fastest Growing Tech Companies in North America

The Technology Fast 500 is a closely watched annual listing of the fast-growing tech companies, businesses that are releasing new, emerging technologies from the U.S. and Canada worldwide.  The latest ranking includes eight Connecticut companies, including one, operating in Stamford, that reached the top 100. Combining technological innovation, entrepreneurship, and rapid growth, Fast 500 companies—large and small, public and private—are located in cities all across North America and are “disrupting the technology industry,” according to consulting firm Deloitte, which has compiled the annual list for two decades.

Fast 500 award winners on the current list were selected based on percentage fiscal year revenue growth during the period from 2011 to 2014.  Companies must own proprietary intellectual property or technology that is sold to customers in products that contribute to a majority of the company’s operating revenues in order to be considered for inclusion on the list, according to Deloitte.

The lone Connecticut company to crack the top 100 was Milford medical device manufacturer SurgiQuest, which was number 100.  The company’s growth was pegged at 877 percent.  It was incorporated in 2006, with a focus on laproscopy technology.

Not far behind, at number 119, was Revolution Lighting Technologies, a manufacturer based in Stamford.  The analysis placed the company’s growth at 755 percent.  Revolution Lighting Technologies Inc. engages in the design, manufacture, marketing, and sale of light emitting diode (LED) lighting solutions in the United States, Canada, and internationally.  The company’s customers include the U.S. military.

Madison-based Clarity Software Solutions, Inc., with 298 percent growth, placed at number 247 on the top 500 fastest growing technology companies in North America.  Clarity Software Solutions, Inc. helps health insurance clients optimize customer relationships-and save time and money-by enhancing flexibility and control over document management and communications delivery, according to the company’s website.

Also making the list were Evariant of Farmington, a software developer, at number 272, and HP One, a software company in Trumbull at number 307.  Biopharmaceutical company Alexion, in the midst of moving its headquarters from Cheshire to New Haven, was ranked at number 349, and etouches, a Norwalk software company ranked at number 357.  Rounding out the Connecticut companies on the list is Wallingford oil extraction technology company APS Tecnhology, at number 466.

“Amid a fierce business climate, there seems to be no shortage of new and established companies that are unlocking a seemingly unlimited potential for growth and advancement through technology’s continued disruption and proliferation across industries,” said Sandra Shirai, principal, Deloitte Consulting LLP and US technology, media, and telecommunications leader.

“It is inspiring to witness the innovative ways companies are incorporating emerging technologies for business gains, be it cognitive computing, or the Internet of Things. We congratulate all those ranked on the Fast 500 and look forward to seeing their continued growth into 2016.”

Revolution Lighting Technologies ranked eighth among energy tech companies, and SurgiQuest Inc. ranked sixth among medical device companies.

Overall, 283 of the 500 companies were in the software sector, and 67 percent of the 500 companies have received venture capital funding at some point in their company’s history.  Topping the list was StartApp, with a growth rate of 21,984 percent from 2011 to 2014. Based in New York and founded in 2010, StartApp provides a free monetization and distribution platform that integrates with applications on mobile devices.

Two-thirds of the companies are private, and 33 percent are public.  The average growth rate of the top 500 companies was 850 percent, with individual company growth on the list ranging from 21,984 percent to 109 percent.  Broken down by region, 20 percent of the companies are based in the San Francisco Bay Area, 14 percent in the New York Metro Area, 7 percent in New England, and 6 percent in Los Angeles and Washington, D.C.

New Casey Foundation Initiative Aims to Improve Job Prospects for Young Adults in Hartford

A total of up to $900,000 will be awarded over the next four years to a Hartford collaborative initiative to strengthen the next generation of workers and meet employer demand.  The Annie E. Casey Foundation has announced plans to award $6 million in grants to increase job opportunities for young adults from low income families in Hartford and four other communities - Cleveland, Indianapolis, Philadelphia, and Seattle. Hartford expects to receive up to $900,000 over the grant period for planning and implementation.

Through Generation Work, the Foundation aims to combine building relationships with businesses, factoring in their needs in the local economy, with youth development strategies to prepare young people for work, such as mentoring and on-the-job learning opportunities. Ultimately, the Casey Foundation hopes to help establish local networks of workforce development organizations that serve young job seekers and have strong connections with businesses.

The Hartford Generation Work initiative is led by United Way of Central and Northeastern Connecticut, working with five other community partners:

• Capital Workforce Partners,
• Hartford Foundation for Public Giving,
• Hartford Opportunity Youth Collaborative,
• Our Piece of the Pie, and
• Workforce Solutions Collaborative of Metro Hartford.

Hartford’s initiative will connect young adults, including those out-of-school or work or underemployed, with education, training and employment for careers in manufacturing and healthcare, officials said. The initiative also intends to improve coordination and collaboration among partners and youth initiatives.

“The strength of our future workforce is one of our nation’s greatest assets and is critical to our ability to compete globally,” said Allison Gerber, a senior associate who oversees the Casey Foundation’s investments in improving job opportunities for low-income individuals and families. “The next generation is eager to work, but we must create more avenues for young adults to develop the knowledge and experience they need to succeed in the job market.”

While the Great Recession hit many hard, teens and young adults have experienced the most drastic drop in employment, data show. Millions of young people — particularly young people of color, justice-system involved, or aging out of foster care and from low-income families — face obstacles to employment or education, and the percentage of young people ages 18 to 29 in the job market nationwide has steadily declined in recent years. At the same time, employers often struggle to find workers with the right set of skills for available positions, Foundation officials point out.

Patent Trolls Target Nearly 50 Connecticut Businesses, Filing Suits in Friendly Texas Court

“I know firsthand how detrimental patent trolls can be to small businesses, as my Connecticut small business was recently the victim of abusive patent litigation in which bad patents were used as weapons of financial intimidation against my small business. $100,000 in legal fees and ten months of litigation later, we successfully defended against these frivolous lawsuits, explained Michael Skelps, General Manager of Middlefield-based Capstone Photography recently in a published report. The New York Times has described patent trolls as “people who sue companies for infringement, often using patents of dubious value or questionable relevance, and then hold on like a terrier until they get license fees. In recent years, patent trolls — they prefer “patent assertion entities,” or P.A.E.’s — have gone from low-profile corporate migraine to mainstream scourge.”

Skelps said that “a year later, my small company is still recovering from exorbitant legal fees, none of which we were able to recoup from the legal system.  As a result of the lawsuit, my mom-and-pop photography shop had to downsize from five full-time employees to three part-time. We spent the equivalent of a year’s worth of profit to defend ourselves, with no budget allocated before to legal defense.”

While action to combat the rapidly escalating challenge to businesses of every size has been unable to navigate through a divided Congress, the problem is growing.  One jurisdiction in particular is a hospitable home for the legal attacks.  Federal court in the Eastern District of Texas is the epicenter of patent troll litigation, and nearly 50 Connecticut companies are among those hauled into court there under dubious circumstances.

The Dallas Business Journal printed what read very much like a warning to American businesses, when a commentary noted that “the Eastern District of Texas’ misguided judicial system makes the towns of Tyler, Marshall, Beaumont and Texarkana the biggest patent-troll nest in the United States, filling the coffers of these tiny towns with money legally extorted from innovators that could otherwise be used to support business growth and create new jobs.”

The Connecticut businesses range from well-known names such as Xerox, UTC, Pitney Bowes, Aetna, Starwood, Priceline, WWE, Frontier Communications and Stanley Black & Decker to dozens of lesser known names lacking the deep pockets to fight what are usually unfounded allegations.  Small and medium-sized businesses – many in the tech fields - are frequently sued in East Texas even if they operate outside the state.  The goal appears to be either to force them to travel to the Lone Star State to defend their business practices, or to extract exorbitant settlements as the only way to avoid the travel and legal costs.

It is those out-of-court settlements that the trolls depend on, and which are bleeding some unsuspecting businesses virtually dry. The median compensatory-damage award by East Texas judges and juries in patent cases was $8.25 million, according to the article, written by the president and CEO of the Consumer Electronics Association, a U.S. trade association representing more than 2,000 consumer electronics companies.

Six months ago, in an effort to put an end to such activities, the Judiciary Committee in Congress approved legislation that would overhaul the nation’s patent laws.  That effort, however, has slowed, and ultimate passage in Congress is in doubt, according to published reports.

In Connecticut, associations and organizations including The Credit Union League of Connecticut, Connecticut Food Association and the Connecticut Retail Merchant Association have called for federal action to end patent trolling.  The National Retail Federation has said that the cost of defending companies against the claims is so high — the average case costs $2 million and can take 18 months — that many victims settle out of court. The cases cost legitimate businesses close to $30 billion a year in direct costs and $80 billion indirectly, amounting to $943 a year for the average household when passed on to consumers.”

Small businesses bear the brunt of the litigation, but larger businesses are not immune.  About a year ago, it was reported that “Apple must pay a shell company $532.9 million because iTunes infringes upon three patents related to online patents, a jury in East Texas ruled.  The company in question … is also based in Texas and doesn’t make or do anything besides file patent lawsuits, as an Apple spokesperson pointed out, noting that the company “makes no products, has no employees, creates no jobs, has no U.S. presence, and is exploiting our patent system to seek royalties for technology Apple invented.”

By mid-2015, the U.S. District Court for the Eastern District of Texas was headed to a record year. An astonishing 1,387 patent cases were filed there in the first half of the year, according to published reports. This was 44.4 percent of all patent cases nationwide, and almost all of the growth is being “fueled by patent trolls.”  Reports indicate that in 1999, only fourteen patent cases were filed there. By 2003, the number of filings had grown to fifty-five. Ten years later, in 2013, it was 1,495.

Overall, patent disputes hit an all-time high of about 7,500 cases in 2015, largely driven by patent trolls who filed two-thirds of the lawsuits, according to a report from Unified Patents. The number of lawsuits filed by non-practicing entities (NPEs), known as “patent trolls,” increased by 25 percent.  Last year, patent troll filings made up 95 percent of the cases in the Eastern District of Texas.

While Congress is mired in inaction, at least one state is stepping into the fray.  Virginia Attorney General Mark Herring, a Democrat who took office in 2014, announced last week a new initiative to support Virginia businesses by combating patent trolling through a newly formed Attorney General’s Patent Troll Unit.

Herring’s announcement explained that “in recent years high-tech businesses, Main Street businesses, and everything in between have become frequent targets of “patent trolls” who send bad faith demand letters, request unjustified licensing fees, and threaten baseless lawsuits. Unchecked, patent trolls and their bad faith practices stifle innovation in the Commonwealth, have a negative impact on our innovation-driven economy, and tie up the courts.” Businesses are forced to “choose between paying unjustified licensing fees and engaging in costly litigation,” the  announcement stressed.

The federal Government Accountability Office (GAO), according to a Washington Post report, found that a disproportionate share of patent litigation concerns software patents. The non-partisan government agency found that the number of defendants in patent lawsuits more than doubling from 2007 through 2011. Notably, this increase is specifically related to software patents — software patents account for 89% of the increase, according to the GAO's calculations.

Said Skelps: “our current patent system is ripe for exploitation. Like the abusive patent litigation we endured, malicious actors are abusing the system and using it as a weapon against legitimate businesses, harming innovation, driving small companies out of business, and overtaxing our already overburdened litigation system.”