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March 6, 2014

Host: Ted Simons


  |   Video
  • Heliae is an Arizona-based company that is developing advanced algae production technologies. The company has seen great business growth throughout 2013, targeting markets centered around nutrition, personal care and natural fertilizers. Heliae CEO Dan Simon will discuss the company’s growth last year.
  • Dan Simon - CEO, Heliae
Category: Business/Economy   |   Keywords: growth, markets, heliae, natural, fertilizers, algae, production, technologies,

View Transcript
Ted Simons: Heliae is an Arizona-based company that develops advanced algae production technologies for various products, including nutrition, cosmetics, and therapeutics. Heliae's CEO Dan Simon is here to talk about the growth of the algae industry. Good to see you again.

Dan Simon: Thank you.

Ted Simons: Does that basically what Heliae does? Those kinds of algae byproducts or products I should say?

Dan Simon: Yeah. Since I saw you last the focus has shifted. We were energy focused before, and since then we've moved to personal care, health sciences, agriculture and nutrition.

Ted Simons: What's the -- Start with the biofuel aspect. That's what you were known for, what we talked about in the past. What's the latest there?

Dan Simon: We still think there's an opportunity there. But we think it's way down the path. What we learned over the years as we developed our production methods, that the costs were too high to current market values. If we couldn't deliver the algae at current market price, we didn't want to go there. So we started looking at interesting niche marks.

Ted Simons: And that includes nutrition?

Dan Simon: Nutrition, we make a product in Gilbert, and it's being sold through a contract manufacturer who sells to Wal-Mart and target and CVS.

Ted Simons: What does that product do?

Dan Simon: It's a joint health and it's a supplement like a nutritional supplement. It's used for joint health and eye health and nervous system health.

Ted Simons: OK. Natural fertilizers as well, what's going on with that?

Dan Simon: It's very interesting. We're still learning, but we've done a number of trials and seen some incredible growth. It's not like standard fertilizer, NPK are the start fertilizers, it's more bioactive, things that make wine grapes grow bigger, healthier, taste better, strawberries that are less bunchy so they grow healthier, with tomatoes they grow them juicier, sweeter. These are ingredients that have been around for many years but over the world as people have simplified production methods, they've lost some of these enhancements. Algae puts them back.

Ted Simons: How? Is it a liquid, are they granules?

Dan Simon: Both. Some are sprayed on as a liquid and some are powder that are mixed within a fertilizer mix.

Ted Simons: Is it similar to phosphorus type stuff?

Dan Simon: Much more high end. Phosphorus is basic fertilizer. This is more -- Think of it like your supplement for human, we take vitamins or eat healthy food this, is healthy food for your plants.

Ted Simons: Is it on the shelves?

Dan Simon: It is.

Ted Simons: We talked about therapeutics as well. What are we talking about here, and how does algae play a part?

Dan Simon: Very interesting. We did end up purchasing % of a company based in San Diego, that has some synthetic biology around growing specialty proteins for remedies to things like dysentery, diarrhea, and malaria, and it's all still well out there, but on the front end there's some animal science opportunities. So gut health for dogs, cats, horses, cows, hogs, they eat the algae, it's like a mother's milk effect. It's like eating healthy yogurt. The same idea.

Ted Simons: Is this FDA --

Dan Simon: we're going through regulation right now.

Ted Simons: It still has to go through that process.

Dan Simon: A year or two years before it's really on the market.

Ted Simons: Cosmetics as well?

Dan Simon: That's the easiest one. We didn't even think about it. My background is energy. Cosmetics was new to me. But the industry came to us, once they started seeing what we were producing. The reality is, we were skipping over these healthy oils that would be used for skin for aging and scar tissue improvements. We were skipping over all that when we were making fuel. Now those same products, same algae are being produced and being sold into the cosmetics for antiaging creams and such.

Ted Simons: All these things are either in the market or on the way to the market?

Dan Simon: Yes.

Ted Simons: But biofuels, you haven't given up on biofuels have you?

Dan Simon: I don't think I'd say given up. I've just put it on the long-term perspective. We see it five to years down the road, not in the next one to five years.

Ted Simons: Any of these other subsets do you see one of those exploding as far as algae is concerned?

Dan Simon: Yes, we do. These are multi billion dollar markets, each one of them. The fertilizer market, personal care cosmetic and nutrition space are all large markets. So in the short term they're very good markets for a company like us to sell to, and survive until the bigger value, higher commodity markets work.

Ted Simons: As far as the algae industry, your company, the industry as a whole, how many folks are employed, what kind of numbers?

Dan Simon: The last time I saw you was . We were about people. We're now over . We had -- We're working out of a ,-square-foot facility, now we're working out of the , square feet plus acres of commercial production.

Ted Simons: As far as patents are concerned --

Dan Simon: We had one last time I saw you, we now are sitting with over . We just had our st come in yesterday.

Ted Simons: What's next for the algae industry, and A, and B, is there anything that's keeping algae from just exploding, being on the cover of every magazine, on the front much everyone's mind?

Dan Simon: It's still pretty new in terms of the technology cycle. So no, I don't think you're going to see it explode any time in the next year or two. It's going to grow quickly, but we're still probably one to two years away before you see algae production happening on every state in the country or different parts of the world. But we expect it will.

Ted Simons: All right.

Dan Simon: We're betting on it.

Ted Simons: Congratulations on your success. Good luck. And good to see you again.

Dan Simon: Good to see you Ted.

Patent Trolls

  |   Video
  • Patent Trolls are organizations or persons that sue to enforce patents, even though there is no intent or even capability of producing the product. Companies that are sued may settle cases they consider frivolous for hundreds of thousands of dollars, because defending against a case can cost much more. Attorney Brian LaCorte of Ballard Spahr in Phoenix will discuss the issue of patent trolls.
  • Brian LaCorte - Attorney, Ballard Spahr
Category: Government   |   Keywords: government, patent, trolls, organization, sue, enforce,

View Transcript
Ted Simons: Businesses are expressing increasing concern over patent trolls, or groups that file suit to enforce patents even though there is no intent or even capability of producing an actual product. Attorney Brian LaCorte of Ballard Spahr in Phoenix is here to talk about patent trolls and their impact on some local companies. Good to have you here. Thanks -- Give me a better definition of a patent troll.

Brian LaCorte: Thanks for having me, Ted. A patent troll is essentially a business or individual that buys or somehow acquires a patent, and then uses that patent as a meal ticket in litigation or in an enforcement campaign to try to what I think can be fairly described to shake down businesses or bring litigation and try to get damages awards when the patent troll itself is not involved in any sort of actual manufacturing, development, research, or innovation of any kind.

Ted Simons: I was going to ask, how do you differentiate between a quote unquote patent troll and someone who is trying to protect an idea that maybe the also guy had over here and the big guy now has appropriated and is not reimbursed?

Brian LaCorte: That's a fair question. It's sort of a negative term for a company that calls itself an assertion entity, a PAE, patent assertion entity or nonpracticing entity. There are small inventors that have legitimate patents, and those patents are at times infringed usually by big companies. But what is more often the case in the last five years is that patents have become a commodity. And those that buy patents for the sole sake of litigating and enforcing them not to protect technology, but to make money off of companies that are not infringing, is the type of operation I would refer to as a patent troll. That's bad on the economy, it's bad for business, and Frankly it's bad for our patent system.

Ted Simons: And it sounds like Arizona companies discount tire, go daddy among those concerned about that.

Brian LaCorte: I think so. Those are companies that I've worked with in patented cases where it's a head scratching exercise. How in the world can what we do really be infringing a patent? It's not just retailers, it's banks, it's pizza delivery operations, it's hotels, it's car -- You name it, the patent cases that I've been involved with are filed in the last few years cover everything from renewing a product on a website, offering wi-fi in the lobby, credit card swipe machines, basic fundamental tools of -- And methods of business being accused of infringement that one would think is not belonging to one individual as a monopoly in a patent.

Ted Simons: Are they winning these cases?

Brian LaCorte: By and large they're not. For a time in Texas there were a number of very big awards that sort of emboldened patent trolls to fire there. More often than not these cases are exposed for what they are -- Dubious. However, it's expensive to litigate a patent case. And so what is typically the operation is to take a patent, try to get a couple hundred thousand dollars in settlement because that's less than what it would cost to defend, and move on to the next target. That is what can fairly be described as shakedown campaign, and it's costing businesses millions of dollars.

Ted Simons: It's costing big businesses, but if I'm an app developer, for example, and I start getting a cease and desist order, I don't even know it exists, that's got to be a problem. I can see where you want to protect the little guy. But it sounds like some of these trolls are going after the little guy.

Brian LaCorte: That's right. In fact, the very analogy or example you cited, the angry birds, a beloved app my kids play, sued for patent infringement an app developer. And it was ridiculous case. It happens all the time. Small businesses, start-ups, companies introducing new products launching for the first time get a cease and desist letter, end up hiring a lawyer, spending a fortune to protect a product and in some cases I've seen companies not introduce that product because they can't afford to defend it. That's bad for the economy.

Ted Simons: So how do we address the problem and how do we do this to ensure that legitimate cases aren't washed away?

Brian LaCorte: It's a fair question. Congress now has before it a very important bill, it passed the house, it's in the U.S. senate, the innovation act. That would curb the litigation abuses. It would expose companies that buy patents and make them more transparent to find out if they're legitimate, it would heighten the standards for proving patent infringement or pleading it, and it would create fee shifting so if a case is really bogus, and a defendant wins, they can get their fees to discourage frivolous litigation. That's pending in the senate, it's being considered, there are alternative measures with similar reforms that have been introduced in the senate. And the hope is that will create meaningful reform in the justice system as it relates to patents.

Ted Simons: If it gets past the senate does it have bipartisan support, the kind of thing the president would sign?

Brian LaCorte: It is. It had bipartisan support in the house and President Obama has been very supportive of patent reform. He's recently announced some executive orders to do that very thing in a small way if it passes the senate can and comes out of Congress I think the president would sign it.

Ted Simons: All right. Interesting stuff. Good to have you here.

Brian LaCorte: Thank you, Ted.

Race to Replace Rep. Pastor

  |   Video
  • Long-time Arizona Congressman Ed Pastor announced his retirement last week, and the race to replace him is heating up. Pollster Mike O’Neil will discuss the situation.
  • Mike O’Neil - Pollster
Category: Government   |   Keywords: congress, congressman, arizona, retirement, replace,

View Transcript
Ted Simons: Good evening, and welcome to "Arizona Horizon." I'm Ted Simons. Representative Kyrsten Sinema said today she will not attempt to succeed congressman Ed Pastor, who announced his retirement last week. Pollster Mike O'Neil is here to talk about what it means and what could it have meant had Sinema made the move. Were you surprised at her decision?

Mike O’Neil: No. I'm surprised it took her three days to make it. I wouldn't be surprised one might have a -minute conversation in passing, but for this to have lingered for three days, I heard a lot of anger out there among her supporters, among people who have given money to her that she would even consider this for more than a brief instant.

Ted Simons: Were you surprised that she considered it in the first place?

Mike O’Neil: Well, it's obvious what the calculation was. If I can move to CD I can have a safe seat forever. All I have to do is get past the primary. Well, first of all there's a lot of big ifs there. First and foremost, that has been clearly identified as a Hispanic seat, and so you would infuriate the spike community by attempting to dislodge -- There would be a chance to win the first time, the arithmetic would go simple -- Her on the one hand and a large number of Hispanics the seat and she eeks by with % in the primary and gets nominated. But keep -- I suspect she thought I could have a primary opponent even if I won the first year.

Ted Simons: You mentioned primarily Latino district. Not just because of % Latino registration in the district for the democrats, but the fact is that that was in a sense carved out voting rights act, that is supposed to be receiptive of a particular community.

Mike O’Neil: It was absolutely carved out for that explicit purpose as required by voting rights act. Do not dilute minority voting strength, so Ed Pastor got far more democrats and far more Hispanics than he ever needed to keep that seat because there's a legal requirement that THOU shall never dilute the minority voting strength.

Ted Simons: Let's say between Wilcox, Giguere doe and Gallego, the top three so far, right now would she have -- You mentioned they would maybe have diluted a vote if a couple of those had dropped out, would she still have been a primary winner?

Mike O’Neil: I don't think she could win a head-to-head race against a Hispanic. But against a multiplicity of Hispanic opponents, split the vote, then it becomes possible. And I'm sure that was the calculation.

Ted Simons: So what does this do now for her campaign in CD? Her opponent obviously will be saying, look she's already looking across the border. So to speak.

Mike O’Neil: I think it will be a momentary ripple. And I don't think they'll make it stick. There's no long -- Other than the one memo that was published that they were having a meeting to discuss their options, there's no paper trail on this. I think it's like brewer signing -- Vetoing SB-. It seemed to take too long to come to the conclusion, but she ultimately came to the right answer.

Ted Simons: OK. Let's go now with Mary rose will Cox and Ruben Gallego, three people in that district, one of the candidates announces he's Gay, who's the front run they're?

Mike O’Neil: I really don't know. I think this has to play out. Let's look and see who raises money. Mary rose Wilcox had this formidable machine, but is it decades since it's been in operation? years ago I would say this would be hers for the asking. I think that's an open -- That seat has been owned by Ed Pastor for so long, I don't think it's possible to say there's a front-runner, nor do I think it's possible to say that the realm of potential contenders is -- I don't think that list is closed yet.

Ted Simons: I was going to ask that. Could someone that we're not even talking about right now come swooping in out of the blue and all of a sudden change the dynamics big-time?

Mike O’Neil: Absolutely. This is early. Three people jumped in, each trying to preempt the field, nobody is going to do that. Somebody who could raise some money, who has some identification -- I wouldn't even speculate as to the names, but I'm sure there's a lot of people looking in the mirror right now saying I could be the next congressman from that --

Ted Simons: I don't want to go too far, because the Avenue is now shut down and closed, but let's say Sinema had jumped over to CD, what in the world would have happened in CD? Would some of those folks in seven jumped to nine?

Mike O’Neil: No. I think you'd have a lot much happy Republicans who would say, this is a toss-up district, we no longer have to face incumbent, we can take that district.

Ted Simons: Would you see more names, and would Vernon Parker decide --

Mike O’Neil: I think on the Republican side you could have seen a big increase in names. I think what you have in that district right now is Kyrsten Sinema has raised a substantial war chest, she has comported herself well, short of this one little callans with CD, she's comported herself well to become established in that district, and I think most people myself included, would at this point rate her a clear favorite in what otherwise would be a task district.

Ted Simons: Last question, you alluded to this earlier, what was the reaction, you said anger, state and national democrats.

Mike O’Neil: Absolutely.

Ted Simons: Real anger?

Mike O’Neil: Absolutely. I could have seen a scenario where she runs in CD, she gets the nomination because the Hispanic vote is split, and then loses the seat to an Hispanic independent or Republican, and the democrats lost CD because they no longer have a candidate, net Republican increase two seats out of two districts. I think that would have been a FUROR and her career would have been over.

Ted Simons: Most would have thought that as well, was she seriously considering doing this?

Mike O’Neil: It took -- All we know -- Nobody -- No reporter anywhere got anywhere near her for the last three days. All I know is it took three days, so I have to assume that she had to have heard the FUROR, but I have to assume it was serious, otherwise why not come out after minutes?

Ted Simons: All right. Good to see you. Thanks for joining us.

Mike O’Neil: Thank you.