Just came back from the Washington Biotechnology & Biomedical Association’s annual meeting in downtown Seattle, where 500-plus biotechies and distinguished guests (including more than a few local politicians) gathered for a quiche-and-berries breakfast and some keen networking.

The keynote speaker was Elias Zerhouni, the former director of the National Institutes of Health and now a senior fellow at the Bill & Melinda Gates Foundation. Just a few highlights from his talk here:

Zerhouni laid out the top five challenges in public health, as he sees it. Nothing too surprising, but a good way to frame the whole healthcare discussion:

1. The shift from acute to chronic conditions. (“This is a worldwide issue,” he emphasized. “This is the new global health horizon.”)

2. Aging population.

3. Health disparities.

4. Emerging and re-emerging infectious diseases. (Pandemics, for example.)

5. Emerging non-communicable diseases. (Things like obesity and depression, the latter of which the World Health Organization predicts will be the No. 1 cause of disability and dysfunction for people aged 25-44.)

As a world-class radiology researcher, Zerhouni also spoke to the scientific challenges the industry faces. He said the fundamental scientific barrier to doing “translational” research—that which leads to new products like drugs or devices—is the complexity of biological systems involved in diseases. “The explosion of data does not equate to explosion of knowledge,” he said. (This is a common theme across all fields of science and technology.)

On this front, Zerhouni stressed the importance of both external and internal sources of innovation. Meaning, the state of Washington should “find ways of bringing in collaboration on the translation or creation of knowledge.” He pointed out that “building relationships with the Asian Rim is probably your strategic advantage.”

For the politicians in the audience, Zerhouni noted, “Today when you get elected or not elected, the main driver is jobs, jobs, jobs.” He said his dream is that in a few years, biomarkers and healthcare stats will impact political campaigns, to the tune of, “In my district, Body Mass Index has dropped from X to Y.” (Luke previously reported on the issue of jobs being the driver of public support for biotech.)

The last issue Zerhouni addressed was a particularly interesting one: culture wars around science and technology. “Don’t be oblivious to the political, cultural, and moral aspects” of biotech and biomedical work, he said. “Be careful to not assume that everyone in the world believes what you do is holy and good.” Having dealt with the profound issues of evolution vs. creation in Washington DC—most notably in the context of stem cell policy—Zerhouni was sharing some hard-earned wisdom that everyone in the room could take home with them.

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Xconomy didn’t score a ticket to President Obama’s speech on clean energy at MIT today, so we can’t bring you a first-hand report. But we’ve got something that’s arguably even better: perspectives from a range of local community members who were inside MIT’s Kresge Auditorium for the speech, which took place at about 12:45 p.m. today. We invited people from across the local energy ecosystem—including students, entrepreneurs, investors, and policy leaders—to contribute their reactions to the President’s remarks.

Click on a name to jump directly to comments from:

• Nick d’Arbeloff, New England Clean Energy Council
• Gregg Dixon, EnerNOC
• Forgan McIntosh, MIT Energy Club
• Furqan Nazeeri, Virdus
• Joel Rodriguez, Commonwealth Capital Ventures
• Bilal Zuberi, General Catalyst Partners

So, dig in. If you missed the President’s speech, MIT has posted the video here on the MIT World video portal. And if you were there, or you watched the video on the Internet, by all means share your thoughts in the comment section. (You may also want to check out this priceless CNN video of Hawaiian-shirt-clad Alex Slocum, a mechanical engineering professor at MIT, explaining his idea for undersea wind energy storage to President Obama, with MIT President Susan Hockfield, Massachusetts Governor Deval Patrick, and Senator John Kerry looking on.)

Nick d’Arbeloff, president, New England Clean Energy Council

Man, that guy is a rock star. It is just incredibly refreshing to see the leader of this nation speak so eloquently and forcefully about clean energy, after the eight years prior. This morning he toured a couple of labs at MIT, including, I believe, one lab that is actually using viruses to grow batteries, as opposed to assembling them. So he was exuding enthusiasm about what he had seen and his positive impressions of the innovation culture that exists within MIT and the broader region.

Needless to say, Obama gets it, and he gets it in a big way. Also attending were, of course, Governor Patrick, and Secretary Bowles, but also John Kerry, who has emerged as a major leader on energy as the Kerry-Boxer bill has made its debut. It’s hard not to look at this event, combined with Kerry’s bill, as the beginning of a new chapter in America’s journey to real climate leadership.

There is a very tough path to tread between here and some type of cap-and-trade bill in Congress, but the President was incredibly upbeat, and he made it clear that difficult odds have been overcome on many many occasions in our nation’s history, and he was confident that we would overcome the odds this time around.

In front of him were roughly 800 clean energy leaders and students whose interests lie within the energy field, and I think they walked away believing that—well, every day is a mixture of optimism and pessimism with regard to Congress and the U.S. energy future, but we have a leader in the Oval Office who is really not going to rest until he makes this one of his legacies. And it’s really nice to know, speaking as one agent of the clean energy revolution, that we’ve got Barack Obama at our backs.

I think it was cheerleading—but it was well-directed, well-received cheerleading. I don’t think there’s a lot to announce here. There are a lot of moving parts in Washington right now, and he could have enumerated all those different parts and he could have made bets on which part is going to move first, but I don’t think that would have made sense. More important is simply to say this battle will be joined and the war will be won.

This is a president who is completely committed to the value that science brings to the table, to the proposition that science and the exploration of scientific truth and the innovations that are derived from it are fundamental ingredients in our way out of this crisis. And granted, it wasn’t a big, honkin’ announcement, but science is a really important thing to stress. Put it this way: if this President had arrived at MIT with a history over the past 10 months of less commitment to clean energy and less commitment to scientific research and less commitment to climate leadership and then made a major announcement, that would be only a fraction as important as what has transpired instead, namely that the administration has been completely committed to clean energy. The fact that no major initiatives were announced today is, in that context, not a huge disappointment at all.

Gregg Dixon, senior vice president of marketing, EnerNOC (NASDAQ: ENOC)

My general impression is that President Obama is getting behind the promises he made on the campaign trail, and cleantech is certainly one of those promises. MIT is a great place to make a speech and to get people excited and to raise awareness. Very simply, it was an executive-level commercial for clean energy, to say ‘Let’s go.’ That can never hurt.

You want to go where you’ve got a friendly crowd if you’re going to push an issue, so that makes sense to me. But the proof is in the pudding. It’s a facade of a building that still needs to be built. You’ve got to build this clean energy economy. So simply throwing money at the problem and talking a great game doesn’t …Next Page »

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[Update, 12:05 p.m., 10/23/09: The time for President Obama's speech has been pushed back to 12:25 p.m., according to the White House. It appears that MIT's video servers are being overwhelmed by traffic; if you want to watch the speech online, we recommend trying the White House's own live video stream.]

When Air Force One touches down at Logan Airport at 11:30 a.m. today, there will already be a small crowd of students, faculty members, and local technology leaders waiting inside MIT’s Kresge Auditorium for President Barack Obama to arrive.

In his noontime speech at Kresge, announced just three days ago, Mr. Obama is expected to call for stronger U.S. leadership on clean energy research and press for passage of the Senate energy bill, S. 1733, co-sponsored by Massachusetts Senator John Kerry and California Senator Barbara Boxer.

Invitations to the MIT speech are the most coveted tickets in town today. While Kresge seats some 1,300 people, only about 60 students and 40 faculty members have been invited, according to estimates by The Tech, MIT’s student newspaper. The White House has also issued invitations to a hand-picked group of local leaders in energy entrepreneurship and investing.

The President will meet briefly before the speech with a select group of MIT energy researchers, according to the MIT News Office.

Massachusetts Governor Deval Patrick will be on stage with the President, who is expected to attend a campaign fundraising luncheon for the governor at the Westin Copley Hotel in Boston before returning to Washington. In a video published on his campaign website this week, Governor Patrick said, “In many ways our agenda here in Massachusetts is very closely aligned with the agenda of the Obama Administration.” He included a reference to “our work to expand innovation industries that will create the opportunities for tomorrow, like IT and clean energy and biotech.”

If you weren’t one of the lucky few who won an invitation to attend the President’s speech in person, here are a few ways you can follow his visit:

—MIT will share a live webcast of the speech at http://amps-web.mit.edu/public/amps/webcast/2009/obama-2009oct23/

—The White House will also offer a live video stream at http://www.whitehouse.gov/live/, and CNN says it will stream the event live.

—If you can make it to Cambridge, MIT will be showing a closed-circuit broadcast of the speech in various rooms around campus (4-237, 1-190, 26-100, 32-141, 32-155, and E51-315) as well as the MIT Museum.

—Xconomy has recruited a posse of local students, investors, and technology leaders who scored tickets to the speech to write to us with their impressions of the event, and we’ll be compiling their contributions in a post early this afternoon.

—Organizers of the Fifth Conference on Clean Energy, to be held in Boston November 12-13, will be sharing real-time posts about the speech on Twitter using the hash tag #CCE-2009.

—Finally, MIT will post a recording of the speech late this afternoon on its video portal site, MIT World.

According to the MIT News Office, today’s visit marks only the second time a sitting U.S. president has visited MIT. President Bill Clinton was MIT’s commencement speaker in 1998.

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I can’t do justice to a comprehensive review of yesterday’s FiReGlobal (West Coast) conference at the Four Seasons Hotel in Seattle. Instead, I’ll just give a few of my key takeaways. The all-day event, organized by Strategic News Service, focused on how to solve some of the most pressing problems in technology, business, and society—in areas as diverse as broadband access, entrepreneurship, education, sustainability and the environment, political discourse, human health, and mobile devices.

The sweeping conference had the tagline, “Global technology driving local solutions.” Interesting, as that’s sort of the reverse of Xconomy’s mantra, which is reporting about local stories with global impact. But I think they’re two sides of the same innovation coin.

So, in “ESPN plays of the day” style, here’s my top 10 list from the conference (if only I had the video to go with it):

10. Setting up entrepreneurial zones. A panel led by Ty Carlson of Microsoft proposed denoting special “R&D zones” from Oregon to British Columbia geared toward supporting startups in fields like renewable energy, sustainable farming, and biotech. The idea would be to offer tax credits and other incentives to create a more entrepreneurial culture in the Northwest, especially in rural areas.

9. What government should and shouldn’t do. Investor and entrepreneur Martin Tobias of Seattle-based Kashless said, “Startups and investors can’t make a 10-year bet when you have a two-year tax credit.” Those conditions freeze out small companies, especially in costly ventures like energy. So government should create open markets and set minimum market sizes for new technologies, Tobias said. But it shouldn’t pick the technology winners themselves.

8. Northwest tech startups do the Olympics. Tom Guthrie, CEO of Seattle-based Twisted Pair Solutions, said his company has helped numerous agencies on the Olympic Peninsula inter-operate their radios—a key problem in disaster response and other scenarios. Twisted Pair, which is backed by Ignition Partners and other investors, is also working on a laser system to deliver broadband signals. Meanwhile, Paul Manson, CEO of Vancouver, BC-based Sea Breeze, talked about his company’s project to build a high-voltage, direct-current undersea cable between Victoria, BC, and Port Angeles, WA. This would be a fast, controllable power transmission component of a smart grid; it should be under construction by mid-2010, he said.

7. The world according to Dell. In a chat with Mark Anderson of Strategic News Service, Michael Dell said he is excited about China and the rest of Asia as fast-growing economies. He anticipates a U.S. recovery from the recession, but says, “I don’t think you’ll see an immediate snap-back.” And he likes South America as an emerging market (Dell does sales of more than $1 billion in Brazil alone). But Europe, not so much—he sees a lot of uncertainty in the workforce there.

6. Get ready for Dell smartphones. “Mobility is absolutely the theme,” Dell said. He was talking about the relative importance of desktop computers, laptops, netbooks, and mobile devices to …Next Page »

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Today marked a milestone in the legislation relating to non-competes in Massachusetts. The Joint Committee on Labor and Workforce Development held its public hearing on two house bills that would attempt to redefine the rules governing “restrictive employee covenants and non-compete agreements.”

This effort began in early January when Rep. William N. Brownsberger (24th Middlesex District) filed House Bill No. 1794, which would effectively prohibit restrictive employee covenants in line with similar provisions in the State of California. Rep. Lori Ehrlich (8th Essex District) also filed House Bill No. 1799, which made significant clarifications to non-compete agreements in line with the State of Oregon. Subsequently, compromise legislation was drafted by Rep. Brownsberger and Rep. Ehrlich.

A good summary of the salient points of this bill can be found at the Trade Secret and Noncompete Blog that is run by Russell Beck of the Foley and Lardner law firm, who participated in the drafting of this legislation.

The hearings on non-competes began with introductions by Rep. Ehrlich and Rep. Brownsberger, who cited complaints over abusive and over-reaching non-compete agreements. They highlighted the fact that the current law is over 200 years old and the rewrite has been long overdue. Attorney Russell Beck and Robert Mantell of the Massachusetts Employment Lawyers Association provided a detailed summary of the compromise legislation and described the key provisions of the bill.

At one end of the spectrum, the committee heard from those who made the argument that the original Brownsberger-Jehlen Bill No. 1794 was “the only ethical thing to do.” The committee also heard testimony from those who felt that the “200 years of jurisprudence” was perfectly adequate and did not need any change.

Up until now, the discussion of these changes has been largely in the blogosphere, and the participants represented members of the high technology sectors of the industry. At the hearing however, members of the non-high technology sectors and small businesses presented strong argument against the proposed changes.

“Talented individuals are leaving the state in large numbers because they see non-competes as unfair,” said one concerned individual who favored changing the current law. “I am willing and able to work but no one will hire me because of the …Next Page »

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A bill proposing restrictions on non-compete agreements in employment contracts in Massachusetts will have its first hearing on Beacon Hill next week, after nine months of discussion, revision, and compromise.

The state legislature’s Joint Committee on Labor and Workforce Development will hear comments on the bill, introduced by State Representatives Lori Ehrlich and Will Brownsberger, on October 7. Called the Noncompetition Agreement Act, the bill would make non-compete agreements unenforceable for employees of Massachusetts companies who earn less than $75,000 per year. The agreements—which are often used by employers to prevent former employees from going to work for competitors or from starting competing firms during the first year or so after they leave—would still be enforceable for employees who make more than $75,000, but only when employers can show the agreements are needed to protect trade secrets, confidentiality, or goodwill.

It’s the third such bill to circulate on Beacon Hill this year. Two related bills, one from Ehrlich that would have prohibited non-compete agreements for employees making less than $100,000 a year and one from Brownsberger that would have banned the agreements altogether, will technically be up for discussion at the hearing. But Ehrlich and Brownsberger are focusing their reform effort on the new, joint bill, a revised version of which was released this week.

The bill itself hasn’t changed much since the previous revision, which we wrote about in July; the big news then was that Brownsberger, in an effort to round up more support for non-compete reform and head off objections from the business community, had joined with Ehrlich in calling for restrictions—rather than an outright ban—on non-compete agreements. Russell Beck, an attorney with Boston-based Foley & Lardner who has been helping Ehrlich and Brownsberger …Next Page »

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The Washington Technology Industry Association (WTIA) announced today it is joining forces with TechAmerica, the advocacy organization, to become a unified tech entity in Washington state.

The move broadens WTIA’s membership to include more companies in hardware, electronics, and devices, which complements the trade association’s strengths in software, digital media, and telecom, says Ken Myer, WTIA’s president and chief executive. WTIA is now TechAmerica’s exclusive management and marketing partner in the state.

Under the terms of the partnership, WTIA will support TechAmerica members and programs locally and market joint membership in TechAmerica and WTIA to tech companies across the state. WTIA will also deliver TechAmerica’s business programs and policy (together with WTIA’s usual offerings). In turn, TechAmerica is transferring its Washington state council programs and staff to the WTIA. Current TechAmerica members based in Washington state (about 100) will automatically become members of WTIA.

There have been various name changes involved in these longstanding organizations. TechAmerica was previously called the American Electronics Association, which was founded in 1956. As the organization enrolled more software companies, it became the AeA, while WTIA was previously named Washington Software Association and was founded in 1984.

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First Wind, the Newton, MA-based developer and operator of wind farms, nabbed $40.4 million in federal financing for a planned installation at Stetson Ridge in Maine, Mass High Tech reports. The project is one of 12 to receive a combined $500 million under the American Recovery and Reinvestment Act. Wade wrote about the challenges First Wind and other cleantech developers face last year, when the company was known as UPC Wind.

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Peter Rothstein, a former entrepreneur in residence at Flagship Ventures in Cambridge, MA, has joined the New England Clean Energy Council as full-time senior vice president, the Cambridge-based organization announced today. At the council, Rothstein will focus on the Clean Energy Innovation Consortia, a project he launched to push for the creation of the “clean energy clusters”—tighter collaboration between universities, entrepreneurs, venture funders, and government agencies—proposed by Congressmen Edward Markey and Henry Waxman in an energy bill passed this year by the U.S. House of Representatives. “Having Peter formerly join the Council in this senior role greatly deepens our ability to impact clean energy research and commercialization at a national level, and accelerate the growth of the New England clean energy cluster,” council president Nick d’Arbeloff said in a statement.

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Todd Park, co-founder of Watertown, MA-based Athenahealth (NASDAQ: ATHN) and San Mateo, CA-based Maria Health, has been tapped to serve as chief technology officer of the U.S. Department of Health and Human Services, Athenahealth announced. To satisfy government requirements, Park will resign this month from his post on the board of Athenahealth, a provider of  Web-based tools used by medical practices to managing billing, electronic medical records (EMRs), and other functions.

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Next week, the U.S. Senate is expected to take up debate on health care reform. Regardless of what happens in Washington DC, the impact will be felt on virtually every business and individual in Washington State.

Without question, a simple solution to our health care crisis is elusive, and in the coming days and weeks many complicated and important issues will be debated, but from where I stand today, there is one key health care issue with no room for debate.

The issue is the development of a pathway for regulatory approval of biosimilars by the Food and Drug Administration (FDA). Biosimilars, as the name implies, are drugs that are similar to, but not the same as, innovator biologics. Biologics are molecular structures that can be hundreds of times more complex. That’s why copycat versions of biologics aren’t called “generics.” Biotechnology-based therapies that fight diseases such as cancer, diabetes, and Alzheimer’s are made from living cells—a process far more complex than the one used to manufacture chemical-based drugs such as aspirin.

The illustration below helps to put into perspective the differences between small molecule drugs and biologics:

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To give a sense of size, same-scale computer models of three drugs—aspirin (a small molecule), somatropin (human growth hormone), and Herceptin (an antibody)—are presented as an example of the relative complexity: The molecules are to scale and the objects are not, but the objects (bike, car, private jet) indicate relative size and complexity of these molecules. Used with Permission. Source: Genentech
http://www.gene.com/gene/about/views/followon-biologics.html

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Here in Washington State, we are fortunate to have great leadership on this issue from Representative Jay Inslee (D, WA-1). Rep. Inslee is one of the lead sponsors of the Pathway for Biosimilars Act (H.R. 1548), bipartisan legislation that protects patient safety and strikes the appropriate balance between increasing competition and maintaining our nation’s status as the world’s leader in science and innovation.

Rep. Inslee wants to make sure that biosimilar manufacturers are required to provide the FDA with clinical data on the safety and efficacy of their medicines. And his legislation preserves incentives for …Next Page »

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In the past few months I have had the opportunity to interact with a number of state and federal officials as the financial crisis has unfolded. And for the most part my faith in the system has been renewed.

In my capacity as chair of the New England Venture Capital Association, I have met a number of times with Governor Deval Patrick of Massachusetts, and in fact I chair his recently formed Entrepreneurship Committee for the Mass IT Collaborative. I have also worked closely with his Secretary of Economic Development, Greg Bialecki, who is working very hard on a number of important initiatives to drive local job growth and company formation. As a board member of the National Venture Capital Association I have also met with Representative Barney Frank to review possible federal regulation of the venture capital industry as part of the pending overarching regulation of the financial services industry.

And what I found was a group of legislators very concerned and engaged in finding constructive solutions—and I appreciate better the big sticks they wield. As the crisis began to unfold last fall the meetings went along the lines of “What is going on? How bad is this going to be?” Now that we seemed to hit a point of some stability, the meetings now are much more focused on finding solutions and launching programs to bolster the innovation economy. For instance, Secretary Bialecki was instrumental in securing initial funding for MassChallenge, an exciting initiative to bring entrepreneurs and investors together.

Admittedly my initial interest in being involved was to see how the VC industry might play a role in seeing as much of the federal stimulus moneys make their way to our portfolio companies as possible. I had suggested to Governor Patrick that a group of VCs advise in the allocation of stimulus dollars on a local level. Notwithstanding the enormity of the stimulus spending, it turns out to be reasonably difficult to pull levers which would quickly get funds to our companies.

My other interest in being involved was much more parochial. I was worried that the government would paint with too broad of a regulatory brush as it tried to “fix” the hedge fund industry and perhaps inadvertently slap around the VC industry as well. The idea that the VC industry somehow caused systemic risk to me was ridiculous—we do not use leverage, do not have public securities, ask our investors to lock up for 10 years, do not use derivatives, etc)—yet there was emerging rhetoric about the risk VCs brought to the financial markets.

On this score I was very pleased with what I heard from key government leaders, particularly Representative Frank. There is great understanding of the important role that the venture industry plays—most officials clearly understand that it is the new companies which create the jobs and growth—and importantly that the VC industry is fundamentally different from the hedge fund world and does not inherently pose great risk.

As I said to Governor Patrick in my office a few months ago, since we started Flybridge Capital Partners nearly 8 years ago we have helped to start almost 45 companies which at the end of 2008 employed 1,231 people.

So maybe I am wrong—we do have a very highly leveraged model.

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Seattle-based Verdiem has some encouraging news today from around the country—and its own backyard. The maker of energy-saving software for personal computers is announcing results from trials performed by the city governments of Seattle, Chicago, and Honolulu. These customers have been using Verdiem’s product over a period of months to a year, in an effort to make their PCs smarter about shutting down when they’re not being used, while also allowing the computers to do things like turn back on when software patches need to be installed.

Verdiem’s PC software package, called Surveyor, now includes a dashboard feature, also announced today, which lets corporate and government customers monitor PC energy costs and carbon emission savings more effectively through the use of charts and graphs.

Energy costs and emissions from PCs are surprisingly high, mainly because there are so many of them (about a billion worldwide). According to a 2008 report from the Global e-Sustainability Initiative, PCs account for more than 30 percent of all IT energy costs—more than servers, data centers, or printers. What’s more, companies, organizations, and individuals waste some $4 billion a year by leaving PCs, laptops, and monitors on when they’re not being used.

All three cities involved with the Verdiem announcement reported significant PC energy savings:

—The City of Seattle has deployed Verdiem’s software on more than 8,000 PCs across 30-plus city departments, and reduced PC energy consumption by some 35 percent. “The results we are achieving with Seattle-based Verdiem in reducing the City’s PC energy consumption demonstrate, in a very tangible way, how we can collectively save on energy costs and protect our planet,” said Seattle Mayor Greg Nickels in a statement.

—The City of Chicago started using Verdiem’s software in February of this year, and says it has reduced its PC energy consumption by 37 percent and has eliminated more than 350,000 pounds of carbon dioxide emissions.

—The City of Honolulu deployed the software on 1,700 PCs starting in July 2008, and saved the city $30 per PC per year, reducing PC energy costs by more than 30 percent. Honolulu has the highest energy rates in the country (30 cents per kilowatt-hour), so its city government has extra incentive to reduce its electricity consumption.

Verdiem was founded in 2001 and is backed by Kleiner Perkins Caufield & Byers and NCD Investors, among others. It appears to be moving full steam ahead under new leadership: the company announced its incoming CEO, Jeremy Jaech, six months ago. Jaech was the co-founder of software giants Aldus and Visio, and was also involved with Trumba, a Seattle startup. When he took the helm of Verdiem back in December, he told me that big companies and other organizations are where the real energy and emissions savings are—and where Verdiem’s biggest opportunities lie. “It’s a simple concept with a quick ROI,” Jaech said. “Companies are starting to get really interested.”

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Any venture firm named after a rodent, especially the world’s biggest rodent (100 pounds), is OK in my book. But I did have to ask co-founder Eric Rosenfeld where the name Capybara Ventures comes from.

Rosenfeld explained that the capybara is a “majestic, noble, inspiring rodent.” It’s also a “category leader,” he added, and “spends most of its time beating the bushes” for food. It’s much like how he and fellow Capybara co-founder Bob Ward beat the bushes of Oregon looking for the next great company to fund.

Earlier this week, I dropped in on Rosenfeld at his office in Portland, OR, for a wide-ranging chat about his investment philosophy, the Portland tech scene, and the state of venture and angel capital in Oregon. Rosenfeld is a managing partner at Capybara Ventures, and is also a co-founder of the Oregon Angel Fund (which has seeded Portland companies like Elemental Technologies and RNA Networks). In April, he and Ward were also named venture partners with DFJ Frontier, a branch of Menlo Park, CA-based Draper Fisher Jurvetson. Let’s just say these guys are connected. They’re also Portland natives who have known each other since sixth grade.

Rosenfeld and Ward started Capybara Ventures in 2004. Since then, the firm has made investments in 10 companies, all early-stage, including RSS software startup Attensa, telecom networking firm Clear Access, and optical tech startup Phoseon. “We look for companies that are at the intersection of what grows well in Oregon, including semiconductors, electronics, Internet software, wireless communication, and where we have experience,” Rosenfeld says. He adds that Capybara’s seven active portfolio companies are doing between $3 million and $11 million in revenue this year, and about half are at cashflow break-even.

Here are a few highlights from our discussion:

Xconomy: Talk about your connections to other venture firms on the West Coast, especially with your recent DFJ Frontier relationship. Do you collaborate much with Seattle-area investors, for instance?

Eric Rosenfeld: We talk to them quite a bit. The ones we’re most close with are Buerk Dale Victor, Voyager Capital, and Madrona Venture Group. We collaborate quite a bit with the angel groups. The DFJ Frontier is a close relationship, but there’s nothing formal yet. They want to be active in Oregon. We have co-invested in one deal with them—Capybara and DFJ led a Series A round in Clear Access in Vancouver, WA. We hope to do more with them. They’ve been wonderful partners. They come up at least once a month, and we try to introduce them to companies they should know. They share their due diligence, we share our due diligence. We have a similar relationship with Walden Capital in the Bay Area.

X: What are your thoughts on the strengths and weaknesses of the Portland innovation scene, as compared to Seattle and Silicon Valley?

ER: When we started Capybara, the semiconductor industry here was more diverse and in better shape. It was Intel plus a whole ecosystem. It’s been a long time since we’ve had a startup really succeed in the semiconductor world. One company we’re involved with is Avnera, which does analog wireless audio chip sets. They’re doing very well, hopefully they’ll be the one that revives people’s confidence locally.

If you step back, Portland’s got an enviable quality of life which draws people from all over. That’s part of the solution. Our research universities are not necessarily world-class, and that’s hurt …Next Page »

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It’s not every day you get to watch a U.S. senator swallow a swirling ball of liquid nitrogen-cooled foam (yuzu-flavored, no less). Talk about a palate cleanser.

That was just one stop along a rather surreal press tour and ribbon-cutting ceremony this morning at the Intellectual Ventures Laboratory in Bellevue, WA, as Sen. Maria Cantwell got a personal tour of the lab from company co-founder and chief executive Nathan Myhrvold. “The point of the lab is to do prototyping and do research around our inventions,” Myhrvold said. “We never know exactly what we’ll need, so we have to have a lot of capabilities.”

(Among these is a unique way of doing ribbon-cutting, as you’ll see on the next page. All photos courtesy of McKenzie Funk.)

The wide range of capabilities at Intellectual Ventures was on display in a series of lab demos. The tour included glimpses of an expansive cooking-science station (site of the palate cleanser) and setups for doing epidemiological computer modeling of malaria outbreaks; diagnosing malaria by laser light (instead of a blood sample); designing electricity-free vaccine containers that can withstand 105 °F exposure in Africa for six months; and photographing mosquito wingbeats at ultra-high speed (27,000 frames per second). Then came the coup de grace—bug-zapping lasers that work as a “photonic fence” against mosquitoes and agricultural pests (the live-demo lasers were non-lethal and just for show, shooting 50 bugs per second). OK, maybe not the most practical technology yet, but it’s certainly a striking demo.

The lab hasn’t changed much since I saw it last summer; it still has about 30 full-time employees. But overall, Intellectual Ventures has grown to more than 500 staff members, up from 400-some employees earlier this year. The company has also leased space across the street from the lab for a new supercomputing center, presumably to help its researchers perform large computer simulations for epidemiology studies and other complex problems.

Sen. Cantwell, a Democrat who’s midway through her second term for Washington state, asked Myhrvold what Intellectual Ventures is doing for this state’s economy. “We’re going to try to keep …Next Page »

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It was a relatively light week for deals in the Northwest, perhaps owing to the holiday weekend. But there was still action in biotech, marketing software, and alternative energy.

—Kennewick, WA-based Infinia raised $14.1 million in debt financing out of a $50 million offering. The company, which is backed by Vulcan Capital, Khosla Ventures, and other investors, develops solar power generation technology that uses free-piston Stirling engines and power systems.

—Luke reported on the story behind Vulcan Capital’s investment in BiPar Sciences, the Brisbane, CA-based cancer biotech firm that was recently sold to Paris-based Sanofi-Aventis for $500 million. Vulcan led the seed financing round for BiPar back in 2005, and pumped $13 million in capital into it through its lifetime. The sale will earn Vulcan more than $100 million in cash, which managing director Steve Hall says has helped put the firm in the top 10 percent of all U.S. venture funds over the past five years. BiPar’s drug, BSI-201, could be a fundamental advance against breast cancer, ovarian cancer, and other tumors.

—Bellevue, WA-based Visible Technologies, a startup that makes software for online brand reputation management and customer service, raised $6 million in debt financing. Visible Technologies was founded in 2003, and is backed by Bellevue-based Ignition Partners and New York-based WPP.

—Seattle-based Survey Analytics, a marketing and customer relations software startup, scored a partnership with the White House to power the Open Government Dialogue website, which seeks to solicit ideas from the public on how the government can be more transparent, participatory, and collaborative. Financial terms of the deal were not given. Survey Analytics, which has been bootstrapped since 2004, has developed a software platform for hosting and managing feedback communities called IdeaScale.

—Luke reported that Seattle-based Uptake Medical, which is developing minimally invasive technology to treat emphysema, raised $3.1 million in a debt financing. Uptake makes a device that seals off access to diseased parts of the lung where air gets trapped. The technique does not leave an implantable device behind. The latest funding adds to the $3 million bridge financing the company raised for its clinical trials in December.

—HealthUnity, a Bellevue, WA-based maker of software for connecting healthcare IT systems, raised $2 million out of a $4 million equity financing, Luke reported. The company was founded in 2004 and is led by CEO Prem Urali, a former group manager in the BizTalk Server division at Microsoft.

—Luke also reported that Oncothyreon, a Seattle-based developer of cancer drugs, received commitments from several investors to buy new shares and warrants for $11.1 million. The deal was underwritten by Boenning & Scattergood. Oncothyreon (NASDAQ: ONTY) has been diversifying its pipeline, and has gotten renewed interest from investors in its cancer immunotherapy program, since Seattle-based Dendreon has had recent success in that field.

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Dave Danielson, founder of the MIT Energy Club and Boston’s greenest VC, has left his position as senior associate at General Catalyst Partners for the U.S. Department of Energy. As an automated e-mail response explains: “I will be making a transition from my role as a member of the General Catalyst Partners’ Cleantech investment team into an exciting new role as a co-founder of the ARPA-E program…I am very excited about this opportunity to help shape this program that, if done right, has the potential to become one of the most important early-stage transformational energy technology funding organizations in the nation…”

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In football, the expression is “three yards and a cloud of dust.” But at Microsoft, it’s apparently “three screens and a cloud.” That’s according to chief software architect Ray Ozzie, who took part in a keynote conversation with University of Washington computer scientist Ed Lazowska at today’s State of Technology Luncheon, hosted by the Technology Alliance at the Westin Hotel in downtown Seattle.

Ozzie was speaking about the evolution of cloud-based software to serve three key device categories: phones, laptops, and TV-sized monitors. He and Lazowska (an Xconomist) touched on many other aspects as well, including Microsoft’s leadership and culture, the past, present, and future of computing, and even Boston versus Seattle (which suits Xconomy’s mission particularly well since we’re in both cities). The event was a big deal, especially because Ozzie doesn’t make a lot of public appearances around town, but there was also plenty of other high-profile news and activity from the lunch. Here’s a quick recap, including an edited account of the Q&A with Ozzie.

Susannah Malarkey, executive director of the Technology Alliance (also an Xconomist), made the opening remarks and introduced Gov. Chris Gregoire, who kicked things off with a few comments about the region’s technology leadership. “On a national scale, I’m very excited that science and technology is back in a big way,” she said. “The innovative spirit that is the lifeblood of the 21st century economy is going to happen in our state.” Gregoire cited the importance of such technologies as the smart grid, broadband access, and healthcare software, and stressed the need to improve education from early childhood through graduate schools. Lastly, Gregoire singled out a few Washington companies, including Modumetal, Insitu, and Verdiem, saying “This is the future of our great state…It is not going to happen without all of us working together. We will get through this terrible downturn in our economy.”

Next up, Marty Smith of the Seattle-based Alliance of Angels announced his group had just closed a $4 million-plus seed fund yesterday, to make “sidecar-type investments.” The Alliance of Angels funded five companies that were acquired last year—Cleverset, Shelfari, Insitu, SnapIn Software, and Coffee Equipment Company. And one of these, SnapIn Software (acquired by Nuance for an estimated $180 million last August), was named the Alliance of Angels 2009 Company of the Year, Smith announced. SnapIn, based in Bellevue, WA, was backed by Frazier Technology Ventures, Trilogy Equity Partners, Hunt Ventures, and Oak Investment Partners.

Jeremy Jaech, chair of the Technology Alliance and CEO of Seattle-based Verdiem, followed with an eye-opening rundown of benchmarking stats comparing Washington state with its top technology peers around the country: Massachusetts, Maryland, New Jersey, Connecticut, Virginia, California, New York, Colorado, and Utah. Jaech, who’s also an Xconomist, pointed out that Washington ranks 4th among its peers in terms of its share of total U.S. venture capital investment (behind California, Massachusetts, and New York), which is encouraging. Washington also ranks in the top 5 in the strength of its engineering workforce, but suffers in education rankings such as 8th grade math proficiency, high school graduation rates, number of bachelor’s and graduate degrees awarded, and state spending on academic research. The most urgent recommendation from Jaech’s team? Boost investment in undergraduate and graduate science and engineering education.

Then it was time for the keynote. The UW’s Lazowska introduced Ray Ozzie by telling the story of how the latter showed up in Seattle in 2005 (when his startup Groove Networks was acquired by Microsoft) and gave a three-hour lecture on collaborative software in Lazowska’s class on the history of computing. I’m not going to do justice to Ozzie’s background here—he’s the main creator of Lotus Notes, among other things, and was a developer at Data General, where Craig Mundie also worked—but let’s just say I’ve long been fascinated by his story of discovering the PLATO mainframe at the University of Illinois in Urbana. (In part because that’s where I did my first computer programming as a high-school kid in 1983. And also, props to a fellow Illini alum.)

Here’s a condensed and edited version of the Ozzie conversation:

Lazowska: In Malcolm Gladwell’s Outliers, he talks about the importance of serendipitous timing. What is it about people born in 1955 for computing—Bill Gates, Steve Jobs, and you?

Ozzie: Timing is a huge, huge factor. Something else in Gladwell’s book is pretty …Next Page »

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President Obama announced today the members of the President’s Council of Advisors on Science and Technology, in remarks made at the National Academy of Sciences in Washington DC. Some members were announced previously, but this is the first time the full council was presented publicly. Obama cited the distinguished council’s “diversity of experience and views,” and said the members would advise him on “national strategies to nurture and sustain a culture of scientific innovation.” You can see the full list here.

Xconomy’s cities of Boston, Seattle, and San Diego are all represented prominently on the advisory council. Here’s a quick rundown:

Council members with strong ties to the Northwest include Craig Mundie, chief research and strategy officer at Microsoft; and Christine Cassel, president and CEO of the American Board of Internal Medicine, who was previously dean of the School of Medicine and vice president for medical affairs at Oregon Health & Science University. (Another presidential advisor with ties to Oregon—though she’s not on this council—is Jane Lubchenco, a professor at Oregon State University, who was confirmed by the U.S. Senate last month as under secretary of commerce for oceans and atmosphere, and the ninth administrator of the National Oceanic and Atmospheric Administration.)

Not to be outdone, the Boston area contributes luminaries John Holdren (co-chair), director of the Office for Science and Technology Policy and former director of the Program on Science, Technology, and Public Policy at Harvard University’s Kennedy School of Government; Eric Lander (co-chair), director of the Broad Institute of MIT and Harvard; Ernest J. Moniz, director of the Laboratory for Energy and the Environment at MIT; Daniel Schrag, professor of geology and professor of environmental science and engineering at Harvard; and Shirley Ann Jackson, president of Rensselaer Polytechnic Institute, former chair of the U.S. Nuclear Regulatory Commission, past president of the American Association for the Advancement of Science, and the first African-American woman to earn a doctorate from MIT.

And San Diego has Mario Molina, professor of chemistry and biochemistry at the University of California, San Diego, and the Center for Atmospheric Sciences at the Scripps Institution of Oceanography. Molina is a Nobel Laureate in Chemistry, and is also the director of the Mario Molina Center for Energy and Environment in Mexico City.

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“Danger, Will Robinson!” These immortal words uttered by the Robot in the 1960s television series “Lost in Space” are now part of our pop culture lexicon when warning of an impending, and sometimes unseen, threat. It’s too bad the Robot is just a fictional character, because as we’ve seen with recent economic and legislative happenings, there are times we could all use someone or something to give us an early warning.

Given the recent turbulence in the markets, imagine how prescient it would have been to have someone yell “Danger, Danger” last spring as you moved all your investment dollars, including the kids’ college money, from the relative safety of that conservative bond fund to the aggressive stock fund when it seemed like the right thing to do. After all, you were only following the advice of CNBC, the leaders in financial news. Oil stocks looked particularly good, and when the experts said stocks can only go up, who were you to second guess them. As you clicked to make that online trade, your warning Robot would have yelled “Danger, Danger! Stock Market Crash ahead!”

Similar warnings might also have been appreciated by many organizations as the Obama administration and a new Congress amends and creates new legislation and regulations. This “Danger” warning certainly would have been appreciated by those major biotechnology companies with local operations when the Patent Reform Act of 2009 was introduced in the Senate in March. The proposed bill provided a statutory methodology to be used in the calculation of damages in patent infringement suits. The methodology would limit damages valuation to the amount of value added by the invention’s improvements over the prior art. The invention’s entire market value would only be considered where the improvements alone constitute the “predominant basis” for market demand. This change, favored by large IT firms who rely on market dominance and not on patents, would severely diminish the value of patent protection. Limiting damages takes the teeth our of patent protection and, while it benefits a few select industries, industries that rely on strong patents to encourage innovation and investment, like the life sciences, would be severely impacted.

Two weeks ago the Senate Judiciary Committee’s approved a modified version of the reform bill that added a “gatekeeper” provision, giving judges more …Next Page »

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