Author: Dennis Pyburn

Innovation, Patents Parallel Economic Growth

8 December 2020
Dennis Pyburn
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When it comes to having a booming thriving economy nothing is more important than ideas. Innovation leads economic success.

Production levels, efficiencies, etc. only matter once there is an idea of what to produce or how to produce it. New ideas and innovation are critical to keep ahead of competitors —and protecting those ideas in the market place are patents. Not only must individuals have the freedom to create, being able to guarantee ownership of the idea incentivizes the effort, and that is what patents do.

A total of 1,914  patents were filed and granted in Montana between 1975 and 2019, according to a new study recently released by CommercialCafé which drew upon data from the US Patents & Trademark Office,  exploring the importance of US innovation over four decades.

Montana is among the states with the fewest patents awarded. California is the highest.

Most of Montana’s patents were in Chemistry & Metallurgy, totaling 555, most of which were filed by Dr. Lloyd Berg, who holds the most patents in the state. The late Dr. Berg was formerly head of Montana State University’s Chemical Engineering Department.

The most innovative CPC class in Montana was Technical Subjects Covered By Former Uspc, followed by Basic Electric Elements with 430 and 356 patents, respectively.

Textiles & Paper was the least innovative section in the state, with a patent count of 11.

Nationally, the data for the past 44 years shows that highest patent applications falls under Physics, with 1.1 million patents, followed closely by Electricity, with 900,000 patents.

It used to be that most patents in the US were granted by individual inventors or entrepreneurs, but now more are being granted to large companies.

CommercialCafe also looked at patent applicability, which is different than a true count of distinct patents, in that it counts one patent multiple times, one time for each application across a different field of innovation. Fields of innovation refer to what are called “sections” in the cooperative patent classification (CPC) scheme. There are nine CPC sections, each including several “classes.” It is often the case that one patent claims an invention that applies across multiple sections or multiple classes within one section, or combinations of both.

The study states, “Historically, small U.S. businesses and widespread entrepreneurship have driven American innovation. And, over time, the infrastructure of U.S. innovation itself has undergone several stages of progress and adaptation. For instance, during the ‘Golden Age’ of invention — between the late 1800s and mid-1900s when the U.S. led the world’s industrial revolution — innovative activity happened largely outside of the corporate frame. At that time, world-changing ideas were given physical form by individual creators with financial backing from various investors. As the Harvard Business Review noted in a comprehensive 2017 study, the modern corporation research and development model had outweighed individual inventor patents by the middle of the 20th century. Then, by the year 2000, corporate assignees accounted for 80% of patents.”

The five most innovative U.S. corporations to date are IBM, General Electric, Intel, Hewlett Packard and Microsoft. Among the top ten innovators in 2020 are Micron, Texas Instruments, Xerox, etc. It is interesting to track how dramatically corporations leading the pack have changed over a 45 year period, reflecting how dynamic free markets really are. In 1975 only IBM and GE were in the top ten. Others who have come and gone include Westinghouse, US Phillips, DuPont, RCA Corp, Caterpillar, Ciba-Geigy, Dow, Bell Labs, Motorola, Kodak, Qualcomm.

The five most innovative states to date are California, New York, Texas, Illinois and New Jersey. In particular, a total of 731,705 U.S.-based assignee patents were filed and granted in California between 1975 and 2019, which puts the Golden State in the lead for patenting activity.

Patent activity in the US peaked in 2013, when 144,072 patents were granted — the most in a single year.

About 51% of patents that were granted in the U.S., between 1975 and 2019, have U.S.-based assignees, amounting to 3,331,802 claimed inventions.

The highest patent applicability to date falls under physics (1.1 million patents). Within this field, innovation in computing and information storage has contributed significantly to increases in patent activity in recent years.

Regardless of the originator innovation has had a positive influence on economic growth. The study unveils “a strong positive correlation between patenting activity and gross domestic product per capita at the state level.”

That means, states the study document, “securing economic growth depends on investing in dreams of progress. As such, it’s reasonable to assume that the best way to invest in the dream is to support the dreamers. But, because humanity has yet to invent a way to predict ideas and inventors, the safest bet on securing long-term growth is to invest in education and innovation across the board.”

Nationwide, “patent applicability distribution” shows how innovation in different fields has progressed and concentrated differently in different regions.

The fact that California leads the nation for invention, points to the need for an area to be socially and economically open to the disruption that comes with new concepts. Innovation is most strong in populated areas with strong capital markets that can finance invention.

California stands out with the highest patent applicability for six of the nine main patent classification sections: human necessities; performing operations and transporting; chemistry and metallurgy; physics; electricity; emerging cross-sectional technologies.

Oil and Gas will Remain Important in Future

20 November 2020
Dennis Pyburn
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The Center Square

Over the next two decades, oil and gas production is projected to account for 68 percent of energy consumption in the U.S. and will play a key role in the energy transition to a low carbon future, according to a new report published by the U.S. Department of Energy.

Natural gas is increasingly powering plants to produce electricity, but oil and natural gas are revitalizing the U.S. petrochemical industry, growing the liquefied natural gas industry, and boosting high-tech materials, the report states.

“Oil and natural gas provide more than two-thirds of the energy Americans consume daily,” Deputy Energy Secretary Mark Menezes said when the department released the 37-page report earlier this month in Albuquerque, New Mexico.

“In addition to meeting our energy needs, these fossil fuel resources are integral to our standard of living. This report delves into the importance of these resources, the five key technologies that have supported the industry’s advancement, the opportunities for future domestic energy growth, and more,” Menezeas said.

The DOE says it will work with the industry, academia, state agencies, the private sector, and non-government organizations “to drive innovation forward, to underpin U.S. economic growth and energy security.”

Innovation in the industry includes expanding resource development in the Bakken Shale, the Permian Basin, and the Eagle Ford Shale, while improving oil and gas safety and mitigating environmental problems, the report notes.

In New Mexico, tax revenue from the oil and gas industry contributes to 39 percent of the state’s budget – generating $16.6 billion in annual economic activity, employing more than 134,000 people, and funding more than $1.4 billion for the state’s public schools.

Ryan Flynn, executive director of the New Mexico Oil and Gas Association, explains that any federal ban on oil and gas leasing, fracking or on federal permitting would be “devastating for New Mexico.” He said in response to the Biden/Harris plan to ban fracking and transition away from oil and gas development that, “Any proposal restricting oil and gas development on federal lands would only result in the elimination of thousands of jobs, massive cuts in support for our public schools, and a greater reliance on foreign energy imports.”

The industry is committed to reducing emissions and protecting the environment, he says, “but we cannot slap millions of Americans with proposals that destroy jobs and ravage communities. Any serious energy proposal must recognize the fact that oil and gas will continue to play a major role in meeting our basic daily energy needs well into the future.”

On July 31, 2019, during the second Democratic Party presidential primary debate, when asked if there would be “any place for fossil fuels, including coal and fracking, in a Biden administration,” Biden replied to CNN’s Dana Bash, “No, we would — we would work it out. We would make sure it’s eliminated and no more subsidies, for either one of those, either — any fossil fuel.”

Last week Biden repeated his position in the presidential debate stating his administration would “transition away from the oil industry, yes.”

A recent analysis by NMOGA and the American Petroleum Institute projects that if oil and gas bans were implemented in New Mexico in 2021, more than 62,000 jobs would be lost by 2022.

“For our state, that means over 100,000 working families will be out of a job and nearly 40 percent of our entire state budget would disappear,” Larry Behrens, Western Director for Power The Future, says. “The latest rankings place New Mexico with the eighth-highest unemployment in the country, a standing that will be more permanent if Joe Biden decides nearly 15 percent of our state’s workforce needs to ‘transition” out of their job to poverty.’”

Small Business Organization Endorses Rosendale

22 October 2020
Dennis Pyburn
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The National Federation of Independent Business (NFIB), a business advocacy organization,endorsed Matt Rosendale for election to the US House of Representatives.

 “Matt Rosendale is a champion of small business issues in Montana, from deregulation to less government interference,” said Gary Selvy, NFIB’s Executive Director of State Governmental Relations. “He understands the issues our members are facing, especially during these difficult times. During his time in the Montana state Legislature, Rosendale has demonstrated that he knows Montana values and what is most important to our members. We have no doubt that he will be an excellent small business representative for our state in Congress and we are proud to endorse him today.”

 Matt Rosendale has served as the Montana State Auditor since 2017. Prior to that, he was a member of the Montana state Legislature for six years and served as the Senate Majority Leader for his final two years.

 “Matt Rosendale has a deep understanding of our members’ priorities and concerns,” said NFIB National Political Director Sharon Sussin. “We are confident he will be a strong ally for small business in Congress. That’s why we are pleased to endorse him today.”

The  endorsement comes from NFIB FedPAC, the organization’s political action committee. NFIB FedPAC is funded by NFIB member donations above membership dues.

Six Recognized at Holland & Hart

25 September 2020
Dennis Pyburn
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Holland & Hart announced that six of the firm’s Billings attorneys have been recognized in the 2021 Edition of The Best Lawyers in America© and three attorneys were named to the inaugural edition of Best Lawyers: Ones to Watch. In addition, W. Scott Mitchell received Best Lawyers “Lawyer of the Year“ recognition in two practice areas in Billings. Only a single lawyer in each practice area and designated market area is honored as the “Lawyer of the Year,” making this accolade particularly significant.

Best Lawyers has published its list for over three decades, earning the respect of the profession, the media, and the public as the most reliable, unbiased source of legal referrals. Lawyers on The Best Lawyers in America list are reviewed by their peers based on professional expertise and undergo an authentication process to make sure they are in good standing. Best Lawyers: Ones to Watch recognizes associates and other lawyers who are earlier in their careers for their outstanding professional excellence.

2021 Best Lawyers in Billings:

Shame Coleman: Litigation – ERISA; Litigation – Intellectual Property; Litigation – Patent; Patent Law

Kyle Gray:  Appellate Practice; Insurance Law

Charles Hingle: Banking and Finance Law; Bankruptcy and Creditor Debtor Rights / Insolvency and Reorganization Law

William Mercer: Commercial Litigation; Natural Resources Law

W. Scott Mitchell: Commercial Litigation; Employment Law – Management; Litigation – Environmental; Litigation – Insurance; Natural Resources Law; Personal Injury Litigation – Defendants; Product Liability Litigation – Defendants; Workers’ Compensation Law – Employers

Elizabeth A. Nedrow: Employee Benefits (ERISA) Law

2021 Best Lawyers: Ones to Watch in Billings:

Vicki Marquis: Environmental Law

Brianne McClafferty: Commercial Litigation

John Sullivan: Commercial Litigation

“Certificate of Need” Requirements Increased COVID Mortality RatesVote

22 September 2020
Dennis Pyburn
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From Center Square

States that enforced Certificate of Need (CON) laws during coronavirus shutdowns increased mortality rates for COVID-19 patients and others, a new assessment of state laws has found.

Montana is among about 35 states that still impose CON laws – laws which require some health care facilities to “prove need” before being allowed by the state government to go into business or to expand business, such as adding the number of beds. Part of that consideration involves protecting existing, both public and private, facilities from competition.

An analysis of state laws, published in a new working paper by economists Agnitra Roy Choudhury, Alicia Plemmons and Sriparna Ghosh at the University of Cincinnati, Auburn University, and Southern Illinois University, concludes that CON laws increased mortality rates for COVID-19 patients and others.

In Certificate-of-Need Laws and Healthcare Utilization during the COVID-19 Pandemic, the authors found that in states with high hospital bed utilization, suspending CON laws saved nearly 100 lives for every 100,000 residents for all causes of death. Suspending CON laws saved 40 lives from COVID-19 and 57 lives from natural causes of death.

In states with high intensive care unit bed utilization, suspending CON laws saved 28 lives for every 100,000 residents for all causes of death, saved 11 lives from COVID-19 and 15 lives from natural causes of death, the report says.

“CON laws are legal limitations to the expansion and acquisition of medical services within a state and were not structured in a way to prepare or stockpile medical goods and services to the volume that has been required to meet demand swells during the recent pandemic,” it states.

The analysis primarily focused on mortality caused by COVID and non-COVID related reasons to assess how CON laws affected access to health care for illnesses that might require similar medical equipment.

“Their baseline results suggest that mortality rates are higher in states with CON laws relative to that in states without any CON laws,” the report states. “States with high healthcare utilization due to COVID that reformed their CON laws during the pandemic saw a significant reduction in mortality resulting from natural death, Septicemia, Diabetes, Chronic Lower Respiratory Disease, Influenza or Pneumonia, and Alzheimer’s Disease in addition to reduction in COVID deaths.

“In states with high ICU bed utilization that subsequently reformed their CON laws in order to increase acquisitions of medical equipment, 11 lives per 100,000 residents [were saved] from COVID weekly,” the report states.

By keeping CON laws in place, health care providers were prevented from expanding care options, the report found, including the ability to add beds, ventilators or expand facilities.

Twelve states do not have CON laws; 15 states and the District of Columbia have CON laws in place; 23 states suspended some portion of CON laws or enabled emergency provisions.

Several attempts have been made to pass bills in the Montana State Legislature to eliminate Montana’s cumbersome bureaucracy controlling the emergence of new health care providers or preventing existing ones to expand, but to date they have been unsuccessful. CON laws protect hospital profits, not patients, in a process that can takes months or even years, Moriah Lawrence and Angela Erickson at the Pacific Legal Foundation, argue.

Lawrence and Erickson charge that state bureaucrats “are so concerned with the potential harm to the existing companies’ bottom lines that this process ultimately creates ‘Competitor’s Veto.’” In Montana government- ran medical facilities have exercised that veto to block private sector companies from entering the market. Hundreds of preventable deaths can be traced back to CON laws, well before the coronavirus, according to a 2016 Mercatus Center report. Mercatus published empirical evidence to show how death rates were higher for patients suffering from pneumonia, heart failure, or heart attacks at hospitals in states with CON laws than in non-CON states.

NFIB Endorses Rep. Greg Gianforte

21 September 2020
Dennis Pyburn
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NFIB, the nation’s leading small business advocacy organization, has presented its most prestigious legislative recognition, the Guardian of Small Business Award, to Montana U.S. Rep. Greg Gianforte.

“The NFIB Guardian of Small Business Award is awarded to lawmakers whom small businesses can truly count on,” said NFIB Vice President of Federal Government Relations Kevin Kuhlman. “These Members of the United States House of Representatives are dedicated supporters of the key issues that our members are concerned about and have proven themselves to be real champions for small business. Our policy positions are driven by our members, and we report NFIB Key Votes back to our membership. We are proud to recognize the elected officials from the 116th Congress who earned this distinction by taking pro-small business votes supporting financial assistance programs and tax relief and opposing new regulations and increased labor costs. Small business owners across the country need their support now more than ever during these unprecedented times, and we are grateful to these lawmakers for their leadership.”

Added Riley Johnson, NFIB’s Montana state director, “At no time in recent history has small business needed more reliable and steadfast friends in Congress and state legislatures, and without a doubt, Congressman Gianforte has been one. The mom-and-pop enterprises of Montana’s Main Streets are grateful for the support Congressman Gianforte has given them.”

NFIB’s Guardian of Small Business Award is reserved for lawmakers who vote consistently with small business on the key issues identified by small business owners. Those who voted with small business on key issues 70% or more of the time during the 116th Congress earned the NFIB Guardian of Small Business Award. NFIB informs lawmakers in advance which votes will be considered NFIB Key Votes and asks lawmakers to support the consensus views of our members. We also remind them that the results will be reported back to the NFIB membership. 

20% of US Businesses Say They Could Close in Six Months

21 September 2020
Dennis Pyburn
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By Bethany Blankley

More than 20 percent of small business owners said they will have to close permanently if current economic conditions do not improve within the next six months, according to a survey conducted by the National Federation of Independent Business.

The largest small business association in the U.S., headquartered in Nashville, conducted the survey to assess the financial health of small businesses.

The survey found that 21 percent of small business owners said they will have to close without improved economic conditions within the next six months.

An additional 19 percent said they will be able to operate no longer than 7-12 months under current economic conditions.

Holly Wade, NFIB Director of Research and Policy Analysis, said that while small businesses are “adapting to the abrupt shifts in consumer spending, managing customer and employees’ health and safety,” complying with state and local mandates has created additional stress.

“Many of them still need more financial assistance just to keep their doors open and staff on payroll,” she said.

Of the small businesses that were able to receive a mostly forgivable loan through the Small Business Pay Check Protection Program (PPP), 84 percent said they have used the entire amount they received.

Nearly half of PPP loan borrowers (47 percent) anticipate that they will need additional financial support over the next 12 months. If eligible, and if offered, 44 percent said they would apply or re-apply for a second PPP loan.

Most small business owners surveyed said they do not expect business conditions to improve to normal levels until next year at the earliest. Only 19 percent said they expected conditions to improve to normal levels by the end of 2020.

Roughly 52 percent said it won’t be before sometime in 2021; 20 percent said sometime in 2022 when business conditions improve.

So far, sales levels remain at 50 percent or less than they were pre-COVID for about 20 percent of those surveyed.

CARES Act extended unemployment benefit funding hurt small businesses, respondents said. About 32 percent said the extra $600 per week that employees received “hurt their business by making it harder to hire or re-hire workers.”

Roughly 3 percent said they had to offer a higher wage to employees to encourage them to come back to their job; 4 percent said they agreed to have an employee continue working at reduced hours so they could also receive the $600 per week payment.

As a result of the $600 weekly payments, about 68 percent of workers received more income than they did when they were working, a report published by the Foundation for Government Accountability found.

Roughly one in five individuals on unemployment received at least double the amount of their prior wage. A worker previously earning $445 per week, or about $23,000 annually, has been receiving $832 per week in unemployment benefits, more than $43,000 annually, for example.

About 21 percent of the small business owners surveyed by NFSB reported they had an employee take COVID-19 related paid sick leave or family leave as mandated and offered through the Families First Coronavirus Response Act (FFCRA). Among them, only 30 percent said they had claimed the tax credit or an advance refund for reimbursement of these costs.

The survey is the 11th Small Business COVID-19 NFSB survey designed to assess the impact of state and national coronavirus shutdowns on small business operations, economic conditions, and utilization of the targeted small business loan programs.

NFIB Credits PPE for Business Recovery

27 August 2020
Dennis Pyburn
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The engine of the American economy is trying its best to start smoothly humming again, according to today’s release of the latest Small Business Economic Trends report (also called the Optimism Index) from National Federation of Independent Business, the nation’s leading small-business association. Now, can the surge in coronavirus cases abate long enough to take that engine for a test run on the road to recovery?
“What our latest Index tells me is that the Paycheck Protection Program is helping as planned and,  combined with the grittiness natural to all small-business owners, is slowly getting our economy back on track,” said Riley Johnson, Montana state director for NFIB. “If only we could get the foot of the COVID-19 crisis off the Superman’s cape of those small-business-owning job creators, we could expedite our national economic recovery.”
Eight of the 10 Index components rose in June, most sharply of all in the ‘real sales expectations’ component, followed distantly but solidly by ‘job openings,’ ‘good time to expand,’ and ‘job creation plans.’ The net percent of owners expecting higher real sales volumes improved 37 points to a net 13% of owners. The historic 61-point drop over March and April has been followed by a 55-point increase over the past 2 months as owners are expecting higher sales with business re-openings.
The NFIB Research Center has collected Small Business Economic Trends data with quarterly surveys since the 4th quarter of 1973 and monthly surveys since 1986. Survey respondents are drawn from a random sample of NFIB’s membership. The report is released on the second Tuesday of each month. This survey was conducted in April 2020. For more information about NFIB, please visit NFIB.com.
“Small businesses are navigating the various federal and state policies in order to reopen their business and they are doing their best to adjust their business decisions accordingly,” said NFIB Chief Economist Bill Dunkelberg. “We’re starting to see positive signs of increased consumer spending, but there is still much work to be done to get back to pre-crisis levels.”

ND Fighting Back Against Adverse Dakota Access Ruling

27 August 2020
Dennis Pyburn
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From the Oil Patch Hotline

North Dakota’s top state officials geared up for a tough legal fight to join in overturning a Federal Judge’s decision to shut down the Dakota Access Pipeline after warning that action could be devastating to the state.
“He (the judge) did not appreciate the economic devastation to our citizens and community,” said Gov. Doug Burgum.
“The massive economic impact is enormous,” said Atty. Gen. Wayne Stenhjem. “It impacts roads, schools, jobs and companies, taxes and royalties.”
They were reacting to the decision by Federal Judge James Boasberg to shut down the $3.8 billion crude oil pipeline and remove all oil by Aug. 5 while an environmental review by the US Army Corps of Engineers takes place.
Energy Transfer Partners, the parent company of Dakota Access, is expected to appeal the judge’s decision after he rejected the company’s stay.
“Shutting down the pipeline will have a greater negative impact on safety than any environmental benefit the court is claiming to gain, putting more trucks on our roads, and more rail cars on the tracks, nearly 900 railcars per day,” said Ron Ness, president of the ND Petroleum Council. “Shutting down the pipeline will cut off North Dakota oil producers from the safest, most reliable and economic method of transporting our high-quality Bakken oil to the best markets in the country.”
Increasing crude oil hauling by train will also impact the state’s farmers during harvest season, he said.
Justin Kringstad, executive director of the ND Pipeline Authority, said 300,000 BOPD is being shipped out of state now on unit trains each carrying 70,000 BOPD.
Briefing the ND Industrial Commission headed by Gov. Burgum, Kringstad said converting more crude oil to rail shipping will be costly, adding at least $5 a barrel on top of the $8 a barrel transportation costs now.
There are 11 loading stations in the state, Kringstad said, but it will take time to ramp up additional rail cars and crews for more rail shipping. At its peak in 2012, the state was moving over 850,000 BOPD by rail.
The Enbridge pipeline running to Clearbrook, MN can handle 145,000 BOPD while the True Oil and Kinder Morgan pipelines also move smaller volumes south through Wyoming.

MSU-B Offers Free Tuition to National Guard

27 August 2020
Dennis Pyburn
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This fall, Montana National Guard members will be able to attend Montana State University Billings tuition-free.
Members of the Montana National Guard are eligible for scholarships, federal tuition assistance, and the GI Bill. The tuition waiver is available for Montana National Guard members as a “last-dollar award,” meaning it will make up the difference between the total cost of tuition and the sum of other funding, such as grants and scholarships that are received.
“This waiver will ensure that tuition is not an obstacle for our Guard members to pursue their higher education,” said Dawn Githens, retired Col. Air Force, director of the Military and Veterans Success Center. “It is one more service we can provide to those who serve our country.”
The waiver will be available starting Fall 2020 semester to all Montana National Guard members who do not have a bachelor’s degree or higher and who meet the admission requirements of MSUB or their Montana University System school of choice. In addition, waiver recipients must be certified as a Montana National Guard member in good standing by the Adjutant General.
“This tuition waiver will help keep members of our National Guard here in Montana, united with their families, continuing their education and strengthening our state’s workforce,” said Chancellor Dan Edelman. “Members of our Montana National Guard fulfill a crucial role for our state and our nation in times of need. Increasing access to higher education in our state with this tuition waiver is also a recruitment benefit for the Montana National Guard.”