Tuesday, June 17, 2008

Nuance-Vlingo: If you are not sued, you do not exi(s)t

Nuance is not only active to push speech based search to the iphone competing with the vlingo/Yahoo offering. Apparently, Nuance just filed a lawsuit against Vlingo for infringing one of their 1000 patents. Nuance and its predecessor (ScanSoft) has a long history of lawsuits which were in sync with their M&A and business strategy. In some cases, when competing on a large account or negotiating a good M&A price, Nuance used the lawsuit mechanism to get a better deal.

Just few examples from the past:

ScanSoft, ART could settle lawsuit with acquisition

"Peabody-based ScanSoft Inc. may settle a lawsuit by acquiring defendant ART Advanced Recognition Technologies Inc., according to an Israeli newspaper report.

The deal could amount to tens of millions of dollars, according to Globes Online, which attributed the report to a Hebrew newspaper called Yediot Ahronot."

ScanSoft files suit against Voice Signal

"Voice Signal Technologies Inc., a Woburn start-up that sells speech-recognition systems used in wireless phones, has been hit with a patent-infringement lawsuit by ScanSoft Inc., after Voice Signal refused to accept what executives yesterday called a lowball takeover bid from ScanSoft."

There is also the famous TellMe case.

I think it is a great feedback to Vlingo whose management includes are ex-Nuance employees. If you are not sued in this industry, you do not exi(s)t.


Anonymous said...

Nuance sued both a European OCR company and eCopy, who used their OCR. eCopy's board, i.e. investors, then (presumably out of fear) sold the company to Nuance).

Nuance then laid off the bulk of engineering in eCopy and sent the work overseas to a company in Budapest Hungary that Nuance has purchased previously.

The OCR patent came from a company that originally was in California, was purchased by another company in California, then purchased by a another company, and later it was acquired by what is now Nuance. Most patents Nuance owns are like this. Nuance has purchased Dragon Naturally Speaking, IBM Via Voice, Lernout and Houspie's text-to-speech, and OCR technology.

Several of Nuances patents fail the "obvious to someone in the field" criteria, such as the idea of displaying the best word or phrase matches for speech recognition and allowing the user to select the correct word or phrase by saying the number for the phrase.

Nuance has so many patents like this that they do hurt small start-up. The head of Nuance ironically is an economist.

Nuance's HR people presented how great it was for employees of eCopy to be purchased by Nuance because of the benefits, while over 90% of the people in the room had already been told they were being let go! At break, it was found the HR presenters didn't know that the people had been told they were being let go. At the very same time, Nuance had notice of an award being presented to the head of HR for "communication".

That story embodies what it's like for employees of Nuance. The Dilbert comic strip could be about that company. I am not a fan of Nuance's upper management. I have also seen the office space that some of the Nuance engineers work in, and it's not pretty.

Note, the relatively few employees of eCopy that Nuance hired took significant pay cuts too. Nuance is not competitive in this area.

I do wish Nuance well, because most of the people in the company were acquired and they need to make a living and they do work hard, plus, Nuance does make good products.

Note, I don't begrudge Nuance suing when one of their patents is violated, nor that they hire people overseas. However, the pattern of upper management's behavior does show a lack of civic responsibility and an almost psychopathic attitude towards fair competition. They're only interested in winning, not in what is right.

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