Nuance v. Vlingo: Legal Battles in the Speech-Recognition Space

It's great to have the biggest stand-alone company in the speech recognition business here in Massachusetts: Nuance Communications. But I wonder if we're starting to see some negative effects... as Nuance seems to believe it owns all of the IP in the speech-rec field. They've been fairly litigious of late, and have yet to win a lawsuit in court.

Today's Globe column focuses on Nuance's latest lawsuit against a rival. This time, the defendant is Vlingo, a 35-person start-up in Harvard Square, co-founded by an ex-Nuance executive, Mike Phillips.

I prepared a chart that didn't run with the column, highlighting some of the other recent Nuance lawsuits. Here it is:

2004 – Burlington-based Nuance Communications, Inc. (then known as ScanSoft, Inc.) files suit against Woburn-based VoiceSignal Technologies, Inc. for infringing a patent related to voice-controlled dialing on mobile phones, and trade secret misappropriation. In 2006, VoiceSignal sues Nuance for patent infringement related to an approach to correcting mistakes used by dictation software. In 2007, Nuance buys Voice Signal for $263 million, ending the litigation.

2004 – Nuance sues ART Advanced Recgnition Technologies, Inc. of Israel for patent infringement over voice-controlled dialing for mobile phones. In 2005, Nuance acquires ART, ending the litigation.

2006 – Nuance sues California-based Tellme Networks, Inc. over two patents related to directory assistance and call center technologies. Microsoft acquired Tellme in 2007, but the lawsuit is still pending.

2006 – Nuance sues SoftMed Systems, Inc. of Maryland, alleging that SoftMed violated patents that cover centralized digital dictation systems and priority voicemail systems. The two companies later settled out of court.

2008 – Nuance sues Vlingo, Inc. of Cambridge over a patent pertaining to adapting speech recognition software to individual users.

Lawsuit to watch: Nuance sues Vlingo

Nuance, the biggest speech recognition software company in the world, is suing tiny Vlingo, a Cambridge start-up, for patent infringement. Vlingo co-founder Michael Phillips had been a Nuance employee before starting the company, which focuses on speech recognition on mobile phones. He took a year off to sit out his non-compete agreement before starting Vlingo.

From Nuance's press release about the lawsuit:

In its complaint, Nuance states that Vlingo infringes a Nuance patent that covers a technique for adapting a speech recognition system to the speech of individuals or groups. In the claim, Nuance seeks monetary damages for infringement and injunctive relief to prevent Vlingo from continuing to infringe U.S. Patent No. 6,766,295, entitled “Adaptation of a Speech Recognition System across Multiple Remote Sessions with a Speaker.”

Update: Vlingo's PR rep just sent along this response, from CEO Dave Grannan:

We believe this lawsuit is unfounded. Nuance has referenced a patent that has serious limitations in its coverage. The patent does not apply to vlingo’s technology; moreover, we have significant doubts regarding the patent’s validity. Vlingo’s technology is based on a license of IBM’s core speech recognition platform, which is used by hundreds of companies worldwide. Industry observers will recognize this as typical counterproductive behavior of filing frivolous lawsuits in an attempt to stifle competition. Vlingo will fight the lawsuit aggressively to its conclusion, while continuing to build on our tremendous momentum we’ve gained in less than one year since our public launch.

Some earlier video of Phillips doing a Vlingo demo is here. And Phillips is also mentioned in this Globe column.

When demos go awry (Sunday Globe column on Nuance Communications)

Yesterday's column looks at Nuance Communications, one of Massachusetts' biggest software companies, and the dominant player in speech recognition.

From the story:

When it comes to controlling a mobile phone, car stereo, desktop PC, or GPS device by voice alone, software from Nuance Communications Inc. is fast becoming the equivalent of Intel Inside. In terms of the breadth of its products, and the number of employees it has dedicated to speech recognition, Nuance looms over its bigger rivals, IBM Corp. and Microsoft Corp. But on the local and national tech scenes, Nuance is far from well-known.

"They've taken a fragmented industry and rolled it up into one company," says Daniel Ives, an analyst at Friedman, Billings, Ramsey & Co., alluding to CEO Paul Ricci's passion for picking up smaller speech recognition companies. (Friedman, Billings makes a market in Nuance's stock, but hasn't done any investment banking for the company.) "Speech recognition is still a green field opportunity, and I view them as the 800-pound gorilla in the space."

There are two videos this week -- one of the demo that Nuance exec Peter Mahoney gave me last week, and another video that Mahoney recorded in response to my column and video, which explains why things didn't go smoothly when he was showing me a TomTom speech-guided GPS.

Here's my video of the original demo:



And here's Mahoney's reply, posted to YouTube:

Sunday's Globe column: Building new pillars in the Bay State

I'm saying it: we need a new generation of pillar companies here in Massachusetts, and the wider New England region.

Sunday's Globe column explores what we need to do to start thinking bigger. From the column:

I understand the argument that big acquisitions, like September's $430 million deal to sell Waltham-based Adnexus Therapeutics to Bristol Myers-Squibb Co., return profits to venture capitalists they can in turn invest in new start-ups and allow newly wealthy entrepreneurs to go off and try something else - maybe even a riskier idea.

But we also need to build the next generation of "pillar companies" here - companies like EMC Corp., Genzyme Corp., Boston Scientific Corp., Hologic Inc., and Nuance Communications Inc.

These companies employ hundreds or thousands of people. They're acquirers, not acquirees. They lead industries, set the agenda, and attract the attention of media and Wall Street analysts. Smaller companies cluster around them.

Right now, acknowledges Steve O'Leary, an investment banker with Jeffries Broadview, New England "is a net sellers market, as opposed to a net buyers market." O'Leary, who earns a living by selling tech companies, says, "I'd like to see more of a food chain, from the big companies on down."

I wrote about this topic back in January, as well, and moderated a salon called 'Thinking Big' late in November.

More gPhone Buzz, in BusinessWeek

BusinessWeek says that software developers are angling for partnerships with Google that would give them a prominent spot on the forthcoming gPhone. That includes Burlington-based Nuance Communications, the (almost totally silent) speech-recognition giant.

Update: BusinessWeek has another piece, titled, 'Will a Google Phone Change the Game?' From Roger Crockett's story:

Wireless industry consultants and marketing executives with knowledge of Google's plans say it has been showing prototypes of a new phone to handset manufacturers and network operators for a couple of months. Its plans have been kept top secret, but Google is expected to tap a company on the Pacific Rim that specializes in mobile design and manufacturing to build a handset to its specs. Google could then apply its expertise in operating software and user applications, says Paul Catalano, a partner at consultancy RelevantC Business Group (RCBG). Google officials won't talk about phones, and industry sources don't expect one before the second half of 2008.