go into court and show which parts of Vlingo’s system are based on the IBM technology, and which parts are yours, and demonstrate that none of the technology in the Nuance patent is in your system?
DG: That’s stuff that the patent lawyers are poring over. What I’ve been assured by our attorneys and technologists is that we simply don’t do things in the way described by the patent Nuance has cited. Beyond that, as our teams looked at that patent, they had serious doubts as to its validity. A lot of things get through the patent office these days that shouldn’t.
X: There is an interesting family tree here. Mike Phillips, the co-founder and CTO of Vlingo, is a former Nuance employee, who ended up there as a result of Nuance’s acquisition of his earlier company, Speechworks. As far as you know, is any part of the patent cited by Nuance related to technologies that were developed by engineers who were at Speechworks? Does the fact that Mike Phillips was at both companies play into the allegations?
DG: That hasn’t been alleged in any way. This is an absolutely straight-up patent allegation. The complaint itself is very brief and it’s directly stating that we use the ‘295 patent and that’s it. From looking at the patent, the two inventors listed on it are from Portola Valley and Redwood City, California, which would lead me to believe that they are from Nuance, not from Speechworks.
X: What do you make of the fact that Nuance filed the complaint in the U.S. District Court for the Eastern District of Texas, which is notorious as a “rocket docket” for patent litigation?
DG: It’s our assumption that that’s exactly why they filed it there. Frankly, that’s fine by us, because we think the faster the better. We think we’ve got a very strong position.
X: What will the next steps be in the case, as far as you know? Has a hearing been scheduled?
DG: We were just served with the lawsuit today. My understanding of the process is that we have 20 days to answer the complaint, with the possibility of a 30-day extension. And at some point in the first few months, the court holds a scheduling conference with the attorneys from both sides to set a discovery calendar. Even though that district is a rocket docket by reputation, as you say, from talking to my attorneys it sounds like court dates at this point in time are taking a couple of years.
X: So this could be something that drags on for a long time.
DG: Yes, unfortunately. The only way I can interpret this is that Nuance is intent on interfering with our business. It’s interesting that they would lob a patent suit our way when they have no product or technology of their own in the market that comes close to matching what we do. That’s the fundamental fact here. If they had a product in the market that we were competing with, with similar features or functionality, even a lay person could say that there might be some substance [to the suit]. But in my mind this is how a company like Nuance stifles competition and, unfortunately, uses the patent process in our country in a disruptive way to meet business ends and not to do what the patent process was designed to do, which is to spur innovation.
X: You announced your partnership with Yahoo in early April, and Nuance filed its suit less than three months later. Do you think Nuance was waiting until you had a major deployment, and perhaps deeper pockets, before they sued?
DG: The short answer is no. The longer answer is, if you look at Nuance’s track record, they are a very litigious company. They sued ART [Advanced Recognition Technologies], Voice Signal, TellMe. I’m unaware of any of those suits actually being adjudicated and won at trial by Nuance. It just seems to be a strategy they use. If anything, I suppose, when they couldn’t win that business at Yahoo and they lost it to us, this was their reaction.
X: So Nuance did have a technology that was being evaluated by Yahoo for oneSearch with Voice?
DG: They certainly did. They have a human-based product, Mobile Voice Control, that tries to do what we do, and it doesn’t end up scaling and having the right economics. They have grammar-based products, but again, they aren’t the same thing. As much as they would like to try to sell that to companies, we have a better technology. Our approach is to go to customers and say it’s a complete technology-based system, not grammar-based; people can say whatever they want and we turn the words to text on a screen. Nuance will go to those same customers and say we’ll either give you a human-based system or a grammar-based system. That’s their heritage. Nuance is a great call center, IVR [interactive voice response] company. When it comes to 411 directory assistance, airline systems, and the like, they are really great. I have a lot of admiration for their call-center products. But [non-grammar-based systems] just isn’t an area of innovation for them. We just end up winning in that market.
X: How has Yahoo reacted to the suit? Have they expressed their support for Vlingo?
DG: You’d have to talk to them. But they sit on our board of directors, and I’ve reviewed everything we know with our Yahoo director, who completely concurs with everything I’ve just told you. He’s been briefed in terms of our findings, and is in complete support.
