Vlingo’s CEO Fires Back at Nuance Over Patent Lawsuit—Says “When they Couldn’t Win Yahoo’s Business, This Was Their Reaction”

As soon as news broke Tuesday that Burlington, MA-based Nuance Communications was suing Harvard Square startup Vlingo for allegedly infringing one of Nuance’s speech-recognition patents, I requested an interview with Dave Grannan, Vlingo’s CEO. Grannan, who came to Vlingo from Nokia last year, has spent quite a bit of time with Xconomy in the past, talking about Vlingo’s speech-to-text technology and its deal with Yahoo, which is using the disputed software for its oneSearch with Voice mobile search service.

I got through to Grannan Wednesday afternoon. He politely upbraided me for the provocative headline I attached to yesterday’s post on the lawsuit. Grannan also shared his opinion that Nuance is a historically litigious company that’s crying foul over the oneSearch technology because it couldn’t win Yahoo’s business using its own speech recognition systems. An edited transcript of our conversation follows.

Xconomy: Thanks for making time to talk.

Dave Grannan: Sure. The first thing is that I did want to register an official complaint with you, in terms of the headline you ran yesterday—“Nuance Suit Against Vlingo Could Shut Down Yahoo’s Voice-Driven Mobile Search Service.” My issue with that is that there has been an allegation of infringement. The only way something gets shut down is if there is proof in court that that is the case. So that headline is achieving for Nuance exactly what they are trying to achieve, which is using the media to jump to a conviction.

X: I see your point. I wrote that headline. In my defense, it did include the word “could.” And the lead paragraph in the article makes it clear that a shutdown would only be a worst-case scenario, if Nuance won the injunction against you that they’re seeking. I think we’ve seen that these patent infringement suits actually can lead to shutdowns, as with the NTP injunction against RIM that nearly shut down the Blackberry service. But I can see your point of view, so thanks for sharing that, and I’ll make sure to include it when we publish this interview.

DG: Thanks. But mainly, of course, we wanted to talk about the substance of Nuance’s allegation.

X: Right. What do you think they’re trying to accomplish here?

DG: To me, this is the clearest admission yet from Nuance that they cannot compete with us in the marketplace, so they want to move the competition to the courtroom. I think their intent is to damage us in the marketplace. Their press release yesterday was the first we’d heard about the lawsuit. One would think that if they had a legitimate concern about intellectual property they would have just approached us and told us. This was clearly intended to be a marketing kind of event, to harm our business.

As far as the patent itself goes, we do not make use of the patent they’ve pointed out here. In our minds, it’s a very limited patent. Further, we have some very serious doubts as to the patent’s validity to begin with. It’s our intent to very vigorously defend ourselves and fight this.

X: My reading of the patent is that it covers a way to adapt speech-recognition algorithms so that they get better over time as they collect more data from speakers. And there is definitely an adaptive element to Vlingo’s technology, isn’t that right?

DG: There is absolutely an adaptive element to our technology. But the way in which we do it is different than what’s described in the patent they cite.

X: In a public statement about the suit earlier today, you said that Vlingo’s speech recognition technology is based in part on technology you license from IBM. So are you basically saying that you’d be able to 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.

Wade Roush is the producer and host of the podcast Soonish and a contributing editor at Xconomy. Follow @soonishpodcast

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13 responses to “Vlingo’s CEO Fires Back at Nuance Over Patent Lawsuit—Says “When they Couldn’t Win Yahoo’s Business, This Was Their Reaction””

  1. Ofer says:

    Nuance and its predecessor (ScanSoft) has a long history of lawsuits which were in sync with their M&A and business strategy.

    See details at
    http://speechanalytics.blogspot.com/2008/06/nuance-vlingo-if-you-are-not-sued-you.html