How to protect yourself against the unethical business practices of a competitor like Nuance Communications?


4

I plan on working in the pattern recognition software industry. Some research into this industry led me to read about a company called “Nuance Communication.” According to this techcrunch article, “Nuance Communications is a massive company with a $6 billion market cap.”
http://techcrunch.com/2011/06/09/nuance-sues-vlingo-again-over-voice-recognition-patents/ More specifically, the article linked above describes Nuance Communication's suing of a Yahoo and AT&T backed statup company called Vlingo for IP infringement, a second time. A simple google search for “nuance communication sues ” returns a long list of IP lawsuits between Nuance Communication and smaller competitors in the pattern recognition market. So apparently, the incident above between Nuance and Vlingo isn't an isolated case.

Here are some articles about Nuance Communication's IP lawsuits that I came across in a google search:

I imagine it's not easy for a small startup company to survive in court against a plaintiff with $6 billion. I imagine that not having the necessary time and funds to go to court for an extended period of time can result in the failure of a startup.

In addition to taking many smaller companies to court, Nuance Communications has a history of acquiring their competitors. According to the wikipedia article on Nuance Communications, Nuance Communications got its name after merging with a company called ScanSoft. Prior to and after that merger, wikipedia lists no less than thirty-four competing companies that were acqiured by Nuance Communication.

http://en.wikipedia.org/wiki/Nuance_Communications#Acquisitions The following Business Week article suggests a link between Nuance's numerous lawsuits and acquisitions: "Nuance Plays Hardball in Voice Recognition "

I found two companies who were sued by Nuance Communications and who spoke out against Nuance Communication's business practices:

I think this statement made by president and CEO of Zi Corp., accurately characterizes what Nuance Communications is all about:
“This motion for contempt is without
merit. Providing this notice is
clearly a tactic employed by Nuance in
light of its failed proposal to
acquire Zi last week at a low
valuation. The timing of this motion
is highly suspicious and is an
unnecessary legal tactic by Nuance. We
are disappointed that Nuance is
resorting to these kinds of tactics to
acquire Zi without recognizing its
full value. We will vigorously defend
ourselves in this litigation
proceeding. We are examining all legal
remedies available to us with respect
to Nuance’s tactics.”
In Summary: Having done some preliminary research, it seems to me that Nuance Communications locates competitors in the pattern recognition industry, offers to buy them out at an unreasonably low evaluation and sues for IP infringement if the offer is turned down. If correct, this is a horrifying conclusion. Here are my questions:
  1. Am I understanding my research and these links
    correctly?
  2. Are these business
    practices as malicious and unethical
    as I think they are, or is this
    normal in the business world?
  3. What can a startup
    company in this industry (or any other) do to protect against
    these kinds of "hardball" tactics?

Patent Ethics Intellectual Property

asked Jun 14 '11 at 04:28
Blank
Amichai
241 points
  • It is ironic that when I clicked on your profile I got a post about TL;DR http://www.amichaioneducation.com/Tim J 8 years ago
  • what is the point of this question? You are taking what looks like an outlier and asking a generic question about a broad topic. This is not really something that can be answered, and there is no one right answer. – Tim J 8 years ago

1 Answer


5

Thank you for posting an incredible case for patent reform.

Am I understanding my research and
these links correctly?

Yes.

Are these business practices as
malicious and unethical as I think
they are, or is this normal in the
business world?

Yes, and Yes.

What can a startup company in this
industry (or any other) do to protect
against these kinds of "hardball"
tactics?

Locate and launch your business in a location which does not recognize their patents.
answered Jun 14 '11 at 05:13
Blank
Joseph Barisonzi
12,141 points

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