My last blog touched upon legal issues in UC and speech technologies by addressing patent trolls and what can be done about them. Here is another little legal nugget, rising up within UC which merits some attention as well, and that is, what to do about compliance issues, privacy and all those other things, that sometimes fall by the wayside when employees use social media applications.

It is pretty evident that companies are jumping on the bandwagon of social media, and investigating, planning, developing or deploying social media within their unified communications and contact center applications. Voxeo, Avaya, Siemens, Cisco, Genesys….. The list is getting longer and longer. The issue is that if we thought we had problems with just pure instant messaging working its way into corporate life unattended, well, well, well, think about Twitter, Facebook, LinkedIn, or any other of the dozens of applications popping up.

Below are excerpts of a press release from Autonomy this week that tackles this issue head on, so I wanted to post it here since the announcement is one of only a few that seems to deal with the legal aspects of incorporating social media into the enterprise, rather than just the fun and business use side. Autonomy announced the availability of Autonomy Social Media Governance, what Autonomy claims is the industry’s first solution designed to monitor, govern, and protect organizations across social media channels. Social Media Governance enables businesses to maintain compliance with new regulatory requirements for employees engaging on social media sites.

The May 26^th press release said:

“Rapid adoption of social media by employees, customers, advertisers, bloggers, and news organizations presents unique challenges to many organizations. Regulators recognize the influence and risks associated with these channels, and are starting to require organizations to actively monitor and govern employees’ social media interactions. For instance, FINRA (The Financial Industry Regulatory Authority) recently issued FINRA Regulatory Notice 10-06, which requires member firms to supervise and archive content posted to social media for business purposes. The Food and Drug Administration (FDA), Federal Trade Commission (FTC), and the National Futures Association (NFA) are also developing rules associated with the use of social media.

New regulatory requirements around social media add to the already burdensome task of adhering to current law for organizations - which requires that corporations archive, set policy, and make discoverable many forms of electronic information, including email, audio, and video.”

“Social media represents an extremely important new channel for businesses to develop engaging and profitable relationships with their customers. However, it is not without its risks, and for a business to leverage social media legally and profitably, corporations need to establish a comprehensive strategy to govern social media interaction.

For instance, a business could face regulatory issues if a bank employee marketed or misrepresented the value of a potential investment on social networks. Likewise, if an employee defamed another fellow employee, or a client, on a social site, this could raise legal issues for the company. Also, a pharmaceutical company could run into litigation issues if an employee denigrated a product on a social site that the company is actively promoting with advertising on traditional channels.”

Those are some good examples of the risks. What Autonomy provides is a platform that does what they call ‘meaning based computing’ which is recognizing patterns and relationships in unstructured information. They combine this with the company’s archiving, policy management, supervision, and analytics technologies. The result is that Autonomy Social Media Governance automatically identifies content and conversations on social networks, and allows a corporation to tie the information directly into a company’s existing compliance infrastructure.  All of this can be stored in Autonomy Digital Safe; a hosted archive service that enables corporations to outsource the storage and management of email messages, rich-media files, audio and video files, instant messages, and web content. According to the press release, the Social Media Governance product includes:

• Connectors and aggregation of thousands of relevant news feeds, blogs, and social media sites. Autonomy Social Media Governance can monitor social media content from employees logged in through company networks, as well as identify discussion from users operating outside company networks.
• Conceptual search of all aggregated content
• Policy-based monitoring
• Compliant archiving for regulated content
• Advanced analytics such as clustering and visualization tools
• Escalation and workflow management
• Reporting and trend analysis
• Executive dashboards

This is a great start to a knotty and growing issue that isn’t as fun to talk about as the benefits of incorporating social media into the contact center and UC.

Tags: Unified Communications, Unified Communications Information by Nancy Jamison
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At this week’s event for industry analysts, AT&T emphasized that after a prolonged absence, innovation is back (and I’d add, hopefully here to stay). But this isn’t the mode of innovation that propelled AT&T into the business voice and data services leadership position between 1985-1995. it’s clearly a (1) more focused, (2) significantly more modest, and (3) less proprietary model. The first two are fairly self-explanatory—the spinoffs of Lucent Technologies and Avaya from AT&T tore Bell Labs asunder, and its level of commitment to basic R&D plummeted. But in addition to engineers who are focused on specific platform or product-related projects, there are about 200 engineers who follow in the Labs’ tradition of working on long term basic research. I’ll get back to the third point in a bit.

 But what does this mean for UC? Actually, a lot of things. Over the next few months, there will be some product announcements in Fixed Mobile Convergence and Telepresence that I’ll analyze as AT&T introduces them. What I want to talk about now is the company’s UC as a service (UCaaS) platform. Core UCaaS functions include desktop and mobile clients, presence, UM, IM, conferencing, telephony and FMC.

AT&T’s UCaaS platform can support a number of managed and hosted IPT/UC applications. Current incarnations include managed IP PBX services (Cisco and Avaya), and managed or hosted Microsoft OCS. Beginning this summer, AT&T will trial a service designed to support enterprise requirements for hybrid connectivity. For instance, many companies still have legacy PBXs but would like to begin using UC services and features now. UCaaS is designed to help these customers—this is especially important for companies with Nortel assets. Other customers want to make sure their Cisco/Avaya and OCS products ‘play well’ together.  Or, some companies need to extend the benefits of UC to smaller sites, or to mobile users, and to have their experience seamlessly interwork with other UC vendor products. UCaaS is designed for these types of hybrid applications. AT&T’s recent Royal Dutch Shell announcement is a case in point-hosted OCS R2 coupled with Cisco and Nortel IPT, and HP Halo and Tandberg videoconferencing products. Not surprisingly, UCaaS (under the AT&T DNA banner) is also available as a stand-alone service—to use UC, companies need not have sunk considerable resources into any of the UC vendors named. In the future, UCaaS will be able to be used on a federated basis—between AT&T customers, and over time, we could see UCaaS elements in third party platforms.

People who are familiar with the UC landscape will point out that AT&T is not the first company whose UC platform can claim the type of functionality I just described. True enough. But AT&T has a huge installed local and LD voice base, and so UCaaS is of significance to all of them, and to anyone else who might be interested in using their services going forward. Over time, the potential margin upside for AT&T is tens of billions of dollars.

Returning to my point of ‘not invented here’, a condition AT&T and its offspring suffered from for decades. The void in internal innovation forced AT&T to look outside. For instance, UCaaS is the brainchild of Interwise, the same company whose web/IP voice conferencing system is the foundation of AT&T Connect (AT&T acquired Interwise in 2008).  And AT&T has plans for UCaaS-to expose its APIs to customers and third party developers—this is one of the great lessons AT&T learned from its 3G experience.

Directionally, everything I’ve discussed is good news. Robust competition is always good for customers. Here are a few things that temper my immediate enthusiasm:

Limited vendor set. From a productized offer perspective, UCaaS’ focus is on several specific UC vendors Avaya, Cisco, Microsoft), not all UC vendors. The pool of prospective legacy vendors is larger (UCaaS and SIP trunking service running into a managed premises gateway), but not all legacy vendor products—it all depends on what the gateway will support (apart from AT&T’s stated focus on supporting Nortel PBXs still covered by maintenance contracts).

Long trial. AT&T plans for the UCaaS platform to be in trial for a year, with GA 2Q 2011. Given the size of the Royal Dutch Shell agreement (150,000 stations), that is not a complete surprise, but it does mean that any company who can’t get on the trial list and who wants to implement this solution soon should look elsewhere. One hundred companies have made inquiries about participating in the trial.

MNC focus. Although UCaaS can be used by customers of any size, initial target customers are large multinationals. I expect this focus will linger at least through mid-2012. Companies who are interested in using UC services within the next two years (or UC hybrid models) and who don’t meet AT&T’s initial target market criteria also should look elsewhere.

Tags: Unified Communications Information by Lisa Pierce
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At the recent Mobile Voice Conference in San Francisco at the end of April there were some delightful departures from the focus on speech technologies and mobility — although there is nothing wrong with speech and mobility. In fact, Mobile Voice was a name change away from the original name of the conference, Voice Search, due to the incredible growth in the use of speech technologies in mobile applications over the last five years or so. And that, of course, has everything to do with unified communications.

The departures from the expected presentations included a very interesting panel on patent law, which included Marie Meteer, of MM Consulting, speaking on “Speech Technology Consortium - Building the Prior Art Library to Enable Better Patent Application Examinations”, Jason Peltz, an attorney with Bartlit, Beck Herman Palencher & Scott LLP, speaking on “Patent strategy: considerations in filing a patent infringement suit and in defending such a suit”, Mark Powell, the Director of the Technology Center 2600 of the US Patent and Trademark Office, speaking on “United States Patent & Trademark Office - How You Can Work With Us”, and Ria Farrell Schalnat, a patent attorney with Frost Brown Todd, speaking on “Speech Technology Consortium - Using Re-examinations Proactively to Clear the Threat of Patent Trolls”.

It was a very educational and interesting session given that the topic involved the legal in and outs of intellectual property, not technology introductions, product information, or applications. Still it was a fascinating panel and one that struck a cord with me. Why? Because there is evil lurking out there in the form of patent trolls, which is threatening to stifle creativity and stall the speech technology industry, and related industries, one of which again is unified communications.

So just what is a patent troll? In a nutshell, it is a non-practicing individual or group/entity that buys up patents from willing sellers or struggling companies, that then turns around uses to sue related companies for patent infringement. In other words, this is someone who has not practiced their patent, and is not contributing or innovating in the industry in any way. Instead, they accrue patents as an arsenal (with multiple claims in each patent), bundle them up, and then take companies to court. We saw this happen starting more than a decade ago, with Michael Katz taking on the voice processing industry (at the time, voice messaging and IVR), and now, extremely aggressively, with Phoenix Solutions, who have sued big companies such as Sony, PG&E, and Wells Fargo, for their use of speech technologies.

To set the stage, Jason Peltz explained that there are 200K patents that are issued annually, with 2700 patent suits filed annually. Currently, there are 4000 patent cases pending. The average case takes two years, with an average cost of between $4.5 to $5M to defend, with an average jury award of $6.5M. Something that was equally interesting is that 30-40% of patent cases are overturned on appeal, which is dramatically higher than any other form of litigation. Also, in the case of patent law, the higher courts at the federal level do not have to defer to the trial court’s interpretation of the claims in the subject patent, so if a company successfully defends their patent, and the “troll” decides to appeal, they may get a second bite at the apple, with all the associated costs escalating. Many small companies just fold, as it’s often less costly to pay license fees than legal fees. But it is not just small companies that fold. In a recent case filed in 2002 (US patent 5,799,273) Allvoice Computing, PLC vs. Nuance, Nuance won their first case, and then ended up settling rather than going through it again on a federal level. Why does this matter? Because even though Nuance won, when they settled in July of 2007 rather than pay, it gave the patent troll a big stick to use against smaller companies by being able to say that Nuance paid rather than fight — we can beat you too.

The panel discussed what could potentially be done about this, and Ria Farrell Schalnat talked about using re-examination as an alternative or supplement to litigation. Depending on the type of re-exam conducted, costs may initially be anywhere between $5,000 - $50,000+. It all depends on the complexity of the patent as well as whether the initial decision is appealed. Although these fees are a fraction of litigation, they may still be too cost prohibitive for one company to take on by themselves. The potential solution would be to band together to fight the trolls as a group - hence the birth of the idea of a Speech Technology Consortium (STC), which would pool money and intellectual property resources to defend and win against the trolls. There would be a membership fee for participating companies, but no charge for the cost of accepted re-exam requests. A key component of this effort would be to uncover, gather up, and create a database of prior art to be used as evidence in the re-exams.

Ria cited statistics showing a 73% patent “kill rate”, through August 2008, which is a complete elimination of all claims targeted by a requestor, which represents a rate much higher than litigation at 33%.

I just love the whole concept of a group effort to defeat something which only hurts the industry. Needlessly spending money to defend or settle “claims” only drains the coffers of companies trying to honestly innovate, and has the effect of inhibiting new companies from emerging because it jacks up the cost of entry to the market. I believe that as the STC is developed, that companies in the unified communications space should definitely jump on board and help out as the technologies used in UC, and the features and functions in these claims are interwoven, leaving UC companies at risk of attack too.

Tags: Mobile UC, Unified Communications by Nancy Jamison
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