In the early days of UC, “softphones” (screen-based PC telephony), offered UC flexibility where traditional desktop “hardphones” were lacking.  It is still a viable alternative for wired, location-based telephony. However, mobile smartphones are making a huge dent in the consumer and business user markets for multimodal UC applications.  That is, until the larger screen size of tablets came into the picture. Now, a user has two kinds of mobile devices, one convenient for the hand and one to carry along.

A couple of years ago, I wrote a piece on the subject of mobility and what the user experience would be like if the user was standing up or sitting down.  Obviously, that experience will vary with the size of the device, the screen, and its impact on on the user interface. When worse comes to worse, and no screen can be looked at (e.g., driving a car), then speech interfaces come into  play, and that is one good reason that mobility needs multimodal UC flexibility.

So, with UC convergence, business applications need to be endpoint device independent, not only in terms of screen-based interfaces vs. speech interfaces, but also based on the size of the screens for handheld devices , portable tablets and iPads, and wired desktop PCs. The choice will be based upon who the users are and what they need to do their jobs, whether premise-based or mobile. It is becoming intuitively obvious that most business users will want to use a single, personalized smartphone when mobile for both their business and personal contacts with “dual persona” access management and services (two addresses). In addition, they can also use a desktop device on a transient basis, using the current network address of their choice.

All this represents a significant shift in old telephony networks, but not to Internet communications, which have always been “virtual.”  So, that’s what is shaking up the enterprise communications world while the migration shift slowly takes place. In the meantime, will multimodal PC “softphones” be replaced more easily by portable/mobile iPads and tablets when a bigger screen is needed for data output? How will the enterprise support such flexible mobile service with CEBP - based applications? Will the choice of mobile tablet become like the smartphones, that of the individual end users’?

Variance in device screen sizes brings with it the problems of standards, impact on Operating Systems, as well as the user applications themselves. The success of Communications Enabled Business Processes (CEBP) will be very dependent on resolving these issues, because outbound notifications and information delivery to individual end users will be based on greater (process-to-person) accessibility through user mobility.

Tags: Mobile UC by Art Rosenberg
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While many eyes were on unified communications and collaboration this month, and speech technologies are certainly part of that, speech held its own for announcements in November too. Just taking a look at Nuance alone, there were quite a few. This didn’t even include the tasty, but so far false rumor that Apple was acquiring Nuance. This came about when Steve Wozniak, Apple’s co-founder, misspoke at an event, mentioning that Apple had acquired Nuance. It created quite a stir and a bump in Nuance’s stock price.

Despite the “rumor”, Nuance was quite busy in November, boasting several announcements across the company’s product lines. Nuance added another mobile device to the customer list by announcing that Nuance’s natural language voice technology is behind the new Genius Button and Hands-Free mode innovations on T-Mobiles’ myTouch 4G phone, which will allow consumers to speak, receive and send text messages completely by voice, by pressing a button and saying “Turn Hands-Free Mode on,”. This turns on Bluetooth capabilities, providing complete hands free use. While this wasn’t a big announcement, I’m all for it.

Nuance’s Healthcare division announced an outsourced transcription service - Nuance Transcription Services, which expands their clinical transcription services portfolio. This draws upon resources they received through the company’s acquisition of Outsourcing Solutions, Inc. and Encompass Medical Transcription Inc. They also introduced PowerScribe 360, which is an advanced radiology reporting and communications platform that combines the best capabilities of PowerScribe and RadWare into a unified solution. Nuance claims that 1/3 of all radiologists in the country now use PowerScribe. Also in the radiology area, Nuance announced collaboration with a privately held company - Montage Healthcare Solutions, that does search and analytics on radiology reports, to improve the ability to search radiology reports. Hmmm. Any time I see privately-held company and Nuance in the same paragraph I smell mergers and acquisitions, but I digress.

Nuance had several mobile applications announcements too. These included saying that Nuance technology is behind the voice-to-text on the new Ask for iPhone application from Ask.com, and that Nuance Dragonmobile technology is behind the new price check for Amazon application for the IPhone as well.

Another announcement that I really liked, although it was also not earth shattering, was Nuance’s announcement that they will be working with WGBH’s National Center for Accessible Media, to improve the quality of close captioned media. A US Department of Education-funded project, this effort seeks to improve the close-captioning of real-time news programming for the hearing impaired. Nuances’ contribution will be using the company’s Dragon NaturallySpeaking technology as the basis for developing customized language processing, data analysis, and benchmarking tools for the project. As a long time proponent for using speech technologies to improve accessibility, I’m all for this one too.

Although not a formal announcement, last week I also spoke with Nuance on how the company is extending Nuance on Demand to include extensions for CTI and ACD, essentially giving Nuance the capabilities of hosting entire contact centers rather than just self-service. This solution includes speech self-service, intelligent routing, screen pops, and fully-featured ACD capabilities. Nuance has paid particular attention to extending their goal of improving the caller experience by providing capabilities such as having the self-service “agent” continue interacting with the caller while the caller is in queue, and populating the agent screen with call context when the caller requests to be transferred to an agent.

Nuance has seen 98% growth in its hosted on-demand customer service applications in the past year, with about half of new customers moving over to Nuance from other hosted service providers. Nuance’s hosted offering is now processing over 2 billion minutes annually, with just self service alone. So it doesn’t surprise me at all that Nuance is now making the foray into hosting the entire contact center. It makes sense from the standpoint that they have had pretty significant success in hosting, and the fact that growth in virtual contact centers in general is growing exponentially across the industry.

This is a good thing for existing Nuance customers who choose to move the contact center to Nuance because they will get better end-to-end analytics capabilities if they choose to do so. It is also a good solution for adding on remote offices or remote agents, and lends itself well to a hybrid approach as well, as Nuance can overlay a CTI adapter onto a Nortel or Avaya contact center and get the intelligence they need to route calls to a Nuance contact center agent or one of the others, for example. It will be interesting to see how competing vendors react to this, however.

We are at a cherry picking time in the contact center industry right now. It is a decade past when we churned a lot of the installed base because of the millennium change, there is a huge installed base of systems out there that are getting to end of life, and hosted solutions are now a common choice. Not to mention the churn that is being caused by consolidation, such as we have seen with Avaya and Nortel. So, all companies that have moved into the virtual contact center space, including Nuance, are in a good spot to capitalize on the chance to win contact centers over to their offerings. One caveat, Nuance isn’t going into the “hosted contact center” wherein they provide agents, just agent management applications.

As an additional proof point of the move to the cloud, Five9, an on-demand contact center software provider, also announced the availability of a speech self-service offering in the cloud in November too. Within Release 8 of their Virtual Contact Center product line, Five9 customers can now add IVR as an integrated or standalone product.

Finally, I had originally set out to do one November roundup of speech announcements, but Nuance has just been too busy this month to bury them in a bigger blog. I’ll blog about the others shortly.

Tags: Collaboration, Contact Center, Mobile UC, Mobility, Speech Technologies by Nancy Jamison
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Since Unified Communications applications and technology include mobility, it’s important to keep abreast of trends that can impact your current or future use of mobile UC applications.   I attended  Mobile Enterprise Magazine’s Executive Summit earlier this month (see www.mobileenterprisemag.com).   During the conference, several important trends were discussed.  Each of the trends highlighted in this posting pose significant management challenges:

1.       In the world of 4G, devices will have short shelf-lives, as short as 6 months.  For companies which can take much longer to test new, develop/customize and deploy mobile devices and applications, this is extremely unwelcome news.  If a new device has a considerably shorter shelf life than your processes are able to support, how will this impact your company’s device, applications deployment and customer support plans?  What will you allow/disallow as far as integration into UC applications, and how will you decide?  What could rapid device turnover do to your budget?  For mission-critical applications, will you seek out solutions that bundle the price of equipment into the service contract?  Will your company seek to reduce possible risk by using cloud-based services, or managed services that bundle the mobile device into the service contract?   Will you implement mobility device management solutions to better track your company’s mobile assets? 

2.       One of the big concerns facing customers is the 4G pricing model.  Carriers like Verizon Wireless have made it plain they expect 4G will provide more revenue (ARPU) than 3G did.  It’s just not yet clear how additional revenue will be extracted from customers.  Thus it’s not too soon to consider how you’ll ensure that the applications your company relies upon make the best use of mobile networks as possible – that they aren’t overly chatty or are bandwidth hogs.  How could this more expensive reality affect your planned use of key UC features like Presence (which is constantly updated) or applications that rely on Location (something else that can require many updates)?  What does this imply for your choice of devices or O/S?  RIM was designed to use bandwidth sparingly, while by comparison, the iPhone can be a bandwidth bandit, and the Android can be an absolute hog (remember, it’s a cloud-based O/S). 

3.       For general business applications, some prognosticators think IL devices will supplant CL devices.  In fact, in many businesses today, there are more employees who expense all or apportion of their mobile services fees (IL) than there are employees who use direct-company contracted and paid mobile devices and services (CL).  IL devices are simpler to administer than CL devices.  IL devices are a financial expense, CL devices are a corporate asset. I think one of the biggest drivers toward IL is employee device choice- in theory, an employee could use any smartphone.  But I think in reality this could be quite limited – because as discussed below, the hard facts (and associated expense) of application and device support do not go away in an IL world.  Regardless, special-purposes devices will remain CL devices for the forseeable future.   But for companies to successfully standardize on an IL framework, they’ll need to consider the following:

a.       Policy.  These issues don’t go away by moving to IL.  If employees use smartphones, major policies must still be decided, because IL devices become, in effect, corporate assets.  For instance, what applications and data are various types of employees privy to?  How much will each class of employee be reimbursed?

b.      Distribution.  In this world, should your company allow any and all smartphones?  I think a number of companies will limit choice even in an IL world – to specific devices and/or O/Ss that can support company policies, or that internal processes and personnel are trained to support (or alternatively, that are supported by external specialists).    See my next point.

c.       Application performance.  As discussed briefly in the 4G pricing section, not all device operating systems are optimally suited to day’s wireless world.  That’s likely to continue into the future-especially since many 4G users will be using both 4G and 3G services for the next several years.  We already know that different devices that use the same application can deliver a different user experience.  As discussed, they consume bandwidth in different ways, and at different rates.  Even if your company doesnot reimburse an employee for data services, how will you answer employee questions, and educate employees about these issues?

d.      Enforcement.  How will security policies be enforced, how will data be destroyed in the event the device is lost or stolen, or the employee leaves the company?

In short, given the likely evolution of services and devices in the U.S., I understand why some people conclude that a consumer-like (IL) model will dominate the business environment.  In theory, it removes the expense of the short device shelf-life from a company’s shoulders, and it can allow for greater freedom of device choice.  But many significant tradeoffs and management challenges remain, so I’m not convinced that our industry has yet identified an optimal solution. The good news is that there is time for better alternatives to come along.

Tags: Mobile UC, Unified Communications by Lisa Pierce
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While enterprises and service providers have been moving quickly to support their end users and customers with the latest and greatest UC technologies, supporting multimodal mobile devices (smart-phones) will be one of their biggest challenges. Why? Because they will be constantly evolving as devices and with their mobile OSs, must be mobile application-independent, and be highly personalized in a variety of ways.

Since mobile products and technologies are still evolving and everyone is still learning to deal with “multimodal mobility” vs. traditional desktop communications and traditional cell phones, there will be ongoing competition for different devices and associated services.

Wirefly Mobile Backup Will Help End Users Keep Up With Smartphone Evolution

Because one of the big problems with mobile devices is that they can be easily lost or stolen, end users will always need a way to easily replace what they already have. Coupled with the possibility that they may simply want to move to a new device or service, the first free, automatic,  cloud-based mobile data backup service available to consumers from developer Spare Backup and Wirefly fills both bills.

Tags: Mobile UC, Mobility, Unified Communications by Art Rosenberg
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By now you must have read some of the very positive analyst comments on Interactive Intelligence’s (ININ) Partner and Analyst conference in San Antonio, TX on October 11-13th.  What was most impressive to attendees is how well-structured ININ’s contact center software applications were to cover both traditional call center and future UC business application needs. What caught my attention, however, was the successful push that ININ was making in the hosted services market, they refer to as CaaS or Communications as a Service.

The idea is now new, but ININ has taken the lead in making CaaS offerings more flexible in order to overcome the concerns of organizations that don’t know enough (yet) about whether they want to end up with a hosted service or take full responsibility for support with their internal IT staff. Given that customer interactions applications are moving into the new UC domain of “multimodal communications,” there is little experience available to make such a decision yet. So, the obvious approach is to “try before buy” with minimum cost and maximum flexibility. What ININ has cleverly come up with is the option to start with a hosted service but switch to other support alternatives based on actual experience with the specific UC applications involved.

Not surprisingly, ININ reports tremendous interest in their CaaS offering for contact center applications, particularly since they have gone out of their way to allow business organizations to retain local control over their telephony communications activities (CaaS with Local Control).

In terms of other contact center UC application functions, those are still evolving slowly but steadily, but will benefit from ININ’s “”all in one” platform philosophy for cost efficient integrations. Their approach is being enthusiastically supported by their business partners who are focused on helping customize different organizational needs for both inbound and outbound multimodal customer UC interactions.  I am waiting to see them support the needs of consumers who will be using mobile smartphones!

Tags: Mobile UC, Mobility, Unified Communications by Art Rosenberg
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Because UC also encompasses human contacts with automated applications, the human user, regardless of how contact was initiated, with one major exception, must dictate the mode of interaction. While great progress has been made in speech recognition as a means of data input and user interface control, it has not made completely full voice conversation practical as a user interface for self-service applications. As recognized in a new book, “Advances In Speech Recognition: Mobile Environment, Call Centers and Clinics,” speech is efficient for user input, but not practical for large amounts of content output which can most efficiently be reviewed on a screen as text or graphics. That is why I see traditional telephone self service applications (IVR) being replaced with what I call “Interactive Multimodal Response” (IMR) applications on all forms of multimodal mobile endpoint devices (smart-phones, iPads, tablets, etc.)

One of the key roles that mobility and UC flexibility can play is in supporting automated business processes that can initiate contacts with individual end users for time-sensitive notifications. However, I see such applications doing more than sending notification information to a user. Instead, the applications will be able to initiate an interactive multimodal exchange with the recipient, but with the choice of input and output media resting with the human recipient.

Communications Enabled Business Processes (CEBP) is going to heavily exploit such “multimodal notifications” because they can proactively initiate a self-service interaction without waiting for the recipient to take the initiative. Until now, telephony-based IVR was seen as the best way to handle self-services from consumers who, until lately, were not expected to have access to a real-time communication device other than a phone. With UC and mobile, multimodal devices, the future and value of business self-services will expand significantly from legacy online desktops and telephone IVR applications

Tags: Mobile UC, Mobility, Unified Communications, Unified Communications Information, Unified Communications Information by Art Rosenberg
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Companies recognize that the capabilities and availability of underlying network infrastructure are essential ingredients to sucessfully deploying and using Unified Communications transparently across multiple types of users and locations.  Thus the ongoing Net Neutrality debate merits close scrutiny.  Yesterday, Verizon and Google announced a nine-point proposal on Net Neutrality (see  http://www.scribd.com/doc/35599242/Verizon-Google-Legislative-Framework-Proposal ).  I recently provided a high-level analysis of the FCC’s Net Neutrality NPRM (see http://www.ucstrategies.com/detail.aspx?id=5345&terms=Lisa+Pierce)

On a 0-1.0 probability scale in which 1.0 is “certainty” and 0 is “won’t happen even if Hades froze over”, here is my assessment on the probability that the FCC will ultimately agree with each of the points in the Verizon-Google proposal: 

1.      First three points- Transparency, Consumer Protection and Non-discrimination on broadband Internet elements:  Probability of FCC agreement: 1.0

2.      Network management: First the FCC must wrap its head around the reality that just adding more bandwidth to the Internet won’t make it more reliable, usable, etc.  Once the FCC concurs that proactive network management is essential to maintaining a reliable, relatively secure, functioning internet, then the probability of FCC agreement: .8

3.      Additional online services—These already exist-they are supported via MPLS and Ethernet services, and can interface to Broadband Access. But by definition, these are not public internet services, and so aren’t part of the FCC’s net neutrality NPRM.   Also, some providers have implemented QoS functionality on their public Internet networks.  The underlying rub seems to be that FCC assumes that broadband internet customers will *only* be able to access content via the public internet.  Despite the fact that this is not the case today and won’t be the case tomorrow, the probability of FCC agreement: .6

4.      Wireless broadband:  Of the nine points, this is by far the most important.  Verizon and Google.  They want to exempt wireless data from all other principles here except the Transparency Principle (above).  Many customers use mobile devices as their primary method of interacting with Internet-based content.  Some rely on mobility exclusively, and this trend is expected to grow with time.  It’s likely a wireline-only FCC ruling on Net Neutrality would face numerous challenges in the courts and in Congress.  True, there have been and will be substantial investments in wireless broadband access (e.g., 3G investments, current and future 4G/LTE investments).  But very suubstantial investments have also been made and will continue to be made in landline Broadband access.  If accepted, the proposal might lead to a world where new multimodal applications appear first on LTE, and sometime later (if at all) on landline.  Such an outcome would not make the FCC happy-because the Commission would see this as a creating new kind of information divide.  Thus, as envisioned by Verizon and Google, probability of FCC agreement: .1

5.      Case by case enforcement:  As described by Verizon and Google, the FCC would be enforcing policy in areas where it does not have rulemaking authority.  That’s a huge can of worms – one that will make for endless litigation and Congressional oversight.  Probability of FCC agreement: .1

6.      Regulatory authority: stipulated over Internet Access, not applications or content.  Those who want more federal oversight of problematic Internet content will point out that this stance is inconsistent with other types of FCC authority (such as over radio and broadcast TV) and so even if all the FCC Commissioners agreed, it could face numerous court challenges.  Probability of FCC agreement: .3

7.        Broadband Access for Americans:  Proposes using Universal Services Funds to spur broadband deployment in underserved areas and by low income populations, and continues to treat Internet services as Interstate.  The FCC is in favor of all of this, so probability of FCC agreement: .9.  But let’s point out that (1) From a regulatory perspective, the internet is currently treated as an interstate service, (2) billions of dollars have already been allocated to deploy Broadband to under-served markets.  Since this has recently begun, we don’t know how much these funds will solve the availability problem and make it un-necessary to redirect additional resources, and (3) the Verizon-Google proposal isn’t clear if any of the USF would directly or indirectly subsidize wireless broadband access, a technology that Verizon and Google clearly want very much to remain unregulated.  

The Bottom Line:  Although it has attracted a lot of attention and debate, this proposal will have very little if any substantive impact.  At best, the FCC will extend an olive branch to Verizon and Google on those points where all parties share similar perspectives.  But it is precisely the controversial topics, like the wireless exclusion proposal, that regulators believe are essential to resolve in order to achieve their stated objectives.   Undoubtedly the Net Neutrality debate will generate more fireworks, but don’t be surprised if this topic takes a hiatus at least until after Election Day.  

Tags: Mobility, Unified Communications Information by Lisa Pierce
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Last week in Las Vegas I got to follow up on Cisco’s contact center analyst day by attending Ciscolive, which is Cisco’s big customer event, co-located with C-Scape, Cisco’s main analyst event. Ciscolive was huge! In the main keynote there were 12,500 customers, a lot of analysts, and 23K total attendees if you include those participating virtually. As usual, John Chambers was completely engaging speaking on the vision that Cisco has with snippets such as, “Economies of the future won’t be information economies, but network economies”, and “Every mistake I’ve made as a leader is in being too slow or in having speed without process and being replicable.”

Ciscolive also had what Cisco called, ‘The World of Solutions Expo’, which was essentially a trade show of Cisco and Cisco partners. In the collaboration area we got to see and hear much more about UC and collaboration products, such as Cisco Pulse, and I was happy to hear that Cisco has come a long way in getting the answers to some of the questions I had last November when they announced those products.

The best part of the keynote was the Cius demonstration; Cisco’s new tablet phone. Aimed at a business user, rather than consumer, like Apple’s iPad, this UC tool, is nice. This telephone/tablet combination acts as a portable communications and collaboration platform, working as a phone with a screen that works with Cisco applications such as Telepresence or WebEx, and with Cisco’s Unified Communications manager, or as a tablet. When the tablet is docked it provides the screen, and the base has USB ports, a wired Ethernet connection, and, of course, a telephone handset and speakerphone.

When used as a tablet, Cius has an HD 720p camera that faces the user, and a 5 megapixel camera mounted on the back, so that a user can pop the tablet off of the base, and use it for two way video calls, or video calls in which the user can see the other party and show them whatever the back camera is pointed at.

The Cius tablet weighs 1.14 pounds, runs on the Android operating system, and supports 802.11 a/b/g/n Wi-Fi and 3G. Later releases will include 4G mobile networking. Cius is blue-tooth enabled, and supports connection of other headsets through a micro-USB port. Cisco said that when the product is released in early 2011 that it will come with a set of applications and a Firefox browser, but also stated that Android developers can write applications to the device using Cisco’s own SDK and APIs. Cisco also claims that the tablet has an 8 hour battery life.

If a unified communications “phone” could be fun, this would be it. It has a nice design, supports a lot of functionality, and appears very easy to use. For Cisco, the Cius is also a very attractive add-on to their shameless drive to put video everywhere, not only because of the video capabilities of the phone, but also because of support for Cisco’s myriad video-enabled UC applications.  There is no hidden agenda here; just video everywhere all the time, and this makes video appealingly mobile.

 Lastly, although the Cius is positioned as a business device, with Cisco’s statements towards bringing the network to everyone, it’s not out of the question that further positioning towards the consumer market might happen not far down the road.

Tags: Mobile UC, Unified Communications by Nancy Jamison
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A new report from mobility expert, Tomi Ahonen,  shows that SMS has already become the most widely used text messaging application by all users in the world (53%), and even more by mobile users (78%). This reflects a shift from “real-time” voice calls that may run into “unavailability” problems and go to “voicemail jail”, to more practical “near real-time,” immediate message notification and delivery that another study reports will usually be responded to within five minutes.

A 2009 study by Lightspeed Research in the UK showed that 11% of mobile users didn’t initiate any voice calls at all,  while in the U.S., the percentage was even higher, 13%.

I am sure you are all familiar with seeing a user with a ringing cell phone often just looking to see who it is from then simply letting it go to a messaging function. Lately, voicemail-to-text services have taken care of caller voice messages by transcribing them automatically to text messages. So, whether the contact initiator chooses to use voice or not, the contact recipient can still deal with voice messages more efficiently than with voice mail interfaces.

From a UC perspective, where I include “process-to-person” contacts in addition to “person-to-person” contacts, text messaging and SMS are an obvious choice for personalized, pro-active, automated, time-sensitive notifications from a business process application, commonly referred to as Communications Enabled Business Processes (CEBP), because business applications don’t really want to generate voice messages instead of their usual text message output.  (If the recipient requires a speech interface because they are driving a car, we can let them selectively exploit “unified messaging’  options based on their presence status.

With the rapid growth of screen-based, multi-modal smart-phones, the flexibility of input and output can be extended to end users independently of whether they are contact initiators or recipients/respondents for SMS. In addition, however, with the power of UC and presence, SMS exchanges can be easily escalated to real-time Instant Messaging and/or “click-to call” voice connections when appropriate.  This makes conversational voice calls more manageable from both a caller’s and callee’s perspective, and reduces the unnecessary problems generated by “blind” call attempts and voicemail’s retrieval limitations.

Needless to say, SMS itself doesn’t satisfy all the informational needs of users involved in a business process, but provides an efficient,  timely, mobile contact interaction to people wherever they are, along with links to the real information required for the business process, e.g., email. However, SMS is used 2.6 times more than email by mobile users. The key to efficient information exchange is to make timely and efficient contact first, not have conversations or deliver documents. Clearly, UC will be successful with its different forms of communication applications,  if it can exploit mobility for accessing individual recipients as quickly and flexibly as possible.

Tags: Mobile UC, Unified Communications, Unified Communications Information by Art Rosenberg
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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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