By Charles Duhigg and Steve Lohr, The New York Times
announced last year that all iPhones would come with a voice-activated
assistant named Siri, capable of answering spoken questions, Michael
Phillips’s heart sank.
For three decades, Mr. Phillips had focused on writing software to allow
computers to understand human speech. In 2006, he had co-founded a
voice recognition company, and eventually executives at Apple, Google
and elsewhere proposed partnerships. Mr. Phillips’s technology was even
integrated into Siri itself before the digital assistant was absorbed
into the iPhone.
But in 2008, Mr. Phillips’s company, Vlingo, had been contacted by a
much larger voice recognition firm called Nuance. “I have patents that
can prevent you from practicing in this market,” Nuance’s chief
executive, Paul Ricci, told Mr. Phillips, according to executives
involved in that conversation.
When the first lawsuit went to trial last year, Mr. Phillips won. In the
companies’ only courtroom face-off, a jury ruled that Mr. Phillips had
not infringed on a broad voice recognition patent owned by Mr. Ricci’s
But it was too late. The suit had cost $3 million, and the financial damage was done. In December, Mr. Phillips agreed to sell his company to Mr. Ricci. “We were on the brink of changing the world before we got stuck in this legal muck,” Mr. Phillips said.
Mr. Phillips and Vlingo are among the thousands of executives and
companies caught in a software patent system that federal judges,
economists, policy makers and technology executives say is so flawed
that it often stymies innovation.
Law school faculty at the University of California, Berkeley, have proposed a “Defensive Patent License”
in which companies would contribute patents to a common pool that
shielded participants from litigious aggressors. Companies would be
allowed to participate as long as they did not become first-strike
plaintiffs. The benefit is that “you don’t have to worry about your
patent being weaponized” and used to attack competitors, said Jason M.
Schultz, an assistant professor who helped design the license.