Nuance Acknowledged Vianix Actions

In the 10-Q filing by Nuance on June 30, 2009 Nuance acknowledged the pending lawsuit by Vianix - on Page 24 you can find the following:

Vianix LLC has filed three legal actions against us, consisting of two breach of contract actions and a copyright infringement claim. It is too early for us to reach a conclusion as to the ultimate outcome or proposed settlement of these actions or to estimate the potential loss that could result from a settlement or adverse judgment against us in these matters. However, we believe that we have substantial defenses against these claims, and intend to defend them vigorously.

We do not believe that the final outcome of the above litigation matters will have a material adverse effect on our financial position and results of operations. However, even if our defense is successful, the litigation could require significant management time and will be costly. Should we not prevail, our operating results, financial position and cash flows could be adversely impacted.

Needless to say the the usual rhetoric "suit without merit", "we will prevail" etc. But you have to question why a company would take on sue a large corporation and invite a host of legal costs and aggravation if they did not have a case. In one of the suits Vianix claims Royalties of $20 - 30 Million in unpaid licenses. While that number may be a small drop in the ocean to Nuance the impact of a loss and the potential for an injunction preventing he use of the technology in the interim could be quote devastating.

In addition to this there is an Antitrust investigation, recently confirmed to be focusing on the potential monopoly following the acquisition of the Philips Speech Engine by Nuance. This represents some significant challenges to the organization which are frequently covered in ASR News from Walt Tetschner

Watch this space!

Motley Fools - 3 Reasons to Sell Nuance

The Motely Fool discussion board weigh in on reasons to sell Nuance stock if you own it.

No Profits, Costly Acquisitions and lack of focus.....

$0.01-to-$0.02-per-share loss......trading future opportunity with dilution to its current shareholders.....its numerous acquisitions has also eaten into margins.....to reduce 2009 earnings by $0.05 to $0.06 per share.....spread over too many highly competitive markets..

And there remains the pending litigation with Vianix that is embedded in the iChart application that according to their numbers has more than 4,000 Hospitals and more than 250,000 individual users. With the passage of time and no news on resolution it is likely that the license contract will be canceled by Vianix leaving their product unusable. This feels similar to recent problems by Blackberyy RIM and Vonage who fell foul when they used technology without paying for it.

Nuance in Hot Water over Unpaid Licenses

Ironic for a company that spends an inordinate amount of time and energy hassling legitimate users of their software with phone home licensing tools that they seem unable to pay license fees themselves........

SpeechTech Magazine is reporting a $30 Million lawsuit against Nuance here

The Vianix MASC codec is embedded in many of Nuance's products including:

...Enterprise Express, Enterprise Workstation, EXSpeech, iChart, iChart Managed Services, Powerscribe, and Powerscribe Workstation SDK...

That's a big chunk of business. The original suit was filed on June 2, 2008
The courthouse news service posted this on Jun 4 and the full suit can be seen here
It makes for interesting reading

"Enterprise Express in 3,000 organizations"

and in Nuance's own press release installed in more than 4,000 healthcare institutions and in June 2007 they issued a release stating that iChart was in use by more than 285,000 unique health care providers and more than 14,000 transcriptionists in 511 sites. That's a lot of sites and users of the technology. $30 million seems on the low side.....