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Nuance Communs., Inc. v. Omilia Natural Language Sols., Ltd.

United States District Court for the District of Massachusetts

May 6, 2020, Decided; May 6, 2020, Filed

Civil Action No. 19-11438-PBS

Opinion

MEMORANDUM AND ORDER

Saris, D.J.

Plaintiff Nuance Communications, Inc. brings this action against Defendant Omilia Natural Language Solutions, Ltd., alleging infringement of eight patents concerning automated speech recognition and interactive voice response systems used in large scale call centers.

Omilia counter-punched with numerous counterclaims alleging, among other things, a violation of Section 2 of the Sherman Act (Count 17); a violation of Section 7 of the Clayton Act (Count 18); common law unfair competition (Count 19); tortious interference with contractual relations (Count 20); and tortious interference with advantageous business [*3]  relations (Count 21)1 .

Now, Nuance moves to dismiss Omilia's antitrust and state law counterclaims (Counts 17-21), or in the alternative to stay those counterclaims pending resolution of the underlying patent infringement suit. After hearing, the Court ALLOWS the motion to dismiss Omilia's claim of common law unfair competition (Count 19) and DENIES the motion with regard to Omilia's remaining antitrust and state law counterclaims.

FACTUAL BACKGROUND

The following facts are drawn from Omilia's countercomplaint (Docket No. 44) and must be taken as true at this stage. See Newman v. Lehman Bros. Holdings Inc., 901 F.3d 19, 25 (1st Cir. 2018).

I. Nuance

Nuance develops and provides Automated Speech Recognition ("ASR") technology, which allows a machine to recognize and respond to human voice commands. Nuance's ASR software is used by enterprise-level call centers around the world.

Nuance was created in 2005 from a merger of ScanSoft and another entity named Nuance ("Pre-2005 Nuance"). ScanSoft had already acquired at least three other voice recognition firms between 2001 and 2005. From 2005 to 2018, the newly formed Nuance acquired at least 16 additional companies "that developed and/or commercialized voice recognition-related technology." Docket No. 44 ¶ 106. [*4]  Nuance also acquired over 5,000 voice-recognition related patents during the 2005-2018 timeframe. Omilia alleges that, due to these corporate and intellectual property acquisitions, Nuance has maintained an international market share of over 70% since 2001.2 Nuance is now the owner of one of the largest speech-recognition patent portfolios in the world.

Omilia alleges that Nuance has a strategy of "acquir[ing] actual and potential competitors through a calculated scheme of threatening to assert and/or actually asserting baseless patent infringement litigation using its massive portfolio of acquired patents to drive its competitors out of the market and/or coerce them into being acquired by Nuance." Id. ¶ 112. Since 2011, ScanSoft/Nuance has initiated at least seventeen patent lawsuits against its competitors. At least three of these lawsuits were initiated shortly after the defendant corporation refused a buyout offer by Nuance.

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2020 U.S. Dist. LEXIS 79718 *; 2020 U.S.P.Q.2D (BNA) 10489

NUANCE COMMUNICATIONS, INC., Plaintiff, v. OMILIA NATURAL LANGUAGE SOLUTIONS, LTD., Defendant.

Prior History: Nuance Communs., Inc. v. Omilia Nat. Language Sols., Ltd., 2019 U.S. Dist. LEXIS 215652 (D. Mass., Dec. 16, 2019)

CORE TERMS

patent, alleges, competitors, antitrust, immunity, counterclaims, customers, lawsuit, acquisitions, discovery, motion to dismiss, patent infringement, unfair competition, tortious interference, geographic, argues, anticompetitive, software, sham, Clayton Act, Sherman Act, monopolization, Enterprise, business relationship, antitrust claim, baseless, infringe, monopoly, communications, technology