Intellectual Property Law

A Virtual Agent Answered the Phone, and 2 Suits Broke Out.

By thomason

Maybe it’s just an earmark of impatience, but how annoying is it when your call for service on your insurance or bank business is answered by an “automated attendant.” Imagine being in a noisy, downtown emergency room, and calling for “pre-authorization” approval to have your jaw wired shut, and trying to explain that to a voice-recognition, software-driven, non-person. “I nee a docta.” “I’m not sure I got that, if you’d like to make a payment, press 7.”

As you might guess, voice recognition systems are patented - and apparently, infringed. Can a “virtual customer service agent” be deposed?

Two recent, unrelated cases provide reasons to blawg. In Phoenix Solutions v. Sony, 3:07CV2112 (N.D.Cal.), Judge Patel issued a recent ruling on the U.C.C. warranty of non-infringement. There are only a few cases on this warranty (none are cited by J. Patel). Phoenix sued Sony for infringement, over an “interactive voice recognition” system used at its call center. Sony had purchased it from Intervoice, and Sony pled a third-party complaint based on the U.C.C. 2-312 warranty of non-infringement. Intervoice counterclaimed on the same ground, contending that specifications provided by Sony had caused the system to be infringing. The ruling parses 2-312, and notes that as between buyer and seller, the provision is “asymmetrical.” It gives the buyer a warranty cause of action, but to the seller only a defense. The buyer can sue to be held “harmless” against the infringement suit. The seller can defend on the ground that the buyer provided specifications for the infringing product. “But Section 2-312 does not appear to vest a seller with a cause of action against a buyer.”  Thus, it appeared the seller’s counterclaim would be dismissed on ‘asymmetry’ grounds - but wait, there’s more. Judge Patel’s actual holding was that the third-party defendant Intervoice had never been sued for infringement, and for that reason, it’s counterclaim could not state a claim against Sony. Thus, it’s counterclaim was dismissed, but Intervoice could assert 2-312 as an affirmative defense to Sony’s warranty claim. “Had Intervoice also been sued by Phoenix for infringement, the result would be different.”

That brings us to Phoenix Solutions v. Wells Fargo, 4:08CV863 (N.D.Cal.), filed 2/8/08, which alleges infringement of 3 patents directed to “speech recognition software.” The described system must have that feature suggested above in the emergency room example, since Phoenix alleges that: “Based on determining the most likely meaning of the customer’s specific question, the interactive virtual agent responds with a specific answer.” Indeed.  The alleged infringing defendant “designed, customized and selected the personality exhibited by the virtual agent.” What, polite and helpful, but not all that helpful? No, the virtual agent’s “electronic persona was specifically selected to be appealing and attractive to Defendant’s customers.” (like cyberporn?).   The Phoenix Complaint also gives some background about the presuit cease-&-desist letter. Defendant’s response was “it needed to investigate” and to identify the “patent claims that may be infringed.” The rejoinder pleaded to that was that, perhaps, the defendant “may have overlooked the CD enclosed with” the desist “letter which has extensive representative claim charts pointing out” the pertinent infringement issues. The Complaint does not indicate if Wells Fargo bought the system from the same seller as Sony or if the result will “be different.”

Full post as published by ISinIP on March 04, 2008 (boomark / email).