Verint Wins Patent Case Against NICE Systems

A U.S. district court in Atlanta on Friday awarded Verint Systems more than $3.3 million in damages in a patent lawsuit it filed against NICE Systems in January 2006.

A jury determined that  certain features of NICE’s analytics products infringe two claims of U.S. Patent 6404857, which Witness Systems (now part of Verint) filed in 1996. The patent in question relates to  speech analytics technology, particularly in the areas of emotion detection, word spotting, and talk-over detection.

In a statement on its Web site, NICE Systems says it "intends to ask the trial court to overturn the verdict based on legal arguments, and, if necessary, to appeal the decision." The company, which is based in Israel, also said in the statement that it "believes the jury’s decision will not have a material adverse impact on its business."

But Verint officials are calling it a victory nonetheless. "The important thing here, from our standpoint, is being able to recognize and validate our own internal research and development's intellectual property and the ongoing development of patents," says Ryan Hollenbeck, senior vice president of marketing at Verint. "This is more of a defensive measure. It's important that when you're innovating technology, you make sure the right people get recognized for their work."

This most recent judgment follows a lawsuit filed by NICE against Verint. Originally, NICE claimed that Verint had infringed on its analysis methods. "I'm sure this is a pot that NICE wished they had never stirred in the first place," states Ken Landoline, program manager at Yankee Group.

While NICE has yet to do so, Landoline expects the company will appeal the verdict this week. In the meantime, two options remain for the company: It can either give part of its earnings from the sale of each of its products that include the patented methods to Verint, or it can change its product offering to include new, unique technologies. The $3.3 million sum represents only a fraction (about 8 percent) of NICE's's total sales of products containing Verint-patented methods. NICE's existing customers will also feel the effects of the lawsuit.

"It puts some doubt in everybody's minds—if you were thinking about NICE Systems you'd certainly want to be indemnified against any lawsuits," Landoline claims. "[NICE] is going to have to work that out on a customer-by-customer basis. Three million [dollars] is sort of a slap on the wrist, but it gets NICE on track."

Hollenbeck says that Verint's next step is seeking a permanent injunction against NICE, but that his company has no major plans for the future. Of course, as speech analytics gains popularity within the speech technology and contact center space, the verdict gives a strong warning to other analytics providers. Hollenbeck says that Verint, which holds 400 patents, is not actively looking for companies infringing upon its patents, but that the increasingly competitive space naturally breeds cases like this.

"In terms of how a market evolves, you start to see early on that someone starts to innovate a market, and ultimately someone is copying somebody else," Hollenbeck says. "Somebody is coming into the market and what's normal in the course of business is to come into the market in a different way. If you come into the market in the same way, that's where you run into patent-related issues."