Speech technology company in court (2)

Translation software has been a white lie from the start of computing in the forties. Various principles of translation have been tried. Systran was one of the oldest machine translation companies. It had its roots in the Georgetown machine translation effort. The company was set up in La Jolla (Cal.), to work on Russian into English for the United States Air Force in the middle of the Cold War. It worked basically from the grammar principles. Systran was adopted by the United States Department of Defense and the European Commission. But the machine translation effort was heavily reduced after that in 1966 a US Government Committee, ALPAC Report was critical about the progress and advised to reduce the efforts. The company was sold in 1986 to the Gachot family, based in Paris, France. Presently SYSTRAN provides the technology for Yahoo!, AltaVista's (Babel Fish) and Google's online translation services, among others and offers commercial versions of SYSTRAN under the usual operation systems.

In the eighties another approach to machine translation was taken in The Netherlands. The BSO Company started a machine translation department which worked on the principle of an intermediary language, codenamed Distributed Language Translation (DTL). The hope was that by having an artificial language in between the target language and the object language a proper translation could be made. It did not work and in the nineties the project was cut.

The speech technology had made its first impression with the introduction of the Reading Machine for The Blind. It was designed by Ray Kurzweil, who had developed the Optical Character Recognition (OCR), a method of scanning text from paper. For his reading machine he combined the OCR method with a speech synthesis machine. A later version of the speech synthesis machine will be bought by L&H.

In the eighties the speech technology was on the rise in academic circles worldwide. In the Netherlands the Nijmegen University, in Belgium the RUG university and in Germany the Saarbrucken University were hotspots for the development of speech technology. Of course, in Europe languages are important as people in Europe speak many different languages.

Jo Lernout (left) and Paul Hauspie (right), the founders of the speech technology and machine translation company L&H were visionaries, but no computer experts, who could develop compression software and algorithms. So they had to lure scientists to their company, which they started in 1987. And they did. They were able to convince Bert van Coillie, Herve Bourlard and Georges Zanelatto. Bert Van Coillie was developing a pc-voice at the RUG in Gent. The company paid a license fee for the Flemish speech synthesis module. The module became the core of the text-to-speech technology. At the same university the Development Environment for Pronunciation Expert System (DEPES) was developed, an innovative system of sound analysis with which algorithms could be developed in other languages than Dutch and Flemish. DEPES became the secret formula of the company. The speech recognition expert Herve Bourlard transferred from Philips to the start-up. And last but not least, Georges Zaneletto joined the company; an expert in signal processing and (de)compression.

Once the company had a scientific base to work from, it was ready for business. It acquired its competitor Dragon Systems. A few weeks earlier it had bought the Dictaphone Corporation, the leader of the medical transcript market. Dictaphone opened the way to vertical markets of intelligent content management and audio mining. And just before the crash the company had the intention to pick up Interactive Systems Inc, a natural speech recognition company.

Blog Posting Number: 762

Tags: speech technology, translation software

Speech technology company in court (1)

Yesterday the court case about the speech technology firm Lernout and Hauspie (L&H) started in Ghent (Belgium). At last; after six years of preparation. It is a mega process about fraudulent bookkeeping. Some 21 persons have been indicted as well as the accountant company KPMG and the bank Dexia. No less than 90 lawyers are representing their clients. The court has left the court house and has started the proceedings in an exhibition centre. The court case catches a lot of attention as more than 13.000 shareholders lost money. They can not request compensation as this court case is one of criminal proceedings and is not a civil case.

L&H started in 1987 in the Belgian technology hotspot Ieper. It grows in no time to a company worth 10 billion euro. In 1998 Bill Gates visited the company which saw it as its mission to make language the interface to man-machine manipulation. By 2001 everything was over and the company had gone bankrupt. The Wall Street Journal had started a series of articles one year earlier, claiming that the figures had been pumped up; especially in South Korea where more than 40 percent of the revenues were picked up. According to prosecution managers of L&H received money from the banks and used this in order to establish Language Development Centers, which ‘bought’ licenses to the speech software. Eventually the prosecuters claim that L&H pumped up the figures for 166 million euro.

It is a case of national pride, technology hype and conspiracy. Belgians were proud of their innovators; the royal house regularly received the founders of the company at their palace. Speech technology with translation software as well as speech-to-text software was sexy. But there was also suspicion about secret services and industrial spy activities. The US CIA was said to be after the company as it had technology the CIA did not have. The European secret service network Echelon helped the company to go into bankruptcy.

The culmination of problems came in the years of the internet hype. Everything was possible technically and money wise. But growing fast harbours risks, especially personnel risks. The managers Jo Lernout and Pol Hauspie do not check closely the credentials of people that offer their services. In this case, when people said that they had been a manager in the Dutch consumer company Philips they were accepted with eagerness; in this case we see back Gaston Bastiaens, the manager of the Philips CD-i technology and publishing venture, which was called off in 1996. When people said that they made big deals with Philips, they were believed; it is said that Maurits de Prins, who swindled Philips with the video chain Super Club, was involved in financing L&H through a Dutch straw man. Also the one year vice CEO of Philips, Roel Pieper was one of the crises managers of the company for a short time; he has not been indicted.

The total proceedings will take half a year. I will keep you updated.

Blog Posting Number: 761

Tags: speech technology