Nuance Communications, Inc. v. International Business Machines Corporation

Background

This is a contract case under New York law that was tried without a jury. During trial, the court admitted certain evidence subject to later motions to strike. The order addresses the admissibility of extrinsic evidence, meaning evidence outside the written agreement, including the circumstances surrounding the agreement, earlier negotiations, and the parties’ conduct while performing the contract.

IBM’s Motion to Strike

The court rejected Nuance’s argument that IBM waived its objections by not raising them during trial because the court had allowed later motions to strike.

The motion was denied in part and granted in part concerning statements about the meaning of the parties’ service-level agreement. The court denied the motion as to statements by Nuance executives about their pre-contractual or contemporaneous expectations because the statements were relevant to Nuance’s purpose in entering the agreement and were not offered for their truth. The court granted the motion as to statements about Nuance’s post-contractual understanding of certain agreement clauses.

The court granted IBM’s motion as to statements about updates provided to Nuance and Nuance’s failure to commercialize DeepQA. The witnesses were not qualified as experts to give opinions about why Nuance could not commercialize the product based on the updates. The court also granted the motion as to statements that IBM assured Nuance it was receiving or would receive all updates, finding those statements to be hearsay within hearsay.

The court denied in part and granted in part the motion concerning the parties’ understanding before or when they entered into the service-level agreement of the earlier Real Time Translation Services agreement. Statements about the earlier understanding were allowed when they concerned the pre-contractual or contemporaneous meaning of the agreement, but the court granted the motion as to a statement about Nuance’s post-contractual understanding of the earlier agreement.

IBM’s Motion to Admit Exhibits

The court granted IBM’s motion to admit exhibits DX-14, DX-70, and DX-116. The exhibits consisted of emails referring to IBM Research or IBM. The court found sufficient circumstantial evidence to authenticate them as emails among Nuance employees and between Nuance and IBM employees.

Corporate Deposition Testimony

The parties offered testimony from corporate representatives under Federal Rule of Civil Procedure 30(b)(6). The court explained that admitted testimony is the designating corporation’s testimony but is not conclusive and may be contradicted or explained by other testimony.

As to Nuance’s proffers of IBM witness testimony, the court admitted the designated testimony of Reardon and the identified Brown testimony within the scope of the designations. It excluded Brown’s testimony at pages 208:21–209:4 because it concerned the division of DeepQA source code within IBM, which was outside the scope of Brown’s designation. IBM’s counter-designations for Reardon’s testimony were also admitted.

As to IBM’s proffers of Nuance witness testimony, the court admitted the McCann and Stubley depositions, along with Nuance’s counter-designations. The court overruled Nuance’s objections that several portions were outside the scope of the relevant corporate designations.

Other Outstanding Objections

The court overruled objections based on relevance, foundation, or completeness. It sustained the objections to PX054, PX114, and PX138 on hearsay grounds. It overruled objections to PX090 and PX151 because they were non-hearsay statements by an opposing party, and it overruled the objection to DX010 because the exhibit was non-hearsay and showed state of mind.

For McCann’s deposition, the court overruled objections to the identified portions at pages 167:6–10 and 167:12–14 because the testimony was not speculative. It sustained the objection to pages 167:10–12 as speculative and sustained the objection to pages 236:21–237:04 as leading.

Disposition and Effect

The order resolves the specified motions and objections concerning trial evidence. It does not state a final ruling on the parties’ underlying contract claims. Judge Eduardo C. Robreno ordered that it be so entered.