Yahoo! gutted a Silicon Valley speech company leaving it with just one engineer on a vital project, a court heard today. Nuance Communications is seeking an injunction to prevent twelve of thirteen employees poached by Yahoo! from working on related projects at the ad and media giant. It also alleges the dirty dozen, which includes former VP of R&D Larry Heck, stole trade secrets from Nuance.

Yahoo!'s actions left the project, called Nuance Directory Assistance Automation, 75 per cent completed, Nuance claims. A Santa Clara district judge declined Nuance's request for an immediate injunction, and the case resumes in several weeks.

Nuance is no start-up and has deep pockets to fight the case, with $75m reported in the bank as of 30 June, according to SEC filings.

Nuance has blamed its rough ride of late on uncertainty surrounding its merger with ScanSoft. In its most recent reported quarter, Nuance lost $7.35m on earnings of $11.25, caused by a 36 per cent decline in gross revenue from the same period last year. The bulk of its income comes from service revenues. Company shareholders approved a merger with ScanSoft two weeks ago. The company estimated merger costs at $2.6m in a SEC filing.

Both court adversaries have their roots at Stanford. Nuance was started in 1994 by Stanford Research Institute members, while Yahoo! was a campus hobby until it incorporated the following year.®

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