Lernout & Hauspie Speech Products, or L&H, was a
Belgium
Belgium, ; french: Belgique ; german: Belgien officially the Kingdom of Belgium, is a country in Northwestern Europe. The country is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeast, France to th ...
-based
speech recognition
Speech recognition is an interdisciplinary subfield of computer science and computational linguistics that develops methodologies and technologies that enable the recognition and translation of spoken language into text by computers with the m ...
technology
Technology is the application of knowledge to reach practical goals in a specifiable and reproducible way. The word ''technology'' may also mean the product of such an endeavor. The use of technology is widely prevalent in medicine, science, ...
company
A company, abbreviated as co., is a Legal personality, legal entity representing an association of people, whether Natural person, natural, Legal person, legal or a mixture of both, with a specific objective. Company members share a common p ...
, founded by Jo Lernout and Pol Hauspie, that went
bankrupt
Bankruptcy is a legal process through which people or other entities who cannot repay debts to creditors may seek relief from some or all of their debts. In most jurisdictions, bankruptcy is imposed by a court order, often initiated by the debt ...
in 2001 because of a fraud engineered by the management. The company was based in
Ypres
Ypres ( , ; nl, Ieper ; vls, Yper; german: Ypern ) is a Belgian city and municipality in the province of West Flanders. Though
the Dutch name is the official one, the city's French name is most commonly used in English. The municipality co ...
,
Flanders
Flanders (, ; Dutch: ''Vlaanderen'' ) is the Flemish-speaking northern portion of Belgium and one of the communities, regions and language areas of Belgium. However, there are several overlapping definitions, including ones related to culture, ...
, in what was later called ''Flanders Language Valley'' (mimicking the
Silicon Valley
Silicon Valley is a region in Northern California that serves as a global center for high technology and innovation. Located in the southern part of the San Francisco Bay Area, it corresponds roughly to the geographical areas San Mateo County ...
).
History
Lernout & Hauspie was founded in 1987 by Jo Lernout and Pol Hauspie. After a difficult start, it quickly grew, and, in 1995, it went public on
NASDAQ
The Nasdaq Stock Market () (National Association of Securities Dealers Automated Quotations Stock Market) is an American stock exchange based in New York City. It is the most active stock trading venue in the US by volume, and ranked second ...
(LHSP), and was also quoted on the now-defunct Brussels-based EASDAQ exchange. Its headquarters were in
Ypres
Ypres ( , ; nl, Ieper ; vls, Yper; german: Ypern ) is a Belgian city and municipality in the province of West Flanders. Though
the Dutch name is the official one, the city's French name is most commonly used in English. The municipality co ...
,
Belgium
Belgium, ; french: Belgique ; german: Belgien officially the Kingdom of Belgium, is a country in Northwestern Europe. The country is bordered by the Netherlands to the north, Germany to the east, Luxembourg to the southeast, France to th ...
, and in
Burlington, Massachusetts
Burlington is a town in Middlesex County, Massachusetts, United States. The population was 26,377 at the 2020 census.
History
It is believed that Burlington takes its name from the English town of Bridlington, Yorkshire, but this has never b ...
, USA. At its peak, Lernout & Hauspie had a market capitalization of almost
US$
The United States dollar (symbol: $; code: USD; also abbreviated US$ or U.S. Dollar, to distinguish it from other dollar-denominated currencies; referred to as the dollar, U.S. dollar, American dollar, or colloquially buck) is the official ...
10 billion.
Flanders played an important role in investing in the company and the surrounding ''Flanders Language Valley''.
It acquired a number of its smaller competitors, including text-to-speech developer
Berkeley Speech Technologies, in 1996. In 1998 it acquired
Globalink, Inc., a provider of
advanced translation software products and professional translation services. During March–April 2000, Lernout & Hauspie acquired
Dictaphone
Dictaphone was an American company founded by Alexander Graham Bell
that produced dictation machines. It is now a division of Nuance Communications, based in Burlington, Massachusetts.
Although the name "Dictaphone" is a trademark, it has ...
for nearly US$1 billion, then acquired
Dragon Systems
Dragon NaturallySpeaking (also known as Dragon for PC, or DNS) is a speech recognition software package developed by Dragon Systems of Newton, Massachusetts, which was acquired in turn by Lernout & Hauspie Speech Products, Nuance Communications ...
shortly thereafter. Lernout & Hauspie also acquired PowerScribe, a voice recognition system for Radiology. This system was started by a company called Articulate Systems, and sold and supported by a company called The MRC Group (later Fonix, then
SpeechFX
SpeechFX, Inc., (formerly Fonix Corporation) offers voice technology for mobile phone and wireless devices, interactive video games, toys, home appliances, computer telephony systems and vehicle telematics. SpeechFX speech solutions are based o ...
) before becoming part of L&H.
For some time, Lernout & Hauspie was dogged by rumours of financial impropriety, and in early 1999 the
Wall Street Journal
''The Wall Street Journal'' is an American business-focused, international daily newspaper based in New York City, with international editions also available in Chinese and Japanese. The ''Journal'', along with its Asian editions, is published ...
ran allegations in its ''Heard on the Street'' column by
Goldman Sachs
Goldman Sachs () is an American multinational investment bank and financial services company. Founded in 1869, Goldman Sachs is headquartered at 200 West Street in Lower Manhattan, with regional headquarters in London, Warsaw, Bangalore, H ...
analyst
Robert Smithson
Robert Smithson (January 2, 1938 – July 20, 1973) was an American artist known for sculpture and land art who often used drawing and photography in relation to the spatial arts. His work has been internationally exhibited in galleries and mu ...
that earnings had been overstated. Further investigation by WSJ staffer
Jesse Eisinger
Jesse Eisinger is an American journalist and author. Winner of the Pulitzer Prize for National Reporting in 2011, he currently works as a senior reporter for ProPublica. His first book, ''The Chickenshit Club: Why the Justice Department Fails to P ...
led to the revelation on 8 August 2000 of a major financial
scandal
A scandal can be broadly defined as the strong social reactions of outrage, anger, or surprise, when accusations or rumours circulate or appear for some reason, regarding a person or persons who are perceived to have transgressed in some way. Th ...
involving fictitious transactions in
Korea
Korea ( ko, 한국, or , ) is a peninsular region in East Asia. Since 1945, it has been divided at or near the 38th parallel, with North Korea (Democratic People's Republic of Korea) comprising its northern half and South Korea (Republic o ...
and improper accounting methodologies elsewhere. In April 2001, founders Jo Lernout and Pol Hauspie, as well as former CEO
Gaston Bastiaens
Gaston Bastiaens (born 16 December 1946 in Westerlo, Belgium) is a Belgian engineer and businessman. As a vice president of Philips Electronics, he was responsible for the Compact Disc as well as for CD-i, CD-ROM, Philips' contributions to the MP ...
, were arrested in what is considered one of the largest corporate scandals in history prior to
Enron
Enron Corporation was an American energy, commodities, and services company based in Houston, Texas. It was founded by Kenneth Lay in 1985 as a merger between Lay's Houston Natural Gas and InterNorth, both relatively small regional companies. ...
. After having struggled for a year, Lernout & Hauspie finally went bankrupt on 25 October 2001 following the release of
Windows XP
Windows XP is a major release of Microsoft's Windows NT operating system. It was released to manufacturing on August 24, 2001, and later to retail on October 25, 2001. It is a direct upgrade to its predecessors, Windows 2000 for high-end and ...
.
Many people, especially in
West Flanders
)
, settlement_type = Province of Belgium
, image_flag = Flag of West Flanders.svg
, flag_size =
, image_shield = Wapen van West-Vlaanderen.svg
, shield_size =
, image_map ...
, were blinded by the company's success and lost large sums of money on Lernout & Hauspie stock. The Flanders regional government became a major Lernout & Hauspie investor through a
venture capital
Venture capital (often abbreviated as VC) is a form of private equity financing that is provided by venture capital firms or funds to startups, early-stage, and emerging companies that have been deemed to have high growth potential or which ha ...
arm. During one of Lernout & Hauspie's cash shortages, it guaranteed 75% of a bank loan to the company. Investors and taxpayers alike were hit hard when the company went bankrupt. While Pol Hauspie pleaded guilty, Jo Lernout denied any wrongdoing, claiming that the company has been a victim of a "CIA conspiracy".
On September 20, 2010, co-founders Jo Lernout and Pol Hauspie, as well as
Nico Willaert, former vice chairman, and
Gaston Bastiaens
Gaston Bastiaens (born 16 December 1946 in Westerlo, Belgium) is a Belgian engineer and businessman. As a vice president of Philips Electronics, he was responsible for the Compact Disc as well as for CD-i, CD-ROM, Philips' contributions to the MP ...
, former chief executive officer, were each sentenced to five years prison (of which three years effective and two years probationary) for fraud by the Ghent Court of Appeals. In September 2012 Jo Lernout began a one-year sentence of house arrest with an electronic ankle bracelet.
Technology
After the bankruptcy,
Nuance Communications
Nuance Communications, Inc. is an American multinational computer software technology corporation, headquartered in Burlington, Massachusetts, that markets speech recognition and artificial intelligence software.
Nuance merged with its compe ...
(known then as ScanSoft) acquired all of the speech technologies. The revenues of the company grew sharply from $17.1 million in third quarter of 2001, to $216 million in Q3 2008.
Vantage Learning acquired all of the proofing, spelling, and linguistic search technologies.
"Lernout & Hauspie Michelle" and "Lernout & Hauspie Michael" are text-to-speech voices created by L&H and included in Microsoft Office 2003. L&H speech recognition was used in the "Speech" option in the control panel of
Microsoft Windows XP
Windows XP is a major release of Microsoft's Windows NT operating system. It was released to manufacturing on August 24, 2001, and later to retail on October 25, 2001. It is a direct upgrade to its predecessors, Windows 2000 for high-end and ...
abbreviated as LH. In addition,
Microsoft Office
Microsoft Office, or simply Office, is the former name of a family of client software, server software, and services developed by Microsoft. It was first announced by Bill Gates on August 1, 1988, at COMDEX in Las Vegas. Initially a marketin ...
uses certain elements of a grammar checker previously owned by L&H, which is mentioned in the About window.
See also
*Recipient of the
2002 Ig Nobel Prize in Economics "for adapting the mathematical concept of imaginary numbers for use in the business world"
*
Dragon NaturallySpeaking
Dragon NaturallySpeaking (also known as Dragon for PC, or DNS) is a speech recognition software package developed by Dragon Systems of Newton, Massachusetts, which was acquired in turn by Lernout & Hauspie Speech Products, Nuance Communications ...
*
Speech synthesis
Speech synthesis is the artificial production of human speech. A computer system used for this purpose is called a speech synthesizer, and can be implemented in software or hardware products. A text-to-speech (TTS) system converts normal languag ...
References
External links
One of Lernout & Hauspie's old websites archived on the Internet Archives.
an article from the WSJ (December 7, 2000) (last cached on Apr 20 2006 in Internet Archives)
New York Times, July 14, 2012
{{DEFAULTSORT:Lernout and Hauspie
Software companies established in 1987
Software companies disestablished in 2001
Companies based in West Flanders
Software companies of Belgium
Defunct software companies
Scandals in Belgium
History of Ypres