Free: VoIP Telephony: Keeping a Lid on Pandora's Box

The rapidly evolving nature of information technology has been a boon to almost every industry in modern society. The ability to generate, store, access and transfer immense quantities of complex data almost instantaneously has allowed for levels of efficiency and profitability that were impossible merely a decade ago.

The business world has clearly been a beneficiary of this information revolution. The rabid excitement and enthusiasm expressed by corporate IT professionals and CEOs over each new technological advance is matched only by the level of fear and trepidation of in-house and outside counsel who are constantly faced with the burning question, "How will the adoption of this new technology affect our e-discovery obligations?" In the aftermath of landmark e-discovery decisions such as Zubulake v. UBS Warburg¹ and Qualcomm Inc. v. Broadcom Corp.,² the question has taken on an added degree of urgency.

One particular innovation that promises to fundamentally change the way businesses communicate is a technology known as Voice over Internet Protocol or VoIP. VoIP represents the holy grail of information technology: an inexpensive voice communications system that can be seamlessly integrated with existing Internet, fax, e-mail and teleconferencing technology. Establishing a clear understanding of the technology and the data it generates is essential in order to update document retention policies and litigation hold procedures and for designing effective implementations.

What Is VoIP?

While an in-depth discussion of the technology that makes VoIP possible is beyond the scope of this article, the basic concepts will be briefly discussed in order to provide an overview of what VoIP is, and how it differs from traditional telecommunications technology. It should also be noted that VoIP is a name for a type of technology, and the manner in which it is implemented and administered within a particular system can vary tremendously from one user to the next.

Before VoIP, most telephone communications were transmitted across the Public Switched Telephone Network (PSTN), which combines analog, digital and electromechanical data links.³ Although voice data is now transmitted across the PSTN digitally instead of in analog form, and much of the copper wires that once made up the network have been replaced with high capacity fiber optic cables, the underlying concept of circuit switching has not changed much in the 100-year period since its inception.⁴

The PSTN in its current form is essentially a modernized electronic version of the "cord board" formerly used by old-time operators to manually connect one caller to another.⁵ Additionally, the phone companies own respective portions of the PSTN and are free to set charges and decide which features will and will not be included in an individual user's calling plan.⁶ While PSTN telephony may be more expensive, and lacking some of the features only VoIP can deliver, its reputation for rock-solid stability causes it to enjoy widespread usage in the United States in both corporate and residential settings.⁷

VoIP, also known as IP Telephony, is the real-time transmission of voice signals using the Internet Protocol (IP) over the public Internet or a private data network.⁸ In simpler terms, VoIP converts the voice signal from a telephone into a digital signal that travels over the Internet, rather than over the traditional phone company-owned PSTN.⁹ As the caller speaks, the analog sound signal from his or her voice is rapidly converted into a series of small chunks of digital data commonly referred to as "packets."¹⁰ Rather than routing the data over a dedicated line (similar to the way the PSTN functions), the data packets flow through a chaotic network along thousands of possible paths in a process called "packet switching."¹¹ Compared to the traditional PSTN, packet switching is very efficient because it lets the network route the packets along the least congested and cheapest lines.¹²

The increasing acceptance and utilization of VoIP technology has been driven almost exclusively by the widespread availability of broadband networks.¹³ The more bits per second that can be processed at a given end of an Internet call, the higher the call quality, and the greater the number of innovative features that VoIP providers can include.¹⁴ VoIP enables end users to treat voice telephone calls and their accompanying features as just another set of applications they can run over any broadband connection at the edge of diverse packet switched networks.¹⁵

Much like any other recent technological advance, a VoIP implementation plan should be carefully reviewed with an eye toward potential business and legal consequences. For example, a VoIP network may unexpectedly create a substantial quantity of electronically stored information that could become the target of opposing counsel's discovery requests. The recent decision handed down by the Southern District of California in Qualcomm Inc. v. Broadcom Corp. makes it clear that failure to promptly identify and produce all relevant electronically stored information can have dire consequences for outside counsel and their clients.¹⁶ The California district court found that counsel for Qualcomm failed to produce approximately 46,000 relevant e-mails during the course of litigation.¹⁷ As a result of their failure to produce these documents, the California district court imposed sanctions on several of the attorneys representing Qualcomm, and referred the sanctioned attorneys to the California State Bar.¹⁸ The California district court also sanctioned Qualcomm itself for its failure to produce the e-mails.¹⁹

When VoIP messages are stored using a unified messaging system, a caller's voicemail message typically appears as a .wav file in the recipient's e-mail inbox.²⁰ However, after that .wav file is reviewed and deleted, it may continue to exist on one of the company's backup servers in the same manner as a deleted e-mail message. This represents a significant departure from the previous PSTN systems. Before VoIP, a voicemail message would either reside on the phone company's server, or directly on the recipient's phone in the form of a local recording on a magnetic tape. The phone company had exclusive control over the length of time voicemail was retained, as well as access to those voicemail files. With respect to a magnetic tape, the end user would listen to the recording, and record over old messages as new messages were received. VoIP voicemail recordings share more in common with e-mails than they do with traditional voicemail, and will probably be subject to identical production obligations during discovery.

VoIP systems can be configured to enable instant recording and storage of large amounts of recorded conversations. Corporate call centers routinely record conversations between businesses and their customers for quality assurance purposes.²¹ If the issues in a case include, for instance, the number and type of complaints about a certain product, when a company had notice of alleged problems with a product, or how a company treated its customers, that information may be found in the thousands (or millions) of calls the company received and recorded.²² Many businesses also record transactional conversations, such as trading or sales calls.²³ These types of recordings have proven critical in cases involving energy companies and commodities traders and are common in the financial services industry.²⁴

VoIP and E-Discovery

Depending on the VoIP system in place, the manner in which such data is retained may be under the direct control of the company and its IT professionals, as opposed to the phone company. Further, VoIP data will likely be subject to a company's or client's backup and retention policies. Unlike traditional voicemails, VoIP data may prove difficult to delete. Instead, as is common with e-mails, redundant backup systems will ensure that additional copies may continue to persist at many levels. As an added complication, VoIP messages cannot easily be searched by subject or text. In fact, searches may be limited to such parameters as caller ID information, recipient, and date and time of call.

Without proper planning, a client or company may be faced with hundreds or even thousands of hours of audio data that cannot be easily parsed if production is required. This situation poses a significant problem in light of recent amendments to the Federal Rules of Civil Procedure that expressly define "sound recordings" as "electronically stored information" and impose new requirements for disclosure, case management, planning, and form of production of all electronically stored information.

Although VoIP-specific e-discovery disputes have yet to make their way into reported decisions, previous decisions regarding the production of recorded phone conversations are likely to guide the courts' reasoning when handling VoIP data production disputes. For example, in E*Trade Secs. LLC v. Deutsche Bank AG, the defendants kept digital recordings of broker/trader conversations on two rewritable DVDs which were recorded over as new calls were completed.²⁵ The court found that the defendants had engaged in spoliation of evidence for failing to preserve recorded conversations.²⁶ Accordingly, the defendants were sanctioned for their conduct.²⁷

As judges become more familiar with electronic discovery and electronic storage techniques, they have also become skeptical of conclusory assertions by counsel that all sources of electronically stored information have been searched. Rather, parties are increasingly required to provide detailed descriptions of what was searched, and the parameters under which the search was executed. A party's obligation to produce electronically stored data, and the expense likely to be incurred in compliance with such obligations hinges upon whether the data sought is stored in an accessible or inaccessible format.

As a general rule, a party is required to produce data that is deemed accessible at its own expense, but may be able to employ cost shifting if the burdensome and often expensive production of inaccessible data is requested. Zubulake v. UBS Warburg provides an in-depth discussion of the issue.²⁸ The Zubulake court ranked the following data storage systems in descending order of accessibility: Online data (active), near-line data, offline storage/archives, backup tapes and finally, erased, fragmented or damaged data.²⁹ The court noted that the first three types of storage systems constituted accessible sources of electronically stored data, defined as "data [that] does not need to be restored or otherwise manipulated to be usable."³⁰ The remaining two systems constituted inaccessible sources of electronically stored data, which the court defined as "not readily usable" because "[b]ackup tapes must be restored . . . fragmented data must be de-fragmented, and erased data must be reconstructed, all before the data is usable."³¹

In Peskoff v. Faber, the U.S. District Court for the District of Columbia determined that the defendant's search of its e-mail system was inadequate.³² Sua sponte, the court ordered counsel for the parties to collaborate with the court on a request for proposals seeking bids from qualified forensic computer technicians to perform an examination of all the computers owned by the company during the period of the former employee's employment.³³ It is entirely plausible that courts may order similar relief in future cases as judges become more familiar with VoIP-generated data.

In light of the Zubulake and Peskoff decisions, it is important to prepare for the possibility that a court will demand that all relevant VoIP-generated electronically stored information be produced. The production and review of audio files is far more complex and time-consuming than simply locating and printing out a series of e-mails.³⁴ The standard methods of reviewing audio to locate information are to listen to the audio or to have it transcribed and searched as text.³⁵ Under the standard method, a medium-size company in possession of large amounts of electronically stored audio data may find hiring contract attorneys to review and transcribe the audio data to be cost-prohibitive.³⁶ Fortunately, new technology is being developed to allow for the rapid review of audio data at a reduced cost.

The first technology is known as speech-to-text software.³⁷ Speech-to-text software uses advanced speech-recognition technology to match spoken words to textual words stored in its built-in dictionary.³⁸ The software then creates a searchable transcript of the audio file.³⁹ Speech-to-text software is not without its drawbacks. It is not much faster than human listening.⁴⁰ Because it relies on an internal dictionary, the software has a difficult time deciphering proper nouns, which reduces its accuracy.⁴¹

The other promising audio searching technology is known as phoneme software.⁴² Rather than converting sound to text, it interprets the individual components of human speech to find keywords.⁴³ By not producing the text file, the software is able to do an hour's worth of human listening in approximately one minute.⁴⁴ The major drawback of these technologies is that the accuracy rate is entirely dependent upon the quality of the source audio files.⁴⁵

Planning Ahead

Appropriate adoption and implementation of a unified VoIP system will require careful planning. Any company considering upgrading to a VoIP-based telecommunications system should undergo the following analysis before making the leap.

First, it is important to determine the types of VoIP data that will be generated by the system. Will the company be recording phone conversations and maintaining a database? Will voicemails be created by the system?

Second, it must be determined where the VoIP data "lives" within a particular network. Will voicemails reside on the same server as the company's e-mail? What are the data backup procedures in place? Where are the disaster recovery archives? Will VoIP data be backed up along with other data? Treating VoIP data differently may have distinct advantages.

Third, a company's or client's document retention policies should be amended to specifically address the creation and storage of VoIP-generated data. Finally, a proactive procedure should be put into place to facilitate the rapid identification, preservation, review and production of VoIP-generated data in the event that a client or company is served with a litigation hold order. Ben Franklin once said, "An ounce of prevention is worth a pound of cure." When it comes to adopting a unified VoIP system, truer words have never been spoken.

Michael Cukor is a director in the Gibbons intellectual property department in New York, and can be reached at mcukor@gibbonslaw.com. Thomas R. DeSimone is an associate in the firm's intellectual property department in New York and can be reached at tdesimone@gibbonslaw.com.

Endnotes:

1. Zubulake is actually a series of cases relating to e-discovery obligations, consisting of Zubulake v. UBS Warburg, 217 FRD 309 (SDNY 2003); Zubulake v. UBS Warburg, 216 FRD 280 (SDNY 2003); Zubulake v. UBS Warburg, 220 FRD 212 (SDNY 2003); and Zubulake v. UBS Warburg, 2004 WL 1620866 (SDNY 2004).

2. 2008 U.S. Dist. LEXIS 911 (S.D. Cal. 2008).

3. Ted Wallingford, "Switching to VoIP 2" (O'Reilly Media Inc., 2005).

4. "VoIP: Circuit Switching," http://communication.howstuffworks.com/ip-telephony2.htm.

5. Wallingford, supra note 3 at xiii

6. Wallingford, supra note 3 at 4.

7. Wallingford, supra note 3 at 2. The author notes that as recently as 2004, there were close to 200 million traditional land lines in operation in the United States alone.

8. "Voice over IP - What Is VoIP?" http://voip.about.com/od/voipbasics/a/whatisvoip.htm.

9. Id.

10. "VoIP: Packet Switching," http://communication.howstuffworks.com/ip-telephony3.htm.

11. Id.

12. Id.

13. Jonathan E. Nuechterlein, Philip J. Weiser, "Digital Crossroads: American Telecommunications Policy in the Internet Age," 192 (The MIT Press 2005).

14. Id.

15. Id.

16. 2008 U.S. Dist. LEXIS 911 (S.D.Ca. 2008).

17. Id. at *29.

18. Id. at *64. However, in a subsequent ruling, the court vacated the portion of the opinion sanctioning counsel retained by Qualcomm in order to allow the attorneys to assert the self-defense exception to attorney-client privilege. See Qualcomm Inc. v. Broadcom Corp., 2008 U.S. Dist. LEXIS 16897 (S.D. Cal. March 5, 2008).

19. Id. at *61.

20. Wav, http://en.wikipedia.org/wiki/.wav. A .wav file is a Microsoft and IBM audio file format standard for storing audio on PCs.

21. David Fishel and Carole Levitt, "Computer Counselor: New Tools in the Discovery of Sound Recordings," 29 Los Angeles Lawyer 46, 47 (2006).

22. Id.

23. Id.

24. Id.

25. 230 FRD 582 (D. Minn. 2005) (overruled on other grounds).

26. Id. at 590.

27. Id. at 594.

28. 217 FRD 309 (SDNY 2003).

29. Id. at 318-19.

30. Id. at 320.

31. Id.

32. 244 FRD 54 (D. D.C. 2007).

33. Id. at 63.

34. Scanned documents and e-mails can be rapidly searched using optical character recognition (OCR) technology which allows a user to scan thousands of documents for certain keywords through the use of search terms.

35. Alan F. Blakely, "Digital Audio Files in Litigation," 2 J. Legal Tech. Risk Mgmt. 2 (2007).

36. Keith Ecker, "Sound Searching: Speech-Recognition Software Scans Audio Files for Discoverable Content," Inside Counsel, January 2007 at 40. Hiring a contract attorney at a rate of $100 an hour would translate into a $50,000 bill for a standard 500-hour project. This estimate does not even include the transcription fee.

37. Ecker, supra note 36 at 40.

38. Ecker, supra note 36 at 40.

39. Ecker, supra note 36 at 40.

40. Ecker, supra note 36 at 40.

41. Ecker, supra note 36 at 40.

42. Ecker, supra note 36 at 40. Nexidia is generally considered to be the industry leader with respect to phoneme-based audio search software.

43. Ecker, supra note 36 at 40.

44. Ecker, supra note 36 at 40.

45. Ecker, supra note 36 at 40. The accuracy rate is approximately 85-95 percent for high-quality recordings.