BlackBoard v. Desire2Learn: Next Steps

I went in search of information that would help me understand howthe BlackBoard v. Desire2Learn case might play out and want to sharethe results of my research with you.

It is important to point out that I am not a lawyer and that none ofwhat I write or say should be interpreted as legal advice or thecreation of a lawyer/client releationship.

I found an excellent article at The Minerals, Metals & MaterialsSociety’s website in JOM: The Member Journal of TMS written by A.B.Silverman at Eckert Seamans Cherin & Mellott, LLC. The title of thearticle is "I’ll See You In Court" and it describes the general stepsthat take place in a patent infringement litigation. I highly recommend all of the articles written by Silverman. They are short and easy to understand and provide a great summary of the issues surrounding patent litigation.

Silverman writes…

"…Becausepatent litigation can be very time consuming, expensive, and uncertainas to the result, it is generally initiated only after a thoroughevaluation of the case and reasonable efforts to resolve the matter amicably have failed…"

Emphasis mine.

As we already know, BlackBoard seems to have skipped this step. From the August 2, 2006 Chronicle of Higher Education article

"… John Baker, president and chief executive of Desire2Learn, said it wasunfortunate Blackboard had decided to go to court before trying tonegotiate the dispute…"

Silverman then explains that once the suit is filed, it will usually include an injunction from the patentee (i.e. BlackBoard) to require the infringer (i.e. Desire2Learn) to stop the infringing activity. BlackBoard has done just that (here‘s the complaint in PDF from Desire2Learn’s website)

Silverman tells us that the infringer can file a suit against the patentee to have the patent declared invalid. This is a likely strategy for Desire2Learn and will probably be the next step in the case. They have 20 days to respond to the 7/26/06 complaint filed by BlackBoard (that’s this coming Tuesday, August 15).

Silverman goes on to explain what happens in the trial, but we are very far from that step.

The case will likely start out with a war of motions to limit claims and stipulate points of agreement (if any exist) between the two parties. This is expensive litigation for both sides.

The Burdick Law Firm has a article describing the costs of Discovery and Trial at $100,000 and $300,000 respectively with the caveat that discovery will be …

"… typically much higher if large monetary value involved…"

…which seems to be the case here. Desire2Learn is a private company, so it’s financials are not generally available, but I would assume that this patent threatens their core business and that this represents millions of dollars for them.

This is an incentive for Desire2Learn to settle the case before discovery gets too expensive and before the trial actually starts. BlackBoard’s General Counsel, Matthew Small is quoted in the same Chronicle article

"…We are seeking a reasonable royalty…"

I don’t know whether Desire2Learn will settle, but that has to be the math they are doing right now. The cost of settling and paying a royalty to license the patent versus the cost of litigating the patent.

The ed-tech community would like to see the patent invalidated because it might threaten open source projects like Moodle, Sakai and others, but Desire2Learn doesn’t have to serve this community. After all, they are competing with open source as much as BlackBoard.

Lawsuits can be expensive distractions for growing companies, but there is another angle for both BlackBoard and Desire2Learn to consider here and I covered it in my first post this topic.

The response from the ed-tech community has been to cast BlackBoard as the "black hat" (pun intended) in this dispute and so that naturally assumes that Desire2Learn can be the "white hat". I call this litigation as marketing. By championing this cause, Desire2Learn can gain goodwill from the community. This has to be part of the math they are doing regarding this case.

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