Blackboard Continues Pursuit of Desire2Learn

• By David Nagel
• 06/18/08

[Update 2, 2:30 p.m. PDT] As Desire2Learn predicted last week, Blackboard is indeed continuing to pursue its rival, this time with a contempt motion that claims Desire2Learn's Learning Environment 8.3 did not sufficiently correct its software to remove code and features that infringe on Blackboard's e-learning patent. D2L released Learning Environment 8.3 in March as a "design workaround" in response to losing a patent infringement suit to Blackboard in February.

New Legal Action
Blackboard filed its motion Tuesday afternoon in the United States District Court for the Eastern District of Texas, Lufkin Division. The company supplied us with a copy of the motion, which states, among other things, "Version 8.3 is not more than colorably different from Learning Environment version 8.2.2, which has been adjudicated to infringe claims 36, 37, and 38 of U.S. Patent No. 6,988,138...."

We spoke with Matthew Small, Blackboard's chief legal officer, who characterized the changes in D2L Learning Environment 8.3 as "cosmetic" with regard to addressing the patent infringement issues.

"We have had our experts extensively review Desire2Learn's [Learning Environment] 8.3, which they purport to be their workaround upgrade," Small said, "and it is not colorably different rom 8.2.2, which is covered by the court injunction."

Desire2Learn has not responded to us directly about the contempt motion. However, in a blog post, the company did mention that my request for a comment was the first they'd heard about it and that they have not yet been able to review the motion.

In the post, the company reported, "We will be posting the papers that have not been filed under seal as soon as we can. We have not yet had the opportunity to study the filing, but we did anticipate that Blackboard would file for contempt. We are disappointed that Blackboard has chosen to continue this litigation, particularly in light of the rejection of all 44 claims by the Patent and Trademark Office.

"We will fight this motion vigorously."

At issue for the most part is claim 36 of Blackboard's patent, which reads verbatim as follows:

Desire2Learn's workaround focused on the "predetermined roles" and "predetermined level of access and control" aspects of the patent. The U.S. Patent and Trademark Office originally awarded the patent based on this wording; it is unclear whether this claim would have been granted without such qualifiers. Even with the qualifiers, since the time the patent was granted, the USPTO has reversed itself and rejected all of the claims in the patent upon reexamination, but final rejection of the patent, should it come to that, is far from complete, and the patent remains in effect.

Regardless, Blackboard asserts, and the court appears to have agreed, that the key aspect of the claim is not the "predetermined" wording but the aspect of users having multiple roles across multiple courses using a single login and password, which Desire2Learn did not address in 8.3 and does not claim to have addressed.

"Basically they've just erased the terms 'user' and 'student' in the system and made some cosmetic changes," Blackboard's Small said. "But the underlying ... actual software itself is the same. I think what they were trying to do was create plausible deniability for their clients because they were on 8.2[.2], which the court injunction states is infringing and is barred by the injunction."

Blackboard also claims that Desire2Learn has not removed infringing functionality with regards to claims 37 and 38 of the patent, involving dropbox functionality of the Learning Environment.

Blackboard, in its motion Tuesday, asked the court to impose sanctions against Desire2Learn. "Desire2Learn is flouting the permanent injunction. The Court should use its inherent and statutory powers to sanction this contempt," the motion read. In particular, Blackboard is asking for:

• Recognition that Learning Environment 8.3 violates the permanent injunction;
• An mandate that Desire2Learn notify legal counsel of all U.S. customers and prospective customers of the order;
• A fine of $23,000 per day from June 11 to the date of the court's order;
• Payment of attorney's fees; and
• An additional payment of $23,000 per day following that court order that "Desire2Learn uses, sells or offers for sale version 8.3 or associated services."

Fighting Words
Meanwhile, even as Desire2Learn is vowing to defend itself "vigorously," Blackboard is seeing openings in the market.

Should Desire2Learn fail in its efforts, said Small, "... Blackboard is committed to avoid[ing] disrupting Desire2Learn's clients. Should Desire2Learn not prevail with its 8.3 attempted design-around, or should they not survive financially or for any other reason, Blackboard is committed to working with their clients to make sure we find a solution that doesn't interrupt their online program."

When asked whether this meant Blackboard wanted to take over Desire2Learn's clients, whether Blackboard wanted to supply a solution to Desire2Learn's clients, or whether Blackboard wanted Desire2Learn to pay a licensing fee, Small responded, "What that means is that it would be up to the school, and we would work with the schools to figure out what best met their needs. To the extent that they needed relief from Blackboard in some way or if Desire2Learn wanted to work with Blackboard in some way or if we could do something ourselves, certainly we would use our best efforts to make sure that those schools' online learning programs were not disrupted. So it would really be a case by case situation with each school, depending on what they wanted to do. Some schools might want to do an RFP and look at other options that are non-infringing. Some schools might want to use Blackboard. Many of [Desire2Learn's] clients are already using Blackboard. We have a lot of the same clients. They might want to find some other solution. Whatever the school wants to do, we are supportive, and we want to work with those schools."

He continued: "What we don't want to see happen is a school gets shut down because Desire2Learn one day has to pull the plug or declare bankruptcy or something like that as a result of the action."

It should be noted that Desire2Learn has told us repeatedly that it is financially stable and in no jeopardy of insolvency, even if it never recovers the more than $3 million it paid Blackboard last week.

When asked whether these words indicated in any way that Blackboard would be willing to pursue legal action against schools, Small said no.

"I was not insinuating in any way that Bb would pursue legal action directly against schools--we would not. However, I cannot imagine that any D2L client would knowingly violate a Court order or choose to use infringing software," he told me via e-mail.

Although Blackboard has said it would not sue schools for using open-source or home-grown learning management systems, it has reserved the right to sue schools for using proprietary and infringing software. According to the company's Patent Pledge FAQ page:

"Suing an institution to enforce our patent would not be in Blackboard's interest as it would generate intense dissatisfaction among Blackboard's clients and potential clients. Blackboard has never sued a school, museum, or library and depends on the goodwill of the academic community for our survival. Having said this, Blackboard cannot promise never to sue a school, museum or library to enforce its patent without placing at risk critical rights and protections afforded under this patent. Specifically, nothing in this pledge or FAQ should be read as implicitly or expressly granting a license to practice any patented invention, and Blackboard reserves the right to sue any entity not otherwise covered by this pledge for inducing or contributing to such school's infringement."