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Is Desire2Learn in the Clear? Blackboard Says 'No'

Desire2Learn is reporting the first bit of (tentatively) good news to come out of Texas since Blackboard initiated its patent-infringement suit against it almost two years ago to the day. According to Desire2Learn, the United States District Court for the Eastern District of Texas, Lufkin Division, has denied issuing sanctions in Blackboard's motion for contempt. But Blackboard told us Desire2Learn definitely is not in the clear.

Blackboard filed its motion June 17, arguing that Desire2Learn had not fulfilled the obligations of the court, which had found Desire2Learn to be infringing on Blackboard's controversial e-learning patent and barred Desire2Learn from selling its Learning Environment 8.2.2 (or earlier) in the United States. In response, D2L released Learning Environment 8.3 in March as a "design workaround." Company representatives said they believed strongly that the new version addressed the patent issue, but Blackboard's chief legal officer, Matthew Small, told us he did not think it went nearly far enough, saying that the changes were merely "cosmetic" in nature.

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.

Details are scant at the moment. In a blog post Monday afternoon, Desire2Learn wrote: "We just received word from Texas. The Court denied Blackboard's Motion for Contempt. We anticipate we will receive the Court's written Order in a few days...."

We spoke with Blackboard's Small Monday evening, and he told us a different version of the story, saying that whether the new 8.3 release infringes or not is still up in the air from a legal standpoint.

In its contempt motion, Blackboard had written, "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...."

Small recounted that the judge in the case in reviewing the contempt motion seemed to have agreed with that, saying that version 8.3 is not, in fact, colorably different from version 8.2.2; nevertheless, the judge did not issue sanctions against Desire2Learn, leaving it up to Blackboard to meet the burden of proof that the new version does infringe.

Does this mean a new trial? That isn't quite clear either. But Blackboard is definitely not dropping the matter.

"It's still our position this is not a valid workaround," Small told us. He said Blackboard will be taking the next steps in the matter when those steps become clear. The final order from the court has not yet been issued to either party. What that order says will determine what happens next in the case.

In its contempt motion, Blackboard had been asking for additional penalties against D2L, including:

  • Recognition that Learning Environment 8.3 violates the permanent injunction;
  • A 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."

Background on the Patent
Between June 1999 and March 2000, Blackboard filed applications for learning management system technologies with the United States Patent and Trademark Office (USPTO) and was finally awarded patent No. 6,988,138 in January 2006, with several items from previous application removed. The company announced its patent publicly July 26, 2006 and filed a patent-infringement suit against rival Desire2Learn the same day.

In December 2006, Desire2Learn filed a request with the USPTO to reexamine the validity of Blackboard's patent. It was granted that request in February 2007. A similar request was filed ex parte by an organization representing open-source LMS developers, the Software Freedom Law Center. That group's reexam request was also accepted in March 2007.

Upon reexamination, in March of this year, the USPTO, in a non-final action, rejected all of the claims in Blackboard's patent, although the patent is still in effect until a final decision is reached. The timeline for such a final decision is up in the air. Both Desire2Learn and Blackboard have had the opportunity to respond to the rejection. Blackboard's response included filing additional claims with the original patent and urging the USPTO to reject all arguments against the patent. (Further information about the response can be found here.)

Blackboard v. Desire2Learn
Meanwhile, Blackboard's case against Desire2Learn went on. In February, a jury in the U.S. District Court for the Eastern District of Texas awarded Blackboard $3.1 million from Desire2Learn for patent infringement and refused to invalidate Blackboard's patent. The court also enjoined Desire2Learn from selling its Desire2Learn Learning Environment 8.2.2 or earlier in the United States, giving the company 60 days to comply. Soon after, Desire2Learn released Learning Environment 8.3 as a "workaround candidate." The company also released a new version of its Learning Repository and also rolled out Desire2Learn ePortfolio on the same day.

Since that time, D2L has migrated all of its U.S. clients to version 8.3 and has paid off Blackboard more than $3 million for the judgment Blackboard won in court in February.

What happens next is likely to be determined at some point later this week when the judge in the case issues his final ruling on the contempt motion. We will keep you posted.

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