Judge Clark in the Eastern District of Texas Federal Court has issued a Permanent Injunction that prohibits Desire2Learn Inc from "using (emphasis mine) in the United States, offering to sell for use in the United States, or selling for use in the United States, either alone or in combination with any products, services or systems" any product or related services that violate the patent.
The ruling might not be as dark as it appears. There is still hope for D2L. Let's consider some knowns and unknowns. Judge Clark has stayed enforcement of the Injunction order for 60 days. He has also ordered Blackboard Inc and D2L to meet during the next ten days to negotiate, if possible, a royalty agreement for existing clients. These are the most important knowns.
Let's turn to some unknowns. From the judgment we can infer that the injunction also applies to existing D2L customers who use D2L's Learning Environment (version 8.2.2 or earlier versions). The Judge seems to have given Bb the upper hand in the negotiations over royalties. What if Bb and D2L cannot reach agreement over royalties for existing customers? Will the Court additionally penalize D2L for violating the injunction? Will Bb sue existing customers for patent infringement? Are existing customer indirectly at risk? We don't know.
D2L claims on its web site that the 60 day grace period allows them to release a redesigned product (version 8.3) that does not infringe. "While 8.3 has undergone exhaustive internal review, we also are in the process of having 8.3 reviewed by independent technical experts knowledgeable about the patent and its claims. We expect this process to be completed well before the 60-day stay period." But will the Court recognize the workaround? What will be the process for considering whether the new release infringes? Or, will see now yet another round of suit and counter-suit over the validity of the workaround? Shades of Jarndyce and Jarndyce and an interminable lawsuit? We don't know.
Let's come back again to what we know. Although the Injunction has been stayed for 60 days this clearly freezes all new sales of the D2L product in the US until D2L can demonstrate unequivocally that its product does not infringe or it is able to offer strong indemnification. We also see that Bb's actions are beginning to impose significant costs to current D2L customers. This is true whether or not D2L prevails in the end. D2L's litigation costs will not be recovered but will be transferred to our institutions and to our students. The Injunction will introduce a fog of uncertainty over pressing operational issues such as the timing of important upgrades and release patches.
Blackboard is a great company with great employees. Unfortunately, its current leadership has dismally failed its employees, its customers, and the higher education community. But it's still not too late to do the right thing and to salvage the company's tarnished image. Negotiate reasonably with D2L. Recognize and support D2L's workaround. Close the books on the lawsuit once and for all. And then inspire and focus your employees to create a great product that wins the market on its merits. You might be surprised at what your employees are capable of. There is still a choice. And it's never too late.
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