Blackboard Inc. has maintained from the beginning that its intention in the patent fight with Desire2Learn has only been to receive "reasonable royalties." In a interview with Inside Higher Education in August 2006 ("Blackboard: Bully or Misunderstood?") Matthew Small, Blackboard's general counsel stated: “We are not bullying anyone. We are not looking to put anyone out of business. We are looking to obtain a reasonable royalty for use of our intellectual property.”
Recall, first of all, that Blackboard filed its lawsuit a day after receiving the patent. There were no discussions with Desire2Learn regarding a "reasonable royalty." Now, having been awarded $3 million in damages and armed with a bogus patent, Blackboard now wants the Court to impose a sweeping permanent injunction which would prevent D2L from selling "all versions and subversions" of D2L's product for both "hosted and self-hosted schools". The injunction would not be limited to the course management system but would also apply to D2L's "entire services spectrum, including hosting, training, help desk, implementation, customization, and content services." In addition to the injunction, Bb is also asking the Court to impose a hefty 25% royalty on all D2L products and services provided to existing customers. If this is not an attempt to put D2L out of business, I don't what is.
As if the over-reach itself were not incredible enough, Blackboard rationale to the Court is based on the "hardship" that it is a "relatively new and small company." (D2L has 30 self-hosted clients in the US. By contrast, Bb claims over 3500 clients worldwide.) According to court documents Bb's market share for course management systems is 75% and possibly as high as 90%.
Desire2Learn's Response to Bb's Motion for Permanent Injunction brings out another salient fact regarding B's market monopoly, namely its successful maneuvering of the Department of Justice at the time of the WebCT acquisition. Blackboard apparently knew that the PTO had granted the patent. Nevertheless, Blackboard averred to the DOJ that the merger would not stifle competition which was "robust and increasing" and "vigorous and growing". It even argued to the DOJ that "Bb will not be able to raise prices or otherwise impact competition unilaterally because of the increasingly strong competition from these numerous and diverse sources." Apparently, Bb did not mention to DOJ officials its intention to wield the patent knife against its next major competitor.
The Court will hear Blackboard's motion for an injunction tomorrow (March 10th, 2008) and also consider other aspects of implementing the jury verdict. Jim Farmer in eLiterate has an excellent overview of the court case as it stands.
Note: Caliopolis ("Did the DOJ Know about Blackboard's Patent and Would They Have Approved the Merger with WebCT") first raised the connection between Blackboard's patent and the DOJ merger review. Caliopolis was also among the first to note the connection between Bb's work on IMS standards and the subsequent patent: "BlackBoard was consulting with IMS, which "...provides
leadership ... through
community development of standards,..." at approximately the same time they were working on the software that they later patented.