The Blackboard Morality Tale

"the rich were usually mean. Not able to separate themselves from the practices that had made the money: infighting, habitual fraud, mad agility in compound deceit, and strange conventions of legitimate swindling."  Saul Bellow's Mr. Sammler's Planet

By focusing exclusively on the legal jockeying in the Blackboard Inc. case we might miss the morality tale.

This week legal activity reached fever pitch. First, Desire2Learn opened up a second front in the battle by filing for a re-examination with the U.S. Patent and Trade Office (PTO). Simultaneously, it filed for a motion in the Eastern Texas District Court to stay legal proceedings pending re-examination by the PTO. Blackboard Inc. countered by filing an Opposition to D2L's Motion to Stay. Desire2Learn then countered Blackboard's counter. Feldstein and Schmoller have provided insightful early commentary on the legal maneuvers.

Let's apply a different lens by unpacking Blackboard's Inc. "Opposition to Stay" document, not from the standpoint of the law but as a rhetorical probe into the company's objectives.

• Reasonable Royalty. Blackboard Inc. has consistently and repeatedly asserted in public forums that its intention in suing D2L is to recover "reasonable royalties." The "Opposition to D2L Document" reveals a very different story. Like mad Ahab in pursuit of the White Whale, Blackboard avows in court that it is seeking the lethal harpoon of  injunction against D2L. ["a stay would harm Blackboard by allowing Desire2Learn to avoid an injunction"; "Blackboard seeks an injunction.."; "a stay would irreparably harm Blackboard by preventing it from obtaining an injunction against Desire2Learn's infringement"; "An injunction is particularly important here.."; "obtaining an injunction against Desire2Learn.."; "Delay in Blackboard's ability to obtain an injunction..; ] Read the entire document and there is no mistake that Blackboard is seeking a mortal blow against Desire2Learn and will pursue its foe relentlessly and ruthlessly.
  
  
• The Foreign Threat. The most remarkable statement in the entire document is the following: "An injunction is particularly important here, given that Desire2Learn is a foreign, (emphasis mine) privately-held technology start-up company." No one can miss the trope. Why is it relevant to mention that D2L is a foreign company? Taken in context the sentence might be translated as: "Judge, you are a loyal American and we are an American company. If you issue a stay order, you will be responsible for loss of American jobs to a foreign competitor. Each day of delay translates into lost jobs at the hands of a foreign competitor that has stolen our intellectual property. We want an injunction (i.e. death) against an illegitimate and criminal foreign competitor." How friendly you reckon is the Eastern Texas District Count to foreigners? We don't know, but Blackboard's lawyers are not hesitating to play the xenophobic card. Also interesting is the mis-characterization of Desire2Learn as a startup company. Here is the context: "There is no reason to believe that, when the reexamination with all attendant appeals is complete, Desire2Learn will have the resources to pay a judgment for damages that accrue during the stay." This is no game. It's apparent that Blackboard will be seeking huge damages and an injunction to force a shut down of the company unless Desire2Learn capitulates and begs for mercy.
  
  
• The Secret Document. Many of us have wondered why Desire2Learn was the target and why so soon? Now we know. We learn of a sealed document filed by Blackboard and referred to as Exhibit C, "a highly confidential submission to the U.S. Department of Justice during the approval process for Blackboard's merger with WebCT, in which Blackboard sets forth in detail the competitive threat posed by Desire2Learn. This document, which was submitted before the PTO issued the '138 patent, shows that Blackboard has lost more licenses to Desire2Learn than to any other company." Not only does Blackboard take Desire2Learn seriously but sees it as the only major competitor and obstacle standing on the road to total dominance of the commerical LMS market. (The sealed document also brings to the forefront John Mayer's observations about Blackboard's possibly questionable conduct during the DOJ anti-trust review. "Professor Chiapetta reminded me that there might be a linkage to the inequitable conduct defense and possible Sherman Act (antitrust) cross-claims that Desire2Learn could bring against BlackBoard. Remember, we still don't know what or how much BlackBoard disclosed to the Department of Justice during the review of their purchase of WebCT back in January of this year.")

What is the upshot of the Blackboard morality tale? We have a company that has seized community property --- your property and mine--- and now in broad daylight is wielding our knife to cut its competitor's throat.