The NOSE

Educause Severely Rebukes Blackboard

In an unprecedented action Educause has issued a strong rebuke to Blackboard Inc  over its patent action against Desire2Learn.

As reported in the Chronicle: "Brian L. Hawkins, president of Educause, said the organization's Board of Directors had voted unanimously on Sunday to encourage Blackboard "to drop the patent, drop the lawsuit," and put the technology "in the public domain."

"We think that it is in their best interest and the best interest of the broader higher-education community," Mr. Hawkins said.

Blackboard's Matthew Small replied that Educause's position would not lead to a change in the company's position (i.e. Blackboard doesn't give a shit about what the educational community and its customer base thinks).

Blackboard Educause2006 Town Hall Meeting: Part I

Blackboard Inc. held a townhall meeting today at Educause2006. It was in three parts. Peter Segall (President, US Higher Education) led off for ten minutes with marketing fluff. Next was Matthew Small (General Counsel and Senior Vice President), who provided "context" for the patent discussion. (Michael Chasen didn't say much of anything. And Matthew Pitinsky was MIA.) The most valuable part was the Q&A with the audience. Overall, I was very impressed by the questions and unimpressed by the answers. Stay tuned for what was said and some analysis.

How to Talk From Both Sides of your Mouth

Blackboard's general counsel Matthew Small is now saying that its lawsuit against Desire2Learn is a "one-off with no planned follow-up lawsuits." That comes from one side of his mouth.

When asked by Michael Feldstein whether the company would consider issuing a royalty-free license to open source projects and universities, Mr. Small asserts that to be a non-starter because it would "diminish the monetary value of the patent." That comes from the other side of his mouth.

The two statements don't add up and it doesn't take a law degree to do the reckoning.

If Mr. Small is intent on preserving the monetary value of his company's beloved patent, the only way to do it is to maintain the threat of litigation. Or, does Mr. Small expect that Blackboard's competitors, of their own accord, will simply line up to pay royalties?  Who in their right mind would do that without the fear of litigation? How can one attach a "monetary value" to a patent unless you intend to derive a revenue stream from it or block your competitors from doing so?

Blackboard Inc. has become adept at talking out of both sides of its mouth and these recent statements are yet another example of why the company can't be believed or trusted.

Note: I don't favor asking Blackboard to provide open source projects or universities with royalty-free use of their e-learning patent. That would be tantamount to recognizing Blackboard's ownership claim for an idea they didn't invent. Mr. Small, drop the lawsuit and stop pretending that your company invented anything. Your patent assertion is rubbish.

Ten Reasons Why you Should Care About the Blackboard Patent: Monopolies Mean Higher Prices

Resting by stelj.

Reason #1: Monopoly Power Over the last decade Blackboard Inc. has achieved monopoly status in the higher education e-learning market by eliminating all viable competition. In 2002 it acquired an emerging competitor Prometheus and promptly killed the product. In 2006 it acquired WebCT with the intention of killing off the product line and swallowing the customer base of its only major competitor. By using an illegitimate software patent as the basis for a lawsuit, Blackboard has in its bullseye Desire2Learn, a rapidly growing Canadian company and the recent recipient of a prestigious Deloitte Technology Fast 50 award for growth, excellence and innovation. Blackboard can and will employ the same patent weapon to bludgeon any and all commercial competitors who pose a threat to its monopoly status in the higher education e-learning market. (I have argued elsewhere ("Blackboard's Fabian Strategy Against Open Source") that Blackboard's war against open source will follow a different strategy.)

Will Blackboard prices go up? They already have. Will they go up in the future? What do you think?

Note: Blackboard revenues have increased over the past five years at an impressive clip not through new sales but through targeted acquisitions of competitors and complementary products which allow the company to achieve strategic lock-in of its customer base.

So Small a Town, So Many Patent Suits

Speed kills. The adage applies these days to more than motor cars. In "So Small a Town, So Many Patent Suits" the NY Times  provides an intriguing look at the town of Marshall, Texas, known among patent aficionados as the "rocket docket".

SPEED is not the only feature bringing patent holders to Marshall. So, too, is the fact that they usually win. Three-fourths of the cases that come to trial in Marshall are decided in favor of the plaintiffs, compared with less than half in New York. The success rate for patent holders in Marshall is a great incentive for defendants to settle matters quickly and privately.

When it comes to the Blackboard case it's worth a reminder that:

• Patent cases in the US are decided less on the merits and more on the idiosyncrasies of the patent legal system. On the one hand, we have an overworked and dysfunctional (due mostly to outdated patent laws which are skewed in favor of incumbents and patent trolls) US Patent Office that slips through ridiculous patents and, on the other hand, jurisdictions such as East Texas which exploit flaws in the US intellectual property system as a gold mine opportunity for local business development.
• Desire2Learn faces an uphill  battle as it simultaneously takes on a financial goliath in Blackboard Inc. and a US legal system which overwhelmingly favors the plaintiff, irrespective of the technical merits of the case.