March 2008 — News
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Desire2Learn CEO Makes Case Against Blackboard Patent, Court Ruling
Lank: We have no idea, but I would be surprised if something didn't come down by the end of the year.
Nagel: Related to that, are you working out some kind of mechanism to recover the royalties you're going to have to pay Blackboard when their patent is overturned?
Baker: I think one of the things we've told our clients very clearly, and I think there was some confusion early on, one of the things we've always said very clearly is that we will never ask our clients to pay for the royalties. That is something that we will bear as a company.
And also, the royalties themselves are not paid directly to Blackboard. I would imagine they're going to go into an escrow account pending appeal. Blackboard shouldn't count on that revenue.
[The conversation at this point turned to corporate financials and legal fees, which we'll spare you.]
Nagel: Have you had any response from Blackboard since the release of 8.3? I know it's only been a day or two.
Baker: No, but we do anticipate that we will be proactive in sharing with Blackboard that release, so that we can also put their mind at ease that this is a workaround. I think they indicated that they want us to have a workaround to continue to do business with our clients. We're going to take them up on that offer. So we're going to share with them what we've done: all of our documentation. We're going to make sure their expert--under a protective order--gets access to the source code and to the application. But it's only going to happen after our expert first gives an official stamp of approval that this is what we refer to as a workaround.
We're volunteering to do that; that's not something that we're forced to do by any stretch of the imagination. Blackboard does not have to approve this as a workaround. We made that determination.
Nagel: You also released it, what was it, about 58 days before the injunction [will go] into effect?
Baker: Yes, we did. Now keep in mind that 8.3 is a workaround candidate today, and it was released--I think you're right--about 58 days prior to the expiration of the stay. And the judge anticipated that. I mean, we told the judge we could have this workaround out within 30 days, and we believe that we're going to hit that. We hope that [it's] only two weeks before we officially call it a workaround.
Nagel: Okay, and what do you need to have happen to be able to make that call?
Baker: We're having our external expert take a very close look at all of the things that Blackboard was claiming that we were infringing. And then they [can] take a very close look at all of our source code, documentation, the application, talk to our architect to ensure that he's comfortable how we've addressed the infringement that Blackboard's claiming.
Nagel: I'm going to ask you to get a little philosophical. Just assume the worst-case scenario where the patent stands, and you lose on appeal. What does it mean to you, and what does it mean to the LMS development community as a whole?
