USPTO Rejects Blackboard Patent Claims (Update 10)
[Update 10, 6:22 p.m. PDT] Blackboard's e-learning patent looks to be going down. The United States Patent and Trademark Office this week sent out a "non-final" determination on the reexamination of Blackboard's patent in which all of the claims on the patent were rejected. Blackboard still has a period of two months to respond to the determination.
We spoke with representatives from the two parties that filed for the reexamination of the patent: Desire2Learn and the Software Freedom Law Center (SFLC). Their comments follow. Blackboard itself chose to release a statement (approximately 3:30 p.m. PDT) rather than speak directly with us today, although we might have additional comments next week.
While Desire2Learn and the SFLC celebrated the decision, Blackboard said that its patent still stands, that the company does not intend to back down, and that the decision has no effect on Blackboard's patent infringement suit victory over Desire2Learn.
The USPTO's Action
In making its determination, the USPTO said that it had found "a substantial new question of patentability" from the objections raised on both the inter partes reexamination request filed by Desire2Learn and the ex parte reexam request filed by the Software Freedom Law Center (SFLC). Both reexam requests were filed in late 2006 and accepted in early 2007.
There were 10 total issues raised in the reexamination request covering all 44 of the claims in the Blackboard patent (patent No. 6,988,138), also known as the "Alcorn" patent. According to the communication from the USPTO, seven out of 10 of the objections have been adopted either as proposed by the SFLC and Desire2Learn or with modification. The result is that all 44 of the claims by Blackboard have been rejected, according the the USPTO's summary of the action taken on the reexam.
Desire2Learn: Patent Had 'Fatal Flaws'
We spoke this afternoon with Desire2Learn CEO John Baker, who told us, "We're very pleased that the [USPTO] has rejected all 44 claims of Blackboard's patent. It was nice to see that the prior art that we submitted to the [USPTO] was used and reviewed thoroughly by the looks of it. Multiple pieces of prior art were enough to reject all claims of the ... patent."
He said that it wasn't just one piece of prior art that knocked down the patent claims, but multiple pieces, which makes the present decision stronger than it would be if there were less prior art involved.
"It's going to make it very difficult for Blackboard to overcome the recent office action from the Patent and Trademark Office."
He continued, "We do believe Blackboard has a significant hurdle to overcome here given the number of pieces of prior art that caused this to be rejected."
Diane Lank, general counsel for Desire2Learn, said that the company expected the USPTO to reject Blackboard's patent claims all along, despite the fact that a jury in Texas did not invalidate the patent last month when it had the opportunity to do so.
"We knew going into this thing that the patent had very, very serious, likely fatal, flaws," Lank said. "The one thing you have to remember is they go on different standards. The court case, to invalidate the patent, is a different standard of proof that we had to show there--a 'clear and convincing' standard. The Patent and Trademark Office isn't governed by that rule."
As for Desire2Learn's next steps in terms of the patent infringement case, "We're just digesting this now," Baker said.
The information is still very new. As of this writing, Desire2Learn had not yet received the letter from the Patent Office directly; the notice is posted on the USPTO's site, which is how Baker found out about it, doing a random search on the site.
"For us, it's a note coming from the U.S. Patent and Trademark Office ... that validates what we've been saying all along, that this patent should have never issued and that if the Patent and Trademark Office had this prior art in front of them that they would invalidate it," Baker said. "And that's what they have done here with this action: They've rejected all 44 claims. It's been a long [time], almost two years we've been saying that, and now finally we're seeing some great results from it. We just wish it would have happened a couple months prior to the trial."
Desire2Learn, of course, lost the patent infringement case Blackboard had brought against it and was ordered to pay $3.1 million in damages and remove "infringing" code from its learning management system.
Desire2Learn did, in fact, remove the code from its system and released version 8.3 as a final design workaround. However, Desire2Learn said the USPTO's action would not affect the latest release of its software. The reason? When the workaround was implemented, the software turned out to be an improvement over previous releases, incorporating not just the code changes but several new features as well.
"Regardless of what the final actions out of the U.S. Patent and Trademark Office are--and we're thrilled with the direction they're going in--we should be in a position where our clients and potential clients are going to be well separated from what Blackboard's trying to claim as an invention because we put the energy into addressing all the things they were trying to claim were infringing."
You can read more about the new version and Desire2Learn's e-learning strategy in relationship to the patent in the following articles from earlier this month:
John McLeod, Desire2Learn's director of marketing, added, "What this [decision represents] is something great for the entire industry. Desire2Learn said all along, 'We'll stand up for everyone.' This result is good for everyone, not just Desire2Learn."
You can find out more about Desire2Learn's involvement in the patent case and decision by visiting its Patent Information Blog here.
SFLC: 'This Patent Is Dead'
Desire2Learn isn't the only one claiming victory with the USPTO's action this week. Eben Moglen, founding director of the SFLC and a partner in Moglen Ravicher LLC, spoke with us this afternoon as well, saying that the decision reinforces what his organization has been saying all along: that the Blackboard patent was wrong from the outset and should never have been granted. The SFLC represents free and open source software developers, such as Sakai; Moglen Ravicher, which just launched this week, represents for-profit clients "that support FOSS but are not eligible to receive SFLC's pro bono services." Moglen himself has been outspoken about software patents in general and has, in the past, gone head to head with Blackboard on the issue of this patent in particular. (You can find out more about that here.)
"This is a step in a procedural road," Moglen said. "There will be other procedural steps and other days. But I think from the point of view of the final outcome, the days that are going forward are not likely to change today's result. This patent is dead."
He added, "We have succeeded not only in saying what needed to be said; we have succeeded in allowing the Patent Office to say it for us. [The] opinion by the Patent Office adopted our objections to the patent as proposed and adopted by incorporation by reference our claim chart." (Moglen pointed out that it was the SFLC's Richard Fontana who actually filed the ex parte reexamination.) "The patent claim chart is the key analytical document in relation to the entire reexam, and by adopting our claim chart by reference the patent examiner was saying, 'You see, everything SFLC says about this patent's content and its relation to the prior art is exactly right. So we have nothing more to say [to the Patent Office]. We are exactly right, and the Patent Office has declared that because we are exactly right there is no single claim in the Blackboard patent that survives. Every single part of the Blackboard patent was obvious, as we said.
"Not only do we have nothing more to say [to the Patent Office], we think there is nothing more to say. We think that Blackboard has nothing to say and ought not to say anything. There's nothing left of this patent. We were correct in the first place."
He said that, in fact, Desire2Learn's filing of an inter partes reexam request only muddied the process.
"We told Desire2Learn that it would take only one shot from a correctly aimed gun to kill this patent," he said. "We regret that they didn't just let us do it. The fact that they have thrashed around as they have thrashed around has only made matters more difficult."
That said, however, "The patent was dead on arrival. It was a foolish patent poorly thought through [that] should not have issued. The conduct of Blackboard in aggressively pointing that patent at other people and threatening them with it was unconscionable conduct."
Blackboard To Be Target of SFLC
He said that, owing to Blackboard's behavior with the Alcorn patent, SFLC will continue aggressively targeting Blackboard's efforts to patent education-related software.
"We told Blackboard that unless we were offered terms of safety and permanent security against such misbehavior by Blackboard, that the free software community, acting through the Software Freedom Law Center, would eliminate the patent and would prohibit Blackboard from holding any further patents at any time in the future. We still intend to behave exactly as we said. We believe the act of threatening aggressively to harm businesses for the employment of techniques which Blackboard had no right to patent was unacceptable, anti-competitive behavior by a poorly socialized entity that does not play well with others and apparently does not understand that education is a collaborative activity."
He said that a poor decision on the part of the government gave Blackboard what amounted to "munitions," and the company "used those munitions to intimidate people engaged in learning. That's as disgraceful a form of economic crime as there is." He added that the education community should be pleased to hear that Blackboard has now been deprived of the opportunity to commit more "thuggery."
When asked how such a patent--which many consider to be blatantly flawed--got through the Patent Office in the first place, Moglen said that the USPTO is not to blame entirely, that it was facing inherent difficulties in this situation, including the quality of examiners available. With the rapid growth of technology in the country, he said, it's not surprising that the Patent Office had trouble finding enough examiners and training them properly for the task. In addition, he said, the USPTO extended its jurisdiction over computer software fairly late in the game and so did not have the body of historical patent information that might have otherwise prevented such a patent from going through.
But he also argued that this is an area in which the USPTO should not be involved--that its jurisdiction and scope should not extend to computer software.
"Companies like IBM and Hewlett-Packard, which were very strongly in favor of the patenting of software in the early 1990s, have now come to realize that the policy was a mistake," he argued. "They now see, as the free and open source software world saw from the very beginning, that this promises to be more of a nuisance to producers and customers, inventors, designers, and businessmen around the society than it can possibly do good.
"They have learned, as we suggested from the very beginning, that overprotectiveness breeds cost, nuisance, out of control litigation, and the kind of 'gotcha' mentality in which everybody hides in the bushes with their government-issued monopolies like a lead pipe in the dark and waits for somebody with an invention to come along and hits them up against the backside and takes their money."
Blackboard: 'No Effect on the Validity of the Patent'
Meanwhile, Blackboard, for its part, said it isn't going away. It issued a statement Friday afternoon, saying that the patent is still alive and kicking.
"This Office Action was expected and is the first step in a reexamination process that often takes years to complete. It has no effect on the validity of the patent, the lawsuit between Blackboard and Desire2Learn or the pending injunction against Desire2Learn that will go into effect on May 10th, 2008, precluding ongoing sale or use of their Learning Environment products and services," the company's statement read.
The company said that with reexaminations of this type, the patent holder goes through a sort of negotiation process, as during the initial application for the patent, and that 90 percent of such reexaminations result in the upholding of the patent.
"With that in mind ... we remain very confident in the validity of our patent and that the Patent Office will agree with the ruling in Federal Court last month," the company's statement read. "While the reexamination process moves forward, the issued patent will remain both valid and enforceable."
Blackboard's complete statement can be found at the end of this article.
SFLC's Moglen had not seen Blackboard's statement at the time of our interview earlier in the day. However, he did have some advice for Blackboard, advice the company does not at this time seem to be interested in taking:
"We believe that Blackboard should now move quickly to make complete peace with the free and open software world by indicating that it will never again under any circumstances invoke any patent claims now existing or after acquired against any free software program," he said. "Unless they feel like making peace there will continue to be war. This patent is the first casualty. But any other patent that Blackboard ever comes to acquire will be a future casualty of the same failure on their part to observe good terms of equal and appropriate collaboration in educational software design and implementation."
Background on the Patent
Between June 1999 and March 2000, Blackboard filed applications for learning management system technologies with the United States Patent and Trademark Office (USPTO) and was finally awarded patent No. 6,988,138 in January 2006, with several items from previous application removed. The company announced its patent publicly July 26, 2006 and filed a patent-infringement suit against rival Desire2Learn the same day.
In December 2006, Desire2Learn filed a request with the USPTO to reexamine the validity of Blackboard's patent. It was granted that request in February 2007. A similar request was filed ex parte by an organization representing open-source LMS developers, the Software Freedom Law Center. That group's reexam request was also accepted in March 2007. The reexaminations were merged into a single reexamination two weeks ago.
Blackboard had pledged non-assertion of its patent against open-source developers but would not relinquish its patent and said it would target commercial developers.
Blackboard v. Desire2Learn
Desire2Learn was the first such target. In February, a jury in the U.S. District Court for the Eastern District of Texas awarded Blackboard $3.1 million from Desire2Learn for patent infringement (considerably less than what was sought) and refused to invalidate Blackboard's patent. Also this month, the court enjoined Desire2Learn from selling its Desire2Learn Learning Environment 8.2.2 or earlier in the United States, giving the company 60 days to comply. Soon after, Desire2Learn released Learning Environment 8.3 as a "workaround candidate," then, this week, released it as a final workaround.
Should the USPTO's rejection of the Alcorn patent stand, this will, of course, have a major impact on Blackboard's case against Desire2Learn. But it's too early to tell. From its statement today, Blackboard clearly is not ready to back down just yet.
Blackboard has two months to respond to the non-final action of the USPTO, after which third parties will have another month to file further responses. There are three potential outcomes of any further action by the USPTO: It could let the rejection of Blackboard's patent stand; it could modify some elements of the decision; or it could reverse itself.
Blackboard's shares on the Nasdaq exchange closed down 1.06 percent at $32.76 on light volume today but were up 1.01 percent at $33.09 in after hours trading.
See links at the end of this article for further reading on the history of the patent, reexam, and patent infringement case.
[The following statement, issued by Blackboard today, is presented unedited in its entirety. --D.N.]
Dear Blackboard Community,
Today, the United States Patent and Trademark Office issued a first Office Action in the reexamination proceeding regarding Blackboard’s U.S. Patent 6,988,138 ("the'138 Patent"). This Office Action was expected and is the first step in a reexamination process that often takes years to complete. It has no effect on the validity of the patent, the lawsuit between Blackboard and Desire2Learn or the pending injunction against Desire2Learn that will go into effect on May 10th, 2008, precluding ongoing sale or use of their Learning Environment products and services.
To put today’s announcement in its proper perspective and help you answer any questions you may receive, it is important to understand the reexamination process.
With all reexaminations of this type, the Patent Office makes an initial determination as to whether the party that requested the reexamination (in this case, Desire2Learn) has articulated any questions that may need to be resolved with respect to the claims of the patent.
With today’s action, the Patent Office accepted some of Desire2Learn's questions, modified some and dismissed others. For questions like these that it accepted or modified, the Patent Office outlines the issues in an Office Action and the patent holder then has a chance to respond and explain its position.
That’s where we are now, entering a stage in which the Patent Office and we, the patent holder, explain our respective positions. This process is very similar in nature to the negotiation that takes place with respect to obtaining any patent, with the additional element that Desire2Learn, which requested the reexamination, also has the opportunity to comment. Blackboard will now have two months to respond to each of the Patent Office’s questions, all of which were unsuccessfully raised by Desire2Learn in the recent litigation.
With that in mind, and given that more than 90% of patents that undergo reexamination of this kind ultimately are upheld, we remain very confident in the validity of our patent and that the Patent Office will agree with the ruling in Federal Court last month. While the reexamination process moves forward, the issued patent will remain both valid and enforceable.
We will now respond to the Patent Office’s questions and will update you as events warrant.
This information has been posted to our Patent Information site at www.blackboard.com/patent
The following links provide further background and perspectives on Blackboard's patent and the suit against Desire2Learn.
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