March 2008 — News
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Desire2Learn CEO Makes Case Against Blackboard Patent, Court Ruling
Baker: I don't think we used the small market share as a major reason against the injunction.
Nagel: The way I read it, you were saying that when Blackboard wanted to merge with WebCT, their argument was they weren't going to stifle competition because you guys exist, and you have a small market share. I thought that was part of the argument.
Baker: I think the key part of the argument we were making was: Around the department of Justice work with Blackboard when they were merging with WebCT, ... they justified the merger by ... playing us off as their most significant competitor in their marketplace. And then, while they had this patent, ... literally [with] the same lawyers ... Blackboard turned around a few months later and sued us to prevent us competing in the marketplace. Or to attempt to prevent us from competing in the marketplace.
It was an amazing strategy where they engaged PR firms and others to come up with strategies around containing and controlling us and prevent us from, in their words, competing against them for clients and for potential clients.
Nagel: All right. Right now you guys are working with Blackboard to resolve some of the issues in the case. What are you doing right now with them?
Baker: Right now we've been asked by the court to have a meet-and-confer with our counsel to come up with a potential "reasonable royalty" to allow existing and new clients to license Blackboard technology.
Nagel: This is an open-ended question. Answer it any way you want. What happened in Texas?
Baker: I personally think I learned a tremendous amount. I was actually trying to use our new ePortfolio product while I as down there, but our lawyers told me that would be discoverable, so I had to stop. But I wanted to share what I was learning. It was an incredible experience. I learned so much about the court system in the U.S.
I found it troubling to understand how a jury could be asked to understand ... all the elements of the law that goes around patents, as well as understanding the technology in question. It was pretty hard for me to sit through some of the testimony. I can only imagine what jury members would have been thinking.
For me it was fairly frustrating because we tending to be focusing on the words that were within the patent. So we tried to talk about prior art that met the definition, the claim construction the court uses to define [elements of] the patent. And Blackboard fought against us by using words that weren't in the patent and weren't in the claim construction. They were almost creating smoke and mirrors around the actual, real heart of the matter. We were trying to define what's in the patent; they were trying to do everything they could to avoid using the words that were in the patent to make it abundantly difficult for a jury to, in my opinion, make the right decision.
Nagel: Ultimately was the validity of the patent ever in question in the trial itself?
Baker: Absolutely. We put up prior art that should have invalidated that patent.
Nagel: I don't mean what you presented; I mean what the jury was asked to consider.
Baker: Oh yes. The jury was certainly asked to consider the validity of the patent.
Diane Lank: Now, remember with that, Dave, that the standard of proof there was "clear and convincing." It's not what they call "mere preponderance of the evidence." To invalidate a patent in court, the party challenging the patent has to prove by clear and convincing evidence that the patent should be invalidated.
One of the things--and I think this goes to what John said--is we tried to focus on the patent. And I think it's fair to say Blackboard tried to focus on anything but the patent. And one of the things that we heard several times in the trial from Blackboard was that the clear and convincing evidence standard is the same standard that they use in Texas to take a child away from its parents. And that's the kind of thing that, I'm not sure, that that kind of language advances the ball in terms of helping the jury.
So that's a bit of an example. But John is right. We absolutely challenged the validity of the patent.
Nagel: Were you the trial lawyer on this case?
Lank: Oh no, no. We have outside counsel. I was at counsel table the whole time, but no....
Baker: And I think I was the only corporate representative from both sides that actually sat through the entire trial.
Nagel. Okay. In terms of your legal options, where are you going from here?
