December 15, 2009, 06:34 PM ET
Blackboard Settles Longstanding Patent Fight With Rival Desire2Learn
Just weeks ago Blackboard said it would appeal its patent battle against rival Desire2Learn all the way to the Supreme Court, but on Tuesday both companies announced that they have settled their epic legal battle.
The companies issued a joint press release announcing that they had reached an agreement that will settle all lawsuits between them, ending litigation that began more than three years ago when Blackboard sued its rival, asserting that it had violated the company's patent on education software. Apparently both sides will license each other's technology, meaning that technically neither side won the dispute. The terms of the agreement are confidential, according to the statement, and as part of the deal, both sides agreed not to talk about the issue publicly.
So a vocal and divisive fight has ended in silence.
Actually, one Blackboard official, Ray Henderson, posted a blog item today that explains the logic behind the company's decision to walk away from the fight. "I came to the view that it was best for us to bring the matter with Desire2Learn to a close," wrote Mr. Henderson, president of Blackboard's teaching and learning division. He said he did so after weighing the balance between the need to defend the company's intellectual property and the desire not to upset its client base (which has long expressed frustration with what some college leaders saw as bullying tactics by Blackboard). "This dialog has distracted attention from the many positive contributions to the industry that Blackboard has made and can continue to make," he added.
Initial reaction by college officials on Twitter consisted mostly of relief. "Sense prevails!" wrote one commenter on Twitter. "Finally peace on earth. Okay, not quite, but at least there is peace between Blackboard & Desire2Learn," tweeted another.
Trace A. Urdan, an education-industry analyst with Signal Hill, an investment firm, said that Blackboard may have felt that it had met the strategic goals of the lawsuit and did not see enough value in continuing the fight. "What this lawsuit was really all about in the first place was deterring other market entrants," he said in an interview. He added that the lawsuit cast a dark cloud over Desire2Learn that made it far less desirable to bigger companies that might have wanted to buy it to challenge Blackboard. "The urgency of that I think has passed so the whole point of it is kind of moved on," said Mr. Urdan, noting that today's economic landscape makes such acquisitions less likely than in the past. Plus, the lawsuit was a public-relations disaster, he added.
"It was an act of intimidation," he said of Blackboard's lawsuit. "The point's been made, and people probably won't soon forget it."