Courtroom Showdown Begins in Blackboard's Patent Dispute With Desire2Learn

By KATHERINE MANGAN

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Lufkin, Tex.

The long-awaited showdown between Blackboard Inc. and Desire2Learn Inc. began this week in a federal courtroom here as lawyers described the humble beginnings of two of the fiercest competitors in the classroom-software industry.

The presidents of both companies, flanked by teams of lawyers, listened intently as their lawyers described how young men in their early to mid-20s had helped launch the companies that are locked in a bitter patent battle a decade later.

"This case is about the largest, most dominant company in the market bringing an unsupported and invalid claim against an up-and-coming competitor," said James D. Dasso, lead counsel for Desire2Learn, which has headquarters in Kitchener, Ontario.

Not so, said his counterpart at Blackboard. "This is about an invention made by seven young men, many just out of college, when the Internet was still fairly new," said Fay E. Morisseau, Blackboard's lead counsel. The goal, he said, was to find a way "so teachers could teach a little better and students could learn a little better."

Mr. Morisseau said Desire2Learn infringed on a Blackboard patent and took away customers that should rightfully be Blackboard's.

In a lawsuit, filed in 2006, Blackboard accuses the rival company of infringing a patent that Blackboard had been granted by the U.S. Patent and Trademark Office that year (The Chronicle, Aug. 2, 2006).

Blackboard had filed for the patent, which covers its e-learning software, in 1999. Critics say the patent is too broad and could be construed as covering many aspects of classroom software. If the patent holds up, they say, colleges that create their own course-management systems could be vulnerable to similar lawsuits.

Concerns on Campuses

The lawyers' comments were made in opening statements this week as Blackboard's lawsuit came to trial. Blackboard, which has nearly 1,000 employees to Desire2Learn's 180, is seeking $17-million in lost profits and an injunction against the Canadian company.

"We don't think it's right that someone should be able to come along and copy our technology and use it to compete against us," Michael L. Chasen, president and chief executive officer of Blackboard, testified on Tuesday.

The case is being closely watched by college and university technology officials, many of whom fear that Blackboard's patent is too broad and could stifle competition.

"They should be worried," John Baker, president and chief executive officer of Desire2Learn, said in an interview during a break in the trial. "We're getting lots of support from people all over the world. They're rooting for us to win."

Desire2Learn has around 500 U.S. clients, compared to Blackboard's 2,400, according to officials with the companies.

From Classroom to Company

Blackboard chose to file the case in Lufkin, a small, laid-back city in the Piney Woods of East Texas, a region better known for its barbecue joints and Southern Baptist churches than high-tech companies. Lufkin juries have a reputation for being friendly to patent owners, according to lawyers here.

The first witness was one of the seven men Blackboard considers the inventors of the patented process that is at the crux of the trial.

Daniel E. Cane was a sophomore at Cornell University in 1997 when he offered to help a professor create a class Web site so she didn't have to waste so much time handing out and collecting papers. Word spread, and soon Mr. Cane and his roommates were busy creating similar sites for other professors.

The work blossomed into a small company, which merged with a brand-new company called Blackboard in 1998. At that point, Blackboard consisted of Mr. Chasen and his former college roommate, who were both in their mid-20s. Mr. Cane and his six college friends graduated and moved to Washington, D.C., where Blackboard had its headquarters, and the merged company took off.

Mr. Cane said he and his team never claimed to have invented course-management systems—just an approach that allowed a single user to access multiple courses in multiple roles with one log-in. Until then, he said, his company, and others in the nascent business of course management, had separate Web addresses for each course, and users usually had to log in with separate user names and passwords.

His team's innovation "pretty much changed the entire course-management industry," Mr. Cane said. "It was a huge success."

For instance, someone who was a student in one course and a teaching assistant in another could use a single log-on to call up his schedule, and automatically be granted access according to his role. A teaching assistant, for instance, could see students' grades, while a student could view only his own.

Blackboard critics, including Desire2Learn, scoffed at the notion that that was a new idea, and they argued it should never have been patented. They also said that the way the invention was described in court was different from how it was portrayed in the patent.

In blogs and newspaper articles, Blackboard has frequently been portrayed as a bully trying to do in a smaller competitor. On Monday, at the opening day of the trial, jurors saw another side of the company. Mr. Cane described how he and his Cornell roommates had worked for free before starting a company in a room in their apartment. "We kicked out the guy who was sleeping there, and that became our corporate office," Mr. Cane said, adding that they borrowed money from their parents and friends to start the company.

Desire2Learn's president, Mr. Baker, also got off to an early start, creating the company in 1999 while he was a senior at the University of Waterloo, where he had helped professors create software and Web pages.

Over the years, Blackboard and Desire2Learn became fierce competitors, even though Blackboard says it currently has about 80 percent of the market share in the United States.

Under Review by Patent Office

Desire2Learn has challenged Blackboard's patent and was joined in that effort by the Software Freedom Law Center, which advocates for open-source software. Last year the federal patent office agreed to take another look at Blackboard's patent.

The patent office said the challenges raised "a substantial new question of patentability."

Desire2Learn tried, unsuccessfully, to persuade the federal court to delay the trial until the patent office had weighed in, but such reviews can take years. So, in the meantime, the company prepared for a full-blown trial. The court ruled, however, that only three of the 44 claims in the patent could be used in the trial to determine whether Desire2Learn was guilty of patent infringement.

Arguments Over 'Prior Art'

In his opening argument, Mr. Dasso argued that Blackboard's patent was invalid because similar methods existed before the patent application was filed, and that Blackboard knew of that pre-existing technology, or "prior art," and should have disclosed it to the patent office. Evidence of prior art can invalidate a patent, and Desire2Learn plans to introduce at least 13 examples of what it considers to be such pre-existing technology during the trial.

Blackboard's chief lawyer argued that the company didn't withhold any information from the patent office. He insisted the patent is actually quite narrow and that colleges have nothing to worry about.

Last year, Blackboard tried to appease its critics by issuing a "legally binding" promise not to take legal action against three open-source projects, Sakai, Moodle, and ATutor.

Educause, a higher-education technology consortium that has questioned the validity of the Blackboard patent, said that promise was a step in the right direction, but didn't go far enough because the company did not pledge to refrain from suing colleges that use competing products (The Chronicle, Feb. 9, 2007).

Mr. Chasen, Blackboard's president, testified on Tuesday that his company had no intention of suing colleges that use open-source software to create their own course-management systems.

Desire2Learn has been posting information on its patent-information blog.

Mr. Dasso said Desire2Learn has become one of Canada's fastest-growing companies because it has "better products, better people, and better services" than its competitors.