As you know by now, the Blackboard patent has been challenged at the USPTO by separate requests filed by the SFLC and D2L respectively. SFLC filed what's known as an ex parte request, while D2L filed what's known as an inter partes request. I think it's important for the community to become familiar with these two strategies because we're likely to see them employed again in our future. Seb has some nice commentary up about the basics of the specific situation with the Blackboard patent. (Be sure to read the comments; there's one by one of the leading researchers on patent re-examination.) What follows here is more of a high-level overview of the legal strategies in general.
Ex Parte filings are essentially fire-and-forget requests. The main role that the filing party has is in making the initial request that the Patent Office look at new evidence regarding the patentability of the alleged innovation. The USPTO has 90 days from that initial request to decide whether they are essentially going to take the case or not. If they "grant" the re-examination request, they will list which claims they intend to re-examine. Remember that Bb's patent, for example, has 44 claims. The USPTO can look at some, all, or none of them in response to the request. So within 90 days of the SFLC's filing, we'll know whether any of Bb's claims are being reconsidered. At this point, the patent holder may (but does not have to) file a response to the USPTO's granting statement. One of the things that the patent holder can do at this point is amend the claims, i.e., rewrite them so that the new evidence doesn't invalidate them anymore. If the patent holder files a response, then the ex parte filer may file one reply to that response. After that, the USPTO rules.
One of the advantages of this strategy is that it's cheap. It generally costs a total of about $10K to prepare and file. So you can think of an ex parte challenge as a kind of asymmetric warfare strategy for organizations with little money (like Open Source foundations). On the downside, ex parte challenges can actually have the effect of strengthening the patent. To begin with, any patent that survives a challenge is generally viewed as having been doubly confirmed by the USPTO in any subsequent trials. In addition, since the patent holder has an opportunity to amend the claims, the patent can actually be rewritten to be stronger during the process.
In contrast to the SFLC filing, D2L as filed an inter partes request. In this case, the request process is somewhat similar to a trial in the sense that it is adversarial. Within 90 days of filing, the USPTO will both say whether they will take the case and issue an initial ruling. Interestingly, the USPTO grants the request (i.e., takes the case) 93% of the time and initially rejects all patent claims in the majority of those cases. So odds appear to be fairly good that the USPTO will take D2L's request and initially overturn Bb's patent. However, this far from settles the matter. There is a potentially lengthy appeal process in which both the request filer and the patent holder are pretty actively involved. As a result, this is not an inexpensive process the way ex parte is (although it is still probably less expensive than a trial).
Inter partes is new. The law was passed in 1999 and, so far, only seven challenges have been seen through to their conclusion. Of those seven, six resulted in the patents being completely invalidated and the seventh resulted in the patent being completely upheld. So the preliminary data shows that these requests may be quite favorable to the challenger, but we don't have anything close to enough data to draw a strong conclusion. On the other hand, we know that defendants in an infringement case have only prevail about 38% of the time (and only 31% in the particular district where the Bb v. D2L suit will be tried). So one way to think about inter partes as a strategy is as a change of venue from a trial-by-jury to an expert patent examiner.
There are downsides to the inter partes strategy as well. The filer is obliged to use all relevant prior art, can only file one request (ex parte filers can request many re-examinations serially if they want), and are forbidden from using evidence in their request again in any future trial. So D2L, for example, has to have laid all of their cards on the table with respect to prior art with this filing and can only play those cards this one time. If they lose, they lose big.
One interesting question is the impact of the current Supreme Court case KSR International v. Teleflex could have on these filings. This case, expected to be decided this June, may relax some of the requirements to proving that an invention was "obvious" and therefore not patentable. D2L's request includes assertions of "obviousness" and is unlikely to be resolved before the Supreme Court ruling. So in more ways than one, we're in somewhat uncharted territory.