Tonight I listened in on the last in Blackboard’s series of Q&A webinars on their patent. To their credit, they let me ask all of my questions. Matthew Small even extended a personal invitation to me to call him with any follow-up questions. I was very happy with all of that. I was far less happy with their answers. But that’s the subject of my next post. For this post, I want to acknowledge what I believe was a genuine effort at outreach on Blackboard’s part and respond in kind. I want to make clear why I could accept Matthew Small at his word regarding Blackboard’s intentions and still conclude that this patent litigation must not stand. I want to say to Mr. Small and the Blackboard management team that this isn’t personal.Let’s strip the problem down to the core by giving everyone the benefit of the doubt. Mr. Small said tonight they see this suit against Desire2Learn as a one-off with no planned follow-up suits. For the sake of argument, let’s take him at his word. Let’s assume that Blackboard never sues anyone else for this particular patent. Let’s also take off the table the argument that patents are generally bad. (This is not an argument that I’ve ever made anyway.) Let’s even take off the table the argument that software patents are bad and assume (contrary to mounting evidence) that they do more good than harm in most cases.
The problem is that educational software is not most cases. Patent enforcement has a cost. In order for intellectual property litigation to provide net benefit to the industry (especially the consumers), the majority of the innovating entities (which may be companies, universities, individuals, etc.) participating the industry in which the litigation is happening must be financially robust enough to bear the costs and stay in the game. There is no reason to believe that the edusoftware space has those characteristics. We know that lots of innovation happens at universities. (And by the way, much of this innovation increasingly happens at community colleges and other small schools that do not have patent portfolios or the resources to create them.) We know that selling any enterprise software to higher education is hideously expensive and not very profitable, particularly in the LMS space where there is less pricing power. Based on this data, it is reasonable to conclude that competitors in this market would fold if multiple patents were asserted and that potential entrants would be deterred from competing. Further, it is also reasonable to conclude that the net benefit from the patents would not be sufficient to encourage new, better financed entrants into the space. We would see a net loss of competition and innovation. If anybody has evidence to the contrary, I’m happy to look at it. To date, I have not seen any such evidence. Furthermore, this is not something we can roll the dice on. Once competition and innovation have been squeezed out of a market because of patent litigation, there is no going back. We have no choice but to err on the side of protecting ourselves.
Blackboard has essentially said that all they want from D2L is a “reasonable royalty” and that the infringement suit is essentially a tactic to force them to the negotiating table. While I can’t speak for the rest of the community, I view myself, at least, as taking a somewhat analagous position vis-a-vis Blackboard. I want to negotiate terms out of court, after which everyone can get back to business. I am not seeking to put Blackboard out of business; I just want a reasonable settlement. And in order to persuade them to come to the negotiating table with a motivation to settle, I (we, really) have taken them to the court of public opinion and are asking for treble damages.
