The Waterloo Record has some more details (although there’s still a lot we don’t know):
- Of the $3.1 million awarded to Bb, there were $2.5 million in lost profits and $630,000 in royalties. I don’t understand this yet, but it appears at first blush as though the forward-looking damages (i.e., royalties) might be limited.
- The jury gave the judge the option of granting Bb an injunction. What this would mean is that D2L could no longer sell its product in the US while the injunction is in force. However, (a) Bb has not yet asked for that injunction, and (b) an analyst quoted in the article claims the judge would be unlikely to shut D2L down like that, especially if an appeal is pending.
- Speaking of which, a quote by D2L’s CEO John Baker seems to indicate that D2L will appeal, although his statement is general enough that I wouldn’t call it definitive.
- D2L thinks that they could develop a workaround for (what’s left of) the patent. (Remember, a good chunk of it was ruled invalid.) In other words, even if the patent holds, they think they can avoid infringing on it with minor modifications to their software.
- At least one of D2L’s major customers (University of Wisconsin) went on record expressing concern that this suit would increase their licensing fees.
I’m still trying to understand what all of this means. I don’t think anybody involved with this has changed their position or reduced their level of concern while this fight has dragged out, so the questions are really about what the legal ramifications are and what the various community members (including but not limited to D2L and BB) will do next.
One thing that is clear, however, is that so far nobody has benefited financially from this. The $3.1 million Bb could receive in settlement probably won’t even cover their legal fees. Their stock is at the same level it was when they initiated the lawsuit and down over 40% from its highs. And obviously D2L has not come out richer either. Blackboard has a net loss of customers and has created tremendous negative press for itself while D2L now has at least one major customer who is willing to go on record saying that they are worried. (We know a lot less about the financial impact on D2L because it’s not a publicly traded company.)
Tell me again how software patent assertion is going reward and enhance innovation in higher education?
[…] Michael Feldstein has been doing a fantastic job of keeping the community up to date on developments in this case. As he writes, it looks like neither company is a winner as the cost of the case will outweigh Blackboard’s costs, D2L already have one major customer on record wondering whether their license prices will be hit, and innovation in education will potentially be stifled. While Blackboard have pledged not to sue open source companies who break their LMS patents, Alan Shapiro notes that they don’t have a great track record of standing by previous pledges (they pledged to customers of WebCT and Prometheus that nothing would change following their acqusition, and those products were subsequently discontinued). The jury’s verdict is by no means the last word. The US Patent and Trademark Office are still re-examining the patent’s validity following requests by both D2L – who have invalidated 35 out of the 44 patent claims – and the Software Freedom Law Centre on behalf of open source LMSs Sakai, Moodle and ATutor. […]