e-Literate

Present is Prologue

Tag: edupatents

  • The Cost of the Blackboard Patent Suit (and Who Pays It)

    An e-Literate reader comments on my post about Blackboard owing Desire2Learn money:

    The amount [that Blackboard will have to pay Desire2Learn, including the original award plus interest] will probably be over $3.8M USD from my rough estimates which is higher than the expected writedown Blackboard took. This should result in additional expenses that will have to be recorded by BBBB.

    What’s also interesting is that Blackboard’s top execs made record bonuses before this writedown, at the same time they took away any salary increases and the 401K plans for the regular staff. I think that is the bigger story.

    Blackboard reported a $2.8 million net profit in 2008. The $3.3 million write down brings them to a $500,000 loss. An additional estimated write-down of another half a million would bring them to a $1 million loss for 2008. In the same year, Michael Chasen received $545,833 in salary, $663,039 in bonus, $1,833,560 in stock options, $80,466 in shares of restricted stock, and $14,911 in “other compensation”, for total compensation that was valued at $3,137,809. Matt Small received $370,833 in salary, $166,544 in bonus, $722,966 in stock options, $40,233 in shares of restricted stock, and $17,372 in “other compensation”, for a total compensation of $1,317,958. Coincidentally, if you add up the 2008 bonuses for the five Blackboard executives listed in the company’s proxy statement, the total is $1,074,127—almost exactly what the company’s final adjusted net loss for 2008 may turn out to be.

    Moving forward, Blackboard is apparently going to incur the additional expense of an attempt to appeal their failed patent suit to the Supreme Court, even though Matt Small is on record saying that it is highly unlikely they will succeed.

  • Blackboard Owes Desire2Learn Over Three Million Dollars

    IOU
    (cc) photo credit: zolierdos

    I’m a little late on this one, but late last week the U.S. Court of Appeals denied Blackboard’s rehearing petition. Their only recourse now would be to appeal to the United States Supreme Court and hope that the court miraculously decides to hear their case. As a result, Blackboard will have to return roughly $3.3 million to Desire2Learn, wiping out 100% of the company’s earnings for 2008.

    This does not mean that the litigation is over. Blackboard is still suing D2L in Canada for infringement of the original patent, and the company has been granted continuation patents (basically revised versions of the original patents) that they could assert.

  • Blackboard Files Yet Another Lawsuit

    Best Lighter In The World!
    photo credit: michelle.irish

    You may recall that Blackboard purchased a patent in what appeared to be a fruitless attempt to countersue TechRadium, the company that sued them for patent infringement over their emergency warning system and that now is suing Twitter. It turns out that the purchase was not quite fruitless after all, because Blackboard used it to get some sort of cross-licensing agreement with TechRadium (with undisclosed terms) in return for TechRadium dropping the suit.

    Well, that apparently freed up some bandwidth on Blackboard’s legal team, and you know what they say about idle hands. Blackboard is now pre-emptively suing the individuals from whom they purchased the patent. Washington Business Journal has the scoop:

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  • Trying To Follow Blackboard v Desire2Learn

    Bureaucracy illustration
    photo credit: Kongharald

    There’s a blog post update from Desire2Learn on the latest back and forth between them and Blackboard over the patents. (Remember, there’s more than one patent now.) Here’s the latest, as near as I can follow it:

    • On the original ‘138 patent suit in U.S. courts, there’s no word yet on any appeal by Blackboard of their recent defeat in the appeals court. There should be a final ruling soon from the USPTO. My guess is that Blackboard will let this suit die, even as they pursue other lines.
    • Relatedly, the action by the US International Trade Commission has been suspended pending the final results of the ‘138 litigation.
    • Meanwhile in Canada, litigation continues on the Canadian version of the original patent, as Blackboard continues to sue D2L there.
    • There’s some wrangling back and forth in the United States of Blackboard’s continuation patent. D2L pre-emptively filed for a declaratory judgment in Maryland in the hopes of heading off a suit on that patent. Blackboard has filed a motion to dismiss while simultaneously filing an infringement suit in the East District of Texas, also moving to consolidate it with another patent suit against D2L. Since I’m out of the business of reading patents, I’m not 100% sure what these are about, but as far as I know they are essentially extensions/revisions of the original patent.

    Oy.

  • Blackboard Settles with TechRadium

    Update: It turns out that TechRadium has also filed suit against Twitter. Oy. (Via Laura Gekeler.)

    Blackboard and TechRadium have apparently come to some sort of cross-licensing agreement on their emergency notification patents. This isn’t surprising. What we don’t know is whether anyone is paying anyone else as part of the cross-licensing agreement. Since Blackboard lost a ruling in their assertion of their patent against TechRadium, the more likely scenario would be that Blackboard is paying TechRadium as part of the deal. That’s just speculation, though. If anyone has any information on this, let me know.

  • The Financial Impact of the Patent Loss on Blackboard

    Financial Crisis / Finanzkrise
    photo credit: alles-schlumpf

    You may recall that Blackboard originally won a judgment of $3.3 million from Desire2Learn in their lawsuit. The ruling from the Court of Appeals means that Blackboar will probably have to return that money—plus interest—to Desire2Learn, as Blackboard indicates in an 8-K SEC filing today. The filing says, in part, that Blackboard “expects to record one-time charges of approximately $3.5 million related to the reversal of the district court judgment” of which $3.3 million is the money they have to return and the extra $200K is presumably interest.

    Now, here’s the thing. According to Blackboard’s 2008 10-K filing, their net income for that year was $2.8 million. If you subtract the $3.3 million in income that they are going to have to return to D2L from the $2.8 million net profit, it appears that Blackboard’s business actually lost $500K in 2008.

  • Another Victory for D2L, Another Opportunity for Blackboard

    Update: Patently-O blogger Dennis Crouch has posted a legal analysis of the ruling in which he concludes, “Defendant Desire2Learn wins a complete victory (after a few million in attorney fees).”

    Via Desire2Learn’s patent blog, we learn today that the U.S. Court of Appeals re-affirmed the invalidation of claims 1-35 and newly invalidated claims 36-38 of Blackboard’s original ‘138 patent. You may recall from my previous post that Blackboard was stalling in the USPTO because they thought their odds would be better in court. I haven’t read the opinion, but from D2L’s post, it appears to be pretty damaging to the patent in the U.S.—perhaps decisively so.  Now, that doesn’t mean that Blackboard has exhausted its legal options by any means. There’s the continuation patent, the trade board fight, and the Canadian patent suit, to name a few of the remaining loose ends. But this is, once again, an opportunity for Blackboard to put this brand-damaging fight behind them by quitting the field.