By taking legal action, Blackboard is making a very public statement about the facts related to illegal activities to be promoted by Mr. Hoffman and Mr. Griffith and how those activities are detrimental to the entire Higher Education community utilizing these systems. Our action was taken over the weekend prior to Mr. Hoffman and Mr. Griffith presenting their activities at the Interz0ne II conference in Atlanta, GA. It is important to note that the Court orders pertain only to the illegal activities and information that Mr. Hoffman and Mr. Griffith intended to present and did not pertain to Interz0ne II or its conference organizers.

As part of our legal actions, Blackboard secured a Temporary Restraining Order issued by the Superior Court of DeKalb County, Georgia prohibiting Mr. Hoffman and Mr. Griffith from publicly disseminating certain information at the Interz0ne II conference in Atlanta, GA. A preliminary hearing was originally set for April 16, 2003, but Mr. Hoffman and Mr. Griffith, through their lawyer, agreed to an extension of the Temporary Restraining Order’s restrictions, without modification of any kind, and asked the Court to postpone that hearing for at least 45 days.

Blackboard recognizes that the hacker community plays an integral role in assisting technology companies in improving their offerings, most notably around security. Blackboard values this and in fact counts on it as a symbiotic relationship. For example, last year Blackboard worked closely with the hacker community to successfully address a security opening in one of the supported Operating Systems on which Blackboard software products operate. Blackboard expects that this type of collaboration and partnership will continue on an ongoing basis.

The events which prompted Blackboard’s action constitute a very different situation. Mr. Hoffman, who has worked as a consultant for one of our competitors, physically dismantled hardware components owned by a higher education institution without the institution’s knowledge or permission, and detailed the process and information gathered. It was this activity and experience that Mr. Hoffman and Mr. Griffith intended to relate at the Interz0ne II event for the sole purpose of enabling a select group of individuals to falsify security events and financial transactions, putting the general public and approximately 275 academic institutions in potential jeopardy. It is this harm, coupled with the safety of these academic institutions and their constituents (primarily, students and faculty) that mandated Blackboard take a very careful and measured stance and a difficult but required position to protect its clients.

On college campuses, Blackboard (as well as other vendors) sells and install hardware and software to enable financial transactions at point of sale devices – vending machines, copiers, laundry machines – so that students can use debit cards to purchase products and services. The physical devices are secured in various vending and public areas. Historically, Blackboard’s solution and other industry solutions utilized proprietary wiring on campuses. The routing of transactions was secured through the physical security of these networks. The transactions themselves are secured unless the hardware systems involved are physically compromised (i.e. breaking into a school’s control box on campus).

The Blackboard Transaction System is a secure and stable system and has been for more than 15 years. Any perceived reader security issues appear to arise only in the context of physical vandalism and/or physical damage to hardware and/or communication connections. This is not hacking; this is vandalism.

In recent years, Blackboard has taken the initiative to design, develop, and manufacture new devices which ensure that transactions travel over public and private IP-based networks. In this environment, Blackboard embraces even more stringent encryption technologies for each individual transaction. We are taking these developments even further with the release of point of sale devices that ensure a transaction is encrypted from the point of the card’s swipe through the reader device.

The industry as a whole has utilized proprietary networks (such as RS-485) for many years. Blackboard has, we believe, a leadership position in developing new-generation, IP-based, and encrypted communications. Our client base as a whole has welcomed these developments and has been leading the deployment of these newer generations of technologies.

Blackboard conducts internal security audits as part of the comprehensive Quality Assurance process rolled into each release of the Blackboard Learning System and the Blackboard Community Portal System.  In addition, Blackboard supports industry-standard protocols such as 128-bit SSL (Secure Sockets Layer), ensuring that sensitive data is safe, secure, and available only to the proper users within the Blackboard Learning and Community Portal Systems.  With the recent proliferation of worms and viruses affecting businesses and corporations alike, Blackboard now aggressively tests all security-related patches and updates issued by third-party vendors (such as Microsoft, Sun, Redhat, Oracle) as soon as they are released for compatibility with the Blackboard Learning and Community Portal Systems.

Lastly, Blackboard routinely works with members of the client community in assessing security concerns and actively participating in the diagnosis as well as resolution of any security-related matters.  As a preventative measure, Blackboard has established formal relationships with security centers such as the CERT^® Coordination Center, positioning Blackboard to react quickly and efficiently to any security incidents that may surface.

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