From what I've seen, Blackboard (the company) spends a lot of effort suing competitors to kept them out of the market. They have a bucket load of patents they're quite happy to wield in order to protect their turf
Blackboard bought my startup in 2001, and I worked there for about a year after. After they bought our company, our product was discontinued and our unique perspective was lost. The remaining employees were integrated into Blackboard's existing teams. Some of them have become excellent leaders at Blackboard, but after the acquisition they were advancing Blackboard's vision, not our vision.
WebCT was the only other large competitor in this market, and Blackboard used its IPO cash to acquire them in early 2006. Together Blackboard and WebCT had over 80% of the market, maybe closer to 90%.
Plus there's the traditional enterprise software problem: when the buyer is not the end user, product skew happens. When IT staff evaluate software alternatives, they're looking for IT features, like LDAP support or integration with a student records system. They know the end users need certain features like "a homework dropbox," but they're not able to evaluate the subtleties of those features. The IT department can't be as familiar with those subtleties as the end users are. And it's rare that an IT department would study internal users in depth, like a product designer would.
This is a horrible meme. No other company that I know of has its potential competitors talked out of the business by this gossip of fear.
Hint: not everyone is operating in the U.S.
Unfortunately, there are plenty of other companies that sue competitors instead of trying to compete with them. I mean, one such company is currently in the #1 spot on the front page: http://news.ycombinator.com/item?id=2081938 Need I list more?
There claim was spurious anyway, just because they have trademarks on the 'Blackboard' (a generic term anyway) regarding education software, doesn't mean they have a claim to the word 'Chalk' for non-educational software. Blackboard just have over-active lawyers.