Akamai Loss to Limelight to Be Reheard by U.S. Appeals Court
By Susan Decker - Apr 21, 2011 2:25 PM MT
Business ExchangeBuzz up!DiggPrint Email .Akamai Technologies Inc. (AKAM) persuaded a U.S. appeals court to reconsider whether Limelight Networks Inc. infringed a patent over software that speeds delivery of Web videos.
A three-judge panel of the U.S. Court of Appeals for the Federal Circuit said in December Limelight didn’t infringe the patent. In an order posted on the court’s website today, the Federal Circuit said the dispute will be considered by all of the court’s active judges.
Akamai’s lawsuit in 2006 accused Tempe, Arizona-based Limelight of building its business on technology developed by Akamai’s founders at the Massachusetts Institute of Technology in Cambridge.
The case was filed as Akamai, also based in Cambridge, faces increased competition from Limelight, Level 3 Communications Inc. (LVLT) and Cotendo Inc. over CDNs, which distribute movies, music and software to computers on behalf of services such as Hulu LLC and Netflix Inc. (NFLX)
The Federal Circuit in Washington, which specializes in U.S. patent law, will consider whether a company should be found liable for infringing a patent if separate entities perform different steps in an invention.
A federal jury in Boston in 2008 sided with Akamai before the judge reversed the $45.5 million verdict. The judge ruled that Limelight’s actions alone didn’t use the Akamai technology, meaning it couldn’t be held liable. Three judges of the Federal Circuit affirmed that decision in December.
Submit New Arguments
The appeals court today vacated the panel’s decision and ordered lawyers in the case to submit new written legal arguments. It gave no date for when the case would be heard. Limelight said today it didn’t infringe the Akamai patent.
“Limelight believes the decision of the panel was correct and should be affirmed,” the company said in a statement. “This was not an issue of first impression for the panel -- its ruling affirmed the court’s precedent from earlier decisions. Limelight Networks welcomes the opportunity to assist the Court in addressing this area of the law.”
Limelight fell 4 cents to $6.94 at 4 p.m. New York time in Nasdaq Stock Market trading. Akamai rose 4 cents to $39.98.
The case is Akamai Technologies v. Limelight Networks, 2009-1372, U.S. Court of Appeals for the Federal Circuit (Washington). The lower court case is Akamai Technologies v. Limelight Networks Inc. (LLNW), 06cv11109, U.S. District Court, District of Massachusetts (Boston).
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