WASHINGTON (Legal Newsline) - A federal appeals court ruled Thursday that Limelight Networks Inc. is liable for direct infringement of a content delivery patent asserted by Akamai Technologies Inc.
Akamai finally won after a fight over the patent -- U.S. Patent No. 6,108,703 -- that lasted almost a decade.
The patent, of which the Massachusetts Institute of Technology, or MIT, is the assignee and Akamai is the exclusive licensee, claims a method of delivering electronic data using a content delivery network, or CDN.
The goal of a CDN is to serve content to end-users with high availability and high performance. CDNs serve a large portion of the Internet content, including web objects (i.e. text, graphics and scripts), downloadable objects (i.e. media files, software, documents), applications (e-commerce, portals), live streaming media, on-demand streaming media and social networks.
The Federal Circuit’s ruling reinstates a 2008 jury verdict awarded to Akamai for more than $45 million in damages. The verdict was thrown out in 2009.
“We conclude that the facts Akamai presented at trial constitute substantial evidence from which a jury could find that Limelight directed or controlled its customers’ performance of each remaining method step,” the full court wrote in its nine-page opinion.
“As such, substantial evidence supports the jury’s verdict that all steps of the claimed methods were performed by or attributable to Limelight.”
The Federal Circuit said a three-judge panel now must decide the “residual issues.”
The case was returned to the Federal Circuit, which is charged with handling all U.S. patent appeals, by the U.S. Supreme Court. The nation’s high court ruled last June that a defendant is not liable for inducing infringement of a patent when no one has “directly infringed” the patent, reversing the Federal Circuit’s decision.
“The Federal Circuit’s analysis fundamentally misunderstands what it means to infringe a method patent,” Justice Samuel Alito wrote for a unanimous court.
“A method patent claims a number of steps; under this Court’s case law, the patent is not infringed unless all the steps are carried out.”
Limelight, which petitioned the nation’s high court to review the case, also operates a CDN and carries out several of the steps claimed in the ‘703 patent.
The patent provides for the designation of certain components of a content provider’s website -- often large files, such as video or music files -- to be stored on Akamai’s servers and accessed from those servers by Internet users.
That process of designating components to be stored on Akamai’s servers is known as “tagging.”
Instead of tagging those components of its customers’ websites that it intends to store on its servers, Limelight requires its customers to do their own tagging.
Despite that fact, MIT and Akamai filed suit in 2006. They claim Limelight “provides instructions and offers technical assistance” to its customers regarding how to tag.
Akamai said Thursday it was “extremely pleased” with the Federal Circuit’s decision.
“Akamai is at the forefront of innovation on the Internet and today’s ruling recognizes the strength of our intellectual property,” said Aaron Ahola, deputy general counsel at Akamai.
“We believe strongly that a company’s intellectual property is a vital asset which must be defended to protect shareholder value.”
Limelight said it is studying “all options” and determining its next steps.
“The company believes its balance sheet is strong enough to continue to invest in the business and respond to any potential outcome in its continuing court battle with Akamai,” it said in a statement Thursday.
But the company said it would not allow the ruling to “distract” it from serving its customers.
“We are disappointed this outcome isn’t aligned with the recent rulings in our favor, which were supported by many global technology and industry leading companies, and are determined to continue the process,” said Bob Lento, Limelight’s chief executive officer.
He added, “Our business is strong and gaining strength. Our network traffic is growing at a record pace. We are investing in our business, improving margins and are confident of our future.”
Limelight contends the technical architecture at issue hasn’t been in use at the company for “many years.”
From Legal Newsline: Reach Jessica Karmasek by email at email@example.com.