Akamai, Limelight bury hatchet (not in each other) to end patent spat

Networking foes settle war over 'induced infringement' with $54m deal

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Internet backbone facilitators Akamai Technologies and Limelight Networks have agreed to end their long-running patent battle, and instead forge a $54m licensing agreement.

The deal will see Limelight pay the $54m to Akamai in a set of 12 installments beginning this month. In exchange, Akamai agreed to drop the $51m letter of credit it held against Limelight after it ultimately won the case.

It will also be a help for Limelight to spread out the payments and minimize the financial hit.

"We are pleased by the outcome of this agreement," Limelight CEO Bob Lento said of the deal.

"It eliminates the continuing risk from the ‘703 patent and allows us to extend the $51m payment over a three-year period at an attractive interest rate."

In agreeing to the deal, Limelight and Akamai wrapped up a court battle that had been dragging on for roughly a decade – and had at one point gone all the way up to the US Supreme Court.

The case centered around the argument over "induced" infringement of patents. Akamai and MIT (which originally held the patent) had accused Limelight of violating US Patent 6,108,703 related to the operation of its content delivery network.

Limelight had challenged the claims on the grounds that its products did not actually infringe on Akamai's technology patents when they were sold, but rather only after customers had installed the equipment and performed a series of steps to set up the service.

The courts eventually ruled in favor of Akamai, finding that by instructing customers on how to perform the steps, Limelight was still infringing on its patents.

Under the licensing deal, Limelight will no longer be subject to infringement claims on the 703 patent from Akamai, but also waives its right to file any further appeals in the case. ®

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