Akamai and Limelight settle their decade-long patent dispute

Akamai and Limelight settle their decade-long patent dispute

In the late 1990s, when the Internet was only starting to go global, two engineers from MIT figured out a way to make the expansion much smoother. They proposed that websites should store text, images and other static content in multiple data centers around the world to reduce the distance that international browser requests must travel. Their invention ended up giving rise to a $2 billion-plus industry and becoming the subject of a decade-long patent dispute that only reached a conclusion this month.

The saga began in 2006 when Akamai Technologies Inc., the company founded by the two MIT engineers to monetize their work, launched a lawsuit accusing rival Limelight Networks Inc. of appropriating the technology. Since both of them provide content delivery services, it didn’t take long to prove the argument. But proceedings hit a snag two years into the trial when a ruling in a separate Federal Circuit case suddenly gave Limelight new legal ammo.

The court decided that a party can only be found guilty of direct patent infringement if it follows every single step detailed in the plaintiff’s filing or has influence over the entire process. Limelight seized upon the opening and had Akamai’s suit dismissed on the grounds that their services take a different approach to identifying what parts of the website they should process. Its victory proved to be short-lived, however. Akamai appealed to the Federal Circuit and in 2012 got a tide-turning ruling that said its rival’s conduct can be considered “inducted infringement” due customer involvement in the content identification process.

More specifically, Limelight required users to manually tag the website elements they wish to store in its data centers at the time of the dispute. The company secured its initial victory by pointing out that while Akamai does employ the same tagging method, the patent filing for its technology states the task is performed on the service provider’s end. The Federal Circuit’s 2012 ruling determined that Limelight can nonetheless be held accountable because it “induced” customers to perform the infringement. After a Supreme Court panel reaffirmed the judgment in early 2015, victory was practically in the bag for Akamai.

The company spent the next few quarters fighting for damages in the lower courts until eventually securing a $51 million judgement. This month’s newly announced settlement converts the damages into a $54 million patent license that will be paid over the next three years. Limelight thus gains the ability to spread out the cost of the dispute in a way that minimizes the impact on its bottom line, while Akamai gets $3 million in interest for its troubles. And so one of the longest and most bitter patent disputes in the history of Silicon Valley has finally come to an end.

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