Limelight Explores Alternatives on Patents

Limelight Networks (LLNW) says it has no plans to scale back its operations and is seeking workarounds to address its court loss to Akamai (AKAM).

In an open letter to reassure customers about its future, Limelight Networks (LLNW) says it has no plans to scale back its operations and will "vigorously defend" the company's position in an appeal of its recent court loss to Akamai Technologies (AKAM).

On Feb. 29 a Massachusetts jury awarded Akamai $45 million in damages from Limelight in a patent dispute. The jury found that Limelight's content delivery technology infringed on Akamai patent 6,108,703, known in the industry as the "703" patent. The verdict prompted speculation that Limelight faced a network shutdown (a prospect the company itself raised in SEC filings about the Akamai case) or be acquired by a competitor. Noting these rumors, the company addressed its customers directly:

We have no plans to discontinue operations. We are financially strong with approximately $197 million of cash and marketable securities on our balance sheet as of the end of 2007, and no material debt. Further, we are actively exploring alternatives that would enable us to continue to provide the same level of service that we always have and eliminate any issue of infringement, if such is determined with finality by the courts. Additionally, there are many aspects of our business that were either not accused of infringing or we believe are clearly outside the scope of what was litigated.

Read the entire letter on Limelight's web site (link via GigaOm).