Judge: Limelight Didn’t Infringe Akamai Patents

A federal judge has overturned last year’s jury verdict that Limelight Networks infringed on patents owned by Akamai Technologies, marking a major reversal in the patent battle between the two leading content delivery networks. Last February a jury ordered Limelight to pay Akamai $45 million for infringing upon a patent (U.S. Patent No. 6,108,703 ) by Akamai founders Tom Leighton and Daniel Lewin.

On Friday afternoon a judge from the U.S. District Court of Massachusetts granted a motion from Limelight seeking top overturn the verdict.

“We are pleased the Court granted our motion for reconsideration in this matter and ruled in our favor,” said Jeff Lunsford, chairman and chief executive officer of Limelight Networks (LLNW). “We have long maintained that we do not infringe the ‘703 patent. This ruling affirms that Limelight Networks respects the intellectual property of others, and that our growth and success have been achieved through our own innovation, hard work, and customer-focused operations.”

Jury: Limelight Didn’t Infringe Level 3 Patents

A jury ruled Friday that content delivery network Limelight Networks (LLNW) has not infringed on patents owned by Level 3 Communications (LVLT). The ruling helped shares of Limelight gain 27 percent in Friday’s trading session.

Level 3 filed suit against Limelight in late 2007, asserting that Limelight was infringing on patents Level 3 acquired earlier that year with its purchase of the CDN assets of Savvis Communications (SVVS). Here are the press releases and blog coverage:

• Limelight’s statement
• Level 3’s press statement
• Contentinople
• Business of Video

Limelight’s CDN Pricing Gets Disruptive

Dan Rayburn at the Business of Online Video tracks pricing for content delivery services as closely as anyone. When analysts predict CDN pricing wars, Dan is usually the voice of caution, adding balance and context to the conversation. So his post this morning about the recent price cuts by Limelight Networks (LLNW) got my attention.

Limelight has been “getting a lot more aggressive” on pricing for video delivery, and telling customers that the new pricing is driven by recent infrastructure improvements that have lowered Limelight’s delivery costs. Dan had anticipated this would happen eventually, but wasn’t expecting to see it until the second quarter of 2009. He writes:

If they can cut their own costs, pass that savings onto customers in the form of lower pricing and increase their margins all at the same time, we are going to see another huge shift in pricing in this quarter. Not to mention, Limelight is going to continue to grab a lot of the new business in the market and continue their momentum. I am already starting to see some big changes in pricing this month as compared to last quarter and if Limelight continues to put pressure on some of the other providers, we’re going to see CDN pricing for video slashed over the remaining two months of the year.

Limelight’s recent momentum would have seemed unlikely back in February, when the company lost its patent infringement lawsuit with rival Akamai (AKAM). At the time, analysts questioned the company’s ability to continue operating and predicted a sale to a competitor or telco.

The Rackspace-Limelight CDN Deal

Almost lost in the hubbub around Rackspace’s acquisitionsof Jungledisk and Slicehost last week was an expanded partnership between Rackspace and Limelight Networks (LLNW). Lydia Leong has some details at CloudPundit:

Under the new partnership, customers of Rackspace’s Cloud Files (formerly CloudFS) service — essentially, a competitor to Amazon S3 — will be able to choose to publish and deliver their files via Limelight’s CDN. Essentially, this will place Rackspace/Limelight in direct competition with Amazon’s forthcoming S3 CDN.

Amazon said in September that it would launch a content delivery network that will deliver files stored on Amazon’s S3 storage service.

Akamai, Limelight Both Object to CDN Study

Rival content delivery networks Akamai Technologies and Limelight Networks finally agree on something: they both take issue with the methods used by researchers from Microsoft and NYU in a study on CDN performance published last week. The study found small performance differences between the two CDN providers in North America, but a “big gap in performance” in Europe and Asia, where Akamai has more data centers than Limelight. It also suggested Limelight might be able to equal Akamai’s performance with as few as five additional data center locations.

Both Limelight and Akamai say the researchers were measuring entirely the wrong thing, and Akamai says most of its conclusions are false. Akamai’s full response is posted at Dan Rayburn’s blog, while Limelight has posted its analysis on its company blog, In The Limelight.  

Limelight Reworks Software for Microsoft CDN

Limelight Networks’ loss to rival Akamai in a patent lawsuit has forced Limelight to rewrite the content delivery network software it licensed to Microsoft Corp. In an SEC filing Friday, Limelight (LLNW) reported that it had amended its agreement with Microsoft (MSFT) to address a February jury verdict in which Limelight was ordered to pay Akami (AKAM) $45 million for infringing its patents. 

Microsoft is building its own content delivery network (CDN), with Limelight providing software and engineering support. The August 2007 agreement between the companies was updated on Oct. 1 to address the Akamai ruling. Here’s an excerpt from the SEC filing: 

Under the Agreement, (Limelight) agreed to license certain software to Microsoft. The Company has been involved in litigation in which a jury verdict has been rendered stating that the Company’s provision of content delivery network services to its customers infringes certain patent claims of Akamai Technologies, Inc. The Company has created or is creating a new version of its software, which the Company believes is or will be non-infringing. The Amendment provides for the implementation of a new version of the Company’s software within Microsoft’s infrastructure.

The brief filing does not indicate whether Limelight has completed the workaround. But it suggests that Microsoft is now satisfied that the software Limelight is providing will no longer infringe Akamai’s patents. If the revised software can support Limelight’s own network - which is not explicitly addressed in the filing - it could reduce the impact of the Akamai patent ruling on Limelight’s ongoing operations.

Limelight Powers Content Delivery for the Wii

As its Wii game console continues to grow in popularity, Nintendo is adding content delivery horsepower to ensure that your Wii news and weather updates aren’t delayed. Nintendo said today that it has begun using Limelight Networks (LLNW) to deliver interactive content for the Wii.

Limelight’s content delivery network (CDN) has caching capacity in more than 900 broadband and last-mile providers worldwide, which will help ensure rapid delivery  to Wii users around the world.

“We are pleased to be enabling a great user experience for the highly successful Wii console, and to be working with such a respected global gaming brand as Nintendo,” said Shinji Tsukamoto, vice president of Limelight. “Limelight Networks is now delivering content and providing services for all three major gaming platforms around the world.”

A Look at Limelight’s Operations Center

It’s Limelight Networks day over at ZDNet, where Jason Perlow looks at the strong performance of Limelight’s streaming efforts for NBCOlympics.com, and Larry Dignan examines how LLNW stacks up against Akamai Technologies (AKAM) in the battle for supremacy in the content delivery market.

ZDNet also offers a look inside Limelight’s network operations center in Tempe, Arizona, where it manages 5 petabytes of customer data. Your eyes are not deceiving you: they have green racks to align with their logo and branding.

UPDATE: Jason Perlow’s post brought a lengthy, detailed rebuttal from Akamai.