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.
The Microsoft CDN , which it calls an Edge Content Network (ECN), is designed to beef up the company's infrastructure to handle "Internet audiences and content offerings that are orders of magnitude larger than today,” according Debra Chrapaty, Corporate Vice President of Global Foundation Services for Microsoft. Chrapaty has said that the ECN will include at least 99 nodes around the world.
The agreement between Microsoft and Limelight was included in an SEC filing. It calls for the ECN to be housed in Microsoft data centers, along with some facilities operated by Limelight and some third-party colocation centers. Under terms of the agreement, Microsoft will specify the location of nodes and supply the hardware, and Limelight will install the software and manage the node during a transition period before handing off to Microsoft.