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 The U.S. Court of Appeals for the Federal Circuit in the District of
Columbia said Limelight's control over its customers' use of its
services to deliver media content over the Internet meant the
company was liable for the infringement.
Limelight shares fell as much as 23.3 percent following the
decision. They closed down 59 cents, or 18.1 percent, at $2.67 on
the Nasdaq. Akamai shares fell 8 cents to $73.84.
The decision by a full slate of 10 judges on the Federal Circuit,
the top U.S. patent court, vacated the same court's previous
decision from May.
"We are disappointed this outcome isn't aligned with the recent
rulings in our favor, which were supported by many global technology
and industry leading companies, and are determined to continue the
process," Limelight's chief executive, Bob Lento, said in a
statement.
A spokesman for Massachusetts-based for Akamai said in a statement
that the company was pleased with the decision and hoped to be
"sufficiently compensated for Limelight's infringement."
Technology companies have closely followed the case, which was on
remand from the U.S. Supreme Court. It centers on whether a company
can be said to infringe a patent when the final step leading to
infringement is carried out by a third party.
The legal dispute dates to 2006, when Akamai accused Arizona-based
Limelight of infringing on its patented technology for efficiently
handling website content.
A jury in 2008 found in Akamai's favor, but the judge threw out the
verdict, saying Limelight did not itself use all of Akamai's
technology.
A divided Federal Circuit ruled for Akamai in 2012. Limelight
petitioned the Supreme Court to hear the case, supported by
companies such as Google Inc and Cisco Systems Inc, saying the
ruling could prompt more infringement lawsuits.
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The high court overturned the decision in June 2014, saying a
defendant is not liable for inducing infringement when not a single
party directly infringed a patent.
In May, a Federal Circuit panel said Limelight did not infringe and
that if Limelight could be found jointly liable with its downstream
users, innocent customers doing as little as swiping a debit card
could be targeted by predatory patent suits.
The appeals court on Thursday voided that ruling and reinstated the
jury verdict because the evidence showed that "Limelight directs or
controls its customers’ performance of each remaining method step,
such that all steps of the method are attributable to Limelight."
The case is Akamai Technologies, Inc et al. v. Limelight Networks,
Inc, in the U.S. Court of Appeals for the Federal Circuit, No.
2009-1372.
(Reporting by Andrew Chung, additional reporting by Ankit Ajmera in
Bengaluru; Editing by Alexia Garamfalvi, Meredith Mazzilli, David
Gregorio and Leslie Adler)
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