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U.S. Supreme Court narrows patent protections in Limelight v. Akamai

A recently released U.S. Supreme Court decision could have a significant effect on patent lawsuits in the U.S. The case, Limelight Networks, Inc., v. Akamai Technologies, Inc., involves two technology companies who use content delivery networks to deliver web content to its clients’ Internet users. The court’s decision could be seen as narrowing the scope of U.S. patent law.

Akamai Technologies is the exclusive licensee of a patent for a method of delivering electronic data using a content delivery network to speed up Internet service during times of peak use. The company maintains numerous servers, and websites called content providers contract with the company to deliver the web content to individual users. Certain parts of a content provider’s site – often large files -- are stored on Akamai’s servers and accessed by Internet users. The process of determining which parts of the components will be stored on the servers is called tagging. Akamai does tagging for its customers.

Limelight Networks, Inc., also operates a content delivery network, and several steps in its method are the same as Akamai’s. However, Limelight does not tag its’ clients’ website components itself. Instead, it requires the customers to tag the components that will be placed on its servers.

Akamai sued Limelight in 2006, alleging patent infringement. A jury agreed and awarded more than $40 million in damages. Limelight appealed and eventually sought certiorari from the U.S. Supreme Court, which agreed to hear the case.

Justices decided 9-0 that Limelight was not liable for inducing patent infringement. The reason: Previous case law held that under patent infringement law, a method’s steps have not all been performed unless the defendant in a case performed all of the steps or directed others to perform them. Under that rule, no one directly infringed on Akamai’s patent because Limelight did not control all of the steps in the process – its customers decided which components to tag. Because there was no direct patent infringement, the Supreme Court held that Limelight could not be liable for inducing infringement.

Analysts have said the case could affect pharmaceutical companies as well as technology companies.

Source: Supreme Court of the United States, “Limelight Networks, Inc., v. Akamai Technologies, Inc.,” June 2, 2014

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