Limelight Beats Level 3 in Patent Case

Written by Craig Matsumoto

Friday, January 23. 2009 at 05:30 PM EST Post a comment

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A jury has found that Limelight Networks Inc. (Nasdaq: LLNW) doesn't infringe on a handful of Level 3 Communications Inc. (Nasdaq: LVLT) patents, a decision that sent Limelight shares skyward today.

A press release didn't come out until the markets had closed, but Limelight shares surged late in the day to close up 64 cents (27%) at $2.99.

Level 3 sued Limelight in December 2007, alleging infringement of three patents Level 3 said it had acquired with Savvis in early 2007. The suit was filed in U.S. District Court for the Eastern District of Virginia.

The jury found Limelight "does not infringe any asserted claims of the patents at issue," as Limelight's press release put it.

Decisions like this tend to get appealed, but for now, it's one less headache for Limelight, which is still battling Akamai Technologies Inc. (Nasdaq: AKAM) in a separate patent case. Akamai won Round 1 there, with a jury finding in February that Limelight did encroach on one big-deal Akamai patent.

Limelight was told to pay $45.5 million and had to create a workaround -- er, take measures -- to try to avoid a possible injunction against its services.