Tuesday, April 28, 2009

Limelight Uses Muniauction Decision to Escape Infringement of Internet Patent

Akamai Technologies, Inc. v. Limelight Networks, No. 06-11109 (D. Mass., April 24, 2009)

A jury awarded Akamai and MIT $45.5M, finding that Limelight infringed a patent relating to a content delivery network ("CDN"), where page objects are replicated among a distributed set of content delivery service provider servers and end user requests for those objects are redirected to a particular content server.

Limelight moved for JMOL, arguing that there was “no substantial evidence” that it “directs or controls another party to perform” several steps of the asserted claims. It was undisputed that Limelight did not itself perform every step of the claims found infringed. Thus Limelight argued that, while it provided its customers with the information necessary for them to modify their web pages or Internet address routing information to utilize its service, the actual modifications were performed by the customer, not Limelight

During litigation, the court considered the patents in light of the BMC v. Paymentech decision, and found that the case "left open the possibility that direction or control adequate for a finding of direct infringement might exist where an accused infringer provided data to another entity along with instructions or directions regarding the use of those data . . . [and] suggested that the existence of a contractual relationship between the accused infringer and the entity performing other steps of the accused method was a significant consideration." As Limelight had contracts with customers to access their CDN, the jury found there to be a sufficient relationship for finding infringement.

However, Limelight argued that Muniauction, Inc. v. Thomson Corp., which issued shortly afterwards, directly ruled that “an accused infringer’s control over access to an Internet-based system, coupled with instructions to customers on how to use that system, is insufficient to establish direct infringement.”

Judge Zobel found Limelight's argument persuasive:

Muniauction did establish a new data point on the continuum between an arms-length relationship and vicarious liability for determining direction or control. In BMC Resources, as discussed supra, the court’s reasoning left open the possibility that evidence of direction or control might be found from the provision of “instructions or directions” regarding the use of the data the defendant provided to the debit networks. 498 F.3d at 1381. It similarly suggested that the lack of a contractual relationship between the defendant and the financial institutions was relevant in finding a lack of direction or control of the latter’s actions by the former . . . Muniauction establishes that direction or control requires something more than merely a contractual agreement to pay for a defendant’s services and instructions or directions on how to utilize those services.

* * *

I find no material difference between Limelight’s interaction with its customers and that of Thompson in Muniauction. There is no suggestion that the agreements between Limelight and its customers for content delivery services were other than the result of an arms-length contract negotiation. Akamai has identified no legal theory under which Limelight might be vicariously liable for the actions of the content providers. The first step of claim 19 of the ’703 patent, serving the initial web page from the content provider’s domain, is performed by the content provider whether it subscribes to Limelight’s services or not. Limelight’s customers, following Limelight’s instructions, do modify the embedded objects of their web pages or alter their DNS records so that requests for the objects resolve to the content delivery service domain, rather than the content provider domain, in order to take advantage of Limelight’s service. However, this step is performed by Limelight’s customers not because they are contractually obligated to do so; rather, they do so because they wish to avail themselves of Limelight’s service. Under Muniauction, this is insufficient to establish the requisite direction or control by Limelight of its customers necessary to find it liable for direct infringement.

Read/download the opinion here (link)

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