Limelight Networks and Akamai Technologies have come to an agreement that puts a long-standing patent fight between the content delivery network rivals to bed.
Limelight announced this week that it has entered an agreement that settles the spat centering on the ‘703 patent (US. No. 6,108,703, describing a “Global hosting system”) and certain other patents in the form of a settlement that converts the $51 million judgment handed down last year into a $54 million license that will be paid in twelve equal quarterly installments starting August 1.
Both companies have also waived all rights to appeal as part of the agreement, and Akamai will release the $51 million letter of credit that bonded the judgment.
As a result, Limelight said it will regain access to the full amount in restricted cash supporting the letter of credit this month.
Dan Rayburn, EVP for StreamingMedia.com and principal analyst at Frost & Sullivan, tweeted that the agreement settles a protracted legal battle.
Limelight Networks will pay the $54M it owes to Akamai over the next 3 years. - 10 year patent suit finally over. https://t.co/IibFFbwQSF
— Dan Rayburn (@DanRayburn) August 1, 2016
However, the agreement excludes patents that Akamai asserted as counterclaims in the patent infringement case filed by Limelight against Akamai and XO Communications in the Eastern District of Virginia in late 2015 and does not otherwise impact Limelight’s rights in that case, Limelight said.
“We are pleased by the outcome of this agreement. It eliminates the continuing risk from the ‘703 patent and allows us to extend the $51 million payment over a three-year period at an attractive interest rate,” Robert Lento, chief executive officer of Limelight, said in a statement. “This agreement, coupled with the series of financial and operational improvements, further enhances our confidence in Limelight’s value creation opportunity.”
Last month, Limelight posted a Q2 net loss of $54.9 million (53 cents per basic share) on revenues of $43.6 million, flat from $43.8 million in the year-ago quarter.
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