NEW YORK (AP) -- Shares in Limelight Networks Inc. sank Friday after an appeals court ruling went against it in its court battle with fellow network services company Akamai Technologies Inc.
THE SPARK: The U.S. Court of Appeals for the Federal Circuit in Washington, D.C., which specializes in patent law, ordered a lower court to reconsider its December 2010 decision that Limelight did not infringe on a patent owned by Akamai, upholding an earlier ruling.
THE BIG PICTURE: The outcome of the case is expected to provide an important precedent in patent disputes, and tech companies, drug makers and other corporations have weighed in on one side or the other. Limelight, which is based in Tempe, Ariz., said it will pursue "all procedural avenues to vindication." It said the court opinion not only does not substantiate Akamai's claims of patent infringement, but does not mean Limelight owes any damages to Akamai.
THE BACKGROUND: Akamai had accused Limelight of violating a content-delivery patent. Although a jury found Limelight guilty in 2008, awarding Akamai $45 million, the decision was reversed by a District Court the following year.
SHARE ACTION: Limelight Networks fell 21 cents, or 8.4 percent, to $2.30. Shares have lost nearly half their value since February.