U.S. high court conflicted over Limelight Networks patent fight

By Lawrence Hurley

WASHINGTON (Reuters) - The U.S. Supreme Court on Wednesday appeared unsure how to proceed in a dispute over whether Limelight Networks Inc infringed upon patented technology for managing Web images and video held by Akamai Technologies Inc.

The nine justices are weighing whether a company can be held liable for inducing patent infringement when the final step that leads to infringement is carried out by a third party.

But during much of a one-hour-long argument, the justices focused less on the legal issue and more on concerns about whether the high court should issue its ruling without first asking a lower court to take a second look at the case.

The justices are reviewing an August 2012 ruling by a divided U.S. Court of Appeals for the Federal Circuit in Akamai's favor, which effectively made it easier to prove that a company is liable based on the induced infringement theory.

But as several justices noted on Wednesday, the appeals court did not decide the question of whether direct infringement had occurred before ruling that there was induced infringement.

Justice Samuel Alito and Justice Elena Kagan both raised concerns that a Supreme Court ruling on the induced infringement question would be rendered largely meaningless unless the direct infringement issue was resolved.

"I can't think of a way our decision ... would be relevant for any case," Kagan said.

Likewise, Justice Stephen Breyer said he was "worried about setting forth any rule" without being more informed on the subject.

Various other companies, including Google Inc, Cisco Systems Inc and Oracle Corp, joined briefs backing Limelight. They say the appeals court ruling under review could make tech companies subject to more infringement lawsuits.

Some pharmaceutical and biotechnology firms, including Eli Lilly and Co and Myriad Genetics Inc, support Akamai, saying the appeals court's decision would help protect major investments in pharmaceuticals by making it easier to sue for infringement involving multiple parties.

The Akamai lawsuit was filed in 2006. A Massachusetts jury initially found that Limelight infringed the patents and awarded $40.1 million for lost profits and $1.4 million for damages.

A ruling is expected by the end of June.

The case is Limelight Networks v. Akamai Technologies, U.S. Supreme Court, No. 12-786

(Editing by Grant McCool)