Limelight Networks soars after patent ruling
NEW YORK (AP) – Shares of Limelight Networks Inc. soared Monday after a court reversed a prior jury verdict and ruled in its favor, saying the network services provider does not infringe a patent held by Akamai Technologies Inc., as CED reported (story here).
Akamai had said late Friday it will appeal the decision.
Limelight said Monday that the U.S. District Court for Massachusetts set aside a jury verdict and ruled that Limelight does not infringe on Akamai's patent. Akamai had sued Limelight in 2006, alleging that Limelight was infringing on an Akamai content-delivery patent.
In February 2008, a jury found that Limelight did infringe Akamai's patent and awarded Akamai $45 million in damages.
"While Akamai will appeal the reversal, we believe Limelight is likely to be an acquisition target," wrote Wedbush Morgan analyst Kerry Rice in a note to investors. "The verdict should also eliminate a distraction for management, which can now refocus their efforts to attract new customers."
Rice kept a "Buy" rating on Limelight's shares. The analyst also said that Limelight's first quarter is likely on track to meet or exceed expectations.
Tempe, Ariz.-based Limelight's shares rose 84 cents, or 21 percent, to $4.75 in afternoon trading. The day's high of $4.98 set a 52-week high. Shares of Cambridge, Mass.-based Akamai rose 38 cents, or 2 percent, to $19.86.