Two-Way Media Files Patent Suit Against Akamai, Limelight, AT&T

On April 11th, Colorado based Two-Way Media filed suit against Akamai, Limelight Networks and AT&T over a series of patents entitled "multicasting method and apparatus". (patent description below) While this is just one of many patent suits taking place in the content delivery sector, there are a few unique details about this one to watch. For starters, Two-Way Media first filed suit against AOL and after a successful Markman ruling in their favor, AOL settled out of court for an undisclosed amount. That by itself does not mean anything as it may have been easier for AOL to settle rather than pay legal costs, but the fact they settled after a ruling is a bad sign.

Even more interesting in my eyes is that the main patent, number 5778187 was filed in 1996 and was licensed by Two-Way Media to Cable & Wireless in the early days of the content delivery market. For those that remember, Sandpiper and Digital Island were some of the original CDNs that were acquired by Cable & Wireless. There is no way to know if Cable & Wireless licensed the patents because they felt they were valid or not, but the fact another CDN even licensed it makes this suit even more interesting.

Some may wonder why other CDNs are not mentioned in the suit and my guess is that it’s the same reason most suits like this only name those showing a lot of revenue. Until a company is doing a certain level of revenue, there is no reason to really go after them. But you can expect that as more CDNs see revenue growth and the content delivery industry turns into a multi-billion dollar market over the years, CDNs are going to be inundated with patent suits. It’s also interesting to note that once again, Level 3 seems to have a very clear strategy with regards to CDN patents and has no exposure to this patent either. Level 3 is covered under the original Cable & Wireless licensing deal with Two-Way Media through Level 3’s acquisition of the SAVVIS content delivery business, which included their intellectual property.

Other CDNs aside from Level 3 could be in the cross hairs of companies like Two-Way Media, but at this time it’s too early to know exactly who Two-Way Media and other patent holders may go after. And for those who say that some CDNs have no concern as they have made public statements saying they are not worried, what do you think they are going to say? No CDN is going to come out and tell Wall Street or investors, yes, this patent worries us. So unless a company comes out and address a specific patent and provides details as to why they feel they are not infringing, you really can’t believe the corporate line of "we’re not worried", unless of course you are Level 3.

Patent Abstract
A scalable architecture is disclosed for delivery of real-time information over a communications network. Embedded into the architecture is a control mechanism that provides for the management and administration of users who are to receive the real-time information. In the preferred embodiment, the information being delivered is high-quality audio. However, it could also be video, graphics, text or any other type of information that can be transmitted over a digital network. Preferably, there are multiple channels of information available simultaneously to be delivered to users, each channel consisting of an independent stream of information. A user chooses to tune in or tune out a particular channel, but does not choose the time at which the channel distributes its information. Advantageously, interactive (two-way) information can be incorporated into the system, multiple streams of information can be integrated for delivery to a user, and certain portions of the information being delivered can be tailored to the individual user.