But the social network’s advertising revenue grew 18.4% during the quarter.
Retailers such as Newegg and L.L. Bean fear a precedent that could affect online shopping.
Five online retailers—Abt Electronics Inc., Crutchfield Corp., L.L. Bean Inc., Newegg Inc. and PetMed Express Inc.—last week filed an amicus curiae, or friend-of-the-court brief, in hopes of blocking a federal court appeal by Akamai Technologies Inc. and helping to prevent online shoppers from being dragged into e-commerce patent infringement cases.
“The retailers are concerned about this setting a legal precedent—this is potentially a pretty big deal,” says Peter Brann, a partner at the Lewiston, ME, law firm of Brann & Isaacson, which filed the brief on behalf of the five retailers. He adds that it’s not uncommon for online retailers to get sued for patent infringement based in part of the activities of visitors to their web sites.
Akamai, however, says that it believes last week’s court filing by the retailers overstates the potential impact on retailers and consumers. “Consumers and retailers have no cause for concern,” Akamai said in response to a request for comment from Internet Retailer. “Under the legal standards advocated by Akamai, liability would not extend to innocent actors.”
Akamai is seeking a review by the full U.S. Court of Appeals for the Federal Circuit of a finding by a three-judge panel of the court that supported a lower court ruling against Akamai. The matter stems from a federal district court ruling in 2009 in Akamai Technologies Inc., et al., vs. Limelight Networks Inc. Akamai and Limelight provide Internet-based technology that cache and accelerate web content that display on e-commerce and other types of web sites.
Akamai charged in the 2009 complaint that Limelight and its web site-operating clients, which include retailers, had combined to infringe on an Akamai patent for accessing and displaying cached content on the Internet, such as product images and videos. But the U.S. District Court for the District of Massachusetts ruled in favor of Limelight.
Akamai appealed the district court ruling to the U.S. Court of Appeals, but the three-judge panel in the court found in favor of Limelight. In effect, the panel backed the contention by Limelight that multiple parties could not be found liable for joint infringement if they were not also involved in a legal contractual relationship.
Newegg and the other retailers who filed the amicus curiae want the appeals court to uphold the panel’s decision, because it would make it harder for patent holders to claim infringement by retailers based in part on the online activity of visitors to their web sites, Brann says.
“Under the position advanced in this case by Akamai,” the new court filing says, “a potential customer’s visit to the retail web site of any Internet retailer would carry with it major legal consequences different from those associated with that same customer’s browsing the pages of a catalog or walking into a retail store, even if what that visitor saw on screen, page or rack was the very same product.” The filing further contends that Akamai wants patent holders to be able to claim joint infringement of patents by both online retailers and their customers, even though retailers have no control over their customers’ online behavior.
But Akamai contends that its interests in the case pertain only to the actions by Limelight, including the actions of its business clients but not of consumers. “The particular patent allegations involved are against Limelight alone, focusing on Limelight’s content delivery service and its activities relating to how [its] customers use that service,” Akamai says in the statement provided to Internet Retailer. “Akamai never alleged that activities of end users or consumers implicate the patent. We have reviewed the recently filed amicus brief, but believe that the concerns therein are overstated and do not take into consideration the nature of the particular patent allegations brought against Limelight."
Newegg is No. 12 in the Internet Retailer Top 500 Guide, L.L. Bean is No. 21, PetMed No. 107, Crutchfield No. 120 and Abt No. 151.