Level 3 Acquires IBM's CDN Patents

Are patents the coin of the realm in the content delivery business? If so, the game has just gotten more interesting. Akamai Technologies (AKAM) has prevailed in three different patent infringement cases against rivals in the content delivery markets, most recently with a Feb. 29 court victory over Limelight Networks (LLNW). But even as Akamai was gaining the upper hand in its battle with Limelight, a new challenger was beefing up its intellectual property warchest.

On Feb. 28, Level 3 (LVLT) signed a cross-licensing agreement with IBM involving thousands of patents owned by the two firms. But that's not all, according to Dan Rayburn, who discovered that Level 3 acquired 20 IBM patents on content delivery and streaming technology.

Level 3 bought the Savvis CDN network in January 2007, and has since launched CDN caching and streaming media services priced at the same rate as its high-speed Internet access service. In January Level 3 CEO Jim Crowe said that "content distribution is where we are focusing our effort."

Here's a summary of the patents shifting from IBM to Level 3, from Dan's guest column at GigaOm:

Dan said he has analyzed the Akamai patent featured in the Limelight case, and believes it does not affect Level 3, which owns an even earlier content delivery patent from its purchase of the Savvis CDN assets - which Level 3 invoked in its own patent infringement lawsuit against Limelight. More interesting days lie ahead for the CDN sector.