Cablevision 2012 Annual Report Download - page 205

COMBINED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
(Dollars in thousands, except per share amounts)
I-77
restitution, attorneys' fees, and equitable relief. The parties have entered into a stipulation staying
discovery until the U.S. District Court in the Livingston matter (above) rules on any motion to dismiss,
and relieving defendants of the obligation to answer or otherwise respond to the complaint until plaintiff
files an amended complaint. The Company believes that these claims are without merit, but is unable to
predict the outcome of this lawsuit or reasonably estimate a range of possible loss.
Patent Litigation
Cablevision is named as a defendant in certain lawsuits claiming infringement of various patents relating
to various aspects of the Company's businesses. In certain of these cases other industry participants are
also defendants. In certain of these cases the Company expects that any potential liability would be the
responsibility of the Company's equipment vendors pursuant to applicable contractual indemnification
provisions. The Company believes that the claims are without merit and intends to defend the actions
vigorously, but is unable to predict the outcome of these lawsuits or reasonably estimate a range of
possible loss.
DISH Network Contract Dispute
In 2005, subsidiaries of the Company (now subsidiaries of AMC Networks) entered into agreements with
EchoStar Communications Corporation and its affiliates by which EchoStar Media Holdings Corporation
acquired a 20% interest in VOOM HD Holdings LLC ("VOOM HD") and EchoStar Satellite LLC (the
predecessor to DISH Network, LLC ("DISH Network")) agreed to distribute VOOM on DISH Network
for a 15-year term. The affiliation agreement with DISH Network for such distribution provides that if
VOOM HD fails to spend $100,000 per year (subject to reduction to the extent that the number of offered
channels is reduced to fewer than 21), up to a maximum of $500,000 in the aggregate, on VOOM, DISH
Network may seek to terminate the agreement under certain circumstances. On January 30, 2008, DISH
Network purported to terminate the affiliation agreement, effective February 1, 2008, based on its
assertion that VOOM HD had failed to comply with this spending provision in 2006. On January 31,
2008, VOOM HD sought and obtained a temporary restraining order from the New York Supreme Court
for New York County prohibiting DISH Network from terminating the affiliation agreement. In
conjunction with its request for a temporary restraining order, VOOM HD also requested a preliminary
injunction and filed a lawsuit against DISH Network asserting that DISH Network did not have the right
to terminate the affiliation agreement. In a decision filed on May 5, 2008, the court denied VOOM HD's
motion for a preliminary injunction. On or about May 13, 2008, DISH Network ceased distribution of
VOOM on its DISH Network. On May 27, 2008, VOOM HD amended its complaint to seek damages for
DISH Network's improper termination of the affiliation agreement. On June 24, 2008, DISH Network
answered VOOM HD's amended complaint and asserted counterclaims alleging breach of contract and
breach of the duty of good faith and fair dealing with respect to the affiliation agreement. On July 14,
2008, VOOM HD replied to DISH Network's counterclaims. VOOM HD and DISH Network each filed
cross-motions for summary judgment. In November 2010, the Court denied both parties' cross-motions
for summary judgment, but granted VOOM HD's motion for sanctions based on DISH Network's
spoliation of evidence as well as its motion to exclude DISH Network's principal damages expert. DISH
Network appealed these latter two rulings. On January 31, 2012, the Appellate Division of the New York
Supreme Court issued a decision affirming (i) the trial court's finding of spoliation and imposition of the
sanction of an adverse inference at trial; and (ii) the trial court's decision to exclude DISH Network's
damages expert. On February 6, 2012, DISH Network filed a motion seeking leave from the Appellate
Division to appeal the order. On April 26, 2012, the Appellate Division denied the motion, thereby
precluding any further appeal of the trial court rulings. The stay of the pending trial court proceedings
was lifted on May 1, 2012, and a jury trial commenced on September 28, 2012. On October 21, 2012,
prior to the conclusion of the trial, the parties entered into a settlement. See Note 20 for a discussion of