DIRECTV 2004 Annual Report Download - page 29

THE DIRECTV GROUP, INC.
offices, two broadcast centers and three call centers. The major locations of the DIRECTV Latin America segment include six
administrative offices, three broadcast centers and two call centers. The Network Systems segment’s major locations include
five administrative offices, one network operations center and two manufacturing and distribution facilities. We consider our
properties adequate for our present needs.
ITEM 3.LEGAL PROCEEDINGS
(a) Material pending legal proceedings, other than ordinary routine litigation incidental to the business, to which we became or
were a party during the year ended December 31, 2004 or subsequent thereto, but before the filing of this report, are
summarized below:
Independent Retailer Litigation. In April 2001, Robert Garcia, doing business as Direct Satellite TV, an independent retailer
of DIRECTV System equipment, instituted arbitration proceedings against DIRECTV U.S. in Los Angeles, California
regarding commissions and certain chargeback disputes. On October 4, 2001, Mr. Garcia filed a class action complaint against
DIRECTV U.S. in Los Angeles County Superior Court asserting the same claims and a Consumer Legal Remedies Act claim.
Mr. Garcia alleges $300 million in class-wide damages and seeks certification of a class of plaintiffs to proceed in arbitration
with court oversight. In February 2004, the trial court compelled the matter to arbitration and relinquished all jurisdiction in
connection with the case. The matter is now pending before the American Arbitration Association.
* * *
On May 18, 2001, plaintiffs Cable Connection, Inc., TV Options, Inc., Swartzel Electronics, Inc. and Orbital Satellite, Inc. filed
a class action complaint against DIRECTV U.S. in Oklahoma State Court, alleging claims similar to those in the above-
described Garcia matter on behalf of all DIRECTV U.S. dealers. The plaintiffs seek unspecified damages and injunctive relief.
After several procedural hearings and orders, the matter is now pending before the American Arbitration Association.
* * *
Intellectual Property Litigation. On June 23, 2004, Acacia Media Technologies Corporation, or Acacia, filed suit in the U.S.
District Court for the Northern District of California against The DIRECTV Group, Inc., Comcast Corporation, Cox
Communications, Inc., Hospitality Network, Inc., Charter Communications, Inc., EchoStar Communications Corporation,
Boulder Ridge Cable TV d/b/a Starstream Communications, Seren Innovations, Inc. and Central Valley Cable TV, LLC,
alleging infringement of various patents and seeking unspecified damages and injunctive relief. The defendants, including us,
have answered by asserting that the patents are not infringed, not valid, and not enforceable on numerous grounds and intend to
vigorously defend against these claims. Activity is now stayed pending outcome of requests by Acacia to combine the action
with others as a multi-district litigation.
* * *
On December 5, 2000, Personalized Media Communications, LLC and Pegasus Development Corporation filed suit in the U.S.
District Court for the District of Delaware against DIRECTV, Inc., The DIRECTV Group, Inc., Thomson Consumer Electronics
and Philips Electronics North American Corp., alleging patent infringement and seeking unspecified damages and injunctive
relief. On May 14, 2003, the court stayed the case pending outcome of reexaminations of the patents by the U.S. Patent Office.
* * *
On June 27, 2000, SuperGuide Corporation filed suit in the U.S. District Court for the Western District of North Carolina
against DIRECTV Enterprises, LLC, DIRECTV, Inc. and DIRECTV Operations, LLC, which we
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