Dish Network 1997 Annual Report Download - page 25

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The final ruling of the Librarian of Congress, reviewing the CARP’s recommendation, was published in the
Federal Register in October 1997. The Librarian, among other things, affirmed the CARP’s recommendation of a
27 cent per subscriber per month royalty rate for retransmissions of distant superstation and network station signals, but
delayed the effective date for the increase to January 1, 1998 (instead of making the increase retroactive, as the CARP
had recommended). Review of the Librarian’s ruling is currently pending on appeal in the Court of Appeals for the
D.C. Circuit. EchoStar believes that it may be able to pass through these increases to its customers by separately tiering
the channels involved, so that its operating margins are not substantially affected. However, the increases may
adversely affect the competitiveness of EchoStar vis-à-vis cable operators, which pay lower rates to copyright holders.
Export Regulation. From time to time, EchoStar requires import licenses and general destination export
licenses to receive and deliver components of DTH systems. EchoStar has contracted with LKE for the launch of
EchoStar IV from the Republic of Kazakhstan. Satellite export licenses were obtained from the Department of
Commerce for the transport of EchoStar IV to the Republic of Kazakhstan. Lockheed Martin also obtained technical
data exchange licenses from the Department of Commerce permitting the exchange between Lockheed Martin and
LKE of certain information necessary to prepare EchoStar IV for launch. While it is not expected, these licenses could
be suspended or revoked if relations between the United States and Russia were to deteriorate prior to the launch of
EchoStar IV, significantly delaying and increasing the cost to launch EchoStar IV.
Patents and Trademarks
EchoStar uses a number of trademarks for its products and services, including “ EchoStar®,” “ DISH
Network,” “ DISH NetworkSM,” “ America’s Top 40,” “ America’s Top 50 CD,” “ America’s Top 60” and others.
Certain of these trademarks are registered by EchoStar, and those trademarks that are not registered are generally
protected by common law and state unfair competition laws. Although EchoStar believes that these trademarks are not
essential to EchoStar’s business, EchoStar has taken affirmative legal steps to protect its trademarks in the past and
intends to actively protect these trademarks in the future.
EchoStar is the assignee of certain patents for products and product components manufactured and sold by
EchoStar, none of which EchoStar considers to be significant to its continuing operations. In addition, EchoStar has
obtained and, although no assurance can be given, expects to obtain, licenses for certain patents necessary for the
manufacture and sale by EchoStar and others of DBS receivers and related components. EchoStar has been notified
that certain features of the EchoStar Receiver System allegedly infringe on patents held by others, and that royalties are
therefore required to be paid. EchoStar is investigating these infringement allegations and, if appropriate, intends to
vigorously defend against any suit filed by the parties. There can be no assurance that the Company will be able to
successfully defend any suit, if brought, or that the Company will be able to obtain a license for any patent that might
be required. See “– Legal Proceedings.”
Employees
EchoStar had 1,930 employees at December 31, 1997, of which 1,865 worked in EchoStar’s domestic
operations and 65 of which worked in EchoStar’s international operations. EchoStar is not a party to any collective
bargaining agreement and considers its relations with its employees to be good. EchoStar intends to hire additional
personnel as required.