Dish Network 2000 Annual Report Download - page 28

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In February 2001, Gemstar filed patent infringement actions against us in District Court in Atlanta, Georgia
and in the International Trade Commission (ITC). These suits allege infringement of United States Patent Nos.
5,252,066, 5,479,268 and 5,809,204 which all relate to certain electronic program guide functions. In addition, the
ITC action alleges infringement of the 121 Patent which is asserted in the North Carolina case. In the Atlanta
District Court case, Gemstar seeks damages and an injunction. Pursuant to Federal law, the Atlanta case can be
stayed pending the resolution of the ITC action. It is also possible the North Carolina action will be stayed while the
ITC case proceeds. ITC actions typically proceed according to an expedited schedule. We expect the ITC action to
go to trial by the end of 2001 or early in 2002. A final decision should be issued by the ITC by mid 2002. While the
ITC cannot award damages, it can issue exclusion orders that would prevent the importation of articles that are
found to infringe the asserted patents. In addition, it can issue cease and desist orders that would prohibit the sale of
infringing products that had been previously imported. We have examined these patents and believe they are not
infringed by any of our products or services. We will vigorously contest the ITC and Atlanta allegations of
infringement and will, among other things, challenge both the validity and enforceability of the asserted patents.
During 2000, Superguide Corp. also filed suit against EchoStar, DirecTv and others in the North Carolina
Court, alleging infringement of United States Patent Nos. 5,038,211, 5,293,357 and 4,751,578 which relate to
certain electronic program guide functions, including the use of electronic program guides to control VCRs. It is our
understanding that these patents may be licensed by Superguide to Gemstar, although Gemstar has not asserted the
patents against us. We have examined these patents and believe that they are not infringed by any of our products or
services. We intend to vigorously defend against this action and assert a variety of counterclaims.
In the event it is ultimately determined that we infringe on any of the aforementioned patents we may be
subject to substantial damages, and/or an injunction that could require us to materially modify certain user friendly
electronic programming guide and related features we currently offer to consumers. It is too early to make an
assessment of the probable outcome of either suit.
IPPV Enterprises
IPPV Enterprises, LLC and MAAST, Inc. filed a patent infringement suit against us in the United States
District Court for the District of Delaware. The suit alleges infringement of 5 patents. The patents disclose various
systems for the implementation of features such as impulse-pay-per view, parental control and category lock-out.
One patent relates to an encryption technique. Three of the patents have expired. We are vigorously defending
against the suit based, among other things, on non-infringement, invalidity and failure to provide notice of alleged
infringement.
In the event it is ultimately determined that we infringe on any of these patents we may be subject to
substantial damages, and/or an injunction with respect to the two unexpired patents, that could require us to
materially modify certain user friendly features we currently offer to consumers. It is too early to make an
assessment of the probable outcome of either suit.
Retailer Class Actions
We have been sued by retailers in three separate class actions. In two separate lawsuits, Air
Communication & Satellite, Inc. and John DeJong, et. al. filed lawsuits on October 6, 2000 on behalf of themselves
and a class of persons similarly situated. The plaintiffs are attempting to certify nationwide classes allegedly
brought on behalf of persons, primarily retail dealers, who were alleged signatories to certain retailer agreements
with EchoStar Satellite Corporation. The plaintiffs are requesting the Court to declare certain provisions of the
alleged agreements invalid and unenforceable, to declare that certain unilateral changes to the agreements are invalid
and unenforceable, and to award damages for lost commissions and payments, charge backs, and other
compensation. The plaintiffs are alleging breach of contract and breach of the covenant of good faith and fair
dealing and are seeking declaratory relief, compensatory damages, injunctive relief, and pre-judgment and post-
judgment interest. We intend to vigorously defend the lawsuit and to assert a variety of counterclaims. It is too
early to make an assessment of the probable outcome of the litigation or to determine the extent of any potential
liability or damages.