Dish Network 2000 Annual Report Download - page 81

ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
F–30
During November 2000, EchoStar filed its appeal brief with the Eleventh Circuit. During December 2000,
the Satellite Broadcasting and Communications Association submitted an amicus brief in support of EchoStar’s
appeal. The Consumer Federation of America and the Media Access Project have also submitted an amicus brief in
support of EchoStar’s appeal. The Networks have responded to EchoStar’s appeal brief and the amicus briefs filed
by the Consumer Federation of America and the Media Access Project and the Satellite Broadcasting and
Communications Association. In December 2000, the Department of Justice filed a motion to intervene with respect
to EchoStar’s constitutional challenge of the Satellite Home Viewers Act, and the National Association of
Broadcasters filed an amicus brief in support of the Networks’ position in the appeal. During January 2001,
EchoStar filed its reply appeal brief and asked the Eleventh Circuit for an opportunity to respond to the amicus brief
filed by the National Association of Broadcasters and the brief filed by the Department of Justice. On January 11,
2001, the Networks advised the Eleventh Circuit that they did not object to EchoStar’s filing a response to the
National Association of Broadcasters’ amicus brief or the Department of Justice’s brief. On January 19, 2001,
EchoStar filed its supplemental brief responding to the Department of Justice’s brief. On January 23, 2001, the
Department of Justice filed a motion to strike EchoStar’s supplemental brief or for an opportunity to reply to
EchoStar’s supplemental brief. On February 2, 2001, without explanation, the Eleventh Circuit issued an order
striking EchoStar’s supplemental reply and denying EchoStar an opportunity to file a response to the Department of
Justice’s motion to intervene. The Eleventh Circuit has currently set oral argument for the week of April 23, 2001.
EchoStar cannot predict when the Eleventh Circuit will rule on its appeal, but it could be as early as April 2001.
EchoStar’s appeal effort may not be successful and EchoStar may be required to comply with the Court’s
preliminary injunction order on short notice. The preliminary injunction could force EchoStar to terminate delivery
of distant network channels to a substantial portion of its distant network subscriber base, which could also cause
many of these subscribers to cancel their subscription to EchoStar’s other services. Such terminations would result
in a small reduction in EchoStar’s reported average monthly revenue per subscriber and could result in a temporary
increase in churn.
Starsight
During October 2000, Starsight Telecast, Inc., a subsidiary of Gemstar-TV Guide, filed a suit for patent
infringement against EchoStar and certain of its subsidiaries in the United States District Court for the Western
District of North Carolina, Asheville Division. The suit alleges infringement of United States Patent No. 4,706,121
(“the ‘121 patent”) which relates to certain electronic program guide functions. EchoStar has examined this patent
and believes that it is not infringed by any of EchoStar’s products or services. EchoStar is vigorously contesting the
suit and has filed counterclaims challenging both the validity and enforceability of this patent.
In December 2000 EchoStar filed suit against Gemstar - TV Guide International, Inc. (and certain of its
subsidiaries) in the United States District Court for the District of Colorado alleging violations by Gemstar of
various federal and state anti-trust laws and laws governing unfair competition. The lawsuit seeks an injunction and
monetary damages.
In February 2001, Gemstar filed patent infringement actions against EchoStar in District Court in Atlanta,
Georgia and in the International Trade commission (ITC). These suits allege infringement of US 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. EchoStar expects 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. EchoStar has examined these patents and believe
they are not infringed by any of our products or services. EchoStar 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.