Dish Network 2004 Annual Report Download - page 121

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ECHOSTAR COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS – Continued
Superguide
During 2000, Superguide Corp. (“Superguide”) filed suit against us, DirecTV and others in the United States District
Court for the Western District of North Carolina, Asheville Division, 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. Superguide sought injunctive and declaratory relief and damages in an
unspecified amount. We examined these patents and believe that they are not infringed by any of our products or
services.
On summary judgment, the District Court ruled that none of the asserted patents were infringed by us. These rulings
were appealed to the United States Court of Appeals for the Federal Circuit. During February 2004, the Federal Circuit
affirmed in part and reversed in part the District Court’s findings and remanded the case back to the District Court for
further proceedings. Based upon the settlement with Gemstar discussed above, we now have an additional defense in
this case based upon a license from Gemstar. We will continue to vigorously defend this case. In the event that a Court
ultimately determines that we infringe on any of the patents, we may be subject to substantial damages, which may
include treble damages and/or an injunction that could require us to materially modify certain user-friendly electronic
programming guide and related features that we currently offer to consumers. It is not possible to make a firm
assessment of the probable outcome of the suit or to determine the extent of any potential liability or damages.
Broadcast Innovation, LLC
In November of 2001, Broadcast Innovation, LLC filed a lawsuit against us, DirecTV, Thomson Consumer
Electronics and others in Federal District Court in Denver, Colorado. The suit alleges infringement of United States
Patent Nos. 6,076,094 (“the ‘094 patent”) and 4,992,066 (“the ‘066 patent”). The ‘094 patent relates to certain
methods and devices for transmitting and receiving data along with specific formatting information for the data.
The ‘066 patent relates to certain methods and devices for providing the scrambling circuitry for a pay television
system on removable cards. We examined these patents and believe that they are not infringed by any of our
products or services. Subsequently, DirecTV and Thomson settled with Broadcast Innovation leaving us as the only
defendant.
During January 2004, the judge issued an order finding the ‘066 patent invalid. In August of 2004, the Court ruled
the ‘094 invalid in a parallel case filed by Broadcast Innovation against Charter and Comcast. Our case is stayed
pending the appeal of the Charter case. We intend to continue to vigorously defend this case. In the event that a
Court ultimately determines that we infringe on any of the patents, we may be subject to substantial damages, which
may include treble damages and/or an injunction that could require us to materially modify certain user-friendly
features that we currently offer to consumers. It is not possible to make a firm assessment of the probable outcome
of the suit or to determine the extent of any potential liability or damages.
TiVo Inc.
During January 2004, TiVo Inc. filed a lawsuit against us in the United States District Court for the Eastern District
of Texas. The suit alleges infringement of United States Patent No. 6,233,389 (“the ‘389 patent”). The ‘389 patent
relates to certain methods and devices for providing what the patent calls “time-warping.” We have examined this
patent and do not believe that it is infringed by any of our products or services. During March 2005, the Court
denied our motion to transfer this case to the United States District Court for the Northern District of California.
We intend to vigorously defend this case. In the event that a Court ultimately determines that we infringe this
patent, we may be subject to substantial damages, which may include treble damages and/or an injunction that could
require us to materially modify certain user-friendly features that we currently offer to consumers. It is not possible
to make a firm assessment of the probable outcome of the suit or to determine the extent of any potential liability or
damages.
F–41