Dish Network 2007 Annual Report Download - page 41

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Table of Contents
of the ‘746 patent. On October 27, 2006, the Patent and Trademark Office issued its initial office action rejecting all of the claims of the ‘746
patent in light of several prior art references. Forgent will have an opportunity to challenge the initial office action. We cannot predict with any
degree of certainty the outcome of the suit or determine the extent of any potential liability or damages.
Finisar Corporation
Finisar Corporation (“Finisar”) recently obtained a $100.0 million verdict in the United States District Court for the Eastern District of Texas
against DirecTV for patent infringement. Finisar alleged that DirecTV’s electronic program guide and other elements of its system infringe
United States Patent No. 5,404,505 (the ‘505 patent).
On July 10, 2006, we, together with NagraStar LLC, filed a Complaint for Declaratory Judgment in the United States District Court for the
District of Delaware against Finisar that asks the Court to declare that they and we do not infringe, and have not infringed, any valid claim of
the ‘505 patent. Trial is not currently scheduled. We intend to vigorously defend our rights in this action. 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 modify our system architecture. We cannot predict with any degree of certainty the outcome of the suit or determine the
extent of any potential liability or damages.
Trans Video
In August 2006, Trans Video Electronic, Ltd. (“Trans Video”) filed a patent infringement action against us in the United States District Court
for the Northern District of California. The suit alleges infringement of United States Patent Nos. 5,903,621 (the ‘621 patent) and 5,991,801
(the ‘801 patent). The patents relate to various methods related to the transmission of digital data by satellite. Trial has been set for July 2008.
We intend to vigorously defend this case. In the event that a Court ultimately determines that we infringe any of the patents, we may be subject
to substantial damages, which may include treble damages and/or an injunction. We cannot predict with any degree of certainty the outcome of
the suit or determine the extent of any potential liability or damages.
Retailer Class Actions
During 2000, lawsuits were filed by retailers in Colorado state and federal court attempting to certify nationwide classes on behalf of certain of
our satellite hardware retailers. The plaintiffs are requesting the Courts declare certain provisions of, and changes to, alleged agreements
between us and the retailers invalid and unenforceable, and to award damages for lost incentives and payments, charge backs, and other
compensation. We are vigorously defending against the suits and have asserted a variety of counterclaims. The federal court action has been
stayed during the pendency of the state court action. We filed a motion for summary judgment on all counts and against all plaintiffs. The
plaintiffs filed a motion for additional time to conduct discovery to enable them to respond to our motion. The Court granted limited discovery
which ended during 2004. The plaintiffs claimed we did not provide adequate disclosure during the discovery process. The Court agreed, and
recently denied our motion for summary judgment as a result. A trial date has not been set. We cannot predict with any degree of certainty the
outcome of the suit or determine the extent of any potential liability or damages.
Enron Commercial Paper Investment
During October 2001, we received approximately $40.0 million from the sale of Enron commercial paper to a third party broker. That
commercial paper was ultimately purchased by Enron. During November 2003, an action was commenced in the United States Bankruptcy
Court for the Southern District of New York against approximately 100 defendants, including us, who invested in Enron’s commercial paper.
The complaint alleges that Enron’
s October 2001 purchase of its commercial paper was a fraudulent conveyance and voidable preference under
bankruptcy laws. We dispute these allegations. We typically invest in commercial paper and notes which are rated in one of the four highest
rating categories by at least two nationally recognized statistical rating organizations. At the time of our investment in Enron commercial paper,
it was considered to be high quality and low risk. We cannot predict with any degree of certainty the outcome of the suit or determine the
extent of any potential liability or damages.
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