Dish Network 2008 Annual Report Download - page 41

Download and view the complete annual report

Please find page 41 of the 2008 Dish Network annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 144

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144

31
The patents relate to certain systems and methods for transmission of digital data. During 2004 and 2005, the Court
issued Markman rulings which found that the ‘992 and ‘702 patents were not as broad as Acacia had contended, and
that certain terms in the ‘702 patent were indefinite. The Court issued additional claim construction rulings on
December 14, 2006, March 2, 2007, October 19, 2007, and February 13, 2008. On March 12, 2008, the Court
issued an order outlining a schedule for filing dispositive invalidity motions based on its claim constructions.
Acacia has agreed to stipulate to invalidity based on the Court’s claim constructions in order to proceed immediately
to the Federal Circuit on appeal. The Court, however, has permitted us to file additional invalidity motions.
Acacia’s various patent infringement cases have been consolidated for pre-trial purposes in 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 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. We cannot predict with any degree of certainty the outcome of the suit or
determine the extent of any potential liability or damages.
Broadcast Innovation, L.L.C.
In 2001, Broadcast Innovation, L.L.C. (“Broadcast Innovation”) 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 2004, the judge issued an order finding the ‘066 patent invalid. Also in 2004, the Court ruled the ‘094 patent
invalid in a parallel case filed by Broadcast Innovation against Charter and Comcast. In 2005, the United States
Court of Appeals for the Federal Circuit overturned the ‘094 patent finding of invalidity and remanded the case back
to the District Court. During June 2006, Charter filed a reexamination request with the United States Patent and
Trademark Office. The Court has stayed the case pending reexamination. Our case remains stayed pending
resolution of the Charter case.
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 that
could require us to materially modify certain user-friendly features that we currently offer to consumers. We cannot
predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability or
damages.
Channel Bundling Class Action
On September 21, 2007, a purported class of cable and satellite subscribers filed an antitrust action against us in the
United States District Court for the Central District of California. The suit also names as defendants DirecTV,
Comcast, Cablevision, Cox, Charter, Time Warner, Inc., Time Warner Cable, NBC Universal, Viacom, Fox
Entertainment Group, and Walt Disney Company. The suit alleges, among other things, that the defendants engaged
in a conspiracy to provide customers with access only to bundled channel offerings as opposed to giving customers
the ability to purchase channels on an “a la carte” basis. We filed a motion to dismiss, which the Court denied in
July 2008. We intend to vigorously defend this case. We cannot predict with any degree of certainty the outcome of
the suit or determine the extent of any potential liability or damages.