Dish Network 2009 Annual Report Download - page 43

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We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe any of the
asserted 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.
During 2001, Broadcast Innovation, L.L.C. (“Broadcast Innovation”) filed a lawsuit against us, EchoStar, DirecTV,
Thomson Consumer Electronics and others in United States 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. 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 District Court found 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 Charter case back to the District Court. During June 2006, Charter filed a reexamination request with the United
States Patent and Trademark Office. The Federal Circuit Court has stayed the Charter case pending reexamination,
and our case has been 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
asserted 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
During 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. On October 16, 2009, the District Court granted defendants’
motion to dismiss with prejudice. The plaintiffs have appealed. 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.
Enron Commercial Paper Investment
During 2001, we received approximately $40 million from the sale of Enron commercial paper to a third party
broker. That commercial paper was ultimately purchased by Enron. During 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. On April 7, 2009, we settled the litigation for an
immaterial amount.