Dish Network 2010 Annual Report Download - page 43

Download and view the complete annual report

Please find page 43 of the 2010 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 148

  • 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
  • 145
  • 146
  • 147
  • 148

36
36
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.
Retailer Class Actions
During 2000, lawsuits were filed by retailers in Colorado state and federal courts attempting to certify nationwide
classes on behalf of certain of our retailers. The plaintiffs requested that 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. On September 20, 2010, we agreed to a
settlement of both lawsuits that provides, among other things, for mutual releases of the claims underlying the
litigation, payment by us of up to $60 million, and the option for certain class members to elect to reinstate certain
monthly incentive payments, which the parties agreed have an aggregate maximum value of $23 million. We
cannot predict with any degree of certainty how many class members will elect to reinstate these monthly incentive
payments. As a result, we recorded $60 million as a “Litigation accrual” on our Consolidated Balance Sheets and
in “Litigation expense” for the year ended December 31, 2010 on our Consolidated Statements of Operations and
Comprehensive Income (Loss). On February 9, 2011, the court granted final approval of the settlement; however,
our payment of the settlement amount is still subject to the satisfaction of certain conditions, including the lapse of
all applicable appeal periods.
Suomen Colorize Oy
During October 2010, Suomen Colorize Oy (“Suomen”) filed suit against DISH Network L.L.C., our indirect
wholly owned subsidiary, and EchoStar in the United States District Court for the Middle District of Florida alleging
infringement of United States Patent No. 7,277,398. Suomen is an entity that seeks to license an acquired patent
portfolio without itself practicing any of the claims recited therein. The abstract of the patent states that the claims
are directed to a method and terminal for providing services in a telecommunication network.
We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the
asserted 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 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.
Technology Development Licensing
On January 22, 2009, Technology Development and Licensing L.L.C. (“TDL”) filed suit against us and EchoStar
in the United States District Court for the Northern District of Illinois alleging infringement of United States
Patent No. Re. 35,952, which relates to certain favorite channel features. TDL is an entity that seeks to license an
acquired patent portfolio without itself practicing any of the claims recited therein. In July 2009, the Court granted
our motion to stay the case pending two re-examination petitions before the Patent and Trademark Office.
We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the
asserted 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. We
cannot predict with any degree of certainty the outcome of the suit or determine the extent of any potential liability
or damages.
Tivo Inc.
During January 2008, the United States Court of Appeals for the Federal Circuit affirmed in part and reversed in part
the April 2006 jury verdict concluding that certain of our digital video recorders, or DVRs, infringed a patent held
by Tivo. As of September 2008, we had recorded a total accrual of $132 million on our Consolidated Balance
Sheets to reflect the April 2006 jury verdict, supplemental damages through September 2006 and pre-judgment
interest awarded by the Texas court, together with the estimated cost of potential further software infringement prior