Dish Network 2013 Annual Report Download - page 162

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-52
Programming Contracts
In the normal course of business, we enter into contracts to purchase programming content in which our payment
obligations are generally contingent on the number of Pay-TV subscribers to whom we provide the respective
content. These programming commitments are not included in the “Commitments” table above. The terms of our
contracts typically range from one to ten years with annual rate increases. Our programming expenses will continue
to increase to the extent we are successful in growing our Pay-TV subscriber base. In addition, our margins may face
further downward pressure from price increases and the renewal of long-term pay-TV programming contracts on
less favorable pricing terms.
Rent Expense
Total rent expense for operating leases related to our continuing operations was $307 million, $254 million and
$267 million in 2013, 2012 and 2011, respectively.
Patents and Intellectual Property
Many entities, including some of our competitors, have or may in the future obtain patents and other intellectual
property rights that cover or affect products or services that we offer or that we may offer in the future. We may not be
aware of all intellectual property rights that our products or services may potentially infringe. Damages in patent
infringement cases can be substantial, and in certain circumstances can be trebled. Further, we cannot estimate the
extent to which we may be required in the future to obtain licenses with respect to patents held by others and the
availability and cost of any such licenses. Various parties have asserted patent and other intellectual property rights
with respect to components within our direct broadcast satellite system. We cannot be certain that these persons do not
own the rights they claim, that our products do not infringe on these rights, and/or that these rights are not valid.
Further, we cannot be certain that we would be able to obtain licenses from these persons on commercially reasonable
terms or, if we were unable to obtain such licenses, that we would be able to redesign our products to avoid
infringement.
Contingencies
Separation Agreement
In connection with the Spin-off, we entered into a separation agreement with EchoStar that provides, among other
things, for the division of certain liabilities, including liabilities resulting from litigation. Under the terms of the
separation agreement, EchoStar has assumed certain liabilities that relate to its business including certain designated
liabilities for acts or omissions that occurred prior to the Spin-off. Certain specific provisions govern intellectual
property related claims under which, generally, EchoStar will only be liable for its acts or omissions following the
Spin-off and we will indemnify EchoStar for any liabilities or damages resulting from intellectual property claims
relating to the period prior to the Spin-off as well as our acts or omissions following the Spin-off.
Litigation
We are involved in a number of legal proceedings (including those described below) concerning matters arising in
connection with the conduct of our business activities. Many of these proceedings are at preliminary stages, and
many of these proceedings seek an indeterminate amount of damages. We regularly evaluate the status of the legal
proceedings in which we are involved to assess whether a loss is probable or there is a reasonable possibility that a
loss or an additional loss may have been incurred and to determine if accruals are appropriate. If accruals are not
appropriate, we further evaluate each legal proceeding to assess whether an estimate of the possible loss or range of
possible loss can be made.