Dish Network 2014 Annual Report Download - page 163

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-57
We intend to vigorously prosecute and defend our position in these cases. In the event that a court ultimately
determines that we infringe the asserted copyrights, or are in breach of any of the retransmission consent
agreements, we may be subject to substantial damages, and/or an injunction that could require us to materially
modify certain features that we currently offer to consumers. In addition, as a result of this litigation, we may not be
able to renew certain of our retransmission consent agreements and other programming agreements on favorable
terms or at all. If we are unable to renew these agreements, there can be no assurance that we would be able to
obtain substitute programming, or that such substitute programming would be comparable in quality or cost to our
existing programming. Loss of access to existing programming could have a material adverse effect on our
business, financial condition and results of operations, including, among other things, our gross new subscriber
activations and subscriber churn rate. We cannot predict with any degree of certainty the outcome of these suits or
determine the extent of any potential liability or damages.
Joao Control & Monitoring Systems LLC
On April 23, 2014, Joao Control & Monitoring Systems, LLC (“Joao Control”) filed a complaint against us in the
United States District Court for the District of Delaware, alleging infringement of United States Patent No.
6,549,130 (the “130 patent”), which is entitled “Control Apparatus and Method for Vehicles and/or for Premises.”
Joao alleges that we infringe the 130 patent by making, using, providing and/or importing remotely-accessed DVRs.
On the same day, Joao Control also filed similar actions against DirecTV; Verizon Communications, Inc.; Time
Warner Cable Inc.; Cox Communications, Inc.; and Cablevision Systems Corporation, among others. Joao Control
is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited
therein. Joao Control never served us with its complaint and on June 23, 2014, Joao Control dismissed its
complaint against us without prejudice.
LightSquared/Harbinger Capital Partners LLC (LightSquared Bankruptcy)
As previously disclosed in our public filings, L-Band Acquisition, LLC (“LBAC”), our wholly-owned subsidiary,
entered into a Plan Support Agreement (the “PSA”) with certain senior secured lenders to LightSquared LP (the
“LightSquared LP Lenders”) on July 23, 2013, which contemplated the purchase by LBAC of substantially all of
the assets of LightSquared LP and certain of its subsidiaries (the “LBAC Bid”) that are debtors and debtors in
possession in the LightSquared bankruptcy cases pending in the United States Bankruptcy Court for the Southern
District of New York (the “Bankruptcy Court”), which cases are jointly administered under the caption In re
LightSquared Inc., et. al., Case No. 12 12080 (SCC).
Pursuant to the PSA, LBAC was entitled to terminate the PSA in certain circumstances, certain of which required
three business days’ written notice, including, without limitation, in the event that certain milestones specified in the
PSA were not met. On January 7, 2014, LBAC delivered written notice of termination of the PSA to the
LightSquared LP Lenders. As a result, the PSA terminated effective on January 10, 2014, and the LBAC Bid was
withdrawn.
On August 6, 2013, Harbinger Capital Partners LLC and other affiliates of Harbinger (collectively, “Harbinger”), a
shareholder of LightSquared Inc., filed an adversary proceeding against us, LBAC, EchoStar, Charles W. Ergen
(our Chairman), SP Special Opportunities, LLC (“SPSO”) (an entity controlled by Mr. Ergen), and certain other
parties, in the Bankruptcy Court. Harbinger alleged, among other things, claims based on fraud, unfair competition,
civil conspiracy and tortious interference with prospective economic advantage related to certain purchases of
LightSquared secured debt by SPSO. Subsequently, LightSquared intervened to join in certain claims alleged
against certain defendants other than us, LBAC and EchoStar.