Dish Network 2014 Annual Report Download - page 169

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-63
Tse
On May 30, 2012, Ho Keung Tse filed a complaint against our wholly-owned subsidiary Blockbuster L.L.C., in the
United States District Court for the Eastern District of Texas, alleging infringement of United States Patent No.
6,665,797 (the “797 patent”), which is entitled “Protection of Software Again [sic] Against Unauthorized Use.” Mr.
Tse is the named inventor on the 797 patent. On the same day that he sued Blockbuster, Mr. Tse filed a separate
action in the same court alleging infringement of the same patent against Google Inc.; Samsung
Telecommunications America, LLC and HTC America Inc. He also has earlier-filed litigation on the same patent
pending in the United States District Court for the Northern District of California against Sony Connect, Inc.;
Napster, Inc.; Apple Computer, Inc.; Realnetworks, Inc. and MusicMatch, Inc. On March 8, 2013, the Court
granted Blockbuster’s motion to transfer the matter to the United States District Court for the Northern District of
California, the same venue where the matter against Google Inc.; Samsung Telecommunications America, LLC and
HTC America Inc. also was transferred. On December 11, 2013, the Court granted our motion for summary
judgment based on invalidity of the 797 patent. Mr. Tse filed a notice of appeal on January 8, 2014, and the United
States Court of Appeals for the Federal Circuit ordered that the appeal be submitted to a three judge panel of the
Federal Circuit on July 10, 2014 without oral argument. On July 16, 2014, the Federal Circuit affirmed the District
Court’s entry of summary judgment in our favor. On August 11, 2014, Mr. Tse filed a petition for rehearing or
rehearing en banc, which the Federal Circuit denied on September 15, 2014. On December 11, 2014, Mr. Tse filed
a petition for a writ of certiorari before the United States Supreme Court.
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.
Voom HD Holdings
In January 2008, Voom HD Holdings LLC (“Voom”) filed a lawsuit against our wholly-owned subsidiary DISH
Network L.L.C., in New York Supreme Court, alleging breach of contract and other claims arising from our
termination of the affiliation agreement governing carriage of certain Voom HD channels on the DISH branded pay-
TV service and seeking over $2.5 billion in damages.
On October 21, 2012, we entered into a confidential settlement agreement and release (the “Voom Settlement
Agreement”) with Voom and CSC Holdings, LLC (“Cablevision”), and for certain limited purposes, MSG
Holdings, L.P., The Madison Square Garden Company and EchoStar. The Voom Settlement Agreement resolved
the litigation between the parties relating to the Voom programming services. Pursuant to the terms of the Voom
Settlement Agreement, among other things: (i) the litigation between the parties relating to the Voom programming
services was dismissed with prejudice and the parties released each other for all claims against each other related
thereto; (ii) we agreed to pay $700 million in cash to Voom; (iii) DISH Media Holdings Corporation, our wholly-
owned subsidiary, agreed to enter into an agreement to transfer its ownership interest in Voom to Rainbow
Programming Holdings, LLC, an affiliate of Voom; and (iv) an affiliate of Cablevision agreed to enter into an
agreement to transfer certain of its wireless multichannel video distribution and data service licenses (the “MVDDS
Licenses”) to us. On October 23, 2012, we paid Voom $700 million.
Separately, we entered into a multi-year affiliation agreement with AMC Network Entertainment LLC, WE:
Women’s Entertainment LLC, The Independent Film Channel, The Sundance Channel L.L.C, each of which are
subsidiaries of AMC Networks Inc., and Fuse Channel LLC, a subsidiary of The Madison Square Garden Company,
for the carriage of AMC, WE, IFC, Sundance Channel and the Fuse channel.