Dish Network 2015 Annual Report Download - page 162

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-58
agreed to institute a proceeding on our petition, as well as on two third-party petitions challenging the validity of the
233 patent, and it heard oral argument on January 16, 2016. On June 4, 2015, the litigation in the District Court was
ordered stayed pending resolution of the proceeding before the United States 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 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.
Customedia Technologies, L.L.C.
On February 10, 2016, Customedia Technologies, L.L.C. (“Customedia”) filed a complaint against us and our
wholly-owned subsidiary DISH Network L.L.C. in the United States District Court for the Eastern District of Texas.
The complaint alleges infringement of four patents: United States Patent No. 8,719,090; United States Patent
No. 9,053,494; United States Patent No. 7,840,437; and United States Patent No. 8,955,029. Each patent is entitled
“System for Data Management And On-Demand Rental And Purchase Of Digital Data Products.” Customedia
appears to allege infringement in connection with our addressable advertising services, our DISH Anywhere feature,
and our Pay-Per-View and video-on-demand offerings.
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.
Custom Media Technologies LLC
On August 15, 2013, Custom Media Technologies LLC (“Custom Media”) filed complaints against us; AT&T Inc.;
Charter Communications, Inc.; Comcast Corp.; Cox Communications, Inc.; DirecTV; Time Warner Cable Inc. and
Verizon Communications, Inc., in the United States District Court for the District of Delaware, alleging
infringement of United States Patent No. 6,269,275 (the “275 patent”). The 275 patent, which is entitled “Method
and System for Customizing and Distributing Presentations for User Sites,” relates to the provision of customized
presentations to viewers over a network, such as “a cable television network, an Internet or other computer network,
a broadcast television network, and/or a satellite system.” Custom Media alleges that our DVR devices and DVR
functionality infringe the 275 patent. Custom Media is an entity that seeks to license an acquired patent portfolio
without itself practicing any of the claims recited therein. Pursuant to a stipulation between the parties, on
November 6, 2013, the Court entered an order substituting DISH Network L.L.C., our wholly-owned subsidiary, as
the defendant in our place. On August 26, 2015, Custom Media dismissed its action against us with prejudice.
Do Not Call Litigation
On March 25, 2009, our wholly-owned subsidiary DISH Network L.L.C. was sued in a civil action by the United
States Attorney General and several states in the United States District Court for the Central District of Illinois,
alleging violations of the Telephone Consumer Protection Act and the Telemarketing Sales Rule, as well as
analogous state statutes and state consumer protection laws. The plaintiffs allege that we, directly and through
certain independent third-party retailers and their affiliates, committed certain telemarketing violations. On
December 23, 2013, the plaintiffs filed a motion for summary judgment, which indicated for the first time that the
state plaintiffs were seeking civil penalties and damages of approximately $270 million and that the federal plaintiff
was seeking an unspecified amount of civil penalties (which could substantially exceed the civil penalties and
damages being sought by the state plaintiffs). The plaintiffs are also seeking injunctive relief that if granted would,
among other things, enjoin DISH Network L.L.C., whether acting directly or indirectly through authorized
telemarketers or independent third-party retailers, from placing any outbound telemarketing calls to market or
promote its goods or services for five years, and enjoin DISH Network L.L.C. from accepting activations or sales
from certain existing independent third-party retailers and from certain new independent third-party retailers, except
under certain circumstances. We also filed a motion for summary judgment, seeking dismissal of all claims. On