Dish Network 2015 Annual Report Download - page 163

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-59
December 12, 2014, the Court issued its opinion with respect to the parties’ summary judgment motions. The Court
found that DISH Network L.L.C. is entitled to partial summary judgment with respect to one claim in the action. In
addition, the Court found that the plaintiffs are entitled to partial summary judgment with respect to ten claims in the
action, which includes, among other things, findings by the Court establishing DISH Network L.L.C.’s liability for a
substantial amount of the alleged outbound telemarketing calls by DISH Network L.L.C. and certain of its
independent third-party retailers that were the subject of the plaintiffs’ motion. The Court did not issue any
injunctive relief and did not make any determination on civil penalties or damages, ruling instead that the scope of
any injunctive relief and the amount of any civil penalties or damages are questions for trial. In pre-trial disclosures,
the federal plaintiff indicated that it intends to seek up to $900 million in alleged civil penalties, and the state
plaintiffs indicated that they now intend to seek $23.5 billion in alleged civil penalties and damages. The first phase
of the bench trial took place January 19, 2016 through February 11, 2016. The Court will conduct a second phase of
the bench trial in October 2016, which we anticipate will cover the plaintiffs’ requested injunctive relief, as well as
DISH Network L.L.C.’s response to certain evidence presented by the plaintiffs in the first phase.
We may also from time to time be subject to private civil litigation alleging telemarketing violations. For example,
a portion of the alleged telemarketing violations at issue in the case described in the previous paragraph are also the
subject of a certified class action filed against DISH Network L.L.C. in the United States District Court for the
Middle District of North Carolina.
We intend to vigorously defend these cases. We cannot predict with any degree of certainty the outcome of these
suits or determine the extent of any potential liability or damages.
Dragon Intellectual Property, LLC
On December 20, 2013, Dragon Intellectual Property, LLC (“Dragon IP”) filed complaints against our wholly-
owned subsidiary DISH Network L.L.C., as well as Apple Inc.; AT&T, Inc.; Charter Communications, Inc.;
Comcast Corp.; Cox Communications, Inc.; DirecTV; Sirius XM Radio Inc.; 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. 5,930,444 (the “444 patent”), which is entitled “Simultaneous Recording and Playback
Apparatus.” Dragon IP alleges that various of our DVR receivers infringe the 444 patent. Dragon IP is an entity
that seeks to license an acquired patent portfolio without itself practicing any of the claims recited therein. On
December 23, 2014, DISH Network L.L.C. filed a petition before the United States Patent and Trademark Office
challenging the validity of the 444 patent. On April 10, 2015, the Court granted DISH Network L.L.C.’s motion to
stay the action in light of DISH Network L.L.C.’s petition and certain other defendants’ petitions pending before the
United States Patent and Trademark Office challenging the validity of the 444 patent. On July 17, 2015, the United
States Patent and Trademark Office agreed to institute a proceeding on our petition, and it heard oral argument on
February 9, 2016.
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.
Grecia
On March 27, 2015, William Grecia (“Grecia”) filed a complaint against our wholly-owned subsidiary DISH
Network L.L.C. in the United States District Court for the Northern District of Illinois, alleging infringement of
United States Patent No. 8,533,860 (the “860 patent”), which is entitled “Personalized Digital Media Access
System—PDMAS Part II.” Grecia alleges that we violate the 860 patent in connection with our digital rights
management. Grecia is the named inventor on the 860 patent. On June 22, 2015, the case was transferred to the
United States District Court for the Northern District of California. On November 18, 2015, Grecia filed an
amended complaint adding allegations that we infringe U.S. Patent No. 8,402,555 (the “555 patent”), which is
entitled “Personalized Digital Media Access System (PDMAS).” Grecia is the named inventor on the 555 patent.