Time Warner Cable 2007 Annual Report Download - page 123

programmer defendants to sell and/or license programming on a “bundled” basis to the distributor defendants, who
in turn purportedly offer that programming to subscribers in packaged tier, rather than on a per channel (or “à la
carte”) basis. Plaintiffs, who seek to represent a purported nationwide class of cable and satellite subscribers,
demand, among other things, unspecified treble monetary damages and an injunction to compel the offering of
channels to subscribes on an “à la carte” basis. On December 21, 2007, the programmer defendants, including Time
Warner, and the distributor defendants, including TWC, filed motions to dismiss the amended complaint. The
Company intends to defend against this lawsuit vigorously.
On June 22, 2005, Mecklenburg County filed suit against TWE-A/N in the General Court of Justice District
Court Division, Mecklenburg County, North Carolina. Mecklenburg County, the franchisor in TWE-A/N’s
Mecklenburg County cable system, alleges that TWE-A/N’s predecessor failed to construct an institutional
network in 1981 and that TWE-A/N assumed that obligation upon the transfer of the franchise in 1995.
Mecklenburg County is seeking compensatory damages and TWE-A/N’s release of certain video channels it is
currently using on the cable system. On April 14, 2006, TWE-A/N filed a motion for summary judgment, which is
pending. TWE-A/N intends to defend against this lawsuit vigorously.
On June 16, 1998, plaintiffs in Andrew Parker and Eric DeBrauwere, et al. v. Time Warner Entertainment
Company, L.P. and Time Warner Cable filed a purported nationwide class action in U.S. District Court for the
Eastern District of New York claiming that TWE sold its subscribers’ personally identifiable information and failed
to inform subscribers of their privacy rights in violation of the Cable Communications Policy Act of 1984 and
common law. The plaintiffs seek damages and declaratory and injunctive relief. On August 6, 1998, TWE filed a
motion to dismiss, which was denied on September 7, 1999. On December 8, 1999, TWE filed a motion to deny
class certification, which was granted on January 9, 2001 with respect to monetary damages, but denied with respect
to injunctive relief. On June 2, 2003, the U.S. Court of Appeals for the Second Circuit vacated the District Court’s
decision denying class certification as a matter of law and remanded the case for further proceedings on class
certification and other matters. On May 4, 2004, plaintiffs filed a motion for class certification, which the Company
opposed. On October 25, 2005, the court granted preliminary approval of a class settlement arrangement on terms
that were not material to the Company. A final settlement approval hearing was held on May 19, 2006. On
January 26, 2007, the court denied approval of the settlement, and so the matter remains pending. The Company
intends to defend against this lawsuit vigorously.
Certain Patent Litigation
On September 1, 2006, Ronald A. Katz Technology Licensing, L.P. (“Katz”) filed a complaint in the
U.S. District Court for the District of Delaware alleging that TWC and several other cable operators, among
other defendants, infringe a number of patents purportedly relating to the Company’s customer call center
operations, voicemail and/or VOD services. The plaintiff is seeking unspecified monetary damages as well as
injunctive relief. On March 20, 2007, this case, together with other lawsuits filed by Katz, was made subject to a
Multidistrict Litigation (“MDL”) Order transferring the case for pretrial proceedings to the U.S. District Court for
the Central District of California. The Company intends to defend against this lawsuit vigorously.
On July 14, 2006, Hybrid Patents Inc. filed a complaint in the U.S. District Court for the Eastern District of
Texas alleging that the Company and a number of other cable operators infringed a patent purportedly relating to
high-speed data and IP-based telephony services. The plaintiff is seeking unspecified monetary damages as well as
injunctive relief. The Company intends to defend against the claim vigorously.
On June 1, 2006, Rembrandt Technologies, LP (“Rembrandt”) filed a complaint in the U.S. District Court for
the Eastern District of Texas alleging that the Company and a number of other cable operators infringed several
patents purportedly related to a variety of technologies, including high-speed data and IP-based telephony services.
In addition, on September 13, 2006, Rembrandt filed a complaint in the U.S. District Court for the Eastern District
of Texas alleging that the Company infringes several patents purportedly related to “high-speed cable modem
internet products and services.” In each of these cases, the plaintiff is seeking unspecified monetary damages as well
as injunctive relief. On June 18, 2007, these cases, along with other lawsuits filed by Rembrandt, were made subject
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)