Dish Network 2008 Annual Report Download - page 132

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DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-50
Multimedia Patent Trust
On February 13, 2009, Multimedia Patent Trust (“MPT”) filed suit against us, EchoStar and several other
defendants in the United States District Court for the Southern District of California alleging infringement
of United States Patent Nos. 4,958,226 entitled “Conditional Motion Compensated Interpolation Of Digital
Motion Video,” 5,227,878 entitled “Adaptive Coding and Decoding of Frames and Fields of Video,”
5,136,377 entitled “Adaptive Non-linear Quantizer,” 5,500,678 entitled “Optimized Scanning of Transform
Coefficients in Video Coding,” and 5,563,593 entitled “Video Coding with Optimized Low Complexity
Variable Length Codes.” The patents relate to encoding and compression technology.
We intend to vigorously defend this case. In the event that a Court ultimately determines that we infringe
any of the asserted patents, we may be subject to substantial damages, which may include treble
damages. We cannot predict with any degree of certainty the outcome of the suit or determine the extent
of any potential liability or damages.
Personalized Media Communications
In February 2008, Personalized Media Communications, Inc. filed suit against us, EchoStar and
Motorola, Inc. in the United States District Court for the Eastern District of Texas alleging infringement
of United States Patent Nos. 4,694,490 (the ‘490 patent), 5,109,414 (the ‘414 patent), 4,965,825 (the
‘825 patent), 5,233,654 (the ‘654 patent), 5,335,277 (the ‘277 patent), and 5,887,243 (the ‘243 patent),
all of which were issued to John Harvey and James Cuddihy as named inventors. The ‘490 patent, the
‘414 patent, the ‘825 patent, the ‘654 patent and the ‘277 patent are defined as the Harvey Patents. The
Harvey Patents are entitled “Signal Processing Apparatus and Methods.” The lawsuit alleges, among
other things, that our DBS system receives program content at broadcast reception and satellite uplinking
facilities and transmits such program content, via satellite, to remote satellite receivers. The lawsuit
further alleges that we infringe the Harvey Patents by transmitting and using a DBS signal specifically
encoded to enable the subject receivers to function in a manner that infringes the Harvey Patents, and by
selling services via DBS transmission processes which infringe the Harvey Patents.
We intend to vigorously defend this case. In the event that a Court ultimately determines that we infringe
any of the asserted patents, we may be subject to substantial damages, which may include treble damages
and/or an injunction that could require us to materially modify certain user-friendly 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.
Retailer Class Actions
During 2000, lawsuits were filed by retailers in Colorado state and federal courts attempting to certify
nationwide classes on behalf of certain of our retailers. The plaintiffs are requesting the Courts declare
certain provisions of, and changes to, alleged agreements between us and the retailers invalid and
unenforceable, and to award damages for lost incentives and payments, charge backs, and other
compensation. We have asserted a variety of counterclaims. The federal court action has been stayed
during the pendency of the state court action. We filed a motion for summary judgment on all counts and
against all plaintiffs. The plaintiffs filed a motion for additional time to conduct discovery to enable them
to respond to our motion. The state court granted limited discovery which ended during 2004. The
plaintiffs claimed we did not provide adequate disclosure during the discovery process. The state court
agreed, and denied our motion for summary judgment as a result. In April 2008, the state court granted
plaintiff’s class certification motion and in January 2009, the state court entered an order excluding certain
evidence that we can present at trial based on the prior discovery issues. The state court also denied
plaintiffs’ request to dismiss our counterclaims. The final impact of the court’s evidentiary ruling cannot
be fully assessed at this time. We intend to vigorously defend this case. We cannot predict with any
degree of certainty the outcome of the lawsuit or determine the extent of any potential liability or damages.