Dish Network 2009 Annual Report Download - page 48
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38
If we are successful in overturning the District Court’s ruling on Tivo’s motion for contempt, but unsuccessful in
defending against any subsequent claim in a new action that our original alternative technology or any potential new
alternative technology infringes Tivo’s patent, we could be prohibited from distributing DVRs or could be required
to modify or eliminate our then-current DVR functionality in some or all set-top boxes in the field. In that event we
would be at a significant disadvantage to our competitors who could continue offering DVR functionality and the
adverse effect on our business could be material. We could also have to pay substantial additional damages.
Because both we and EchoStar are defendants in the Tivo lawsuit, we and EchoStar are jointly and severally liable
to Tivo for any final damages and sanctions that may be awarded by the District Court. We have determined that we
are obligated under the agreements entered into in connection with the Spin-off to indemnify EchoStar for
substantially all liability arising from this lawsuit. EchoStar has agreed to contribute an amount equal to its $5
million intellectual property liability limit under the Receiver Agreement. We and EchoStar have further agreed that
EchoStar’s $5 million contribution would not exhaust EchoStar’s liability to us for other intellectual property claims
that may arise under the Receiver Agreement. We and EchoStar also agreed that we would each be entitled to joint
ownership of, and a cross-license to use, any intellectual property developed in connection with any potential new
alternative technology.
Voom
On May 28, 2008, Voom HD Holdings (“Voom”) filed a complaint against us in New York Supreme Court. The
suit alleges breach of contract arising from our termination of the affiliation agreement we had with Voom for the
carriage of certain Voom HD channels on the DISH Network satellite television service. In January 2008, Voom
sought a preliminary injunction to prevent us from terminating the agreement. The Court denied Voom’s motion,
finding, among other things, that Voom was not likely to prevail on the merits of its case. Voom is claiming over
$2.5 billion in damages. We intend to vigorously defend this case. We cannot predict with any degree of certainty
the outcome of the suit or determine the extent of any potential liability or damages.
Other
In addition to the above actions, we are subject to various other legal proceedings and claims which arise in the
ordinary course of business, including among other things, disputes with programmers regarding fees. In our
opinion, the amount of ultimate liability with respect to any of these actions is unlikely to materially affect our
financial position, results of operations or liquidity.