Dish Network 2010 Annual Report Download - page 133

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-48
Olympic Developments
On January 20, 2011, Olympic Developments AG, LLC (“Olympic”) filed suit against us, Atlantic
Broadband, Inc., Bright House Networks, LLC, Cable One, Inc., Cequel Communications Holdings I,
LLC, CSC Holdings, LLC, GCI Communication Corp., Insight Communications Company, Inc.,
Knology, Inc., Mediacom Communications Corporation and RCN Telecom Services, LLC in the United
States District Court for the Central District of California alleging infringement of United States Patent
Nos. 5,475,585 and 6,246,400. The patents relate to on-demand services. Olympic is an entity that seeks
to license an acquired patent portfolio without itself practicing any of the claims recited therein.
We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe
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 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.
Personalized Media Communications
During 2008, Personalized Media Communications, Inc. (“PMC”) 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; 5,109,414; 4,965,825; 5,233,654; 5,335,277; and 5,887,243,
which relate to satellite signal processing. PMC is an entity that seeks to license an acquired patent
portfolio without itself practicing any of the claims recited therein.
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 requested that 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. On September 20, 2010, we agreed to a settlement of both lawsuits that provides, among
other things, for mutual releases of the claims underlying the litigation, payment by us of up to $60
million, and the option for certain class members to elect to reinstate certain monthly incentive payments,
which the parties agreed have an aggregate maximum value of $23 million. We cannot predict with any
degree of certainty how many class members will elect to reinstate these monthly incentive payments.
As a result, we recorded $60 million as a “Litigation accrual” on our Consolidated Balance Sheets and in
“Litigation expense” for the year ended December 31, 2010 on our Consolidated Statements of
Operations and Comprehensive Income (Loss). On February 9, 2011, the court granted final approval of
the settlement; however, our payment of the settlement amount is still subject to the satisfaction of certain
conditions, including the lapse of all applicable appeal periods.