Dish Network 2010 Annual Report Download - page 36

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length negotiations. The allocation of assets, liabilities, rights, indemnifications and other obligations
between EchoStar and us under the separation and other intercompany agreements we entered into with
EchoStar in connection with the Spin-off of EchoStar may have been different if agreed to by two
unaffiliated parties. Had these agreements been negotiated with unaffiliated third parties, their terms may
have been more favorable, or less favorable, to us. In addition, conflicts could arise between us and
EchoStar in the interpretation or any extension or renegotiation of these existing agreements.
• Additional intercompany transactions. EchoStar or its affiliates have and will continue to enter into
transactions with us or our subsidiaries or other affiliates. Although the terms of any such transactions will
be established based upon negotiations between EchoStar and us and, when appropriate, subject to the
approval of a committee of the non-interlocking directors or in certain instances non-interlocking
management, there can be no assurance that the terms of any such transactions will be as favorable to us or
our subsidiaries or affiliates as may otherwise be obtained between unaffiliated parties.
• Business opportunities. We have retained interests in various companies that have subsidiaries or
controlled affiliates that own or operate domestic or foreign services that may compete with services
offered by EchoStar. We may also compete with EchoStar when we participate in auctions for spectrum or
orbital slots for our satellites. In addition, EchoStar may in the future use its satellites, uplink and
transmission assets to compete directly against us in the subscription television business.
We may not be able to resolve any potential conflicts, and, even if we do so, the resolution may be less favorable to
us than if we were dealing with an unaffiliated party.
We also do not have any agreements with EchoStar that would prevent either company from competing with the
other.
We rely on key personnel and the loss of their services may negatively affect our businesses.
We believe that our future success will depend to a significant extent upon the performance of Charles W. Ergen,
our Chairman, President and Chief Executive Officer and certain other executives. The loss of Mr. Ergen or of
certain other key executives could have a material adverse effect on our business, financial condition and results of
operations. Although all of our executives have executed agreements limiting their ability to work for or consult
with competitors if they leave us, we do not have employment agreements with any of them. Pursuant to a
management services agreement with EchoStar entered into at the time of the Spin-off, two of our officers provide
services to EchoStar. In addition, Roger J. Lynch also serves as Executive Vice President, Advanced Technologies
of EchoStar. To the extent Mr. Lynch and such other officers are performing services for EchoStar, this may divert
their time and attention away from our business and may therefore adversely affect our business.
We are party to various lawsuits which, if adversely decided, could have a significant adverse impact on our
business, particularly lawsuits regarding intellectual property.
We are subject to various legal proceedings and claims which arise in the ordinary course of business, including
among other things, disputes with programmers regarding fees. Many entities, including some of our competitors,
have or may in the future obtain patents and other intellectual property rights that cover or affect products or
services related to those that we offer. In general, if a court determines that one or more of our products or services
infringes on intellectual property held by others, we may be required to cease developing or marketing those
products or services, to obtain licenses from the holders of the intellectual property at a material cost, or to redesign
those products or services in such a way as to avoid infringing the intellectual property. If those intellectual
property rights are held by a competitor, we may be unable to obtain the intellectual property at any price, which
could adversely affect our competitive position. Please see further discussion under Item 1. Business — Patents and
Trademarks of this Annual Report on Form 10-K.
We may not be aware of all intellectual property rights that our services or the products used in connection with our
services may potentially infringe. In addition, patent applications in the United States are confidential until the
Patent and Trademark Office issues a patent. Therefore, it is difficult to evaluate the extent to which our services or
the products used in connection with our services may infringe claims contained in pending patent applications.
Further, it is often not possible to determine definitively whether a claim of infringement is valid.