Dish Network 2011 Annual Report Download - page 144

Download and view the complete annual report

Please find page 144 of the 2011 Dish Network annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 164

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-50
Patents and Intellectual Property
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 that we offer. We may not be aware of all intellectual property rights that our
products or services may potentially infringe. Damages in patent infringement cases can be substantial, and in certain
circumstances can be trebled. Further, we cannot estimate the extent to which we may be required in the future to obtain
licenses with respect to patents held by others and the availability and cost of any such licenses. Various parties have
asserted patent and other intellectual property rights with respect to components within our direct broadcast satellite system.
We cannot be certain that these persons do not own the rights they claim, that our products do not infringe on these rights,
and/or that these rights are not valid. Further, we cannot be certain that we would be able to obtain licenses from these
persons on commercially reasonable terms or, if we were unable to obtain such licenses, that we would be able to redesign
our products to avoid infringement.
Contingencies
Separation Agreement
In connection with the Spin-off, we entered into a separation agreement with EchoStar that provides, among other
things, for the division of certain liabilities, including liabilities resulting from litigation. Under the terms of the
separation agreement, EchoStar has assumed certain liabilities that relate to its business including certain designated
liabilities for acts or omissions that occurred prior to the Spin-off. Certain specific provisions govern intellectual
property related claims under which, generally, EchoStar will only be liable for its acts or omissions following the Spin-
off and we will indemnify EchoStar for any liabilities or damages resulting from intellectual property claims relating to
the period prior to the Spin-off as well as our acts or omissions following the Spin-off.
Litigation
We are involved in a number of legal proceedings (including those described below) concerning matters arising in
connection with the conduct of our business activities. Many of these proceedings are at preliminary stages, and many
of these cases seek an indeterminate amount of damages. We regularly evaluate the status of the legal proceedings in
which we are involved to assess whether a loss is probable or there is a reasonable possibility that a loss or additional
loss may have been incurred and to determine if accruals are appropriate. If accruals are not appropriate, we further
evaluate each legal proceeding to assess whether an estimate of the possible loss or range of possible loss can be made.
For certain cases described on the following pages, management is unable to provide a meaningful estimate of the
possible loss or range of possible loss because, among other reasons, (i) the proceedings are in various stages; (ii)
damages have not been sought; (iii) damages are unsupported and/or exaggerated; (iv) there is uncertainty as to the
outcome of pending appeals or motions; (v) there are significant factual issues to be resolved; and/or (vi) there are novel
legal issues or unsettled legal theories to be presented or a large number of parties (as with many patent-related cases).
For these cases, however, management does not believe, based on currently available information, that the outcomes of
these proceedings will have a material adverse effect on our financial condition, though the outcomes could be material
to our operating results for any particular period, depending, in part, upon the operating results for such period.