Dish Network 2014 Annual Report Download - page 159

DISH NETWORK CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - Continued
F-53
Communications, Inc.; Akamai Technologies, Inc.; Cablevision Systems Corp. and Limelight Networks, Inc.
CRFD is an entity that seeks to license an acquired patent portfolio without itself practicing any of the claims recited
therein. On January 26, 2015, we and EchoStar filed a petition before the United States Patent and Trademark
Office challenging the validity of the 233 patent.
We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the
asserted patent, 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.
Custom Media Technologies LLC
On August 15, 2013, Custom Media Technologies LLC (“Custom Media”) filed complaints against us; AT&T Inc.;
Charter Communications, Inc.; Comcast Corp.; Cox Communications, Inc.; DirecTV; Time Warner Cable Inc. and
Verizon Communications, Inc., in the United States District Court for the District of Delaware, alleging
infringement of United States Patent No. 6,269,275 (the “275 patent”). The 275 patent, which is entitled “Method
and System for Customizing and Distributing Presentations for User Sites,” relates to the provision of customized
presentations to viewers over a network, such as “a cable television network, an Internet or other computer network,
a broadcast television network, and/or a satellite system.” Custom Media alleges that our DVR devices and DVR
functionality infringe the 275 patent. Custom Media is an entity that seeks to license an acquired patent portfolio
without itself practicing any of the claims recited therein. Pursuant to a stipulation between the parties, on
November 6, 2013, the Court entered an order substituting DISH Network L.L.C., our wholly-owned subsidiary, as
the defendant in our place. Trial is scheduled to commence on September 19, 2016.
We intend to vigorously defend this case. In the event that a court ultimately determines that we infringe the
asserted patent, 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.
Do Not Call Litigation
On March 25, 2009, our wholly-owned subsidiary DISH Network L.L.C. was sued in a civil action by the United
States Attorney General and several states in the United States District Court for the Central District of Illinois,
alleging violations of the Telephone Consumer Protection Act and Telephone Sales Rules, as well as analogous
state statutes and state consumer protection laws. The plaintiffs allege that we, directly and through certain
independent third-party retailers and their affiliates, committed certain telemarketing violations. On December 23,
2013, the plaintiffs filed a motion for summary judgment, which indicated for the first time that the state plaintiffs
are seeking civil penalties and damages of approximately $270 million and that the federal plaintiff is seeking an
unspecified amount of civil penalties (which could substantially exceed the civil penalties and damages being
sought by the state plaintiffs). The plaintiffs are also seeking injunctive relief that if granted would, among other
things, enjoin DISH Network L.L.C., whether acting directly or indirectly through authorized telemarketers or
independent third-party retailers, from placing any outbound telemarketing calls to market or promote its goods or
services for five years, and enjoin DISH Network L.L.C. from accepting activations or sales from certain existing
independent third-party retailers and from certain new independent third-party retailers, except under certain
circumstances. We also filed a motion for summary judgment, seeking dismissal of all claims, and the Court heard
oral arguments on the parties’ summary judgment motions on October 17, 2014. On December 12, 2014, the Court
issued its opinion with respect to the parties’ summary judgment motions. The Court found that DISH Network
L.L.C. is entitled to partial summary judgment with respect to one claim in the action. In addition, the Court found
that the plaintiffs are entitled to partial summary judgment with respect to ten claims in the action, which includes,
among other things, findings by the Court establishing DISH Network L.L.C.’s liability for a substantial amount of
the alleged outbound telemarketing calls by DISH Network L.L.C. and certain of its independent third-party
retailers that were the subject of the plaintiffs’ motion. The Court did not issue any injunctive relief and did not