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Supreme Court gives NDS victory in dispute with Dish

Mon, 01/23/2012 - 1:42pm
Brian Santo

NDS earned vindication in a nearly decade-old dispute with Dish Network and EchoStar, with a Supreme Court decision that essentially absolved NDS of charges of hacking Dish service.

The legal battle stretches back to 2003, when EchoStar filed a $2 billion claim against NDS alleging that NDS was responsible for compromising EchoStar's content security system.

The Supreme Court did not address the merits of the case; rather, it decided a legal nicety that upheld a lower court's decision that EchoStar had failed to prove NDS' involvement in the original hack under the statutes cited.

More than 10 years ago, someone had, in fact, managed to crack EchoStar's encryption system; EchoStar accused NDS of complicity in the act. By 2008, the case reached the Ninth Circuit, which decided in NDS' favor. That court in 2010 awarded NDS $18 million and the release of a further $4.3 million of NDS' funds held in escrow pending the appeals. (NDS is seeking a further $1.7 million in attorney's fees, costs and interest.)

EchoStar (which has since reorganized as Dish Network, EchoStar Communications and EchoStar Technologies) petitioned the Supreme Court, arguing the decision was based on a flawed legal point.

The Supreme Court denied EchoStar's petition; that denial effectively ends the challenge to the Ninth Circuit's 2008 decision and 2010 award against EchoStar.

NDS Group executive chairman Abe Peled repeated assertions that EchoStar's suit was designed to eliminate competition from NDS.

"From the outset of the allegations made by EchoStar, we have maintained that the claims were baseless and an effort to thwart competition and deflect attention from a fundamentally flawed technology and strategy pursued by EchoStar and NagraStar," Peled said.

"In bringing a $2 billion dollar lawsuit against a company much smaller than themselves, we believe that EchoStar looked to remove a formidable competitor in NDS from the market."

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