Echostar's Billion Dollar Demand From Murdoch Becomes A Lot Less Demanding

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Echostar's Billion Dollar Demand From Murdoch Becomes A Lot Less Demanding

Mon Oct 20, 2008 @ 11:28PM PST

By Eriq Gardner

Satellite TV giant Echostar will have to settle for $45.69 from rival Rupert Murdoch's pocketbook after once claiming to be owed more than a billion dollars in damages.

Here's the backstory: In 2002, Echostar sued News Corp. subsidiary NDS, claiming the digital satellite TV smart card maker hired a hacker in 1999 that reverse-engineered a smart card to encrypt Echostar's satellite television. NDS hired the man, Christopher Tarnovsky, to help prevent piracy to News Corp.'s DirecTV, but allegedly Tarnovsky's hack circulated on the Internet and caused great damage everywhere. Several satellite TV companies sued NDS under the theory that NDS's hired gun contributed greatly to the $5 billion piracy problem that haunts the satellite TV industry. At the time, Murdoch called the allegations "a joke."

In May, a California district court returned a judgment against NDS, saying the company violated the Communications Act, but mostly let NDS off the hook on the broader claims that they had committed a huge business conspiracy that violated both RICO and DMCA statutes. The jury returned a $45.69 award in actual damages.

Echostar appealed. Now it wanted just $94 million and change on the theory that this was the price it had to pay for a secure satellite system delivery method.

Last week, in pointing to the jury's finding that NDS wasn't responsible for the Internet circulation of the hack, California District Judge David Carter basically said, "Sorry, you'll have to live with the forty-five dollars."

Here's the order.

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The Hollywood Reporter, Esq. blog focuses on how the entertainment and media industries are impacted and influenced by the law. It is edited by Matthew Belloni with contributions from veteran legal reporter Eriq Gardner and others. Before joining The Hollywood Reporter, Belloni was a lawyer at an entertainment litigation firm in Los Angeles. He writes a column for THR devoted to entertainment law. Gardner is a New York-based writer and legal journalist. Send tips or comments to [email protected]

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