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EchoStar Wins NDS Suit, Gets Peanuts

5/15/2008 02:52:00 PM Eastern

Santa Ana, Calif. — EchoStar Thursday won a hard-fought legal battle with News Corp.’s

NDS America’s Group after a jury found that NDS had violated a portion of California state piracy laws by hacking EchoStar’s conditional access system, but the satellite TV provider was awarded only $1,500 in statutory damages instead of the $1 billion it had sought.

EchoStar said NDS will also be required to pay its legal fees.

EchoStar had alleged that NDS Group hacked its security “smart cards” and then posted the information on the Internet in 2003. EchoStar uses NagraStar security technology, and owns 50 percent of the company.

NDS, a NagraStar competitor, produces rival security technology, which is used by DirecTV, among others.

EchoStar argued that NDS tried to benefit its own business interests by damaging the reputation of NagraStar.

The jury said EchoStar had met its burden of proof that NDS violated the Cable Communications Policy Act of California against piracy. The award reflected the cost of a single piece of EchoStar's anti-theft system, without further damages for NagraStar.

Commenting on the verdict, an EchoStar spokesperson said: “We are pleased that after four weeks of testimony on all the facts, the jury concluded that NDS violated the Federal Communications Act and the California Penal Code. We will continue to vigorously prosecute those individuals and companies that engage in stealing our satellite signals. While we are disappointed in the jury’s damages award, we are pleased that NDS will be responsible for our attorney fees in this case, and that we were completely vindicated on NDS' merit-less counterclaims.”

In a statement on the verdict, NDS claimed that it was "exonerated" by the ruling.

"NDS is pleased that the four-week long trial in which NDS faced baseless allegations, widely repeated and exaggerated to suggest the involvement of our majority shareholder News Corporation, has ended in a resounding affirmation of NDS and its business ethics and proper conduct," the company said..

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