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EchoStar Lawsuit Alleges Sabotage

June 19, 2003|From Bloomberg News

EchoStar Communications Corp., the second-largest U.S. satellite-television provider, sued News Corp.'s NDS Group, claiming sabotage of its security technology.

EchoStar claims that NDS employees hacked into its systems and illegally deciphered coding for the "smart cards" that give customers access to programming.

The suit, similar to one brought against NDS last year by Canal Plus Technologies, alleges conspiracy, misappropriation of trade secrets and racketeering. The allegations may allow a court to triple any damages.

NDS and its employees "essentially cracked EchoStar's security system and were or are facilitating" the manufacture and design of counterfeit cards sold on the black market, according to the suit, filed this month in U.S. District Court in Santa Ana.

A federal grand jury also is investigating, the suit says.

Littleton, Colo.-based EchoStar went to court after Canal Plus Technologies and NDS settled their dispute last month. EchoStar had sought to join the Canal Plus suit.

Representatives of Britain-based NDS couldn't be reached Wednesday.

EchoStar shares fell 15 cents to $35.57 on Nasdaq.

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