SAN FRANCISCO--A U.S. appeals court Friday (May 13) found that IP vendor Rambus Inc. wrongly destroyed documents and sent to cases involving Rambus back to lower courts for review, according to reports.
The U.S. Court of Appeals for the Federal Circuit said it was clear that Rambus had destroyed documents, but it was not clear that the destruction was so serious that a lower court should have tossed out a case involving Rambus and Micron Technology Inc., according to a report by the Reuters news service.
The court also found that Rambus destroyed documents related to a successful patent infringement suit against South Korea’s Hynix Semicondcutor Inc. and asked a California court to review the decision in light of the finding of document destruction, according to the Reuters report.
"We are very disappointed with the decisions in these cases," said Thomas Lavelle, senior vice president and general counsel at Rambus, in a statement issued by the company following the ruling.. "We are hopeful when the district courts reconsider these decisions, they will find, as we believe, there was no bad faith and no prejudice."
Rambus said at issue in both cases is when the company reasonably expected litigation. Both district court judges in these matters identified different dates, with the U.S. District Court for the Northern District of California determining Rambus did not engage in bad faith, while the Delaware Court determined that Rambus executed its document retention policy during a time when it reasonably foresaw litigation, Rambus said.
The appeals court said it was not a clear error for the Delaware court to conclude that Rambus' document policy was to further its litigation strategy by frustrating the fact-finding efforts of parties adverse to Rambus, according to the Reuters report.
Hynix and Micron accused Rambus of improperly shredding documents as Rambus laid out plans to sue both companies for infringement, according to the Reuters report. The lower courts were divided on the issue, with Micron winning in Delaware because a judge invalidated 12 Rambus patents, citing the document destruction and Rambus winning against Hynix in a separate California triall, Reuters reported.
"We are pleased that the Federal Circuit panel unanimously agreed with Judge Robinson's decision in Delaware that Rambus wrongfully destroyed evidence," said Rod Lewis, Micron's vice president of legal affairs and general counsel, in a statement issued by Micron. "We believe the record before Judge Robinson provides more than ample support for the Federal Circuit's request for findings regarding Judge Robinson's decision that Rambus acted in bad faith and, therefore, the only appropriate sanction was to declare Rambus' patents unenforceable against Micron."
Reuters reported that trading of Rambus’s stock was halted six times on Friday as the stock hit circuit breakers after rapidly rising and then falling more than 10 percent in a matter of minutes.
Here's an interesting perspective on what the decisions mean in terms of when a company should halt the shredding of documents.
My understanding is that the court basically said just that: If you are going to sue someone, don't shred a bunch of documents right before that. The implication is that something among the destroyed documents might have been evidence that may have invalidated the patents or otherwise provide reason why Micron and Hynix shouldn't have to pay to use the technology.
So if I understand: the courts were unhappy with RAMBUS destroying documents that may (or may not) have been relevant to the cases? It seems that they are saying the documents (in this article) related to the lawsuits but I question How would anyone know? If the documents were destroyed then it would be hard to tell. I wonder if the fix for this would be to require companies to hold on to any related (even marginally) documents beyond the lifetimes of the associated patents?
The court concluded that Rambus had at least two "shred days" when it destroyed 9,000 to 18,000 pounds worth of documents. What got shredded? I don't know. I kind of doubt anybody knows. But the court's point appears to be, if you are getting ready to file some lawsuits, don't destroy documents that may be evidence. Rambus, of course, maintains that it destroyed the documents long before planning to sue Micron and Hynix.
I am wondering why these known documents (if they are/were so important to litigation) were not entered into a previous lawsuit and therefore part of the legal records already. I am not sure what the issue is: did someone find new pertinent documents and destroy them (but told someone) or did the existence of these documents come to light some other way. It seems a little confusing.. any clarification possible?
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