Judge Sue L. Robinson: Extensive Spoliation of Documents Leads to Ruling Patents Unenforceable
As part of an aggressive litigation strategy developed to manage and assert its intellectual property, defendant Rambus Inc. implemented a document retention policy – one meant to protect its intellectual property. Much to their chagrin, however, the District of Delaware has found that this policy, in fact, caused the company to destroy such crucial evidence to its infringement claims that the only proper sanction would be to hold the patents-in-suit unenforceable. Micron Technology, Inc. v. Rambus, Inc., C.A. No. 00-792-SLR, Opinion (D. Del. Jan. 9, 2009). As part of the implementation of the new document retention policy, Rambus held company-wide “shred days” during which employees would shred documents pursuant to the policy. Id. at 13-14. Outside prosecution counsel was even asked by Rambus to purge their files for issued patents except for documents that were part of the official record. Id. at 17. The Court found that a duty to preserve potentially discoverable evidence arose when the company “articulated a time frame and motive for implementation of the Rambus litigation strategy” and because the document retention policy was adopted as a part of this strategy, Rambus “knew, or should have known,” that such a policy would destroy potentially relevant and material documents and therefore such behavior was inappropriate. Id. at 31-32.
Plaintiff Micron Technology had asserted claims of patent misuse and inequitable conduct, along with others against Rambus Inc. These claims, by their nature, are often established using non-public, internal documents from the patentee. The fact that these types of documents were included in the destroyed documents at Rambus would cause Micron extreme prejudice in trying to prove its case which the Court notes, “has been compounded by Rambus’ litigation conduct, which has been obstructive at best, misleading at worst.” Id. at 33.
The Court further found that typical sanctions such as adverse jury instructions or the preclusion of evidence would be “impractical, bordering on meaningless, under these circumstances and in the context of a typical jury trial.” Id. Judge Robinson stated that “[T]he spoliation conduct was extensive, including within its scope the destruction of innumerable documents relating to all aspects of Rambus’ business; when considered in light of Rambus’ litigation conduct, the very integrity of the litigation process has been impugned.” Id. Therefore, the Court found the only appropriate sanction to be declaring the 12 patents-in-suit “unenforceable against Micron.” Id.
Litigants in this district should be reminded that the discovery process and claims of spoliation are taken very seriously here. In fact, Judge Robinson, in this case held a bench trial just on the issue of spoliation and unclean hands. Id. at 1. No one disputes that document retention policies are critical, particularly in today’s electronic world, but one should beware of the timing and motive of the company when implementing such a policy particularly when litigation or an aggressive licensing strategy is part of the company’s business.