Posted On: January 13, 2013 by Gregory J. Brodzik

Judge Robinson finds twelve patents unenforceable in light of unlawful spoliation in Micron Tech., Inc. v. Rambus Inc.

Judge Sue L. Robinson held in a recent post-trial opinion that “Rambus’ spoliation was done in bad faith, that the spoliation prejudiced Micron, and that the appropriate sanction is to declare the patents-in-suit unenforceable against Micron.” Micron Tech., Inc. v. Rambus Inc., C.A. No. 00-792-SLR, at 45-46 (D. Del. Jan. 2, 2013). This case was on remand from the Federal Circuit, which directed Judge Robinson to “reconsider [the] bad faith and prejudice determinations related to Rambus’ spoliation, as well as the appropriate sanction, if any, for Rambus’conduct.” Id. at 21. See here a discussion of the Federal Circuit’s opinion, and here for a discussion of Judge Robinson’s opinion prior to appeal.

Judge Robinson noted that in order to find “bad faith,” the Court must “find that Rambus implemented its document retention policy to disadvantage Micron or other potential defendants.” Id. at 22. Judge Robinson explained that “four categories of facts in this case support a finding of bad faith.” Id. Specifically, these categories were “(1) facts tending to show that Rambus’ document retention policy was adopted as part of a firm litigation plan; (2) facts tending to show that the document retention policy was executed selectively; (3) facts tending to show that Rambus acknowledged the impropriety of the document retention policy; and (4) Rambus’ litigation misconduct.” Id. Judge Robinson delineated the specific facts that fell under each category and concluded that there existed “clear and convincing evidence that Rambus’ spoliation was carried out in bad faith.” Id. at 22-29.

Turning to whether Rambus’ spoliation prejudiced Micron, Judge Robinson noted that “[t]he question of prejudice ‘turns largely’ on whether a spoliating party destroyed evidence in bad faith.” Id. at 29. Because “bad faith [had] been found on Rambus’ part, the burden shift[ed] to Rambus to show lack of prejudice.” Id. at 30. Judge Robinson ultimately held that Rambus did not satisfy its burden, and that “Rambus’ spoliation at least prejudiced Micron’s (1) claims and defenses related to patent misuse and violation of antitrust and unfair competition laws, and (2) defense of inequitable conduct.” Id. Regarding the prejudice to Micron’s inequitable conduct defense, Judge Robinson addressed the prongs of “specific intent” and “materiality” individually. Judge Robinson found that “proving the intent prong of inequitable conduct would undoubtedly be more difficult for Micron given Rambus’ bad faith spoliation,” as “nonpublic documents will be instrumental in showing that the patentee purposely chose not to disclose a known reference to the PTO.” Id. at 36. Similarly, Judge Robinson found that proving the “materiality” prong of inequitable conduct would be more difficult, as Micron was precluded from “possibly obtaining evidence of affirmative acts of egregious conduct, such as perjury, the manufacture of false arguments, or deliberate fraud during prosecution.” Id. at 37. Under Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc), such egregious acts support a finding of materiality. Id. at 37. Furthermore, with regard to both specific intent and materiality, Judge Robinson emphasized that “the fact that no record was made of what documents were destroyed [could] be of no avail to Rambus, the bad faith actor.” Id. at 37 (emphasis added).

Next, Judge Robinson addressed the appropriate sanction to “rectify Rambus’ spoliation.” Id. at 37. Judge Robinson relied on the factors set forth in Schmid v. Milwaukee Elec. Tool Corp., 13 F.3d 76 (3d Cir. 1994), which include “(1) the degree of fault of the spoliating party; (2) the degree of prejudice to the adverse party; and (3) whether there is a less severe punishment that would avoid substantial unfairness to the adverse party while still serving to deter similar spoliation by others in the future.” Id. at 38. First, Judge Robinson noted that the “degree of fault in Rambus’ spoliation cannot be overstated by the court.” Id. at 39. Judge Robinson explained that even though her finding of “bad faith” spoliation was sufficient to find Rambus at fault, that degree of fault was “compound[ed]” by “Rambus’ purposeful, thorough document destruction, which did not occur just once, but several times in 1999 and 2000.” Id. (emphasis added). Second, Judge Robinson reiterated that “several of Micron’s affirmative defenses [had] been prejudiced by Rambus’ bad faith spoliation.” Id. She reasoned that “[w]hile the precise degree of prejudice cannot be known because Rambus did not keep any record of what was destroyed, Rambus should not easily be able to excuse its misconduct by claiming that the vanished documents were of minimal import.” Id. Moreover, “[t]he wide range and sheer amount of materials destroyed, along with Rambus’ bad faith, [made] it almost certain that the misconduct interfered with the rightful resolution of the case.” Id. at 39-40.

Third, Judge Robinson considered sanctions less severe than holding the patents-in-suit unenforceable and found them “inappropriate for the unique circumstance of this case.” Id. at 40-46. In reaching her conclusion, Judge Robinson noted that “Rambus’ destruction of evidence was of the worst type: intentional, widespread, advantage-seeking, and concealed.” Id. at 44 (emphasis added). Judge Robinson explained that “[a]ttorney fees, monetary sanctions, and adverse jury instructions will not restore Micron to the same position in which it would have been absent Rambus’ unlawful spoliation, and an evidentiary sanction would likely result in the same substantive outcome but in a less efficient manner.” Id. at 45. Judge Robinson further explained that “[a]ny lesser sanction would, in effect, reward Rambus for the gamble it took by spoliating and tempt others to do the same.” Id. at 45. Judge Robinson concluded that the appropriate sanction was “to hold the patents-in-suit unenforceable against Micron,” given the “nature and degree of Rambus’ wrongdoing.” Id. at 45-46.

Micron Tech., Inc. v. Rambus Inc., C.A. No. 00-792-SLR (D. Del. Jan. 2, 2013) by YCSTBlog