Rambus v. Infineon Rambus v. Infineon Technologies AGTechnologies AG

22 F.R.D. 280 (E.D. Va. 2004)

Parties Rambus instituted patent infringement litigation against

Infineon in 2000

The present case comes after an opinion, referred to as the March 17th opinion, in which the court found that Rambus destroyed a significant amount of electronic information which was subject to discovery◦ This case concerns possible sanctions against Rambus for spoliation◦ Spoliation: destruction of records or documents that may be relevant to

ongoing or anticipated litigation, government investigation or audit

◦ Rambus defense: Spoliation is not warranted because they destroyed the documents

pursuant to a standard policy

Facts Infineon has established that Rambus intentionally destroyed

documents relevant to this litigation by way of their document purging program

Additionally, the court found that the destruction had taken place at a time when Rambus reasonably anticipated litigation◦ Duty to preserve had attached◦ March 1998: Rambus institutes its document retention/destruction

policy◦ September 1998: document kick off, “shred day” at the company;

20.000 pounds or 2 million pages shredded◦ Immediately prior to Rambus instituting this action against Infineon,

Rambus’ former outside patent counsel destroyed documents pursuant to Rambus’ instructions But, was done prior to Rambus putting Infineon on notice of possible

patent infringement action Finally, there was also depositions given by Rambus employees

that they were told to destroy documents because such documents would be discoverable in any future litigations

E-Discovery Rules affectedPrimarily, Federal Rule Civil Procedure

37(e)◦Failure to provide electronically stored

information No sanctions for failing to provide ESI lost as a

result of the routine, good-faith operation of an electronic information system

Good faith exception◦ Issue here: did Rambus act in good faith in destroying

documents pursuant to its standard policy?

Analysis of caseRambus defense

◦Legitimate document retention program in place In accordance with general standards for document

retention programs Adopted for legitimate purposes, and not due to

anticipated litigation

On shred day, advised employees to look for things to keep and reasons to keep it

Reasons for destroying◦Kept too much

Would take too many resources to locate something if asked in discovery or pursuant to a third party subpoena

Analysis of case

Court rejects Rambus’ argument◦The only litigation Rambus was exposed to was

litigation that itself was initiating against various companies, including Infineon, for patent litigation

◦And….◦Even if the program was valid

Purging programs need to be put on hold when litigation is “reasonably foreseeable”

Issues regarding E-DiscoverySpoliation

◦Court found Rambus retention policy, devised and implemented by the company with the advice of lawyers, included plans to destroy discoverable documents as part of its litigation strategy Destroying documents as part of a litigation

strategy is NOT a legitimate defense They initiated the litigation with specific targets

(Infineon, et.al.) ◦Document policy was set up for an improper

purpose to gain a litigation advantage against Infineon prior to Infineon having notice of such action

Issues regarding E-DiscoveryDocument Retention Policies

◦Important to have◦MUST be suspended when litigation is

reasonably anticipatedApplied to Rambus

◦They only started the policy because of anticipated litigation Just by calling it a “document retention policy”

does not make it legitimate◦Court finds spoliation against Rambus

Two Student QuestionsAt the time Rambus created their document

retention policy, they felt their patented technology was being used illegally. Do you feel they should be punished for being aware of such possible infringement and thus creating document retention policies?

When IS the appropriate time to create document retention policies?