On remand from the Federal Circuit Court of Appeals, a federal district court in California has reversed its determination that Rambus, Inc. did not spoliate evidence by shredding hundreds of boxes in the months preceding its implementation of a strategy to aggressively protect its technology patents. Hynix Semiconductor Inc. v. Rambus, Inc., No. C-00-20905 RMW (U.S. Dist. Ct., N.D. Cal., San Jose Div., decided September 21, 2012). Additional details about the case and the Federal Circuit’s ruling in a companion suit appear in Issue 14 of this Bulletin.

The court issued new findings of fact and determined that the collateral estoppel doctrine required it to find, as the Federal Circuit had ruled, that the shredding occurred after litigation was reasonably anticipated. While the court found that Rambus acted in bad faith or at least willfully and that Hynix was prejudiced thereby, it refused to apply the unclean hands doctrine as a complete defense to Rambus’s patent-infringement claims. According to the court, the evidence did not show that Rambus knew that particularly damaging documents or emails were destroyed or specifically altered, hid or destroyed adverse evidence.

The court concluded, “[T]he sanction most commensurate with Rambus’s conduct and which addresses the above concerns is to strike from the record evidence supporting a royalty in excess of a reasonable, non-discriminatory royalty. Such a remedy recognizes that Rambus’s patents have been determined to be valid while at the same time recognizing that Rambus’s spoliation of evidence should preclude it from entitlement to a royalty that places Hynix at a competitive disadvantage.”

The court ordered the parties to brief the issue of “what a reasonable, nondiscriminatory royalty rate would be with respect to the patents-in-suit.” Hynix’s supplemental brief must be filed by October 12, 2012, and Rambus’s response must be submitted by October 26.