Hynix v. Rambus, Case No. 2009-1299, 1347 (Fed. Cir. May 13, 2011)

Micron v. Rambus, Case No. 2009-1263 (Fed. Cir. May 13, 2011)

In these two related cases, the Federal Circuit addressed the question of whether destruction of documents as part of company-wide “Shred Days” before commencement of litigation qualified as improper spoliation of evidence.  

The issue considered was what constituted “reasonably foreseeable” litigation sufficient to trigger a duty to preserve documents.  

The Court decided that litigation need not be imminent to be “reasonably foreseeable” to trigger a duty to preserve evidence. But what qualifies as “reasonably foreseeable” is “a flexible fact-specific standard . . . . This standard does not trigger the duty to preserve documents from the mere existence of a potential claim or the distant possibility of litigation. . .[h]owever, it is not so inflexible as to require that litigation be ‘imminent, or probably without significant contingencies.”  

Rambus’s “Shred Days” constituted improper spoliation. Factors important to the decision included the following:

  1. Rambus’s internal memos and presentations showed that it had adopted 1. its document retention policies as part of its litigation strategy, not for the purposes of business management.
  2. Rambus was already on notice of potential patent infringement suits before 2. the “Shred Days.”
  3. Rambus took several steps in furtherance of litigation before the second 3. “Shred Day.”
  4. As plaintiff/patentee, Rambus’s decision whether to litigate was the 4. determining factor in whether litigation would ensue. Thus, it is more foreseeable for a party in Rambus’s position to foresee litigation, than for a potential accused infringer.
  5. The relationship between Rambus and the accused infringers was naturally 5. adversarial, rather than a mutually beneficial one that later turned sour. In the former situation, litigation is more reasonably foreseeable than in the latter.

It is important that a company institute a comprehensive document retention policy before any threat of litigation, implement it consistently, and ensure it is adopted and used for well reasoned business purposes.

Click here to view the attached cases.