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:
- 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.
- Rambus was already on notice of potential patent infringement suits before 2. the “Shred Days.”
- Rambus took several steps in furtherance of litigation before the second 3. “Shred Day.”
- 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.
- 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.
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