Qualcomm Inc. v. Broadcom Corp., Case No. 05-CV-1958 (S.D. Cal. August 6, 2007 & August 13, 2007)
At some point, every experienced litigator has had to deal with a client who was certain that his opponent in litigation was hiding documents, lying, or engaged in massive fraud on the court. No doubt the lawyers for Broadcom were hearing that refrain as Qualcomm’s patent infringement lawsuit against Broadcom wended its way through Judge Rudi Brewster’s court in the Southern District of California. Who would have predicted that a story worthy of a soap opera involving a broadscale effort on the part of Qualcomm and its employees to conceal elements of its patent program from a standard setting organization, followed by actively hiding this concealment from the court, the jury, and opposing counsel during the litigation would surface during cross examination of a Qualcomm witness on one of the last days of the trial. During that examination, Broadcom learned of the existence of emails that had been removed from the witnesses email box and never produced. Following up on this information after a jury verdict in its favor, Broadcom demanded further production and ultimately received 200,000 pages of emails and other electronic documents relevant to one of the principal issues in the case. The court was not amused.
The case revolved around the issue of waiver, specifically whether Qualcomm had waived the enforceability of its patents by failing to disclose them as relevant to a standard being considered by the Joint Video Team (“JVT”), an industry standard setting organization. Like many standard setting organizations, JVT had a policy relating to patents that might cover a standard, which required that any company involved in the standard setting process disclose relevant patents and agree to one of several approaches to enforcing the patents. The ultimate goal was to avoid setting a standard that would require obtaining licenses from an organization that had not agreed to conform the JVT patent policy. If Qualcomm was found to have intentionally failed to notify JVT of its patent position as it related to the H.264 standard, it would have waived the enforceability of its patents.
During pretrial, trial, and even post-trial, Qualcomm had vigorously denied any involvement in the standard setting organization. As it turned out, the court found that Qualcomm emails produced after trial showed by clear and convincing evidence that “Qualcomm and its employees organized and attempted to execute a plan to actively conceal its patents from the JVT in order to later become an indispensable licensor to those practicing the H.264 standard.” The court went on to find that Qualcomm’s misconduct permeated every aspect of the litigation, including the post-trial period.
In an August 6 order that is not to be missed, the court held that Qualcomm’s patents were unenforceable, including any related patents. The court also awarded reimbursement of all Broadcom’s attorney fees and expenses related to the litigation. In a final twist of the knife, on August 13, in response to Judge Brewster’s August 6 Order, which “impugned Qualcomm’s counsel and their claims that they carried out their discovery obligations in good faith,” Magistrate Judge Barbara Major issued an Order to Show Cause Why Sanctions Should Not Be Imposed. Her Order stated:
This Court believes that the record evidence provides a basis for finding that Qualcomm’s attorneys violated this Court’s discovery and/or scheduling orders. As such, this Court is inclined to consider the imposition of any and all appropriate sanctions on Qualcomm’s attorneys, including but not limited to, monetary sanctions, continuing legal education, referral to the California State bar for appropriate investigation and possible sanctions, and counsel’s formal disclosure of this Court’s findings to all current clients and any courts in which counsel is admitted or has litigation currently pending.”
Stay tuned. The Judge has ordered no less than fourteen attorneys by name to appear before her on August 29, and has suggested they may want to file declarations. I can hear that soap opera tune playing in the background. I can also smell the blood.