Lexplug logoLexplug

Micron Technology, Inc. v. Rambus Inc.

Court of Appeals for the Federal Circuit
98 U.S.P.Q. 2d (BNA) 1693, 2011 WL 1815975, 645 F.3d 1311 (2011)
ELI5:

Rule of Law:

The duty to preserve evidence for litigation arises when litigation is "reasonably foreseeable," an objective standard that does not require litigation to be imminent or probable without significant contingencies. Dispositive sanctions for spoliation require clear and convincing evidence of bad faith, prejudice to the opposing party, and consideration of lesser sanctions.


Facts:

  • Rambus founders developed RDRAM memory technology in the early 1990s, but the industry standard body (JEDEC) adopted a competing technology called SDRAM.
  • Rambus formulated a business strategy to amend its patent applications to cover the industry-standard SDRAM technology while keeping its participation in JEDEC and its patent claims secret.
  • In 1998, Rambus executives and counsel developed a strategy to license and eventually litigate against SDRAM manufacturers, including Micron.
  • As part of getting "battle-ready," Rambus implemented a document retention policy in mid-1998 designed to destroy discoverable evidence, while instructing employees to keep documents that would help prove their own intellectual property rights.
  • Rambus held a "shred day" in September 1998 and a second one in August 1999, destroying between 9,000 and 18,000 pounds of documents.
  • Rambus instructed outside patent counsel to purge files related to patent prosecution in April 1999.
  • Rambus prepared claim charts and litigation timelines targeting specific manufacturers prior to the August 1999 shredding event.
  • Rambus sued Hitachi in early 2000, settled, and subsequently approached Micron regarding licensing.

Procedural Posture:

  • Rambus sued Hitachi for patent infringement (case settled).
  • Micron filed a declaratory judgment action against Rambus in the U.S. District Court for the District of Delaware asserting non-infringement, invalidity, and unenforceability.
  • The District Court pierced Rambus's attorney-client privilege under the crime-fraud exception.
  • The District Court denied Rambus's motion to transfer the case to the Northern District of California.
  • The District Court held a bench trial specifically on the issue of spoliation.
  • The District Court found Rambus liable for spoliation and entered judgment declaring the patents unenforceable against Micron as a sanction.
  • Rambus appealed the decision to the U.S. Court of Appeals for the Federal Circuit.

Locked

Premium Content

Subscribe to Lexplug to view the complete brief

You're viewing a preview with Rule of Law, Facts, and Procedural Posture

Issue:

Did the district court err in finding that Rambus engaged in spoliation by destroying documents when litigation was merely "reasonably foreseeable" rather than "imminent," and did it abuse its discretion by declaring the patents unenforceable without sufficiently detailing the factual basis for bad faith and prejudice?


Opinions:

Majority - Judge Linn

Yes, spoliation occurred, but no, the sanction cannot stand without further findings. The court affirmed that the duty to preserve evidence begins when litigation is "reasonably foreseeable," rejecting the stricter "imminent" standard proposed by Rambus. The court found that Rambus reasonably foresaw litigation before its second shredding party in August 1999 because it had specific litigation targets, timelines, and claim charts. However, the court vacated the sanction of unenforceability. The court reasoned that the district court did not provide a sufficient factual explanation for its finding of "bad faith" (intent to impair the defense) and "prejudice" (harm to Micron's ability to defend), nor did it adequately explain why lesser sanctions would not suffice. The case was remanded for the district court to clarify these points.


Dissenting - Judge Gajarsa

No, the sanction should not have been vacated. Judge Gajarsa concurred that spoliation occurred but dissented regarding the remand. He argued that the district court had already provided ample factual basis for its decision, showing that Rambus's conduct was egregious and "impugned the very integrity of the judicial system." He contended that the majority was improperly re-weighing evidence and interfering with the district court's inherent power to control litigation and impose sanctions for abuse of process.



Analysis:

This case is a seminal decision regarding spoliation of evidence in the patent context. It clarifies that the duty to preserve documents attaches when litigation is "reasonably foreseeable," which is an objective, flexible standard based on the totality of the circumstances. Companies cannot avoid spoliation liability by destroying documents simply because a lawsuit has not yet been filed if they are actively planning for it. However, the decision also imposes a high bar for dispositive sanctions (like dismissal or unenforceability), requiring district courts to be meticulous in documenting the specific facts supporting bad faith and prejudice before imposing the "death penalty" on a case.

G

Gunnerbot

AI-powered case assistant

Loaded: Micron Technology, Inc. v. Rambus Inc. (2011)

Try: "What was the holding?" or "Explain the dissent"