U.S. District Judge Sue Robinson in Wilmington, Del., has once again punished the chip designer Rambus Inc. for shredding documents back in 1998 and 1999, shortly before it declared a patent war against much of the semiconductor industry.
In a 48-page decision issued on Wednesday, Robinson tossed a patent case Rambus brought against Micron Technologies Inc. more than a decade ago, concluding that the company deliberately destroyed evidence ahead of its litigation campaign. If reading that sentence has you feeling deja vu, it’s because Robinson handed down the same punishment four years ago, before the U.S. Court of Appeals for the Federal Circuit reversed in 2011 on the grounds that the judge didn’t adequately explain how she arrived at such a severe sanction.
Someone could easily write a book about the Rambus saga. (Sister publication Corporate Counsel ran a long feature about it here). The condensed version goes like this: In the early 1990s, Rambus debuted cutting-edge dynamic random access memory (DRAM) technology that some say revolutionized computing. By the late 1990s, the company boasted about 200 employees and hundreds of millions of dollars in patent licensing revenue. According to Rambus, around that time rivals like Micron and SK Hynix Inc. blatantly infringed its patents and also anticompetitively conspired to push Rambus out of business. In 2000, Rambus sued Micron for patent infringement, and Hynix sued Rambus. In 2004, Rambus also brought an antitrust complaint against both companies in state court in San Francisco.
Those antitrust claims against Micron and Hynix ended up before a California jury in the summer of 2011. The lead defense lawyers–William Price of Quinn Emanuel Urquhart & Sullivan (for Micron) and Kenneth Nissly of O’Melveny & Myers (for Hynix)–wanted to show jurors internal Rambus e-mails from the late 1990s in which Rambus higher-ups announced company-wide “shred days” and a “shred party.” The judge overseeing the case mostly blocked the spoliation evidence, but Price and Nissly were able to secure a complete defense win anyway after a near-record eight weeks of jury deliberation.
As for Rambus’ patent infringement cases, they have a long and tumultuous history. The claims against Hynix were heard before U.S. District Judge Ronald Whyte in San Francisco, while the claims against Micron were heard before Robinson in Delaware. Whyte ruled that Rambus didn’t commit spoliation because litigation against its rivals wasn’t reasonably foreseeable. That ruling allowed Rambus to have its day in court against Hynix, and Rambus eventually won a verdict worth $397 million. Robinson, on the other hand, ruled in 2009 that Rambus spoliated evidence and that the appropriate sanction was dismissal of Rambus’s claims.
After a star-studded oral argument, the Federal Circuit finally weighed in on both cases in May 2011. The appeals court indicated that Rambus likely spoliated evidence, but remanded so that Whyte and Robinson could make the final determination.
On remand, Robinson and Whyte have continued to take different approaches. Last September Whyte reversed himself and found that Rambus spoliated evidence, but he refused to set aside the Hynix verdict. Instead, he indicated that he would recalculate Rambus’s royalties, and he’s asked for further briefing on what constitutes an appropriate royalty rate. (We explained Whyte’s decision in more detail here.)
In contrast, Robinson stuck to her guns in Wednesday’s ruling, and once again precluded Rambus from suing Micron. “The record demonstrates that Rambus attempted to destroy evidence that would be unfavorable to its litigation position and to keep other, more favorable evidence,” she ruled. “[A] dispostive sanction serves as an effective deterrent to future misconduct of this severity.” No doubt aware that people would compare her ruling to Whyte’s, Robinson noted in a footnote that “his findings of fact were different from those of the instant case.
“Quinn Emanuel’s Price, who represented Micron throughout the Delaware case, praised Robinson’s ruling when we reached him on Thursday. “This is a company that edited the facts, that picked what evidence would be heard,” he said of Rambus. “I don’t see how a sanction besides dismissal could be appropriate.”
Munger partner Gregory Stone, who represented Rambus, did not immediately return a call seeking comment. A Rambus spokesperson sent us this statement: “Despite this result, we remain confident in the strength of our technology and will move beyond this matter to reach reasonable agreements.”