In Micron Technology, Inc. v. Rambus, Inc., 2011 WL 1815975 (Fed. Cir. 2011) and Hynix Semiconductor Inc. v. Rambus Inc., 2011 WL 1815978 (Fed. Cir. 2011), the United States Court of Appeals for the Federal Circuit held that a memorandum prepared by the vice president outlining plans for suing Intel and DRAM manufacturers for patent infringement triggered Rambus's duty to preserve evidence. 

There, Rambus, a manufacturer of RDRAM (memory components for computers) developed a two-prong approach to marketing and competition; First, Rambus would license manufacturers to create RDRAM and second, Rambus prepared to make demands for license fees and litigate, if necessary, against all manufacturers of competing SDRAM.  Rambus met with litigation counsel regarding the litigation strategy and counsel advised putting a document-retention policy in place to get "battle-ready."  In the Fall of 1998, Rambus hired outside litigation counsel to pursue patent claims and in December 1998, the Vice President of Rambus distributed a memorandum describing a "nuclear winter" scenario under which Intel abandoned RDRAM for SDRAM and the plans for a litigious response.  In the meantime, Rambus implementing a widespread document retention/destruction policy whereby destruction was not stopped until litigation was commenced, employees were encouraged only to retain vindicating emails, several "shred-days" were held and backup tapes for emails were deleted. 

In two separate lawsuits that followed, the Plaintiffs sought discovery sanctions for spoliation of evidence.  In Micron, the Court awarded the spoliation sanction of dismissal finding that the December 1998 memo made it reasonably foreseeable that litigation would result.  However, in Hynix, the Court found that the adoption of a document-retention policy in July 1998 was a permissible business decision and did not constitute spoliation.  The Court found that the purpose for the document-retention policy, to further Rambus's litigation strategy by frustrating the fact-finding efforts of adverse parties, made it more likely that litigation was reasonably foreseeable at the time.  The Court also looked at factors such as knowledge of potential infringement, quarterly reports stressing goals of initiating litigation and Rambus's role as plaintiff as opposed to defendant.  The Court held that the totality of the circumstances as of the date of the December 1998 memo made litigation reasonably foreseeable.  Accordingly, the Court affirmed the trial court's holding in Micron, overruled the trial court's ruling in Hynix, and remanded both matters for finding on bad faith and appropriateness of sanctions. 

For a copy of the opinions click here and here.