Rambus destroyed evidence in Hynix patent dispute

A judge in California ruled that the destruction of evidence was not intended to destroy damaging evidence

A Judge In California ruled that Rambus destroyed documents related to its patent dispute with Hynix Semiconductor, now called SK Hynix, and recommended royalties on Rambus' patents at reasonable, non-discriminatory (RAND) rates as a sanction.

Such a remedy recognizes that Rambus' patents have been determined to be valid while at the same time recognizing that Rambus' spoliation of evidence should preclude it from entitlement to a royalty that places Hynix at a competitive disadvantage, Judge Ronald M. Whyte of the U.S. District Court for the Northern District of California, San Jose division wrote in an order Friday.

Rambus' senior vice president and general counsel Thomas Lavelle described the Judge's order in a statement late Sunday as a positive result which is consistent with the reasonable compensation for the use of its patented inventions that the company has been seeking all along. The decision does not provide Hynix with a going-forward license, and covers past infringements, Rambus said.

The U.S. States Court of Appeals for the Federal Circuit had earlier remanded the case back to the district court to among other things determine the appropriate sanction, if any, against Rambus for the spoliation.

Rambus was first advised to have a document control system in 1998 by the company's external counsel, and in September 1998, Rambus held its first "Shred Day," destroying 400 boxes of documents pursuant to the new document retention policy, and another 300 boxes on another such Shred Day in August 1999, according to court papers.

Through the Shred Days, Rambus kept no record of what was destroyed, but admitted that some destroyed documents related to contract and licensing negotiations, patent prosecution, its participation in standards body JEDEC, board meetings, and company finances.

Rambus which developed and licensed Rambus DRAM (RDRAM) which was for a while adopted by Intel, anticipated instituting litigation against one or more makers of non-compatible DRAM such as SDRAM before the shredding of the papers in 1998, according to Judge Whyte.

Rambus has sued numerous companies that it claims violated its memory patents and chip technologies. It has settled cases and signed license agreements with companies like Samsung, Nvidia and Mediatek, but is still in court battles against companies like Micron Technology and Hynix Semiconductor.

The company's spoliation of evidence "did not involve intentional destruction of particular damaging documents," Judge Whyte wrote in the order.

The Judge said that the sanction most commensurate with Rambus' conduct is to strike from the record evidence supporting a royalty in excess of a RAND royalty. He asked both parties to submit supplemental briefs addressing what a RAND royalty rate would be with respect to the patents-in-suit, taking into account the royalty rates obtained by Hynix competitors like Infineon and Samsung.

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