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February 2013: Quinn Emanuel Scores Unclean Hands Victory Against Rambus

February 2013

Quinn Emanuel obtained a ruling holding unenforceable all twelve patents that plaintiff Rambus Inc. asserted against Micron Technology, Inc. and Micron Semiconductor Products, Inc. After a five-day bench trial regarding Micron’s unclean hands defense and multiple rounds of post-trial briefing, Judge Robinson of the United States District Court for the District of Delaware found Rambus’ patents unenforceable due to unclean hands based on Rambus’ bad-faith spoliation. Rambus appealed and the case was remanded by the Federal Circuit in Micron Technology, Inc. v. Rambus Inc., 645 F.3d 1311 (2011), a seminal decision regarding spoliation of evidence. The Federal Circuit held that Judge Robinson’s finding that Rambus “knew or should have known” its conduct was in bad faith was not adequate. Id. at 1327. Instead, the Federal Circuit held that bad faith requires a showing that Rambus intended to impair the ability of potential defendants to defend themselves. Id. at 1327. The Federal Circuit also remanded the question of whether Micron was prejudiced by the spoliation and pointed out that resolution of the question of prejudice hinged on whether Rambus acted in bad faith. Id. at 1328. And the Federal Circuit provided specific instructions about what factors needed to be considered in assessing an appropriate sanction. Id. at 1328-1329.

On remand, after hearing additional argument, Judge Robinson held that the only appropriate sanction was to hold the twelve asserted patents unenforceable. She held that: “Rambus’ destruction of evidence was of the worst type: intentional, widespread, advantage-seeking, and concealed.” She concluded that: “This bad faith underlies the entire [document destruction] policy and permeates any action taken pursuant to the policy.” Judge Robinson also found that Micron was prejudiced. She held that Rambus prejudiced Micron’s claims and defenses related to Rambus’ conduct before the standard-setting body JEDEC, including patent misuse and violations of the antitrust and unfair competition laws. She also found prejudice to Micron’s inequitable conduct defense. She held that: “The wide range and sheer amount of materials destroyed, along with Rambus’ bad faith, make it almost certain that the misconduct interfered with the rightful resolution of the case.” As a result, she concluded that “[a]ny lesser sanction would, in effect, reward Rambus for the gamble it took by spoliating and tempt others to do the same.”