By Chris A. Paul
A federal appeals court found memory chip
designer Rambus was wrong to shred hundreds of
boxes of documents that were potentially relevant in
two patent infringement lawsuits it filed. The court
said it was clear Rambus had destroyed documents,
but it was not clear the action was so serious that a
lower court should have dismissed its suit. It sent
the dismissal back to the U.S. District Court in
Delaware, adding that the lower court might still
decide that the records destruction was serious
enough for Rambus to lose the case it brought
against Micron Technology, the top U.S. maker of
memory chips for computers. In another ruling, the
appeals court found Rambus destroyed documents
related to a patent suit it had successfully brought
against Korea’s Hynix Semiconductor. It asked a
California court in that case to review its ruling in
view of the document destruction.
The appeals court said “it was not clear error”
for the Delaware court to conclude that the Rambus
document policy was aimed at boosting its litigation
strategy by limiting the fact-finding efforts of
opponents. Micron had won in the Delaware court
when a judge invalidated 12 
Rambus patents, citing
document destruction by Rambus as the reason. But
Rambus won against Hynix in a separate trial when
a federal judge in California found that nine Rambus
patents were valid and had been infringed.
According to court records, Rambus used at
least two “shred days” as part of a strategy to get
ready for litigation over its patents. Despite a stated
goal of getting rid of all documents once they
were old enough under document management
policies, employees were instructed to look for
helpful documents to keep, i.e., documents that
would help prove Rambus had intellectual property
rights. Rambus employees were told there would be
“pizza, beer, champagne, etc.” at a 1998 shred day. “It
is undisputed that Rambus destroyed between 9,000
and 18,000 pounds of documents in 300 boxes,”
the appeals court said in its majority opinion in the
Micron case.
Rambus designs memory chips and licenses
technology used in them to other chipmakers. Much
of Rambus’ income has come from patent litigation
against companies it accuses of not paying for its
technology. Shortly following the ruling the stock
price dropped sharply. Shareholder suits against
Rambus management will likely follow.