Rambus argues Hynix, Micron cases in appeals court

WASHINGTON, USA: Memory chip designer Rambus told an appeals court on Wednesday that destruction of corporate documents before filing patent infringement lawsuits was proper, prompting questions from at least two of the judges on the five-person panel on Wednesday.

The case involves allegations that Rambus employees held improper shredding parties even as the company laid out plans to sue memory chip makers Hynix Semiconductor Inc and Micron Technology Inc for patent infringement.

Lower courts were divided on whether Rambus had behaved improperly. Rambus won against Hynix in a trial in San Jose, California, when a federal judge found that nine Rambus patents were valid and had been infringed. But Rambus lost in a Delaware court to Micron, the largest U.S. maker of memory chips that go into personal computers, because of the shredding.

Rambus gets the lion's share of its revenue from patent litigation and its share price tends to move following court decisions. The stock was down 1.5 percent in Wednesday afternoon trading.

In separate hearings on the Hynix and Micron cases before the same panel of five judges at the U.S. Court of Appeals for the Federal Circuit, Rambus attorneys argued that the company had no duty to preserve evidence in the nearly two years before infringement suits were filed.

This troubled Judge Arthur Gajarsa. "The policy (of document destruction) was adopted hand in hand with litigation," he said.

"That's not what the record reflects here," shot back Rambus attorney Carter Phillips, who argued that Micron had failed to show that Rambus had destroyed documents relevant to the case.

Phillips also argued that at least one of the patents hadn't been issued at the time that much of the shredding took place.

"The fact that the patents hadn't issued yet is hardly dispositive," responded Judge Alan Lourie.

Micron lawyer Matthew Powers said that Rambus emails showed that the tons of documents destroyed became a company joke, quoting one executive as saying he couldn't find documents that he was looking for and adding jocularly, "I guess I'm zealous about 'document retention.'"

Phillips, however, took another tack and argued that the fact that the apparently damaging emails survived were proof that "the shredding was content neutral and not in bad faith."

The cases had been argued previously but the companies were forced to reargue them because one of the judges who was on the original appellate panel retired in May before a decision was issued.

The cases are: Hynix Semiconductor v. Rambus, 09-1299 and Micron Technology v. Rambus 09-1263 in the U.S. Court of Appeals for the Federal Circuit.