How Chickens and Eggs Relate to Patents and Infringement
By Daniel J. Ross
Qualcomm, Inc. v. Broadcom Corp., No. 05-CV-1958-B, 2008 WL 66932 (S.D. Cal. Jan. 7, 2008).
Employees Implicated: Everyone, from management to individual employees to in-house counsel to independent contractors
eLesson Learned: During discovery, make sure you and your employees give attorneys complete access to company email records, guiding them towards the accounts of relevant employees and offering helpful search terms that relate to the matter at hand.
Let’s say you download an e-book of Aesop’s Fables to look for the story “The Milkmaid and Her Pail.” You think of search terms and come up with: milkmaid, pail, count, chickens, hatched. Then what? If you want to find the story, you do the search. However, if you’re pretty sure the story is there but you don’t really want to find it, you might search other terms. Well, as Qualcomm found out, the second option doesn’t work so well when it comes to discovery.
Qualcomm held two digital video compression patents integral to the development of a high quality video standard H.246, a.k.a. MPEG-4 AVC, which was being developed by the Joint Video Team (JVT). The JVT comprised members from a range of digital media corporations, and required that these companies disclose any intellectual property rights (IPR) concerns to ensure that proper licensing could be arranged for development. H.264 was published in May 2003.
Qualcomm had been involved with the JVT since December 2001 but withheld its patents from the group, seemingly with the thought that its IPR would be more valuable in litigation than in the form of a license. And in 2005, Qualcomm filed a patent infringement suit against Broadcom, who had introduced an H.264-compliant product. The key to the suit was Qualcomm’s claim that it was not involved with the JVT until after H.246 was released.
Broadcom sought to uncover documents that linked Qualcomm to the JVT prior to the publication of H.246, but Qualcomm maintained throughout discovery and the trial that its relationship with the JVT began after May 2003. However, in January 2007, towards the end of the district court trial, Qualcomm discovered that one of its witnesses had, since August 2002, been a member of an email group, “avc_ce,” related to the development of H.264. A quick search in the employee’s email account found 21 emails relating to the group, none of which had been produced during discovery. Although Qualcomm eventually produced these emails, it conducted no follow-up searches for other documents.
In April 2007, Qualcomm admitted that it had uncovered thousands of relevant documents that were not produced at trial. By June 2007, that number had grown to over 46,000 requested but undisclosed documents, totaling over 300,000 pages.
So here’s what happened: Qualcomm happened to find all the helpful documents dated after September 2003, but failed to find the entire e-paper trail that showed its relationship with the JVT before that date. The reason? Willfully poor document and email searching.
As a company assisting attorneys to search for electronic documents in this case, what terms would you identify as relevant? How about: JVT, H.246, avc_ce, and MPEG-4. And guess what? Qualcomm searched for none of these terms until after the district court concluded its inquiry. The magistrate who heard Qualcomm’s appeal from sanctions determined that “[t]he fact that Qualcomm did not perform these basic searches at any time before the completion of trial indicates that Qualcomm intentionally withheld the documents.”
The magistrate characterized the situation as an “incredible discovery violation,” and concluded with her own mini e-lesson:
“For the current ‘good faith’ discovery system to function in the electronic age, attorneys and clients must work together to ensure that both understand how and where electronic documents, records and emails are maintained and to determine how best to locate, review, and produce responsive documents.”
The result? The court determined that Qualcomm’s plan to shield the patents from the JVT was underhanded and illegal, and its substantial withholding of relevant documents was damages-worthy. For its iniquities, Qualcomm lost its rights to the two relevant patents and was ordered to pay over $8.5 million to Broadcom.
Qualcomm counted the $$$ its patents would earn it through litigation without taking proper care to ensure that its behavior was within the bounds of the law. If it hadn’t deliberately misled the court during electronic discovery and had been more forthcoming overall, Qualcomm might not have gotten the golden goose, but at least it could have had a nice omelet.
Daniel is a third-year evening student at Rutgers School of Law – Newark and is a member of Rutgers Law Review.
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