Bloomberg News

Hynix, Micron Lose Decision on Rambus Document-Shredding

June 14, 2011

(Updates with Micron lawyer in seventh paragraph.)

June 14 (Bloomberg) -- Hynix Semiconductor Inc. and Micron Technology Inc. lost a bid to have the judge in an antitrust lawsuit by memory-chip designer Rambus Inc. tell jurors that Rambus shredded documents in anticipation of litigation.

Superior Court Judge James McBride in San Francisco today rejected a request by the chip manufacturers for jurors to be instructed that Rambus’s document destruction is proven. The companies based their request on a federal appeals court ruling last month that Rambus destroyed documents relevant to patent- infringement claims it planned to pursue against the chipmakers.

McBride said the subject of Rambus’s document destruction is “not dead” in the trial “but is not enshrined,” and that to raise it the defendants will have to pass “a test of evidence.”

Rambus, based in Sunnyvale, California, is seeking as much as $4.3 billion from Hynix and Micron over claims they drove Rambus-designed dynamic random access memory, or RDRAM, chips out of the computer memory market. The damages would be automatically tripled to $12.9 billion under California law if Rambus wins the case, the company’s General Counsel Thomas Lavelle said this month in an interview.

‘Engaged in Spoliation’

“We believe the fact that Rambus has been found to have wrongfully destroyed documents and engaged in spoliation by a federal appeals court demonstrate Rambus’s bad faith and lack of fair dealing,” Rod Lewis, Micron’s general counsel, said in an e-mailed statement.

“We look forward to presenting these facts to the jury at trial and proving our case in court,” Lewis said. “RDRAM failed because of inherent deficiencies in its technology, which was less efficient, more costly to produce and more difficult to implement than competing technologies.”

Patrick Shields, a lawyer representing Boise, Idaho-based Micron, told the judge the chip manufacturers sought an order instructing jurors that Rambus’s document destruction is proven; that it engaged in the destruction starting no later than 1998 and did so in anticipation of litigation; that it had a duty to preserve documents that Micron and Hynix, based in Ichon, South Korea, need to defend themselves, and that Rambus violated that duty.

Sean Eskovitz, a lawyer representing Rambus, said he was experiencing “déjà-vu” because the document destruction issue is a “sideshow” that was previously argued and decided by Judge Richard Kramer, who has issued many pretrial rulings in the case since it was filed in 2004.

The federal appeals court decision the chip manufacturers rely on, upholding portions of a ruling from federal court in Delaware, “is not on point with any of the issues here, because that’s a patent suit,” Eskovitz told Judge McBride. “There’s no basis for revisiting what Judge Kramer has done,” he said.

Rambus spokeswoman Linda Ashmore declined to comment.

The case is Rambus Inc. v. Micron Technology Inc., 04- 431105, California Superior Court (San Francisco).

--With assistance from Ian King in San Francisco and Susan Decker in Washington. Editors: Peter Blumberg, Fred Strasser

To contact the reporter on this story: Joel Rosenblatt in San Francisco at jrosenblatt@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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