Rambus Brief Regarding Defendants Spoliation of Evidence 042009[1]

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JOSEPH W. COTCHETI (#36324)PHTLTP L. GREGORY (#95217)COTCHETT, PITRX & McCARTHYSan Francisco Airport Office Center840 Malcolm Road, Suite 200Burlingame, CA 94010Telephone: (650)697-6000

GREGORY P. STONE (#78329)BRADLEY S. PHILLPS (#8s263)STEVEN M. PERRY (#106ls4)KErTH R.D. HAMTLTON (#2s2tr5)MI.JNGER" TOLLES & OLSON LLP355 South Grand Avenue, 35th FloorLos Angeles, CA 90071-1560Telephone: (213)683-9100

susAN TRAUB BOYD (#229664)LEE S. TAYLoR (#243863)MTRTAMzuM (#238230)MI.JNGER TOLLES & OLSON LLP560 Mission Street, 27th FloorSan Francisco, C A 9 41 05-2907Telephone: (415)5124000

Attomeys for PlaintiffRAMBUS INC.

RAMBUS INC.,

Plaintiff,

vs.

MICRON TECHNOLOGY, INC., et al.,

Defendants.

SUPERIOR COURT O['TIIE STATE OF CALIFOR}IIA

COTINTY OF SAI\ F'RANCISCO

Case No.: 04431 105

RAMBUS INC.'S BRIEF REGARDINGDEFEI\DANTS' SPOLIATION OFEVIDENCE

PTJBLIC RE DAC"TED VERSION

Date: April 27,2009Time: 9:30 a.m.Dept: 304Judge: Hon. Richard A. Kramer

Complaint Filed: May 5, 2004Trial Date: April 27,2009

RAMBUS INC.'S BzuEF REGARDINO DEFENDANTS' SPOLIATION OF EVIDENCE

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TABLE OF CONTENTS

page

INTRODUCTION AND SUMMARY OF ARGUMENT..........................,........,..,....,......1

BACKGRO1JND.,.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4

A. Evidence Regarding Defendants' Conspiracy And Their Anticipation ofAntitrust Litigation .....,.... ........;...........................4

l. The Synclink Consortium...,................ .............................5

2. Secret Meetings.

3. Inter-Defendant Communications............... .......................6

B. Evidence Regarding Defendants' Anticipation of Patent Litigation.......,...............8

C. Evidence Regarding Defendants' Deliberate Destnrction of RelevantDocuments .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1 I

l. Evidence Regarding Hynix's Deliberate Destruction of RelevantDocuments ........ ........... I I

2. Evidence That Hynix Offered False and Incomplete DiscoveryResponses In An.Effort To Cover Up Its Document Destruction ..,.,........ 14

3. Evidence Regarding Samsung's Deliberate Destruction of RelevantDocuments... . . . . . . . . . . . . . . . .16

4. The Scope of Sarnsung's Destruction Is Revealed By The DistrictCourt ofNew Jersey's Finding That Samsung's DRAM GroupIntentionally Destroyed Emails ............. 19

5. Evidence Regarding Micron's Deliberate Destruction of RelevantDocuments ....... ............20

ARGUMENT.., . , . . , , . . .22

A. Under Defendants' Proposed (But Inappropriate) Approach To The DutyTo Preserve Documents, Defendants Had A Duty To Preserve RelevantEvidence Since At Least 1997 ....,,............ ................................,..22

B. Under Defendants' Proposed @ut Inappropriate) Approach To Spoliation,Defendants Intentionally Deshoyed Documens In Anticipation ofLit igation... . . , . . . . , . . , . , . . . . . . . . . . . . . . . . .24

C. Under Defendants' Proposed @ut Inappropriate) Approach To Spoliation,Defendants' Spoliation Of Evidence Prejudiced Rambus. .........25

D. Under Defendants' Proposed (But Inappropriate) Approach For Sanctions,Rambus is Entitled to Proportionate Sanctions........... .................30

1 Under Defendants' (Inappropriate) Approach, Rambus Is EntitledTo Terminating Sanctions.......... ............30

2. Under Defendants' (Inappropriate) Approach To Spoliation, TheCourt Should Dismiss Micron's And Samsung's Cross-ClaimsUnder The Doctrine Of Unclean Hands ,..,,,.................................,............31

3. According to Defendants' Proposed (But Inappropriate) Approachfor Spoliation And Collateral Estoppel, Terminating SanctionsShouldBeImposedAgainstSarnsung.................. ...........31

III.

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Iv,

TABLEOFCONTENTS(continued)

paqt

4. Under Defendants' (Inappropriate) Approach To Spoliation, TheCourt Should Impose Issue And Evidence Sanctions To PreventPrejudice Against Rambus...,......... .................................32

5. Under Defendants' (Inappropriate) Approach To Spoliation,Adverse Inference Instructions Should Be Given...................................,..33

E. Even Ifthe Court Does Not Impose Sanctions Or Give Adverse InferenceInstructions, Rambus Reserves Its Right to Offer Evidence of Defendants'Spoliation At Trial ....................... ......................34

coNcLUSroN .........35

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TABLE OF AUTHORITIES

FEDERAL CASES

Hynk Semiconductor, Inc. v. Rambus Inc.,No. C-00-20905 RMW, 2009 WL 292205 (N.D. Cal. Feb. 3, 2009) .... ........................2, 10,24

Mosaid Techs. Inc. v. Samsung Electonics Co., Ltd.,2004 WL 2550306 (D.N.J. Juty7,2004).... ......19,20,28,32

Mosaid Techs. Inc. v. Samsung Electronics.Co. Ltd.,348 F. Supp.2d 332 (D.N.J.2004).. . . . . . . . . . . . . . . . . . . . . . . . .20,25,32

STATE CAsEs

Bihun v. AT&T Info. Sys,13 Cal. App. 4th976 (1993).. ....................34

Cortez v. Purolator Air Filtration Prods. Co.,23cal4th 163 (2000).. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34

New Albertsons, Inc. v. Superior Courl,168 Cal. App. 4th 1403 (2008).. . . . . . . . . . . . . . . . .32

lilillard v, Caterpillar,40 cal. App. 4th 892 (1995).. . . . . . . . . . . . . . . . . . . . .23

ll/illiams v. Russ,167 Cal. App. 4th l2l5 (2008) ...... ........:...26

SurB Srerurps

Califomia Code of Civil ProcedureSection 437c(h) . ...............30

Califomia Evidence CodeSection 413 .. . . . . . . . . . . . . . .32. 33Section 500 .. . . . . . . . . . . . . . . . , . . . .34

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I. INTRODUCTION AND SUMMARY OF ARGUMENT

Hynix, Micron, and Samsung (collectively "Defendants') assert meritless

spoliation allegations against Rambus based on erroneous legal standards for spoliation and

sanctions, and on unreasonable inferences from the evidence.l This Court should not adopt

Defendants' incorrect assertions of law and fact. However, ifthe Court applies Defendants'

proposed legal standards and modes of drawing factual inferences, then the evidence will show

that each of the Defendants engaged in deliberate spoliation ttrat sufficiently prejudiced Rambus

in this litigation so as to warant sanctions and/or adverse inference instructions,

Firsf, applying Defendants' erroneors proposed duty standard, Defendants had a

duty to preserve documents as early as 1997 when they developed a coordinated strategy to "kill"

RDRAM and in so doing recognized that this united effort could create antitrust Iiability for the

co-conspirators. In response to Intel's selection of Direct RDRAM as the next mainstream

memory interface, Defendants and other DRAM manufacturers used the Synclink Consortium,

ostensibly formed to develop an altemative to RDRAM, to engage in an unlawful concerted

campaign to prevent widespread market acceptance of RDRAM. By February 1998, Defendans

were musing about whether they would need to visit one another injail due to their illegal

conspiracy, ̂See Declaration of Miriam Kim in Support of Rambus Inc.'s Brief Regarding

Defendants' Spoliation of Evidence ('Kim Decl."), Exh. 23 (6303 at l).2 And by January 1999,

tle conspirators recogrrized that because of their coordinated efforts to "kilf'RDRAM, it might

be wise to form a corporation for their united front that would "[i]ndemniff member companies

from anti-trust" liability. Exh.24 (6417 at 3). Further, rmder azy standard, once the Department

of Justice ("DOJ") announced its investigation into the DRAM industry and served subpoenas on

' Rambus has set forth its arguments against collateral estoppel and demonsfiated the legal errorin Defendants' proposed legal standarG in separate "Track l" briefing. ,See Rambus's OpeningBrief Regarding the Collateral Effect of the Inuzry 2009 Micron Rulingo filed Mar. 10, 2009;Rambus's Consolidated Response to Defendants' Opening Briefs on the Impact ofthe DelawareSpoliation Decision as a Matter of Laq filed April 3,2009; Rambus's Reply Brief Re: theCollateral Efect of the January 2009 Micron Rriing, filed April 17,2009 ("Rambus Reply'').The evidence at trial will demonstrate that Rambus did not engage in deliberate spoliation thatsufficiently prejudiced Defendants in this litigation so as to warrant sanctions.2 Unless noted otherwise, exhibits cited herein are attached to the Kim Declaration.1634979.l

RAMBUS INC.'S BRIEF REGARDING DEFENDANTS'SPOLIATION OF EVIDENCE

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Hynix, Micron, and Samsung, Defendants had a duty to preserve evidence relevant to the DOJ

investigation as well as the clearly foreseeable civil antitoust litigation related to their unlawful

conduct.

Moreover, under Defendants' overly expansive view ofthe preservation standard,

a duty to preserve documents related to tlits antitru litigation also arose when Defendants

anticipated separate patent litgation against Rambus. That duty arose at least by the summer of

2000, under Defendants' approach to spoliation, when Micron and Hynix decided to initiate a

"coordinated [] dual-front litigation" strategy by filing declaratory relief actions against Rambus

in Califomia and Delaware, see Hynix Semiconductor, Inc. v. Rambus Inc., No. C-00-20905

RMW, 2009 WL 292205, at *5 (N.D. Cal. Feb. 3,2009), and Samsung hired counsel to monitor

the various patent litigations and weighed litigation as a potentiat option.s ,See, a.g., Exh. 100

(Vl03 (5/14108 Donohoe Depo. at9:15-23)); Exh.71 (5/14/08 Donohoe Depo. at 35:23-36:15,

42:1-20), Rambus disputes that anticipation of separate patent litigation figgers a duty to

preserve in this antitust litigation. Rambus also disputes that a duty to preserye evidence that is

relevant and material to patent litigation with respect to non-compatible DRAM (such as SDRAM

and DDR) covers evidence that is relevant and material to this litigation. But Defendants are

steadfast in their assertion that "spolialion does not require anticipation ofa specific cause of

action" and that anticipation ofpatenf litigation triggered a duty to preserve documents relevant

to this litigation. See Micron's Response to Opening Brief on Collateral Effect of Delaware

Ruling, filed April 3, 2009 ("Micron Response"); Micron's Reply Brief, filed April 17,2009

("Micron Reply'), at 1:7-8, 3:16-18; Samsung's Reply Brief, filed April17,2009 ("Samsung

Reply"), at2:2-3.

Second, if the Court were to adopt Defendans' proposed standards for the duty to

preserve (which it should not), it would need to find that Defendants intentionally destroyed

relevant documents after the presewation duty atlached as early as 1997 (or altematively, in

' Samsung continued negotiations with Rambus and elected to take a license for SDRAM andDDR in October 2000. While Rambus contends that the eamest and successfirl nesotiation of alicense precluded suffrcient anticipation ofpatent litigation to trigger a duty to preiewe, Samsungasserted the opposite in the Northern District of Califomia.7634979,l

RAMBUS INC.'S BRIEF REGARDING DEFENDANTS' SPOLIATION OF EVIDENCE

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2000). Defendants knew that their conduct violated antitust laws, and they took affirmative steps

to conceal evidence of their misconduct. Given Defendants' knowledge of the criminal nature of

their conduc! Defendants' continued destruction of documents after the preservation duty

attached (and even after litigation with Rambus commenced and after they were served with

subpoenas from the DOJ) demonstrates that their destruction of documents was deliberate.

Third, if the Court were to adopt Defendants' proposed incorrect standard for

prejudice, then the Court would need to find that Defendants' destruction of evidence prejudiced

Rambus. The evidence will show that Defendants engaged in what Defendants view as large-

scale destruction of documents without maintaining any record of the documents that tley

destroyed such tha! under Defendants' theory ofspoliation, the burden is on Defendants to show

that Rambus has not been prejudiced in its pursuit of its claims here. Hynix, for example,

destroyed more than 550 boxes of documents in the summer of 2002, approximately two weeks

after it received a subpoena from the DOJ regarding its price-fixing activities. See Exhs, 60 & 6l

(Olson Depo. Exhs. l9 & 20); Exh. 84 (1217104 Olson Depo. at260:6-262:15); Exh. 59

(Computer Memory Chip Makers Probed, A.P. ONLINE, Jlullre 19,2002). Rambus will never know

the contents of those boxes, but it should be presumed - under Defendanls' view of the world -

that the documents included correspondence related to Hynix's conspiracy to fix prices and to

prevent RDRAM from achieving mmket success. Similarly, Samsung's President Jon Kang, who

was responsible at times for Samsung's RDRAM marketing programs, never received a litigalion

hold notice for Rambus-related documents and testified ttrat he regularly engaged in a "garbage

flush" ofthe materials in his office. Exh. 4l (Tr. Ex. 9339); Exh. l0l (V104 (6/19/08 Depo. of

Jon Kang at 207:12-208:l). Under Defendants' approach to spoliation, the Court should presume

that the destroyed materials.related, in partn to Mr. Kang's work on RDRAM. Micron, too,

continued to destroy documents after litigation commenced. For example, Micron CEO Steve

Appleton - who personally met with his at competitors such as Hynix to discuss

pricing and supply

EyJl66 (4/20101 Appleton Depo. at234:25 -235:1). See alsoExh.6T

(5/7/08 Appleton Depo. at 148:22 - 149:19). In the end, when faced with what Defendants-3-1634919.1


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characterize as widespread destruction, Rambus's prejudice is clear under Defendants' view of

the law and its application to fact because Defendants' "wrongdoing makes it practically

impossible to assess what role the missing evidence would have had in this action." Micron's

Opening Brief Regarding Impact of the Delaware Decision, filed Mar. 10,2009 ("Micron

Opening"), at 9:18-19.

To tlre extent the Court adopts Defendants' proposed standards for spoliation and

sanctions, Rambus intends to seek proportionate sanctions for Defendants' spoliation of evidence,

including but not limited to terminating sanctions striking Defendants' answen and granting

default judgrnent in Rambus's favor, terminating sanctions dismissing Defendants' cross-claims,

and issue or evidence sanctions. Rambus also intends to seek adverse inference instructions. and

to make other uses oftle evidence of spoliation as described below.

U. BACKGROT]NI)

A. Evidence Regarding Defendants' Conspiracy And Their Anticipation ofAntitrust Litigation

In 1996, lntel announced that its "next generation" microprocessors would be

engineered to take advantage of Rambus's revolutionary DRAM technology, Direct RDRAM,

expected to be available in the late 1990's. Exh.5 (Appleton Depo. Exh.614).4 In response to

Intel's selection of RDRAM as the next mainstream technology, Hynix, Samsung, and Micron

embarked on a selfdescribed campaign of "RDRAM killing." Hynix's Worldwide Vice

President of Marketing, Farhad Tabrizi, has acknowledged under oath that it was his goal to blosk

RDRAM from becoming the dominant memory interface. .Sae Exh. 99 (7117108 Tabrizi Depo. at

32:9-34:4). Mr.Tabrizihascalledthisjointeffort"RDRAMkillinC;'Idat32:3-8.

Defendants utilized a variety of vehicles in furtherance of their "RDRAM killing"

efforts. Rambus describes hereinjust a few examples as relevant to Defendants' consciousness of

guilt and their recogrition that theirjoint efforts potentially could give rise to antitrust litigation.

' As the Court ordered. the evidence summarized herein does not constitute a fi.rll offer of proofregarding Defendants' spoliation ofevidence, and Rambus reserves the right to make a firflpresentation of Defendants' spoliation at trial. ,See Feb. 24,2009 HrgTr. at25:24-26:2.

RAMBUS INC.'S BRIEF REGARDING DEFENDANTS' SPOLIATTON OF EVIDENCE

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l. The Synclink Consortium

It is undisputed that a central purpose ofthe Synclink Consortium was to develop

a "united strategy" to "resisf'the Rambus-Intel partnenhip. Exh. 6 (Dec. 1996 Synclink

Meeting Minutes at HR905_136815). Among other things, Mr. Tabrizi used his position as

Synclink Chairman to urge other DRAM manufacturers '1o please educate others and get their

agreement to say 'NO TO RAMBUS AND NO TO INTEL DOMINATION.'" Exh. 7 (Tabrizi

Depo. Exh.24) (Sept. 1996 email). Synclink also sought to develop, and jointly persrade Intel

to choose, the Synclink DRAM (SLDRAM) in lieu of RDRAM as the next generation

technologv. See Exh. 8 (Mailloux Depo. Exh.404).

Defendants knew that the "united shategy" they contemplated raised both antitrust

and patent concems. During the December 1996 Synclink meeting, Micron representative Terry

Lee opined that the "Consortium needs its own attomey to handle press releases, contracts,

antitrust concerns." Exh.6 (HR905_136814, at HR905_136816) (emphasis added). One month

later, Mr. Lee gave a presentation raising questions such as: "Could the Consortium be used to . . .

challenge existing patents" or "address DMM business legal concerns?" Exh. 9 (RX-0849)

(emphasis added) ; Exh. 8l (6 124 I 03 Testimony of T. Lee ar 6906 : 19 -21, 6906 :25 -6907 :6,

6921:15-6922:3,6924:20-6925:16). Shortlythereafter,Synclinkretainedthelawfirmof

Townsend and Townsend and Crew. Exh. 10 (Tabrizi Depo. Exh.32atl). See a/so Exh. I (RX-

0966 at 2) (July 1 997 Synclink meeling minutes stating that "legal fees for May alone were

$28K!).s

5 The Synclink Consortium members were also considering legal action involving Intel. OnMarch 25, 1997,Mr. Tabrizi sent an email to several Consortium members (known by that timeas SLDRAM Inc.) entitled "SLAP INTEL NOWI" Mr. Tabrizi wrote:

Earth to DOJ - haven't you noticed what Intel is up to? . . .[Including,] refusing access to information needed to buildcompeting products. Don't you agree this anogant company needsa slap upside the head before it does any more damage?

RAMBUS INC,'S BRIEF REGARDINO DEFENDANTS' SPOLIATION OF EVIDENCE

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2. Secret Meetings

In the Fall of 1998, Defendants met secretly to coordinate efforts to promote DDR

(in lieu of SLDRAM) and discourage desigr wins for RDRAM. See, e.g., Exh. 19 (Tabrizi Depo.

EyJ.732) (10/21198 email from Hynix to Samsung, Microrl and other DRAM manufacturers

establishing a private Intemet site for the "MX" group created to promote DDR); Exh. 20 (lBMl2

149399, produced by IBM) (email listing "noise-creating ideas" and "carefully planted rumors" to

sow doubt about RDRAM), These secret meetings laid the groundwork for Defendants'

concerted efforts to prevent RDRAM fiom becoming the dominant memory technology in the

marketplace.

The conspirators were conscious that their actions violated antitrust laws and

sought to conceal evidence oftheir misconduct. For example, in a February 1998 email about

RDITAM's puported drawbacks, a Micron marketing director asked his Hynix counterpart to

"please visit me if I end up in jail." Exh. 23 (6303 at I ). In January 1999, a consultant named

Desi Rhoden acknowledged that the DRAM manufacturers were "clearly shonger together" than

ifthey acted "individually," but he advised them to act under the umbrella ofa corporation in an

efforr to "[i]ndemnifu member companies from anti-ru$" liability. Exh. 24 (6417 at3).

3. Inter-Defendant Communications

As this Court is aware, both Samsung and Hynix have ple.d guilty to participating

in a conspiracy to fix the prices of SDRAM, DDR and (in the case of Samsung) RDRAM at times

between 1999 and2002. .lee Exh. 2l (Samsung Plea Agnt); Exh. 22 (Hynix Plea Agrnt).

Micron has admitted publicly to participation in a conspiracy to fix DRAM prices, and its Vice

President ofSales, Michael Sadler, testified after reviewing the Samsung Plea Agreement that

Micron and Hynix were participants in the conspirary to which Samsung had pled guilty.

Exh. 86 (4/25108 Sadler Depo. at 65:6-67:17). In addition, as Rambus demonstrated in

conjunction with Defendants' Summary Judgrnent motions, the evidentiary record is rife with

additional examples of anticompetitive conduct directed toward Defendants' joint goal of

"RDRAM killing." See, e.g., Rambus's Separate Statement of Facts In Opposition To Samsung's

Motion For Summary Judgnr.enr on Rambus's Complaint, filed Jan.27,2009.

RAMBUS INC.'S BRIEF REGAR.DING DEFENDANTS' SPOLIATION OF EVIDENCE

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Defendants knew they violated antitrust laws and tried to cover their tracks. For

example, in September of 2000, Micron manager Bill Lauer sent an email to Micron sales

managers

Exh. 25 (Lauer Depo. Exh. 348). I\&. Lauer confirmed under oath that

Exh.78 (12/19/07 Lauer Depo. at77:23-

78:2).

Id. at78:.7-79:1. Otler Micron executives played along. Keith Weinstock

testified that "[i]fI was sending an email, I would try to say something [such as 'call for details']

that would let the others know that I had more information that I wasn't putting in. . . .'). Exh. 95

(2114/08 Swanson Trial Tr. at 1388:17-19). Eee also Exh.96 (2/15/08 Swanson Trial Tr. at

1492:5-19) (testimony of Micron executive Steve Thorsen noting that he used sirnilar efforts to

"mask" information relayed in emails). Another Micron manager, Jeff Mailloux, circulated a

confidential Hynix roadmap to others at Micron. Exh. 64 (Seibert Depo. Exh. 271). lnstead of

identiffing his source at Hynix who provided him with the confidential information, Mr.

Mailloux said that "the roadmap fairy" left it for him. /d Similarly, in a March 2001 email.

Hynix sales manager Ken Heller explained to his colleague Jay McBroom:

Jay:

Just Si, pls, consider NEVER making statements in email that youspoke with the competition. Lawyer's love these baby's (sic). Juststate "l heard from dependable source . . ."

Exh. 26 (Gary Swanson Trial Exhibit 98).

In June of2002, the DOJ arurounced that it was investigating price fixing issues in

the DRAM industry and issued subpoenas to Samsung, Micron, aad Hynix, among others. See,

e.g, Exh. 62 (Plea Agreement of Alfred. P. Censullo atrll 4(a)); Exh.59 (Computer Memory Chip

Makers Probed, A.P. ONLINE, June 19,2002). After learning ofthe subpoenq Micron account

manager Alfred Censullo "altered his handwritten notations in his notebooks" in an effort to7634979.1


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obscure entries related to "competitor pricing informatioq responsive to the subpoena." Exh. 62

at !f 4(c). Upon receipt of the subpoena, Samsung, Micron, and Hynix each knew that their price

fixing activities would give rise to criminal and/or civil antitust litigation, and had an undisputed

duty under any standud to preserve documents relevant to the DOJ investigation.

B. Evidence Regarding Defendants' Anticipation of Patent Litigation

As explained in Rambus's briefing on the collateral effect of the Delaware Ruling,

when and whether the parties anticipated patent litigation is irrelevant to the instant anlitrust

litigation. Because Defendants make much of Rambus's purported anticipation of patent

litigation based on intemal Rambus discussion of the contingent possibility of such litigation,

however, it is important to note that beginning in 1997, Defendants likewise were discussing (and

even were preparing for) patent litigation with Rambus. The Synclink meeting minutes from

July 1997 state:

Consortium should collect information relevant to prior art andRambus filings and ?? Not an opinion, just collect material for allmembers to use. Dig out early minutes of Ramlink, etc. Rambus willsue individunl companiss instead of Consortium. Companies willthen ask Gustavson etc. for prior art info. Budget effort for getting oldminutes etc. collected.

Exh. I (RX-0966 at 3) (emphasis added). During that meeting, a patent attomey also led a

discussion about litigation and patent prosecution shategies, including the need to obtain "broad

claims" in order to "stop nonmembers from using" patented technolo gy. Id. at1.

Defendants' contempomneous actions conlirm their recognition ofpotential patent

litigation with Rambus related not just to SLDRAM, but also related to SDRAM and, eventually,

DDR SDRAM products. For example, Dave Gustavson of SCI wamed Hynix in a March 1997

email that Rambus's patents were likely sufficiently broad to cover a// synchronous DRAMs (r'.e.

including SDRAM and, eventually, DDR SDRAM). ,See Exh. 13 Q292660). ln response, Hynix

engineers and lawyers conducted a detailed analysis of Rambus's patents in the 1997 time frame

to determine their scope. See, e.g., Exh.98 (8/10/05 Tabrizi Depo. at 139:14-l4l:.ll); Exh.97

(l l/10/03 Tabrizi Depo. at 42:234311). After conducting that analysis, Hynix was sufficiently


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concerned about patent infringement litigation that it sought information in April 1998 about

patent infringement liability insurance. See Exh. 14 (HR905_079410-079546). Similarly, in

December 1996, Samsung was analyzing Rambus's '327 patent. See Exh. 15 (Tr.8x.7228A).

perceived in April 1997 that Rambus believed that "changing data on both edges of the clock" (a

technology which Defendants would later incorporate into their DDR SDRAM design) was

"under fRambus's] patent coverage." Exh. 58 (RX-920). As the entity intending to infringe,

Micron thus contemplated potential litigation.6 By January of 1998, Micron engineers were

working "closely with legal on issues related to Intel and Rambus patents and anti-trust issues."

Exh. l8 (RX-I095 at4).

Defendants' concem that Rambus "will sue individual companies" reached a fever

pitch after Rambus filed a patent infringement suit against Hitachi on January 18, 2000. That

same day, Hynix Vice President Farhad Tabrizi reported to Hynix COO Sang Park that the

Rambus lawsuit "was brought up with Micron. and other companies, and everyone believes that

we can not take this lightly, and we have to join together, and help Hitachi fight this to the end."

Er$. 2 (6522 at I ). Mr. Tabrizi similarly asserted on January 19, 2000 that 'DRAM companies

will join forces and fight this to the end of Rambus company." Exh. 3 (6524 at l;.7 In February

2000, Micron CEO Steve Appleton asserted

Exh. 4 (Sadler Depo. Exh. 548); Exh. 67 (517/08 Appleton Depo. at 170:15-18,

' Rambus, on the other hand, did not want to litigate with Defendants. Instead, Rambus wasfocused on ensuring that RDRAM would have strong market success and it only viewed patentprosecution and licensing for non-compatible technologies such as SDRAM and DDR SDRAMas an unlikely contingent back-up plan.7 During this time immediately after the Hitachi suit, Rambus did not intend to sue Defendants forpatent infringement. Instead, Rambus hoped that Defendants would take a license for Rambus'spatents and there would be no need for litigation. It was Defendants who knew whether theyplanned to sign a license and, thus, Defendants were in the best position to assess the probabilityof litigation.7614979 |

See Exhs. l6 & 17 (SS0013000220 and translation) (emphasis added). Micron, too,

MMBUS INC.'S BRIEF RECARDING DEFENDANTS' SPOLIATION OF EVIDENCE

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170:21-171:l). Also in February of 2000, Rambus and Samsung met to discuss Rambus litigation

and a potential license agreement covering SDR and DDR products. ,See Exh, 27 (Tr. Ex. 4204);

Eyh. 94 (5123108 Steinberg Depo. at 220:5-221 :14)

That same montlL email traffrc between Micron's

Director of DRAM Marketing, Jeff Mailloux, and Mr. Tabrizi of Hynix discussed "the DDR

potential patent problems with respect to RDRAM." Exh. 28 (I{R905 }34773). Then, in July

2000, Samsung received information about Rambus's patents and how Samsung's products

infringed those patents. ,See Exh. 29 (Tr. Ex. 9062); Exh. 89 (9/24108 Testimony ofJay Shim at

417:1419:16). Meanwhile, Micron hired "a lot" of lawyers, including "multiple outside firms"

in order to prepare for a "preemptive strike" against Rarnbus. Exh. 80 (2/28108 Trial Testimony

ofT. Lee at3275:l -3276:15).

Defendants coordinated their litigation response to their peroeived threat of

Rambus's patent infringement litigation. In July of2000, Hynix CEO Sang Park sent an email to

Steve Appleton requesting a meeting in August and stating "I had a meeting with Geoffof

Rambus yesterday and I don't have much time to decide what we want to do with them." ^lee

Exh. 30 (Appleton Depo. Exh. 627). Appleton and Park then held a face-to-face meeting on

August 11. 2000. Exh. 67 (517108 Appleton Depo. at 112:14-21), Two weeks later, Micron and

Hynix filed suits against Rambus on opposite coasts, one day apart. Judge Whyte recently

described some ofthe evidence ofthis "coordinaled dual-front litigation" conspiracy:

Micron sued Rambus for declaratory judgrnent on August 28, 2000 inDelaware. Hynix sued Rambus for declaratory judgment the next dayhere in San Jose. Califomia- Persuasive circumslantial evidencesuggests that Micron and Hynix coordinated their filing ofthedeclaratory judgment lawsuits.,See Conduct Trial Tr. 4006:8-4008:12(Mar. 5, 2008) (former Hynix employee Fmhad Tabrizi admitting tohis belief in 2000 prior to litigation with Rambus that Hynix wouldlitigate "to the end of Rambus company"); 5131:1-25; 5135:l-16 (Mar.I 8, 2008) (testimony of Micron CEO Steve Appleton that he met withHynix penonnel in early August of2000 and that he cancelledlicensing meetings with Rambus to sue for declaratory judgment);5633:16-5634:1 (Mar. 20, 2008) (testimony from Hynix employeeD.S. Chung about licensing meetings Hynix scheduled with Rambus,then cancelled by suing for declaratory judgment).

Hynix Semiconductor Inc. v. Rambus 1nc.,2009 WL 292205, at *5 (N.D. Cal. Feb. 3, 2009).7634979.t

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RAMBUS INC.'S BRIEF REcARDINC DEFENDANTS' SPOLIATION OF EVIDENCE

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Just as Micron and Hynix were finalizing their Complaints against Rambus in

August 2000, Samsung postponed licensing negotiations with Rambus because it was monitoring

these events. ,See Exh. 3 I (Tr. Ex. 9 I 00) (August 2000 email from Samsung to Rambus that there

were "issues [that] are not so trivial and they are taking longer for us to resolve intemally than

expected'). Jay Shim, Samsung's Vice President and General Patent Counsel, has admitted that

Samsung was considering the possibility of being sued by Rambus or suing Rambus at this time.

Exh.89 (9/24/08 Testimony of Shim at 422: 15-19). In August 2000, Samsung also hired

litigation counsel, including David Healey (then at Weil Gotshal, Samsung's trial counsel in the

Northem District of Califomia patent cases and this case) and the Clifford Chance firm to follow

Rambus litigation with other DRAM manufacturers. See Exh. 100 (V103 (5114108 Donohoe

Depo. at 9: I 5-23 )); Exh. 7 I (5 I | 4 / 08 Donohoe Depo. at 35 :23-3 6 :l 5, 42:1 -20).

C. Evidence Regarding Defendants' Ileliberate Destruction of RelevantDocuments

l. Evidence Regarding Hynix's Deliberate Destruction of RelevantDocuments

Despite Hynix's participation in joint efforts aimed at "RDRAM killing" and its

concem by 1997 that Rambus "will sue individual companies," as described in Sections II(A)-(B)

above (and which, under Defendants' incorrect approach, gives rise to a duty to prcserve

documents relevant to this litigation), Hynix took no steps to preserve potentially relevant

evidence. Instead, Hynix's Korean entity had in place a document retention policy up to May

2000 that called for documents to be preserved for only one year. See Exh. 33 (Shin Depo. Exh.

39, Hynix's Quality Records and Confiol Procedure). Prior to July 2000, Hynix gave no

insfuctions - written or verbal - to its employees to preserve documents related to Rambus. See

Exh. 79 (11/16/04 Jin Ho Lee Depo. at lE4:19-185:1, 185:20-186:2); Exh. 76 (l/31/05 Sung Chul

Kim Depo. at l0l:23-102:l); Exh. 84 (12/7104 Olson Depo. at223:20-224:4). In a brief filed in

the Northem District of Califomia patent litigation, Hynix acknowledges that "there is no doubt

that valuable documents were discarded" by Hynix. Exh. 34 @eply Brief in Support of Renewed

Motion to Dismiss, filed Mar. 2, 2005 , at 22) .

Among other things, Hynix desfoyed evidence that would further establish that

RAMBUS INC,'S BRIEF REGARDING DEFENDANTS' SPOLTATION OF EVIDENCE

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Hynix worried about Rambus litigation as early as 1997. For example, the evidence will show

that Hynix destroyed the patent analyses that Hynix conducted in response to the March 1997

email waming Hynix that Rambus's patents were likely sufficiently broad to cover all

synchronous DRAMs. See, e.9., Exh. 98 (8/10/05 Tabrizi Depo. at 139:14-141:,ll) (describing

patent analysis by Hynix patent tearn); .sea also Exh. 97 (11110/03 Tabrizi Depo. at 42:2343:11)

(same); Kim Decl.. 'lf 106(a).

voluminous under Defendants' standards and it contained sensitive

Exh. 84 (1217/04 Olson

Depo. at 286:8-15). Because H1'nix had no litigation hold in 1997 and 1998, Rambus can never

fully know what the complete array of evidence might have shown about Hynix's "RDRAM

killing" efforts and its efforts to block Rambus's patent rights and marketplace success.

Later in 2000, while Hynix was preparing its plan ro launch a coordinated attack

on Rambus, meeting with its competitors, and planning a dual-front litigation strategy, Hynix

amended its document retention policy to remove then-existing requirements that employees

preserve documents for a specified period of time. As described above, from 1997 through May

2000, Hynix's Korean headquarters had instructed its employees to preserve documents for one

yew. SeeExh.90(1 1/9/04ShinDepo.atl l0:23-111:20);seealsoExh.33(ShinDepo.Exh.39).

On May 5, 2000 - just months before Hynix sued Rambus -

.lee Exh. 9l (213105 Shin Depo. at2ll:9-212:18,219:6-9,231:21-

24).

During discovery,

See id. at2ll;9-212:l; see alsoExh.90 (l l/9/04 Shin-12-

Butthat is not all Hynix destroyed. Hynix's document destruction in 1997 was

id. at 227 :1 4-229:12. 23 1 :6-233 :25.

RAMBUS INC.'S BRIEF REGARDINC DEFENDANTS' SPOLIATION OF EVIDENCE

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Depo. at lll:22-ll4:15). However, when faced with a discovery order requiring production of

the details ofthose team level policies, Hynix recanted its story and admitted that it did not have

any written team level policies in this post-May 2000 time frame. ,See Exh. 35 (Amended Supp.

Response to lntenogatory No. 16, which does not list or describe any teamJevel policies for the

period from May 2000 through November 2000); see a/so Exh. 36 (Hynix's counsel's Mar. 7,

2005 Letter. stating that Hynix teams "did not have their own written [document preservation]

policies prior to May 2004"). In the end, as a result of the May 2000 revision to the document

retention policy, Rambus will never know the extent and scope ofthe destruction ofevidence

about Hynix's conspiracy with its competitors during the relevant time period.

Hynix's destruction of Rambus-related documents continued even afrer it srrcd,

Rambus on August 29, 2000 in the Northem District of Califomia. For example,

.See Exh. 83(l l/4/04 Olson Depo. at I l0:25-l l2:2); see a/so Exh. 79 (11116104 Lee

Depo. at 162:.18-163:.4 ); Exh. 91

(2/3/05 Shin Depo. at232:25-233:25); Exh. 37 (HR905_384106 to HR905_384117, examples of

invoices for shredding).

Farhad Tabrizi. a central figure in Hynix"s conspiracy to "kill Rambus," has

admitted that he destroyed emails after Hynix sued Rambus. Mr. Tabrizi tesified that !

,See Exh. 98 (8/10/05 Tabrizi Depo. at

67:21-68:4). He further testifi ed that even after he was instructed not to destroy Rambus-related

documents and a/er Hynix sued Rambus, he continued to indiscriminately delete his email at

regular intervals. Mr. Tabrizi's proffered excuse for violating the litigation hold instruction was

that he supposedly thought that Hynix was "backing up all the emails" and he was "hoping that

they have all the backups" if xhey later needed his email for the litigation. Id. at 68:5-71:20

(explaining that he continued deleting his email after the alleged litigation hold inscuction

because "I was thinking there's a backup tape, so there is a copy somewhere'). Mr. Tabrizi's

document destruction was compotmded when he left Hynix in 2003.


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(12/7104 OlsonDepo. at2l0:5-17);Exh.83(1 l/4/04OlsonDepo. at38:22-39:22).

In addition, there is evidence that other Hynix witnesses destroyed documents after

litigation commenced in 2000.

,See Exh. 82 (l/19105

Martinez Depo. at 160:13-161:3). Similarly, Hynix Vice President D.S. Chung, whom Hynix

called to testifr in the Northem District litigation, testified:

E/J.68 (7129/05 Chung Depo. at75:23-76:7).

However, Hynix's desfiuction of documents was not limited to a few isolated

individuals. For instance, on June 28, 2002, Hynix destooyed 550 boxes of documents. See

Exh.84 (1217104 Olson Depo. at260:6-262:15); Exhs. 60 & 61 (Olson Depo. Exhs. 19 &20),

Remarkably, this destruction happened just two weeks after the DOJ served Hynix with a

subpoena for documents related to its conspiracy to fix prices. See Exh. 59 (Computer Memory

Chip Makers Probed, A.P. ONttttt,I:urlle 19,2002). Even though this destruction (which,

according to Defendants, should be considered "massive") took place afier Hynix received its

subpoena from the DOJ,

See Exh. 83 (11/4104 Olson Depo.

at 61:19-63:13). Nor did Hynix otherwise maintain a list of the contents of the 550 boxes of

documents it destroyed during the Summer of2002, so Rambus will never know what volume of

material related to the claims in this litigation. See id. at 64:10-21 .

2. Evidence That Hynix Offered False and Incomplete DiscoveryResponses In An Effort To Cover Up lts Document Destruction,

Hynix has been less than forthcoming about its document retention policies and

practices. In 2001, Rambus served its First Set of Requests for Production on Hynix in the

Northem District of Califomia litigation. Therein, Rambus requested that Hynix produce "[a]ll

documents relating to [Hynix's] document retention or destruction policies or procedure from

-t4-RAMBUS TNC.'S BzuEF RECARDING DEFENDANTS' SPOLIANON OF EVIDENCE

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1990 to the present." Exh. 38 (Request for Production No. 59). Hynix objected bur agreed to

produce all non-privileged documents. Hynix limited its production to ten "document retention

policies (applicable at various times and to various activities)." Exh. 39 (7/7/03 letter).

On July 3, 2003, Hynix produced Carl M. Durham, Jr., general counsel for Hynix

Semiconductor Americ4 as the corporate designee on "any policies or practices within Hynix

relating to the storage and/or retention ofdocuments including email and/or electronic data back-

up policies and practices between 1990 and the present." However, after his deposition, the

Discovery Master found that Mr. Durham was completely 'lrnprepared and unqualified" to testi$

about the policies and practices of the four Hynix entities relating to the storage and retention of

documents. Exh. 40 (10/17104 Order Granting Rambus's Motion to Compel Production of

Documents and 30OX6) Deposition Re: Hynix's Document Retention Policies at 6:14).

In Hynix's nine years of litigation with Rambus, Hynix's story regarding its

document preservation practices has been ever-changing and evolving.

. tnitially, Hynix led Rambus to believe that Hynix America had a written

docunent retention policy. ,See Exh. 39 (July 7, 2003 letter from Ted Brown

to Truc-Linh Nguyen (listing Hynix America document retention policy)).

Later, after it had accused Rambus ofspoliation and put Rambus's document

retention policies under a microscope, Hynix changed its story and said that

the Hynix America policy was merely a draft that had never been adopted.

See Exh. 83 (11/4/04 Olson Depo. at l9:6-18); see alsoExh.35 (Amended

Supp. Response to Intenogatory No. 16 at l0 ("From 1997 to the present,

HSA has not had or adopted any written, company-wide document retention

policy.")).

Initially, Hynix's 30(b)(6) witress testified that

See Exh. 72 (7 13 / 03 Durham Depo. at 40:2 I 4. | :6, 42:4-8, 42:2243 :2).

Then, after accusing Rambus ofspoliation, Hynix offered a new 30(b)(6)


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,See Exh. 83 (lll4l04 Olson Depo. at

126:.12-127:9)

3. Evidence Regarding Samsung's Deliberate Destruction ofRelevant Documents

Notwithstanding Samsung's participation in Defendants' conspiracy and

discussion of potential patent litigation as described above (which, under Defendants' incorrect

assertions oflaw and fac! gives rise to a duty to preserve documents relevant to this litigation),

Samsung took no steps to preserve potentially relevant evidence until June 2005 at the earliest.

Samsung claims that it put a litigation hold in place for Rambus-related documents in June 2005,

but not earlier. ,Sea Exh. 102 (VI08 (7/28/08 J.S. Park Depo. at25:22-27:13) (Samsung's

30(bX6) designee testirying that Samsung took no action prior to June 2005 'to retain or preserve

documents related to actual or potential litigation with Rambus"); Exh. 4l (Tr. Ex. 9339 (list of

recipients of litigation hold notices at Samsung)).

Any litigation hold Samsung did put in place was not comprehensive. For

example, one ofthe individuals who never received a litigation hold for documents related to

actual or potential litigation with Rambus (even after this litigation began) is Jon Kang, the

President of Samsung Semiconductor lnc.. the U.S.-based Samsung defendant in this action.

From 1995 to 2000, Mr. Kang served as Samsung's Senior Vice President ofoperations. He

served as Senior Vice President of Memory Product Planning of Samsung Electronics, the parent

corporation in Kore4 from 2000 to 2004. Exh. 73 (6/19/08 Kang Depo. at l0: I - I I :4). He was

involved in marketing RDRAM, and he attended quarterly executive meetings between Samsung

and Rambus executives regarding RDRAM. Id. (6/19108 Kang Depo. at 65:4-12). Despite

Mr. Kang's role in Samsung's efforts to market RDRAM, which Samsung has stated is critical

evidence to its defense, Mr. Kang did not receive any litigation hold notice for Rambus-related

documents. ,See Exh.4l (Tr. Ex. 9339).E Ifhe did receive such a notice (which Samsung's

8 Mr. Kang has testified that he communicated by e-mail regarding Rambus-related business. ,SeeExh. l0l (V104 (6/19/08 Kang Depo. at2ll:22-25)).7634919.t

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30OX6) designee indicates he did not), he did not pay any attention to its instructions. .See

Exh. l0l (V104 (6/19/08 Kang Depo. at208:2-12)) (testiffing that he received a litigation hold

notice but "didn't pay much attention" to it). In fact, Mr. Kang testified that he continued to do a

regular "garbage flush" of his written materials. Id. at207:12-208:1 ("WheneverIhave-the

drawer gets filled up, then I do a garbage flush ofpaperwork[.]").

Similarly, four Samsung executives (Sun Woo Lee. Young Woo Lee, Tom Quinn,

and Yong Hwan Park) who pled gurlty to participating in a price fixing conspiracy with respect to

DRAMs were not among the Samsung employees who ever received a litigation hold notice

related to actual or potential litigation with Rambus. See Exh. 41 (Tr. Ex. 9339). Each ofthese

individuals had responsibilities for recommending and/or deciding Samsung's DRAM prices, and

each sommunicated with representatives of other DRAM manufacturers about DRAM prices.

See Exh.42 @lea Agreement of Y.W. Lee t| 4); Exh. 43 (Plea Agreement of Y.H. Park fl 4);

Exh. 44 (Plea Agreement of S.W. Lee fl 4); Exh. 45 @lea Agreement of Quinn !f 4).e

With no litigation hold in place before June 2005, Samsung automatically

destroyed e-mails up to at least June 2005 on an ongoing basis. .See, e.g., Erh. 89 (9124/08

Testimony of Jay Shim at 389:13-24) (Mr. Shim testifuing that Samsung has "a system in place

that would keep some of these files but automatically erase some ofthese other files"); Exh. 101

(V104 (6/19/08 Depo. of Jon Kang at 210:3-9)) (e-mail "automatically erases after a certain time

offof my computer"); Exh. 46 (330042000197 at65:8-20,68:6-21) (9/3/03 testimony of

Samsung's corporate designee stating that

Exh.47 (S500420016s4)

Similarly, employees

continued to do regular housekeeping (like Mr. Kang's "garbage flush" described above) to get

9 In addition, Samsung did not give instructions to preserve documents to others who wereinvolved in the process of deciding Samsung's RDRAM prices in the 2000 to 2002 time period,including Y.W. Lee, President of the Semiconductor Division of Samsung Electronics Co. Ltd.;Young Bae Rha, Senior Vice President in charge of sales and marketing globally; HJ Kim,President of SSI in 2000; Dieter Mackowiak, Senior Vice President of Sales and Marketing; andSean Cronin, Samsung's account manager at Dell in 2000. See Exh.4l (Tr. Ex. 9339) (does notinclude individuals listed above).1634919.1


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rid of unwanted documents. See, e.g,,Eldr.77 (8/23/07 Kyung Depo. at22:'12-19,22:22-23:4)

(describing regular housecleaning process, resulting in destruction of notebooks).

Indeed the regular destruction of documents is consistent with Samsung's

document retention policies. In 2006, after this litigation had already commenced, Samsung

Elechonics America ("SEA") adopted a document retention policy that required employees.

among other things, to clean out and destroy documents "[a]t least semiarmually." Exh. 48 (Tr.

Ex,9221). Semi-annual destrustion of documents is still mandatory under SEA's current

document retention policy, which expressly acknowledges that its purpose is to destroy otherwise

discoverable documents.ro Exh.49 CIr. Ex.9222 at 4).

The evidence at trial will show tha! as a result of the failure to implement a

litigation hold, Samsung destroyed relevant evidence, including communications with other

DRAM manufacturen regarding their coordinated refusal to meet OEMs' demands for lower

prices on RDRAM. For example, the evidence at hial will show that Samsung failed to produce

the March I , 2001 email from Samsrmg Vice President Il Ung Kim (who went to prison for price

fixing) to his counterpart at Toshiba about Samsung's refiisal to meet Dell's demands for sharper

declines in RDRAM pricing. Mr. Kim urged Toshiba to "hang in there" and "give same pricing"

l0 Commonly accepted reasons for adoption and implementation of content-neutral documentretention policies include the reduction ofthe high costs of complying with discovery requests inthe event a business should become involved in litigation, by limiting the extent of paper recordsand electronic data that would have to be searched for discoverable materials. However" becauseDefendants purport to find something nefarious in the adoption of Rambus's document retentionpolicy and in statements by Rambus personnel that the company's document retention programextended to "discoverable" documents (although even the Delaware Court did not), it is worthnoting that SEA's current document retention policy explicitly acknowledges the tie betweeq onthe one hand, the need to destroy material "that either has no value to SEA or whose presewationis not required by law", Exh. al 1tr. Ox. 9222 at3) (Underlying Principles" !] l), ani, on theother hand, concems about the potential discoverability of documents:

The law may not distinguish between "personal" work files and SEA's "corporate"or "business" files, As sucll "personal files" containing business- or work-relatedinformation may be subject to discovery in a legal proceeding, just like othercorporate or business records. Therefore, calendars, diaries, notes, andchrbnological fies, in electronic and pa1ier forms, of firm personnel are typicallyconsidered o'information" or "records" covered by this Policy. Each employeeshould, at least twice annually, review his "personal files" and dispose of anyinformation or records for which the retention period has passed.

Id. (SEA January l, 2008 document retention policy provision for "Personal files').16v9n.l

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as Samsung "even if they threten (sic) you badly." Exh. 50 (TAEC-RMBS-v-MU2569). The

only reason Rambus leamed of the document is because Toshiba produced a copy during

discovery. Kim Decl., !f 104(a).

Likewise, the evidence at trial will show that Samsung destroyed documents

regarding communications and meetings with other DRAM manufacturers about their internal

projections ofRDRAM pricing and production. ,lee, e.g., Exh. 5l 0TAG-00263188, produced by

Infineon) (7 /5100 emul from Samsung to Infineon requesting marketing meeting with proposed

agenda including "[d]emand forecas by applications, Rambus/DDR./PC I 33" and "[p]roduct

[r]oadmap"); Exh. 52 (ITAG-003033228) (lnfineon summary of meeting with Samsung). The

evidence will also show that Samsung destroyed documents regarding Defendants' secre!

coordinatedeffortstopromoteDDRwhilefashingRDRAM, See,e.g.,Exh.20(18M12149399,

produced by IBM) (listing "noise creating ideas" and "carefi.rlly planted rumors" about RDRAM.

Kim Decl., fl 104(b-c).

4. The Scope of Samsung's Destruction Is Revealed By The DistrictCourt of New Jersey's Finding That Samsung's DRAM GroupIntentionally Destroyed Emails.

The scope of Samsung's document destruction is described in Mosaid Techs. Inc.

v. Samsung Electronics Co., Ltd., et al., Case No. 0l-CV4340. In that case, Mosaid sued

Samsung in the Dishict of New Jersey for infringement of seven patents involving DRAMs and

DRAM technology. During the course ofdiscovery, Magishate Judge Hedges found that

Samsung had committed "breathtaking and absolute" spoliation, resulting in Samsung's complete

failure to produce emails to Mosaid. Mosaid Techs. Inc. v. Samsung Electronics Co., Ltd.,2004

WL 2550306, at *3 @.N.J: July 7,2004). He found that ",?o technical e-mails were presemed,

and that no 'off-switch' [to Samsung's retention] policy existed demonstrat[ing], at the least

extremely reckless behayior." Id. (emphasis added). Magistrate Judge Hedges also found that

"[t]he prejudice resulting ftom complete and total e-mail spoliation seems particularly obvious."

Id. at*2 (emphasis added).

Mosaid had submitted an affidavit by a former Samsung memory designer who

testified directly to'"the extensive and technical use of e-mail" at Samsung. /d. The affiant stated7$49n,1

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that "email was commonly used every day''by Samsung memory chip designers by 1995.

Among other uses, email was regularly used by Samsung engineers to share information and

ideas (such as presentations, test results, etc.) during the development ofmemory produots; to

communicate with other engineers regarding the stafus of memory product development and

manufactue; to distribute status reports, meeting minutes, and test results regarding the operation

of memory products; and to communicate with customers about specific product needs. Exh. 54

(550042001361, at 550042001362). In light ofthe evidence ofthe e-mails' relevance, the

Magishate found that, "in addition to defendants' effective concession ofabsolute spoliation of

technical e-mails, which is enough to support an inference, plaintiff has made a primafacie

showing of relevance." Mosaid,2004 WL 2550306,at*2. As a resul! the Magistrate granted

Mosaid's request for an adverse inference instruction. Id. at *3. The Magistrate also awarded

$566,839.97 in fees and costs associated with Mosaid's motion for sanctions. Mosaid Techs. Inc.

v. Samsung Electronics Co. Ltd,348 F. Supp. 2d,332,334 (D.N.J.2004).

Samsung appealed the Magistrate's orders, but the district court found that the

sanctions were both "appropriate and fair" given the "staggering" extent of Samsung's spoliation

from the inception ofthe litigation in September 2001 until late 2004. Id. at339. The district

court found that "Samsung never placed a 'litigation hold' or 'offswitch' on its document

retention policy conceming email" and that Samsung's email policy allowed emails to be deleted

automatically on a rolling basis. Id. at333. 'oAs a resull Samsung failed to produce a single

technical e-mail in this highly technical patent litigation because none had been presemed." Id.

(emphasis added). The court fudher found that "Samsung's actions go far beyond mere

negligence, demonstrating lz owing and intentional conduct that led to the nonproduction of all

technical e-mails." /d at 338 (emphasis added).

5. Evidence Regarding Micron's Deliberate Destruction of RelevantDocuments

Despite Micron's participation in the conspiracy against Rambus and RDRAM, its

concem about the antitrust consequences, and its initiation of patent litigation against Rambus as

discussed in Secfion II(A)-(B) above, Micron witnesses have testified that they desfoyed, altered,


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or failed to retain relevant documents long after a preservation duty attached under Defendants'

approach, including in many cases long after Micron had commenced litigation with Rambus.

For example, as of May 2001, Micron did not arshive its emails.

Exh.92 $/2101Julie Smith Deno. at

5:3-6:15, 71:14-73:25). S"" o/- !*hj11Z]1/09 !.ith Depo. at 7:l l-12, 8:2-5). IlFld:..93 (2/14/06 Smith Depo. at 53:8-

53 :25, 5 4 :21 -5 5 :13, 7 4 :5 -l 4).

Id. at69:25-72:9.

Critical witnesses acknowledged their destruction of emails relating to Rambus

and/or pricing discussions with competitors, even after Micron sued Rambus. Examples include:

. Steve Appleton: Micron CEO Steve Appleton testified in April 2001 - after

Micron initiated litigation against Rambus -

E,h. 66 (4120/01 Appleton Depo. at

234:25 -235:l). Se e also E h. 67 (5 /7 /08 Appleton Depo. at 148:22-149 :19).

,See Exh. 55 (Radford Depo. Exh. 216); Exh. 85 (10/10/07

Radford Depo. at 133:16-135:12).

Mike Seibert: Mike Seibert, Micron's Marketing Enabling Manager with

responsibility for promoting DDR over RDRAM as the next industry standard,

testihed that

Exh. 87 (8/3/01 Seibert Depo. at 12:20-13:10, 16:l-9, 52:14-

53: I 0). See a/so Exh. 88 ( I 0/30/07 Seibert Depo. at 30:3-8, 54: I 6-55: I l, 58:4-

24) (describing Mr. Seibert's responsibilities).

o Kyle Daniels.' Micron executive Kyle Daniels, Micron's marketing manager

for memory modules during the relevant period, testified in July 2001 that I7634979.l

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Eldl.. 69 (7 /31 /01 Daniels Depo. at 9:4-9, 25:17 -27 :19).

The evidence at trial will show that Micron deshoyed relevant evidence, including

communications with OEMs, such as Dell, demonstrating RDRAM demand (see, e.g.,Exh.63

(DEL-RAMB 0l 8056 produced by Dell). The evidence at trial will also show that Micron

destroyed documents regarding Defendants' secret, coordinated efforts to kill RDRAM and

promote DDR. See, e.9., Exh. 30 (FIR905_387986, produced by Hynix) (7/24100 Appleton-Park

email discussing "what we want to do with [Rambus]"); Exh. 53 (ITAG-00259310, produced by

Infineon) Qn2/99 email from Mr. Tabrizi regarding HSDRAM agenda); Exh.20 (lBW2 149399,

produced by IBM) (10/19/98 email listing "noise creating ideas" and "carefully planted rumors"

about RDRAM).

il. ARGUMENT

As the above summary demonstrates, the evidence shows Defendants destroyed

documents relating to the parties' claims and defenses in this case (even without resort to the

improper presumptions Defendants seek to employ). As explained in Rambus's briefing on the

collateral effect of the Delaware Ruling, Defendants' proposed standards for spoliation are

inconect. So are their methods of drawing inferences from the facts. However, if the Coud were

to adopt Defendants' proposed approach, the Court would need to find that each ofthe

Defendants engaged in intentional spoliation resulting in sufficient prejudice to Rambus to

warrant terminating or issue sanctions or adverse inference instructions.

A. Under Defendants' Proposed @ut Inappropriate) Approach To The DutyTo Preserve Documents. Defendants Had A Dutv To Presene RelevantEvidence Since At Least 1997

Defendants assert that a duty to preserve documents through a litigation hold arises

when litigation involving ary cause of action is "reasonably foreseeable" and a party therefore

"knew, or should have known, that a general implementation of [its document retention] policy

was inappropriate," Micron Response at 5, 8-9; Micron Reply at I:7-8, 3:16-18 ("Spoliation does

not require anticipation ofa specific cause ofaction...."); Samsung Reply at 2:2-3 (same).7634979.1

RAMBUS INC.'S BRIEF REGARDING DEFENDANTS' SPOLIANON OF EVIDENCE

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Defendants' proposed standard is contrary to California law, which will not find a duty to

preserve documents unless litigation is "ongo ing or clemlyforeseeable. . . involving claims

similar [to those at issue in the present suit]." Willmd v. Caterpillar,40 Cal. App. 4th 892,922-

23 (1995) (emphasis added);see generallyRambus Replyat 2:6-3:14. Moreover, Defendants'

argument tries to extend even the "reasonably foreseeable" standard beyond recognition to

encompass a mere generalized poss ibility of any futwe litigation.

If the Court were to adopt Defendants' approach, the Court should find that each

of Defendants had a duty to preserve relevant documents since at least 1997. By this time,

Defendants had already come together with other DRAM manufacturers to resist the

Rambus/lntel partrrership and spread 'tarefully planted rumors" about RDRAM, Exh. 20 (IBN{/2

149399). Defendants were aware that their misconduct violated antitrust laws.rr lndeed, in

preparation for potential litigation, Defendants retained lawyers to 'ohandle" various issues,

including "antitrust concems,oo Exlt.6 (HR905_136816), and developed a coordinated litigation

strategy against Rambus that included patent and antitrust claims. See supra, Sections II(A)-(B).

Upon receipt of the June 2002 DOJ subpoenas, Hynix, Micron, and Samsung were certainly

obligated to preserve documents relevant to that investigation and to clearly foreseeable litigation

related to the same conspiracy, according to any duty standard.

Under Defendants' overly expansive view ofthe preservation standard, a duty to

preserve documents related to this litigation also arose when Defendants recognized and prepared

for potential seprate patent litigation with Rambus. By at least JuJy 1997 , Defendants were

aware ofthe broad scope of Rambus's intellectual property and discussed their beliefthat

"Rambus will sue individual companies." Exh. I (RX-0966 at 3), Synclink members, including

Defendants, were asked to gather critical "information relevant to prior art and Rambus filings" in

preparation for litigation. .ld (emphasis added). Defendants' duty to prcserve documents under

" See, e.9., Exh. 23 (6303 at l) ("[P]lease visit me if I end up in jail."); Exh.24 (6417 at3)(January 1 999 presentation advising that the DRAM manufacturers act under the umbrella of acorporation in an effort to "[i]ndemni$ member companies from a4!i:quq{&bil!ty. See alsoExh. 25 (Lauer Depo. Exh. l4t; (Sept6mber 2000 emlail regarding I Exh. 78(l 2 | 1 9 / 07 La;ur;r D epo. at 7 7 :23 -7 8 :2, 7 8 :7 -7 9 :1).76v979.1

RAMBUS INC.'S BRIEF RECARDING DEFENDANTS' SPOLIATION OF EVIDENCE

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Defendants' approach then became clearer in the summer of 2000 when Micron and Hynix sued

Rambus as pan ofa coordinated dual-front litigation strategy. See Hynix,2009WL292205 at

r .5 .12

B. Under Defendants' Proposed @ut Inappropriate) Approach ToSpoliationn Defendants Intentionally Destroyed Documents InAnticipation of Litigation

If the Court were to adopt Defendants' proposed approach to spoliation, then it

should find that Defendants intentionally destroyed documents.

As explained above, despite the fact that it was anticipating litigation (under its

erroneous approach to the duty issue), Hynix undertook no efforts in 1997 or 1998 to preserve

potentially relevant evidence and instead in wholesale document and email destruction.

Further, Hynix

.9ee Exh. 9l (213/05 Shin Depo. at2ll:9-212:18,219:6-9,231:21-24).

,See Exh. 79 (11116104

l0l:23-102:l); Exh.84 (12/7104 Olson Depo. at223:20-224:4). For example,

See Exhs.60 & 61 (Olson Depo.

Exhs. 19 & 20); Exh.84 (1217/04 Olson Depo. at260:6-262:15). Under Defendants' erroneous

approach, Hynix knew or should have known that the documents destroyed were potentially

relevant to antitrust litisation.

'' With respect to Samsung, Rambus contends, as it did in the recent unclean hands trial in theNorthern Distric! that insuffrcient anticipation of patent litigation with Samsung ever existed togive rise to a duty to preserve, and that in any event the October 2000 license agreement betweenRambus and Samsung extinguished any duty that previously existed. Samsung disagreed,arguing that the possibility that Rambus could, at some hlpothetical time years later, terminatethe license was sufficient to impose a continuing duty. Samsung is wrong, but if its standard didapply, then it had a continuing duty to preserve. Samsung's hiring of litigation counsel and closemonitoring of Rambus litigation evidences that it actually contemplated the potential for futurepatent litigation with Rambus.163/.979.1

JinHo LeeDepo. at 184:19-185:1, 185:20-186:2); Exh.76 (l/31/05 SungChul Kim Depo. at


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Under Defendants' spoliation approach, Samsung also intentionally destroyed

documents in anticipation of litigation. Samsung failed to implement any litigation hold for

Rambus-relaled documents until June 2005 at the earliest - well after it hired litigation counsel to

monitor Rambus litigation and after it was subpoenaed by the DOJ - resulting in the delibemte

destruction of relevant documents. In addition, according to Defendants' proposed but inconect

standard on collateral estoppel, the Court would need to find thal the Mosaid spoliation order

conclusively establishes for purposes of ry'ris lirigation that Samsung intentionally destroyed

evidence in anticipation of litigation. The New Jersey District Court found that "Samsung's

actions go far beyond mere negligence, demonstrating ln owing and intentionol conduct Ihat led

to the nonproduction of all technical e-mails." Compare Mosaid, 348 F. Supp. 2d at339

(emphasis added), with Micron Response at l :8- l0 ('Judge Robinson's factual findings

conclusively establish that Ramous intentionally destroyed documents in anticipation of

litigation."); Samsung's Opening Brief, filed Mar. 10,2009, at 6:l5-16 ("Samsung is entitled to

relief purely based on findings in the [Delaware] Opinion").

Micron also intentionally destroyed documents under Defendants' spoliation

approach. Numerous Micron witnesses have testified that they deshoyed, altered, or failed to

retain relevant documents well after Micron's duty to preserve arose under Defendants' approach,

including after litigation with Rambus had commenced, 1ee, e.g.,Exh. 66 (4/20101 Appleton

Depo. at234:25-235:l) (testifying in April 2001

generally supra, Section II(C)(5),

C, Under Defendants' Proposed @ut Inappropriate) Approach ToSpoliation, Defendants' Spoliation Of Evidence Prejudiced Rambus

The parties agree that the Court must impose a burden-shifting approach in

determining the existence and degree ofprejudice, although they disagree about the

implementation of that approach, The parties agree that under Califomia law, the moving party

must make a prima facie showing that the responding party destroyed documents that had "a

substantial probability of damaging the moving party's ability to establish an essential element of

-25-R.AMBUS INC.'S BRIEF REGARDING DEFENDANTS' SPOLIATION OF EVIDENCE

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[their] claim[s] or defense[s]." Wliams v. Russ,167 Cal. App. 4th 1215,1227 (2008), If this

burden is met, the burden shiffs to the responding party to show that the documents available to

the moving party are suffrcient for it to t'mount an adequate defense." Id. at 1227 n.5.

Defendants suggest howeveq that the destruction of documents is sufficien! by itself, to meet the

burden and establish a primafacie case of preludice. ,Seq e.g., Micron Opening at 10:10-12;

Micron Reply at 7:2-4. This is not conect. Moreover, Defendants suggest that a party can never

rcbut a prima facie case ofprejudice unless it kept a written record of the substance of the

documents that were destroyed or can otherwise reconstruct all that was destroyed, which is also

not correct. See, e.9., Micron Opening at 9:18-19. If the Court were to adopt Defendants'

proposed but erroneous standard for prejudice, then the Court should find that Defendants'

spoliation of evidence prejudiced Rambus.

As explained in Section II above, Defendants' spoliation was part ofa larger

coordinated conspiracy against Rambus tlat began to form as early as 1997 to prevent RDRAM

from becoming tle dominant memory technology. Under Defendants' approach, the destruction

of documents was so widespread that it was not limited to specific categories of documents, but

rather involved "all aspects" of Defendants' business operations. Defendants kept no written

record of what was destroyed. While it is impossible to know every.thing that Defendants

destroyed, the evidence at trial will show that the spoliated evidence included documents such as

(l) documents relating to communications among and meetings between Defendants;

(2) documents relating to the activities of the Synclink Consortium and similar organizations;

(3) documents relating to Defendants' concerted effofts to promote DDR; (4) documents relating

to meetings with Rambus and/or Intel; (5) documents relating to communications with OEMs

and/or other DRAM supplien; (6) documents relating to the performance and cost of RDRAM;

(7) financial documents; (8) documents related to Defendants' coordinated dual-front litigation

strategy; and (9) internal emails.

The evidence at trial will demonstate that the destroyed documents would be

relevant to issues in this case, including, but not limited to, the following:

-26-RAMBUS INC.'S BRIEF REGARDING DEFENDANTS' SPOLIATION OF EVIDENCE

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o. Communications among Defendants and other DRAM suppliers regarding the

pricing and production of RDRAM;

. The scope ofthe price fixing conspiracy to which Hynix and Samsung pledguilty and in which Micron admittedly participated;

. Communications between Defendants and OEMs regarding RDRAM pricingand pricing projections, the production of RDRAM, and the costs tomanufacture RDRAM;

r Defendants' artificial restriction of the production of RDRAM, includingDefendants' coordinated refusal to meet OEMs' demand for RDRAM;

r Defendants' purported efforts to develop and promote altematives to RDRAM;

r Defendants' intentional interference with Rambus's business relationships withIntel and other companies;

. The cost of producing and performance of RDRAM, SDRAM, and DDR;

. Projections of RDRAM's future market penetration and pricing; and

r Defendants' purported efforts to develop and promote RDRAM.

Unlike the categories of materials that Defendants have wrongly alleged Rambus

failed to preserve, one would expect to find the best evidence for the above categories in

Defendants' frles. For example, evidence relating to issues such as commrurications among

Defendants would only come from Defendants' files. The evidence will show that a number of

Hynix, Samsung, and Micron executives, who were directly involved with Rambus or RDRAM,

and/or communicated with competitors, were not properly preserving relevant emails.

Hynix did not properly preserve its email with competitors during the relevant

time period. For instance, Hynix's Farhad Tabrizi testified that

,See Exh. 98 (8/10/05 Tabrizi Depo. at

67:21-68:4). Then, when Mr. Tabrizi left Hynix in 2003, the

See Exh. 84 (1217104 Olson Depo. at210:5-17); Exh. 83 (1 1/4/04 Olson Depo. at

38:22-39:22). Therefore, it is not surprising that Mr. Tabrizi's emails sent to Hynix's co-

conspirators were, most likely, destroyed. For instance, Rambus's review of Infineon's document

7634979.l


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production reveals emails from Mr. Tabrizi to Infineon that were not preserved and produced by

Hynix. See, e.g., Exh.53 (ITAG-00259310-31l, 9122199 emul from Mr. Tabrizi to lnfineon,

Micron, and other Hynix executives regarding joint meeting); Kim Decl., !f 106ft).

Samsung, too, engaged in unfettered destruction of its email resulting in the loss of

relevant documents that would help Rambus illustrate the scope, nature, and impact ofthe price-

fixing conspiracy. Indeed, Samsung automatically destroyed e-mails up to at least June 2005 on

an ongoing basis. See supra. Section II(B)(3) (citing testimony of Jay Shim, Jon Kang, and

Samsung's 30(bX6) designee explaining that Samsung automatically erased emails after one to

two weeks); see also Mosaid,2004 WL 2550306, at *3 (holding that Samsung engaged in

widespread spoliation of email and failed to stop the automatic destruction of email after

commencement of another DRAM-related litigation matter). An example of Samsrmg's email

destruction is an email from Samsung's Vice President Il Ung Kim, which was produced by

Toshiba in which Mr. Kim tells Toshiba to "hang in there" in response to pressure from Dell to

lower prices in Spring 2001. See Exh. 50 (TAEC-RMBS-v-MU2569). A review of Samsung's

document production demonstrates that it destroyed this email. Kim Decl., fl 104(a). The

evidence at trial will show that Samsung deshoyed and failed to produce other emails relating to

its commnnications with its competitors about the pricing and production of RDRAM. See, e.g.,

Kim Decl., !f!l I 04(b-e); Exh. 5 I (ITAG-00263188); Exh. 52 0TAG-003033228).

competitors. As of May 2001, Micron's email system was not archived.

Exh. 92 (5/2/01 Smith

Depo. at 5:3-6:15,71:14-73:25). See alsoExh.93 (2/14/06 Smith Depo. at7:11-12,8:2-5).''

Exh.93 (2114106 Smith Depo. at

I l;xh. 93 Qll4l06 Smith Depo. al69i25-7219).were occurring throughout 1999-2002. See Exh. 56cf such activities were communicated intemally at(Micron Conduct Statement). The results of such activities were communicated intemally at

Micron via email. See id. at MSF048731, lines 2-5 (noting that Mr. Sadler shared information heleamed from his contacts with others at Micron, and the information was shared orally and byemail).7634979.1

RAMBUS TNC,'S BRIEF RECARDINC DEFENDANTS' SPOLIAT1ON OF EVIDENCE

Micron also engaged in the destruction of email communication with its

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53:825, 54:21-55:13,74:5-14). As a result, email relevant to this litigation was destroyed. For

instance, a June 7, 2000 email from Hynix's Farhad Tabrizi (which appears to have somehow

slipped past Mr. Tabrizi's email destruction) was sent to, among others, Messrs. Lee, Mailloux,

Ryan, and Sadler of Micron. Exh. 57 GfR905_435633). Based on Micron's document

production. it appears that ,rozre of these individuals preserved this email. Kim Decl., tf 105(e).

The missing email discussed exactly the type of communications that would be relevant to this

litigation: Defendants' RDRAM pricing to Dell, and Defendants' desire to tell the "InteVdell

folks" to "get your head out ofyoul ***t' with respect to RDRAM. Exh, 57 qfR905_435633).

The evidence at trial will also show that Micron destroyed and failed to produce olher emails

relating to its communications about RDRAM. See e.g., Exh. 63 (DEL-RAMB 018056 produced

by Dell regarding Dell RDRAM Demand); Exh. 53 (ITAG-002593 10, produced by Infineon);

Exh. 20 (IBIW2 149399, produced by IBM); Kim Decl., fl 105(a-d).

Rambus is, of course, unable to know what relevant inter-Defendant

communications were destroyed by a// recipients. Moreover, one can infer that individuals such

as Farhad Tabrizi, Il Ung Kim, and Steve Appleton communicated internally about the price

fixing conspiracy in addition to communicating with competitors. Due to Defendants' destruction

of documents, Rambus and the Court will never know the full nature and substance ofthe wholly

intemal communications relevant to this litigation. Therefore, under Defendants' proposed

prejudice approach, this Court should presume that Defendants destroyed correspondence

relevant to this case and that it was harmfirl to Defendants' defense of this litigation. See, e. g. ,

Micron Opening at I l:18-21 (speculating about what "lost" emails might have shown).

In addition to email, Rambus will show that Defendants destroyed relevant

"paper" evidence exchanged between Defendants, including documents exchanged in fu(herance

of the conspiracy to prevent RDRAM from achieving market success. As shown in Section II

above, Defendants all engaged in what Defendants would call large-scale destruction of hard

copy documents. As discussed above, Hynix admitted that it destroyed more than 550 boxes of

documents in 2002. Samsung's President Jon Kang, who was involved in Samsung's marketing

of RDRAM in the 2000 time frarne, testified that he would personally rip up his documents and7634979.1

RAMBUS INC.'S BRIEF RECARDING DEFENDANTS'SPOLIATION OF EVIDENCE

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throw them away as part of his regular 'ogarbage flush." Other Samsung witnesses who worked

on RDRAM admitted to throwing away their company-iszued notebooks. See Exh. 74 (7 /20/07

Yeongho Kang Dep. at93:17-94:6); Exh. 77 (8/23107 K.H. Kyung Depo. at22:12-23:4);

Exh.75 (8/22107 M.H. Kim Depo.at64:22-66:12). Micron witnesses have also admitted to

destroying a range of"papeC' documents. See Exh. 69 (7l3ll0l Daniels Depo. at9:.4-9,25:.17-

27:19)

Exh. 87 (8/3/01 Seibert Depo. at 52:14-53:13)

Ifthis Court adopts Defendants' prejudice

and relevance arguments (which Rambus disputes), then this Court must presume that the paper

docurnents shredded, bumed, and otherwise destroyed by Defendants included relevant

documents that would have been harmful to Defendants' defense here.

The above are merely examples ofthe types of evidence destroyed by Defendants

and is not meant to be comprehensive.la

D. Under Defendants' Proposed @ut Inappropriate) Approach ForSanctions, Rambus is Entitled to Proportionate Sanctions

l. Under Defendants' (Inappropriate) Approach, Rambus Is EntitledTo Terminating Sanctions

If the Court were to adopt Defendants' proposed approach for spoliation and

terminating sanctions, it would need to issue an order striking Defendants' answers and granting

default judgnrent against Defendants on each of Rambus's claims. In addition, the Court would

need to dismiss Micron's cross-claims (i,e., its Cartwright Act claim, unfair competition claim,

and intentional interference claim)ls and Samsung's remaining cross-claims (i.a., its Section

ra As explained in prior briefing, alleged misconduct by Rambus in other litigation has norelevance to this litigation. However, to the extent that Defendants claim that Rambus's allegedlitigation misconduct elsewhere caused prejudice to their ability to defend this case, Rambusintends to present evidence of Hynix's litigation misconduct in the Northem District of Califomiapatent cases. See supra, Section II(BX2); see also Micron Response at l0:6-18.15 Rambus notes that this Court had announced its intention to grant Rambus's motion forsummary judgment, filed on May 9, 2008, with respect to Micron's Cartwright Act claims. Withrespect to Micron's unfair competition and intentional interference causes ofaction only, theCourt continued the hearing, pursuant to Code of Civ. Proc, $ 437c(h), rmtil the completion ofcertain remaining discovery. ,See Aug. 1, 2008 llrg Tr. at31:5-27. On November 20,2008,Rambus informed the Court that that discovery had been completed, that Micron and Rambus7634919.l

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17200 claim based on spoliation allegations and its intentional interference with prospective

economic advantage claim). As explained above, under Defendants' view of the law and

application to facts, Defendants' deliberate misconduct has seriously impaired Rambus's ability

to litigate this case, and terminating sanctions for Defendants' spoliation are therefore justified,

2. Under Defendants' (Inappropriate) Approach To Spoliation, TheCourt Should Dismiss Micron's And Samsung's Cross-ClaimsUnder The Doctrine Of Unclean Hands

The requisite findings to establish the unclean hands defense are essentially the

same as those required to impose sanctions. Therefore, if terminating sanctions are justified

under Defendants' view ofthe law and facts, the Court should also dismiss Micron's and

Samsung's cross-claims under the unclean hands defense if it adopts Defendants' proposed (but

inappropriate) approach. As explained above, Micron and Samsung destroyed documents in a

deliberate attempt to gain an unfair advantage in litigation against Rambus.16

3. According to Defendants' Proposed @ut Inappropriate) Approachfor Spoliation And Collateral Estoppel, Terminating SanctionsShould Be Imposed Against Samsung

If the Court adopts Defendants' proposed standards for spoliation and collateral

estoppel, the Court would need to find that the doctrine of collateral estoppel requires that

terminating sanctions be ordered agains Samsung striking its answer to Rambus's complaint,

entering judgment on Rambus's complain! and dismissing Samsung's remaining cross-claims

(t e., its 17200 claim based on spoliation allegations and its intentional interference with

prospective economic advantage claims). Under Defendants' proposed (erroneous) approach, the

spoliation issue resolved against Samsung by the New Jersey District Court in the Mosald

litigation is "in substance the same" to the spoliation issue in this case for purposes ofcollateral

agree that no further argument or briefrng is required, and that the motion should be submitted onthe current record.16 Micron (erroneously) asserts that "spoliation of evidence is frmdamentally different than othertypes of misconduct considered in prior cases declining to dismiss antitust claims under thedostrine of unclean hands" because "spoliation infects the very merits of plaintiffs claim."Micron Response at lS;4-T. If Micron is conecl which Rambus disputes, the Court would needto dismiss Micron's antitrust claims - i.e., its Cartwright Act claim and the Section 17200 claimbased on alleged conduct in violation ofthe Cartwright Act, the Sherman Act, and the ClaytonAct - under the doctrine of unclean hands.7634979.1

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estoppel. Compare Samsung Reply, filed April 17,2009,a13:9-21,with Mosaid,348F, Supp.2d

at 338-39. Among other things, the New Jersey Court found that (l) Samsung failed to institute a

"litigation hold" or "off switch" for its document retention policy which automatically deleted

emails on an ongoing basis; (2) no technical emails were preserved from the Semiconductor

Division's DRAM Group (the same group that worked on RDRAM) between September 2001 to

late 2004; (3) email was used by memory designers for various aspects of Samsung's business;

and (4) Samsung's actions demonstrated "knowing and intentional conduct." ,See.rapr4 Section

II(BX4). According to Defendants, it is inelevant that the finding that Samsung engaged in

"breathtaking and absolute" spoliation was rendered in a patent case. Mosaid, 2004 WL

2550306, at *3. Under Samsung's proposed collateral estoppel standards, it would be

conclusively established based on the New Jersey Disfict Court's findings that Samsung

intentionally destroyed documents in anticipation of litigation, and these findings would be

sufficient to establish prejudice in this case as a matter of law.17

4. Under Defendants' (Inappropriate) Approach To Spoliation, TheCourt Should Impose Issue And Evidence Sanctions To PreventPrejudice Against Rambus

The same predicate findings that are required to impose issue sanctions also are

required to impose terminating sanctions, See New Albertsons,Inc. v. Superior Court, 168 Cal.

App. 4th 1403,1428-34 (2008). Accordingly, absent terminating sanctions, and applying

Defendants' standards for issue sanctions, the Court should order that the following facts "shall

be taken as established" and that Defendants are prohibited from contesting the following issues

in this case:

o Defendants made concerted efforts to keep the price of RDRAM high and thesupply of RDRAM low;

17 Even if the Cdurt finds tlut terminating sanctions are not appropriate, under the Defendants'interpretation of the law, Samsung should not be allowed to dispute the New Jeney Court'sfindings at trial. Applying Defendants' standards for collateral estoppel, the Mosaid opinionclearly constitutes substantial evidence of Samsung's spoliation such that the jury should beinstructed that Samsung has been found guilty of spoliation by a federal court, and that the jurymay infer that the documents Samsung deshoyed would have been unfavorable to Samsung'scas'e and favorable to Rambus's. .See Evid. C;de 6 413.


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Defendants engaged in anticompetitive communications and informationexchanges conceming the pricing and production of DRAM, including RDRAM;

Defendants were aware in 2000 and 2001 that Dell and other OEMs needed lowerRDRAM prices in order to drive RDRAM into the mainsteam;

Defendants collectively refused to meet OEMs' pricing targets in 2000 and 2001;

Defendants agreed to keep DDR prices and price projections low in order to obtaindesign wins for DDR chips and modules insead of RDRAM;

At the time of and after tle November 1999 Camino launch, there was no technicalreason why RDRAM could not become tlre dominant memory technology;

At the time of and after the November 1999 Camino launch. there was no technicalreason why RDRAM could not have been used in a variety ofapplications;

Samsung sought to become the industry leader in both RDRAM and DDR;

Samsung prefened that RDRAM become a "niche" product as opposed to amainstream memory standard; and

Hynix and Micron participated in the price fixing conspiracy to which Samsungpled guilty.

If the Court applies Defendants' proposed legal standards for spoliation, Rambus also intends to

seek evidence sanctions by an order precluding Defendants from introducing evidence relating to

these issues.

5. Under Defendants' (Inappropriate) Approach To Spoliation,Adverse Inference Instructions Should Be Given

If the Court adopts Defendants' proposed approach to spoliation, Rambus also

intends to request that the Court provide adverse inference instructions against Defendants to the

jury. ,9ee Evid. Code $ 413 ("In determining what inferences to draw from the evidence or facls

in the case against a party, the trier of fact may consider, among other things, the party's ... willful

suppression of evidence relating thereto."). As explained above, there is substantial evidence

under Defendants approach to spoliation that Defendants destroyed innumerable documents about

"all aspects" of their businesses and failed to keep a record of what was destroyed. Therefore,

Rambus intends to request advene inference instructions that the evidence Defendants

"intentionally concealed or destroyed . . . would have been unfavorable to [Defendants]." CACI

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204asee also BAJI 2.03.rE Rambus also intends to request an instruction that the jury may regard

such an inference "as reflecting [the Manufacturer's] recognition ofthe strenglh of plaintiffs case

generally and/or the weakness of its own case." Bilwn v. AT&T Info. Sys, 13 Cal' App.4th 976'

992 (1993), overruled on other grounds by LaHn v. Watkiw Assoc. Indus., 6 Cal. 41h e4 Q993).

E. Even If the Court Does Not Impose Sanctions Or Give Adverte InferenceInstructions, Rambus Reserve lts Right to Offer Evidence ofIlefendants' Spoliation At Trirrl

To the extent that the Court finds that spoliation is relevant to claims and defenses

asserted by Defendants, Rambus reserves its right to offer evidence and findings regarding

Defendants' spoliation at Eial. Ifthe Court does not dismiss Defendants' Section 17200 claims

based on spoliation allegations prior to trial, Rambus intends to offer evidence of Defendants'

document retention policies and spoliation of evidence to demonstrate that Rambus's document

retention policies and practices were not untawfirl, unfair, or fraudulent under Section l72}O.te

Rambus also intends to assert evidence ofDefendants' unclean hands as an equitable factor

bearing on whether the Court should grant any relief Defendants seek for Rambus's alleged

spoliation.

Rambus also reserves the right to infoduce evidence of Defendants.' spoliation for

any purpose that the Court deems proper in response to a request from Defendants. For example,

if the Court ultimately were to allow Defendants to assert spoliation allegations with Rambus's

witnesses in order to attack their or Rambus's credibility (as Defendants have suggested they

intend to request the right to do), then Rambus would present evidence of witnesses' participation

in and awareness of Defendants' spoliation for the same purpose. Rambus may also offer

evidence of Defendants' spoliation to move to shift the burden of proof with respect to certain

l8 DeDendine on the evidence presented by Defendants at trial, Rambus may also seek adverseinferdnce initnrctions for Defe:ndants' failure to explain or deny evidence (CACI 205) and/or theirfailure to produce better evidence (CACI 203).le Rambus also reserves its right to ofer evidence of Defendants' spoliation to establish thatDefendants' unclean hands limit or eliminate their entitlement to relief under Section 17200'sremedial provisions. See Cortez v. Purolator Air Filtration Prods. Co.,23 Cal.4th 163' 180(2000) ('A court cannot properly exercise an equitable power without consideration oftheequities on both sides ofa dispute.').7624t%

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elements of its claims and defenses (Evid. Code $ 500); move to exclude the introduction of

evidence; or address associated document authentication problems. Rambus also intends to assert

evidence ofDefendants' unclean hands as an equitable factor bearing on whether the Court

should grant any relief Defendants seek for Rambus's alleged spoliation.

CONCLUSION

Ifthe Court adopts Defendants' proposed approach to spoliation, Rambus

respectfully requests that the Court find that Defendants engaged in spoliation of evidence under

those standards, strike Defendants' answers and grant default judgrnent in Rambus's favor, find

that Itambus is entitled to judgnrent as a matter of law on DefendanS' cross-claims' and impose

the other sanctions and/or adverse inference insructions set forth above.

DATED: April 20,2009 COTCHETI, PITRE & McCARTHY

-35-

MI,JNGE& TOLLES & OLSON

Attomeys for PlaintiffRAMBUS INC.

RAMBUS INC.'S BRTEF REGARDINC DEFENDANTS' SFOLIATION OF EVIDENCE

Rambus Brief Regarding Defendants Spoliation of Evidence 042009[1]

Documents

Transcript of Rambus Brief Regarding Defendants Spoliation of Evidence 042009[1]