By Eric Schweibenz
On December 10, 2010, ALJ Theodore R. Essex issued the public version of Order No. 15 (dated July 23, 2009) granting-in-part Respondent NVIDIA Corporation’s (“NVIDIA”) motion to compel in Certain Semiconductor Chips Having Synchronous Dynamic Random Access Memory Controllers and Products Containing Same (Inv. No. 337-TA-661).

According to the order, NVIDIA moved to compel Complainant Rambus, Inc. (“Rambus”) to produce (i) “[a]ll materials that Rambus has been ordered to produce pursuant to privilege piercing orders in [other cases]”, (ii) “[a]ll discovery and testimony taken in connection with such materials”, and (iii) “[a]ll other documents related to Rambus’ document destruction or document retention policy.”  In support of its motion, NVIDIA asserted “that it is entitled to the requested documents either (1) under the crime fraud exception, or (2) because Rambus has waived its rights to assert that the requested documents are still privileged.”  Specifically with respect to its assertion of the crime fraud exception, “NVIDIA argues that [Rambus’s] spoliation of documents constitutes fraud, which warrants piercing Rambus’s claims of privilege” and for support pointed to the piercing orders of three district courts.  The Commission Investigative Staff supported NVIDIA’s motion, but opposed NVIDIA’s request that Rambus be required to file a certification of compliance.

In opposition, Rambus asserted that NVIDIA has failed to show (i) “that Rambus had a duty to preserve relevant documents with respect to this litigation,” thus implicating the crime fraud exception, (ii) “that Rambus has waived its privilege to the documents surrounding the implementation of its document retention policy,” and (iii) “the relevancy of the requested documents.”  In support of its assertions, Rambus “argues that it has appealed every order piercing its privilege” and “has not waived privilege since its [disclosure of the privileged communications] was required to defend itself in those proceedings where the district court pierced its privilege and ordered the privileged documents to be produced.”

Granting-in-part NVIDIA’s motion, ALJ Essex found that NVIDIA met its initial burden of showing that the documents it requested, namely those “destroyed under Rambus’s document retention policy,” “are relevant to this investigation, and in particular, to NVIDIA’s defenses.”  Specifically, those “documents related to the prosecution of the patents-in-suit; potentially damaging or invalidating prior art; documents pertinent to NVIDIA’s unclean hands defense, . . . and documents relating to domestic industry that pertain to Rambus’s licensing activities.”  Further, ALJ Essex determined that the crime fraud exception applied where “[t]he record shows that Rambus consulted with its attorneys regarding its document retention policy, which resulted in the destruction of evidence, which Rambus knew or should have known would be relevant in forthcoming litigations.”  ALJ Essex also noted that Rambus failed to cite “any legal authority for its proposition that [its] duty to preserve evidence in anticipation of litigation is limited to the instant litigation in which it is involved.”  With respect to Rambus’s waiver of its privilege, ALJ Essex found that “despite Rambus’s objections, it appears Rambus also voluntarily disclosed certain documents related to its document retention policy . . . [t]hus, to the extent Rambus voluntarily produced these documents, it does not appear that it ‘zealously’ protected it privileged materials.”  Accordingly, ALJ Essex granted-in-part the motion.