Toshiba was ordered to produce BIOS source code, which Toshiba represented as "unavailable."

Contrary to Toshiba’s repeated representations to the court, however, such BIOS code was available and in the possession of Toshiba. Toshiba’s 30(b)(6) witness confirmed this. Deposition of Toshiba’s 30(b)(6) Designee Norimasa Nakamura on April 27, 2007 at 139-140.

Toshiba continued to balk and dissemble, raising the court's ire.

Judge Everingham ordered the defendants to appear before the undersigned on June 14, 2007, to show cause why they should not be held in contempt for disobeying the court’s amended discovery order. Dkt No. 141. This court conducted that hearing pursuant to its contempt powers as well as those flowing from the Federal Rules of Civil Procedure.

Federal Rule of Civil Procedure 37 authorizes sanctions for failure to comply with discovery orders. This court may bar the disobedient party from introducing evidence, or it may direct that certain facts shall be “taken to be established for purposes of the action . . . .” Rule 37 also permits this court to strike claims from the pleadings and even to “dismiss the action . . . or render a judgment by default against the disobedient party.” Roadway Express, Inc. v. Piper, 447 U.S. 752, 763 (1980). “Rule 37 sanctions must be applied diligently both ‘to penalize those whose conduct may be deemed to warrant such a sanction, [and] to deter those who might be tempted to such conduct in the absence of such a deterrent.’” Id.. at 763-64.

Rule 37(b)(2) sanctions requires that any sanction be just and that the sanction must be related to the particular claim which was at issue in the order to provide discovery. Compaq Computer Corp. v. Ergonome Inc., 387 F.3d 403, 413 (5th Cir. 2004) (citations omitted) (sanction was a finding of alter ego rooted in party's behavior regarding discovery related to the alter ego issue). Further, the penalized party’s discovery violation must be willful. United States v. $49,000 Currency, 330 F.3d 371, 376 (5th Cir. 2003). Finally, a severe sanction under Rule 37 is only to be employed where a lesser sanction would not substantially achieve the desired deterrent effect. Id.

This court also has inherent powers to enter sanctions. The inherent powers of this court are those which “‘are necessary to the exercise of all others.’” Roadway Express, 447 U.S. at 764 (citation omitted). The contempt sanction is the most prominent inherent power, “‘which a judge must have and exercise in protecting the due and orderly administration of justice and in maintaining the authority and dignity of the court . . . .’” Id. (citation omitted). When inherent powers are invoked, however, they must be exercised with “restraint and discretion.” Gonzalez v. Trinity Marine Group, Inc., 117 F.3d 894, 898 (5th Cir. 1997). Thus, severe sanctions should be confined to instances of “bad faith or willful abuse of the judicial process.” Id. In any event, when parties exploit the judicial process, a court may sanction conduct beyond the reach of other rules. Natural Gas Pipeline v. Energy Gathering, Inc., 2 F.3d 1397, 1407 (5th Cir. 1993).

Ward found and ruled -

Based upon the record together with the arguments and statements made at the June 7, 2007 hearing, the court finds that the defendants willfully and intentionally violated the court’s amended discovery order, and that the defendants’ conduct constitutes discovery abuse. As sanction for the defendants’ conduct, the court

1. Limits the defendants’ time for voir dire to one-half of the amount of time that will be awarded to the plaintiff by the court;

2. Removes two juror strikes from the defendants, leaving them with a total of 2. The plaintiff will receive a total of 4 juror strikes;

3. Limits the defendants’ time for opening statements to one-half of the amount of time that will be awarded to the plaintiff by the court;

4. Limits the defendants’ time for closing statements to one-third of the amount of time that will be allotted to the plaintiff by the court;

5. Prohibits the defendants from proffering any expert testimony or opinion from any source during trial regarding non-infringement, save and except through cross-examination of the plaintiff’s expert witnesses;

6. Will instruct the jury that the court found that the defendants intentionally withheld documents from the plaintiff in willful violation of a specific court order to the contrary, and that the jury is entitled to consider this fact when determining the credibility of any witness called to testify in this matter; and

7. Awards attorneys fees and costs to the plaintiff that are attributable to the defendants discovery abuses in this case. In order to recovery such fees and costs, the plaintiff must, together with an application for such fees and costs, submit satisfactory proof that the fees and costs its seeks are attributable to the defendants’ discovery abuse.

The court has considered lesser sanctions, including monetary sanctions, but finds that such sanctions would be ineffective to cure the prejudice resulting from Toshiba’s conduct and deter such conduct in the future.