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January 8, 2008

Sanctioned

Six attorneys involved in a Qualcomm video patent assertion fiasco against Broadcom were sanctioned for "monumental" discovery violations, and referred to the State Bar of California for possible discipline. Presiding U.S. Magistrate Judge Barbara Major found:

[The attorneys] assisted Qualcomm in committing this incredible discovery violation by intentionally hiding or recklessly ignoring relevant documents, ignoring or rejecting numerous warning signs that Qualcomm's document search was inadequate, and blindly accepting Qualcomm's unsupported assurances that its document search was adequate.

Judge Major harshly criticized and sanctioned Day Casebeer Madrid & Batchelder attorneys James Batchelder, Adam Bier, Kevin Leung, Christian Mammen and Lee Patch, along with Heller Ehrman's Stanley Young, in a 42-page order that chronicles the criticality of the deception, its unraveling, and the aftermath denouement.

As the case progressed, Qualcomm became increasingly aggressive in its argument that it did not participate in the JVT during the time the JVT was creating the H.264 standard.[P]articipation in the JVT in 2002 or early 2003 during the creation of the H.264 standard would have prohibited Qualcomm from suing companies, including Broadcom, that utilized the H.264 standard. In a nutshell, the issue of whether Qualcomm participated in the JVT in 2002 and early 2003 became crucial to the instant litigation.

[T]here is clear and convincing evidence that Qualcomm intentionally engaged in conduct designed to prevent Broadcom from learning that Qualcomm had participated in the JVT during the time period when the H.264 standard was being developed. To this end, Qualcomm withheld tens of thousands of emails showing that it actively participated in the JVT in 2002 and 2003 and then utilized Broadcom’s lack of access to the suppressed evidence to repeatedly and falsely aver that there was “no evidence” that it had participated in the JVT prior to September 2003. Qualcomm’s misconduct in hiding the emails and electronic documents prevented Broadcom from correcting the false statements and countering the misleading arguments.

The Federal Civil Rules authorize federal courts to impose sanctions on parties and their attorneys who fail to comply with discovery obligations and court orders. There is no requirement under this rule that the failure be willful or reckless; “sanctions may be imposed even for negligent failures to provide discovery.” Fjelstad v. Am. Honda Motor Co., Inc., 762 F.2d 1334, 1343 (9th Cir. 1985).

Qualcomm’s claim that it inadvertently failed to find and produce these documents also is negated by the massive volume and direct relevance of the hidden documents... Qualcomm’s conduct warrants sanctions.

As to Qualcomm's law firm representation:

It is inconceivable that these talented, well-educated, and experienced lawyers failed to discover through their interactions with Qualcomm any facts or issues that caused (or should have caused) them to question the sufficiency of Qualcomm’s document search and production. Qualcomm did not fail to produce a document or two; it withheld over 46,000 critical documents that extinguished Qualcomm’s primary argument of non-participation in the JVT. In addition, the suppressed documents did not belong to one employee, or a couple of employees who had since left the company; they belonged to (or were shared with) numerous, current Qualcomm employees, several of whom testified (falsely) at trial and in depositions. Given the volume and importance of the withheld documents, the number of involved Qualcomm employees, and the numerous warning flags, the Court finds it unbelievable that the retained attorneys did not know or suspect that Qualcomm had not conducted an adequate search for documents.

[T]he Court finds it likely that... one or more of the retained lawyers chose not to look in the correct locations for the correct documents, to accept the unsubstantiated assurances of an important client that its search was sufficient, to ignore the warning signs that the document search and production were inadequate, not to press Qualcomm employees for the truth, and/or to encourage employees to provide the information (or lack of information) that Qualcomm needed to assert its non-participation argument and to succeed in this lawsuit. These choices enabled Qualcomm to withhold hundreds of thousands of pages of relevant discovery and to assert numerous false and misleading arguments to the court and jury. This conduct warrants the imposition of sanctions.

To address the potential ethical violations, the Court refers the Sanctioned Attorneys to The State Bar of California for an appropriate investigation and possible imposition of sanctions.

Nineteen attorneys had been in the dock over their handling of the case. Judge Major was carefully discriminatory in applying sanctions to those attorneys that participated in the case at the time and to the degree that they should have known better and acted otherwise.

Day Casebeer partner Paul Grewal responded shamelessly: "While we are disappointed with some of the court's conclusions, our attorneys here at Day Casebeer always held themselves to the highest standards of professional advocacy."

Lawrence Keeshan, a partner at Heller Ehrman, was pleased that the court did not sanction other Heller attorneys involved in the case. "However, we believe the sanctions imposed on Stanley Young are unwarranted," Keeshan tooted. "This is especially true as Mr. Young did not have the opportunity to tell his full story to the court, because he was prevented from doing so by the attorney-client privilege."

Qualcomm general counsel at the time, Lou Lupin, resigned in disgrace last August over the deception.

Broadcom vice president of IP litigation David Rosmann lamented: "I don't think anybody can look at this and feel happy."

Posted by Patent Hawk at January 8, 2008 12:09 AM | Inequitable Conduct

Comments

PH, how did Broadcom find out about the ruse?

Posted by: Enquirer at January 8, 2008 6:42 AM

Enquirer,

Legend has it that Bill Lee from Wilmer Hale (representing Broadcom) asked one of the Qualcomm employees a question about the JVT meetings during his examination of the employee (and supposedly he didn't already know the answer to the question). The employee revealed that he/she had received several e-mails regarding JVT meetings.

Flood gates opened.

Posted by: JD at January 8, 2008 10:55 AM

Enquirer,

Hyperlinks are wonderful, saving redundant explanation. Try the link for "video patent assertion fiasco."

Thanks for reading!

Posted by: Patent Hawk at January 8, 2008 1:26 PM