Post Process

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E-discovery Pitfalls: What a Tangled Web we Weave…

Posted by rjbiii on September 30, 2007

The second installment in our series on E-Discovery Pitfalls. has posted an article in which a team of lawyers is now trying to justify their management of discovery project gone wrong:

Attorneys who once represented Qualcomm Inc. in its ill-fated federal patent case against Broadcom Corp. have asked a judge to pierce their client’s privileged communications.

With the threat of formal sanctions bearing down on them, lawyers at Heller Ehrman and Day Casebeer Madrid & Batchelder — Qualcomm’s former litigation counsel — are asking for a rare exception to privilege so they can explain to the judge how their side failed to produce hundreds of thousands of relevant documents during discovery in the San Diego case.

Qualcomm, citing privilege, has refused to produce any evidence about the discovery error. Magistrate Judge Barbara Major has ordered the attorneys to show cause at an Oct. 12 hearing as to why they should not be sanctioned. Now, in advance of the hearing, many of the outside counsel have hired their own lawyers and have been trying to find a way to explain what happened.

(emphasis added)

Obviously, this is an ugly situation for all parties, and it looks to get uglier. Lifting privilege is one of those actions necessary to examine an attorney’s management of a case, and is an element in bar malpractice suits. All the elements of a worst case scenario seem present with respect to a lawsuit: unhappy clients, their former attorneys who find themselves threatened by a deadly triple-threat of sanctions, malpractice actions, and state bar proceedings. Now, whether the attorneys are responsible or not is something that will only come out with further examination, although there is ample case law that states that ultimately the buck stops with counsel. However, an attorney doesn’t actually physically collect the data, so counsel’s responsibility is far from absolute.

How did we get here? To find out, let’s reboot and start from the beginning.

In October 14, 2005, Qualcomm sued Broadcom for patent infringement on two of its patents. Broadcom counterclaimed, alleging that one of the patents (‘104 patent) was unenforceable, while asserting an affirmative defense of waiver to both patents. The trial took place in January 2007, with the outcome, as already mentioned, proving a disaster from Qualcomm. The jury found that Broadcom did not infringe either patent at issue, although the jury did agree with Qualcomm that the patents were valid and not “obvious.” A patent that makes an advance that is obvious is not valid.

The jury further returned advisory verdicts by finding that both patents should be declared unenforceable based on the doctrines of inequitable conduct and waiver. The court then entered a verdict finding, inter alia, that both patents were unenforceable due to waiver based on Qualcomm’s conduct before a standards-settings body, and then set a date for a hearing to show cause to determine the what the remedy for the waiver should be. Next:

After the verdict was entered, Broadcom again demanded discovery of Qualcomm’s records that previously had been concealed, but [w]hose possible existence was only revealed during Broadcom’s cross-examination of Qualcomm witness Viji Raveendran on one of the last days of trial. Thereafter, after over three more months of denials, refusals, and opposition, Qualcomm reversed its position, allegedly to avoid further dispute over the matter, and produced on April 13, 2007, over 110,000 pages of emails, company correspondence, and memoranda, and on May 15, 2007, over 120,000 more pages, some of which have now been filed with the Court, none of which have been disputed by Qualcomm.

(emphasis added)

On the substantive issues, the court found that Qualcomm employees acted contrary to an obligation incurred by its participation on a standards setting body (the “Joint Video Team” or “JVT”) to disclose the existence of both patents at issue, that Qualcomm “intentionally organized a plan of action to shield the ‘104 and ‘767 patents from consideration by the JVT with the anticipation that (1) the resulting H.264 standard would infringe
those patents and (2) Qualcomm would then have the opportunity to become an indispensable licensor…”

The court concluded that “Qualcomm, its employees, and its witnesses actively organized and/or participated in a plan to profit heavily by (1) wrongfully concealing the patents-in-suit while participating in the JVT and then (2) actively hiding this concealment from the Court, the jury, and opposing counsel during the present litigation.

Ahh. You were beginning to wonder where the discovery issues entered the picture, weren’t you? Well, we just found them. Part of the concealment and deception by Qualcomm, in its attempt to make its patents indispensable for a standard it was helping to craft, occurred during the trial, and this conduct was intentional and organized. On these actions, the court stated:

The Court’s finding as to Qualcomm’s wrongful conduct is further supported by evidence of widespread and undeniable misconduct of Qualcomm, its employees, and its witnesses throughout the present litigation, including during discovery, pre-trial motionspractice, trial, and post-trial proceedings.

Where the Attorneys went wrong…

The court then continued by listing specific examples of this misconduct, describing instances of “blatant” lying by Qualcomm’s witnesses during depositions and trial. It then found that counsel “participated in an organized program of litigation misconduct and concealment throughout discovery, trial, and post-trial before new counsel took over lead role…” (emphasis added).

The court’s first example of “stonewalling” is:

Broadcomsubmitted its First Set of Requests for the Production of Documents and Things (Nos. 1 -88), in which it requested

    “[a]ll documents concerning Qualcomm membership, participation, interaction, and/or involvement in setting any standard relating to the processing of digital video signals that pertains in any way to any Qualcomm Patent.”

Qualcomm counsel submitted in Qualcomm’s Response to Broadcom’s request on February 24, 2006, the following response: QUALCOMM will produce responsive non-privileged documents that were given to or received from standards-setting body responsible for the ISO/IEC MPEG-4 Part 10 standard, and which concern any QUALCOMM participation in setting the ISO/IEC MPEG-4 Part 10 standard, following the entry of, and pursuant to the terms of, a mutually agreed-upon protective order.

This response deflected the request as though it only addressed the MPEG-4 Part 10 standard and completely concealed Qualcomm’s extensive involvement with the JVT and the H.264 standard.

So the court feels that the response deliberately misinterprets the discovery request, inappropriately confining the subject matter to an issue favorable to Qualcomm while failing to address an unfavorable topic. The next example is one in which Qualcomm simply fails to produce over 200,000 pages of documents now known to exist in response to a discovery request:

On January 23, 2006, Broadcom also submitted Request for Production No. 49 requesting “[a]ll documents given to or received from a standards setting body or group that concern any standard relating to the processing of digital video signals that pertains in any way to any Qualcomm Patent, including without limitation communications, proposals, presentations, agreements, commitments, or contracts to or from such bodies.” (Doc. No. 543-2, Ex. E at 1.) Later on July 14, 2006, Broadcom submitted Request for Production No. 93 requesting “[a]ll documents referring to or evidencing any participation by Qualcomm in the proceedings of the JVT, the ISO, the IEC, and/or the ITU-T.” (Id.) Despite these requests, Qualcomm counsel produced none of the over two hundred thousand pages of emails and electronic documents concerning the JVT and the H.264 standard, which were clearly within the scope of the requests, and that were finally produced four months post-trial.

(emphasis added).

This is a failure to produce significant amount of data in response to a discovery request. The court is of the opinion that it is a deliberate act of omission, consistent with all the other forms of misconduct that have occurred.

The court next moves to Broadcom’s first set of interrogatories, and found that they “demonstrate[d] vividly the stonewalling denial and diversions of requests for evidence repeatedly directed to Qualcomm…” Qualcomm’s assurance that they performed a “reasonable search” when they in fact did not, compounded the errors. The court’s opinion becomes a litany of misdeeds: supplemental responses that were “calculatedly misleading” and “totally false;” counsel was unable to locate with alacrity company records from December 2003 forward…; counsel “inexplicably,” were unable to locate over 200,000 pages of relevant documents; were all “examples of Qualcomm counsel’s indefensible discovery conduct belie counsel’s later implied protestation of having been ‘kept in the dark’ by their client.” Counsel used a scientific expert to “step out of his field of expertise” to “sign a declaration vouching for the absence of any corporate records” of issues relating to the JVT, the standards-setting entity. Counsel then argued zealously that there was no evidence of their client’s participation in the JVT, contending that “the facts are undisputed.” While the “adamant and determined” denials of participation in or knowledge of the JVT was part of a “calculated orchestration of a deliberate plan to conceal evidence in the case.” The bottom line of the court’s voluminous examples come to this: Qualcomm and counsel lied about facts in the case while concealing evidence that would contradict those lies.

Read this damning paragrap from the opinion:

That same day, the Court received a separate letter of apology directly from Qualcomm’s General Counsel and Executive Vice President Louis Lupin, in which Mr. Lupin conveyed “[his] regret and apologies regarding the circumstances described in [Qualcomm lead trial counsel’s April 9 letter].” (Doc. No. 543-2, Ex. L at 1.) Mr. Lupin claimed that “QUALCOMM takes its obligations to the Court, opposing parties, and the community seriously, and will take all necessary steps to live up to the high expectations QUALCOMM has always set for itself.” (Id.) However, in an interview with the San Diego Union-Tribune about this post-trial production, Mr. Lupin reportedly stated that these newly discovered documents “‘on the whole’ bolstered Qualcomm’s arguments during trial” and that “‘[w]e kind of hurt ourselves’ by not finding them before trial.” Kathryn Balint, Another face-off in patent battles, THE SAN DIEGO UNION-TRIBUNE, May 31, 2007, at C1. The Court finds, in sharp disagreement to Mr. Lupin’s characterization of
the new evidence, that the documents in fact fully bolstered Broadcom’s waiver arguments and completely refuted Qualcomm’s waiver defenses at trial.

Because of this conduct:

Qualcomm has waived its rights to enforce the ‘104 and ‘767 patents and their continuations, continuations-in-part, divisions, reissues, or any other derivatives of either patent.

OK. We’ve now seen Qualcomm penalized, at least with respect to the patents they were attempting to protect by means of subtrefuge. Will that be it for Qualcomm? And what about the attorneys?

In an order filed concurrently with the Order on Remedy for Finding of Waiver, the court forced Qualcomm to pay for Broadcom’s attorney’s fees in the matter. Next, Magistrate Judge Barbara Lynn Major issued an order to show cause why sanctions shouldn’t be imposed:

In light of the District Judge’s findings, and based on its review of the documents submitted in connection with Broadcom’s Motion for
Sanctions [Doc. No. 540], this Court believes that the record evidence provides a basis for finding that Qualcomm’s attorneys violated this Court’s discovery and/or scheduling orders. As such, this Court is inclined to consider the imposition of any and all appropriate sanctions on Qualcomm’s attorneys, including but not limited to, monetary sanctions, continuing legal education, referral to the California State Bar for appropriate investigation and possible sanctions, and counsel’s formal disclosure of this Court’s findings to all current clients and any courts in which counsel is admitted or has litigation currently pending.

Counsel was ordered to appear before the magistrate judge on August 29, 2007. There has been an extension, and many of the attorneys who represented Qualcomm now have attorneys of their own to defend them on their management of what has been a disastrous turn of events for both client and advocate. We will update you as events develop.

One Response to “E-discovery Pitfalls: What a Tangled Web we Weave…”

  1. […] by rjbiii on October 4th, 2007 We posted an extensive discussion of the Qualcomm case in our second installment of e-discovery pitfalls. Now, posts an article stating a Day Casebeer partner is “highly contaminated.” […]

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