Submitted by patentadmin on Tue, 11/02/2010 - 14:46

You can withhold affection; you can withhold support; but, you can’t withhold documents from production.

Some time ago, Qualcomm Incorporated sued Broadcom Corporation, alleging patent infringement. Other than the amount of damages sought by Qualcomm – a LARGE amount – there was nothing about this case that should have been of any great interest to anyone other than the parties themselves. Nothing, that is, until the “Court” (judicialspeak for the “judge”) found that Qualcomm intentionally withheld “tens of thousands” of documents that Broadcom had requested in discovery, documents which “directly contradicted a key argument advanced by Qualcomm in pretrial motions and throughout trial and supported a defense asserted by Broadcom.”

The Court held that six of Qualcomm’s outside counsel had “failed to conduct a reasonable inquiry into the adequacy of Qualcomm’s document product” and had ignored “warning signs” that the document search was inadequate and incomplete. As punishment, he entered sanctions of $8.5 million against Qualcomm. Qualcomm did not appeal the sanctions. Its outside counsel were required to show cause why they should not be sanctioned individually.

The attorneys’ defense was substantially handicapped by the fact that their communications with Qualcomm were protected by the “attorney-client privilege.” The privilege prevented the attorneys from disclosing the communications without the client’s approval – something Qualcomm was disinclined to grant. At this point, the Court apparently had a change of heart and came to the aid of the lawyers, holding that they “had a due process right to defend themselves” and, therefore, the “self-defense exception” to the attorney-client privilege applied. The Court granted the attorneys “an almost unlimited opportunity to conduct discovery” of their former client.

With the impediment removed, the disgraced attorneys sprang into action. Whatever may be said of their discovery efforts when representing Qualcomm, the accused attorneys left no discovery stone unturned when representing themselves. Over a period of 15 months, 1.6 million documents in the Qualcomm internal database were reviewed, of which 22,500 were found to be responsive to the attorneys’ discovery demands. Qualcomm’s outside law firm – which had formerly employed the “discovery six” – produced an additional 31,000 pages of hard copy documents and 39,000 electronic documents. The attorneys deposed 7 Qualcomm engineers, 3 in-house attorneys and 2 in-house paralegals.

Faced – or burdened – with all of this evidence, the Court reversed itself, finding that, while “this massive discovery failure resulted from significant mistakes, oversights and miscommunications … the [accused] Attorneys made significant efforts to comply with their discovery obligations … [and] the discovery responses were made after a reasonable, although flawed inquiry and were not without substantial justification … the evidence does not establish that any of the [accused attorneys] acted in bad faith.” The Court, therefore, declined to sanction them.

In reaching this decision, the Court noted that there had been “an incredible lack of candor on the part of the principal Qualcomm employees” who “misled” the outside attorneys in their efforts to comply with discovery requests. The Court did not reverse itself as to the sanctions imposed on Qualcomm. They paid the $8.5 million.

THE LESSON TO BE LEARNED: Discovery is serious business – produce whatever should be produced.

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