Chip-design firm got rid of evidence, regulators contend
WASHINGTON (Reuters) - Employees at technology company Rambus Inc. were given burlap bags to help gather and destroy potentially incriminating documents in the late 1990s, the U.S. Federal Trade Commission alleged in court filings on Friday.
Rambus engaged in a campaign of "massive" document destruction at least partly out of concern that some internal documents could be used to press antitrust charges against the company and invalidate its valuable patents, the FTC charged in a motion filed before administrative law judge James Timony.
"I definitely made an attempt to go through my files and look for things to keep ... as he had directed us to do," Rambus employee Richard Crisp said in a deposition excerpted by the FTC. "And everything else that I couldn't justify keeping, I put in a burlap bag that they gave us, and ... I presume they shredded it."
The FTC told Timony that Rambus had forfeited its right to a trial. It asked the judge to issue an immediate judgment against the company and move straight to the penalty phase of the case.
"We believe that the nature of Rambus's conduct seriously undermines the FTC's ability to have a fair trial," said M. Sean Royall, deputy director of the FTC's competition bureau. "The unfairness here is so serious that we believe a default judgment is appropriate."
Rambus "intended to -- and did -- destroy documents it knew or should have known would be relevant to, or at a minimum discoverable in, future litigation of this sort," the FTC told Timony in Friday's filing.
Rambus maintains the document destruction was part of a the company's regular document retention policy. It has dismissed the FTC's motion as a legal maneuver designed to compensate for the weakness of its main case.
In an interview on Thursday, Rambus general counsel John Danforth said the move showed "a growing awareness that (FTC) cannot support the allegations on the merits."
At issue are antitrust charges the FTC filed against Rambus in August in which the agency charged the firm with improperly patenting key computer chip technologies.
The FTC contends Rambus participated for more than four years in an industry standard-setting group without disclosing it had a patent and several pending patent applications for specific technologies ultimately adopted by the group.
Among the documents targeted for destruction were records of Rambus's partcipation in the standard-setting group, called JEDEC, between 1991 and 1996.
The FTC's complaint could force Rambus to walk away from enforcing patent claims worth over a billion dollars in royalties from memory-chip makers.
Los Altos-based Rambus, whose technology is used in memory chips found in high-end PCs and servers, insists it did nothing wrong.
Danforth on Thursday dismissed the FTC's latest allegations as bogus claims recycled from past private lawsuits against the company. He said the tactic was designed "to distract attention from their failure of proof" or "to make us look bad in the eyes of the public."
In the motion made public on Friday, the FTC called Rambus's document retention policy a "sham." It cited an internal memo in which Crisp joked sarcastically about looking for a document "that hasn't fallen victim to the document retention policy :-)"
Two other employees cited by the FTC indicated the documents should be destroyed because they might be "discoverable" in future lawsuits against Rambus.
"The truth is that Rambus's document retetion policy was not adopted in the ordinary course of business," the FTC said in its motion. "Rather, it was adopted with one paramount goal in mind: The elimination of documents that were likely to prove damaging to Rambus in anticipated future litigation."
The comments first emerged in litigation between Rambus and Infineon Technologies.
"We are confident we can win our case with the proof that still exists," Royall said. "Yet it would be unfair to require the FTC to prove liability against Rambus if it can be shown that Rambus deliberately destroyed evidence it feared it could be used against it in litigation."
another link: http://www.bayarea.com/mld/mercurynews/ ... 977750.htm
Some surprise from a company with a long, lame history. :foo
FTC: Rambus destroyed papers
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nero wolfe
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