March 8, 2017

Spoliation on a “Staggering Scale” Results in Judgment Sanction in International Patent Infringement Case

by Alan Brooks

destroying esiIn Organik Kimya, San. Ve Tic. A.S. et. al. v. International Trade Commission, Consolidated Case Nos. 2015-1774, 2015-1833 (Fed. Cir., Feb. 15, 2017), Petitioners appealed a decision by the International Trade Commission (ITC) finding that they had spoliated evidence during a patent infringement suit filed by Dow Chemical. Dow alleged that Petitioners infringed four Dow patents. During discovery, Dow discovered spoliation “on a staggering scale.” After the Administrative Law Judge (ALJ) issued the discovery order and before Dow’s computer forensic experts could arrive in Turkey to review a certain laptop owned by Petitioners’ employee Dr. Perez, Petitions overwrote the laptop’s hard drive, backdated the computer’s internal clock, ran CCleaner to delete the C: Drive and D: Drive contents, and ran WinHex to test whether the information could be recovered.

Dow further discovered that another employee, Dr. Nene, who had not been identified by Petitioners, had smashed a computer hard drive with a hammer and destroyed a bag full of zip drives. Further, a third employee, Dr. Strozzi, “accidentally” left his computer at a rest stop. His other computer had been wiped. The ALJ found that Petitioners had spoliated evidence in bad faith in an egregious manner and entered judgment against Petitioners. Petitioners appealed to the ITC, who agreed with the ALJ and affirmed the judgment. Petitioners then appealed to the Federal Circuit.

The Federal Circuit agreed with the ALJ and the ITC, finding that “the facts of this case were so extreme” that the ALJ wished he could call it “gross bad faith” and finding that Petitioners’ attempts to deceive the ALJ made things worse. The Court found that the ITC did not abuse its discretion in affirming the ALJ’s decision, nor did it abuse its discretion in ordering a cease and desist and a limited exclusion order against Petitioners for a 25-year span. The Court affirmed the ITC’s decision.  Judgment entered against Petitioner’s for spoliation was again affirmed.

ILS – Plaintiff Electronic Discovery Experts