04/07/2010
Wall Street Journal – San Francisco Bureau
A federal judge in San Diego found that six attorneys who represented Qualcomm Inc. in a high-profile case against Broadcom Corp. should not face sanctions for mishandling evidence, but sharply criticized Qualcomm employees for withholding information from the lawyers.
U.S. Magistrate Judge Barbara Major, ending an evidence-handling flap that came to light in 2007, issued a ruling after an unusual trial that allowed the lawyers to seek documents and other evidence from their former client to try to counter Qualcomm’s assertions. She blamed the failure to produce documents that would have aided Broadcom on errors that resulted from “an incredible breakdown in communication” between Qualcomm and its external legal team.
But Judge Major concluded that the lawyers, while they made “a number of poor decisions,” made a reasonable effort to find relevant evidence and never acted in bad faith. She concluded that sanctions against the lawyers–first ordered in January 2008 but later vacated so a trial could be held in the case–should be dissolved.
The judge’s 12-page opinion, which was issued Friday and filed Monday, said the lawyers’ failures were exacerbated by “an incredible lack of candor on the part of the principal Qualcomm employees” about the existence of evidence that should have been produced to Broadcom. Qualcomm previously paid an $8.5 million penalty for its own role in the case, during which the court previously ruled the company had improperly withheld tens of thousands of documents.
Qualcomm, which competes with Broadcom in the market for communications chips, sued its rival in October 2005 in U.S. District Court in San Diego for allegedly infringing two patents on video-compression technology. In defending against those charges, Broadcom accused Qualcomm of violated an obligation to disclose its patents to an industry committee setting standards on the technology. Qualcomm insisted that it hadn’t participated in the group–called the JVT, for Joint Video Team–before the committee defined the standard in May 2003.
But in January 2007, near the end of a trial in the case, a senior Qualcomm engineer named Viji Raveendran made the surprise disclosure that emails about the standard-setting effort had been discovered on her laptop computer. Searches after the trial ended uncovered thousands of additional documents indicating Qualcomm personnel had participated in the standard-setting effort.
Judge Major wrote that Ms. Raveendran had repeatedly told Qualcomm’s outside attorneys that Qualcomm had no involvement in the JVT effort, despite the fact that she personally attended some of the group’s meetings. Asked about whether a consultant working for Qualcomm had attended JVT meetings, she answered that she did not know, “despite having exchanged approximately 118 messages” with the consultant, the judge wrote.
In all, the judge wrote, some 15 Qualcomm employees on 31 occasions provided assurances to Qualcomm’s lawyers that the company did not participate in the JVT process.
Ms. Raveendran could not be reached for comment. She has said in past declarations in the case that she did not intend to conceal or diminish Qualcomm’s involvement in the JVT.
Qualcomm issued a statement Tuesday in response to the judge’s ruling. “We have always maintained that this situation was the unfortunate result of a breakdown in communication and not deliberate misconduct by Qualcomm or its employees,” the company said. “The court’s opinion is consistent with that.”
The furor over the evidence was just one costly aspect of Qualcomm’s legal battles with Broadcom. During the struggle, Qualcomm’s general counsel resigned and the company suffered several other adverse court rulings. Qualcomm last April agreed to pay $891 million to Broadcom Corp. over four years to settle outstanding cases.
Rulings also affected lawyers involved in the patent case. A Silicon Valley firm that represented Qualcomm, Day Casebeer Madrid & Batchelder LLP, ended up being acquired by a larger firm, Howrey LLP. Four of six lawyers who had received sanctions stopped representing large companies and went into private practice, said Joel Zeldin, a San Francisco attorney representing two of the sanctioned lawyers. Other lawyers in the case worked for San Francisco-based Heller Ehrman LLP.
Mr. Zeldin applauded Judge Major’s ruling, and the court’s prior decision that the lawyers’ right to defend themselves in court outweighed the attorney-client privilege–which could have blocked them from producing email communications with Qualcomm and other evidence to prove their case. “It would have been such a devastating situation had the court found that our clients acted in bad faith,” Mr. Zeldin said. “She found the opposite.”
Mr. Zeldin added that the California State Bar Association, which had been reviewing the matter, also has said it will take no disciplinary action against the lawyers.
