Qualcomm Attorneys Sanctioned $8,568,633.24 for Discovery Abuses

In the on-going saga of Qualcomm v. Broadcom, a judge has ordered Qualcomm to pay Broadcom $8.5 million in attorneys fees and costs for the mishandling of discovery in the case. QUALCOMM INC v. BROADCOM CORP, 2008 U.S. Dist. LEXIS 911 (S.D.Cal. 2008). After the conclusion of the trial in this patent infringement case, Qualcomm produced hundreds of thousands of pages of documents and emails that showed that they and their counsel had made material misrepresentations to the court. As a result, the court held that Qualcomm waived its right to enforce the patents. Qualcomm was ordered to pay all of Broadcom's legal fees, Qualcomm's general counsel resigned, and fourteen other attorneys in the case were ordered to show cause why sanctions should not be imposed against them for violating the court's discovery orders. After extensive oral argument, the court sanctioned and held personally responsible six of Qualcomm's retained lawyers and referred six attorneys to the state bar of California. Qualcomm initiated this case against Broadcom, claiming that Broadcom had infringed two of Qualcomm's patents. In its defense, Broadcom claimed that Qualcomm had waived its right to enforce the patents because Qualcomm had participated in the Joint Video Team (JVT), a joint standards setting group, in 2002 and 2003. Participation in the JVT would have required Qualcomm to identify its patents and to license them royalty-free or under non-discriminatory, reasonable terms, and would have prohibited Qualcomm from suing companies that used the same standard. Throughout the course of discovery, Qualcomm denied that it had participated in the JVT as early as 2002 and produced no documents that demonstrated otherwise. Qualcomm's attorneys did not properly prepare their two 30(b)(6) witnesses nor did the attorneys search the witnesses computers for any relevant information. As a result, the witnesses testified falsely that Qualcomm had never been involved in the JVT. In addition, emails about involvement in the JVT that came to light during the trial were not produced by the attorneys, who claimed that the emails were "nonresponsive." After the emails were revealed, the judge in the case found in favor of Broadcom on its waiver defense, and also found that Qualcomm's counsel participated in "an organized program of litigation misconduct and concealment throughout discovery, trial, and post-trial." Post-trial, Qualcomm discovered over 46,000 relevant documents showing Qualcomm's participation in the JVT. In the most recent opinion, the court found that "one or more the retained lawyers chose not to look in the correct locations for the correct documents, to accept the unsubstantiated assurances of an important client and that its search was sufficient, to ignore the warning signs that the document search and production were inadequate, not to press Qualcomm employees for the truth and/or to encourage employees to provide the information (or lack of information) that Qualcomm needed to assert its non-participation argument and to succeed in this lawsuit. These choices enabled Qualcomm to withhold hundreds of thousands of pages of relevant discovery and to assert numerous false and misleading arguments to the court and jury. This conduct warrants the imposition of sanctions." The court awarded Broadcom all of its attorneys' fees and costs incurred in the litigation in the amount of $8,568,633.24 for its "monumental and intentional" discovery violation. This case highlights the importance of being forthcoming in discovery. There is no more "hiding the ball" in litigation. It also underscores the need, especially in our high tech world, for parties to have a thorough discovery plan. The case also brings to light the power of Rule 26(g),

Fed. R. Civ. P. 26, which requires parties to certify to the court that they have made reasonable inquiry before signing discovery responses, and for the need to continue to supplement those responses throughout the case. Finally, although Qualcomm's retained counsel were ultimately responsible, in-house counsel were also admonished for their lack of diligence in the case.