Sanctions for Deleting Pre-Lawsuit Emails

by Dennis Crouch

The court issued an important short-opinion, In re Ivantis, Inc. (Fed. Cir. 2020), that should be read and considered as a case-study by in-house counsel. The case involves pre-lawsuit destruction of evidence.

The basic setup is that Ivantis has a corporate email-destruction-policy* of deleting emails that are 12-months old.  Glaukos sued Ivantis for infringement in April 2018 and served the defendant with the Summons and Complaint on April 16, 2018. On April 19, 2018 the company instituted an internal “litigation hold” that suspended the deletion-policy for emails potentially related to the lawsuit.  It turns out that Ivantis has been preparing for this litigation and considering work-arounds for Glaukos patents since at least 2013, and all those emails were deleted.

The district court found that Ivantis actually anticipated the litigation and that the email deletion constituted improper spoliation under FRCP 37(e) . As a penalty, the court found that the jury should be given an adverse inference instruction, focusing on willfulness:

Ivantis intentionally deleted and failed to preserve relevant evidence for this litigation. Ivantis anticipated patent infringement litigation from Glaukos, but nonetheless adopted and maintained a policy that deleted all company email after 12 months, resulting in the destruction of virtually all emails at Ivantis that pre-date April 2017, including emails specifically relating to the Glaukos Asserted Patents. You may presume from that destruction that the destroyed evidence was favorable to Glaukos and unfavorable to Ivantis, including on the issue of whether Ivantis willfully infringed the Asserted Patents.

Glaukos adverse inference order.  The district court also awarded “a sanction prohibiting Ivantis from referring to any pre-suit investigation of the Asserted Patents as a basis for believing that it did not infringe or that the patents were invalid.”

On mandamus, the Federal Circuit has refused to take the case – finding that the decision was not “so patently unreasonable as to warrant mandamus.” Ivantis argued that immediate appeal was important because “a massive damages judgment and an injunction against sales of Ivantis’s only product will cast a dark shadow over the company, threatening its ability to grow at this critical juncture in its development—even if Ivantis were to obtain a stay and ultimately prevails on appeal.”  The Federal Circuit noted that argument, but found it unconvincing: “we are not prepared to depart from the usual practice of waiting until after final judgment to review such orders based on such speculation.”

= = = =

I should note here that this case has more red-flags than the typical email-retention issue.

  • Both companies are competing in the narrow field of FDA-approved stent-treatments for glaucoma.
  • As early as 2009, Ivantis was told that it infringed Glaukos patents.
  • In 2013, Ivantis hired “patent litigation counsel” to conduct diligence
    related to Glaukos’s patents.  Shortly thereafter, Ivantis instituted its email-deletion policy that resulted in deleting all the emails relating to the patents at issue here. The same attorneys represent Ivantis in this litigation.
  • In 2017, Ivantis CEO distributed a report from an industry analyst wo indicated Glaukos would sue Ivantis for infringement in 2018.
  • In 2018 (about a month before the lawsuit), Ivantis began preparing a petition for IPR.

In its decision, the appellate panel found these events sufficient to sustain the lower court’s determination that Ivantis “acted with the intent to deprive another party of the information’s use in the litigation.”

= = = =

* Ivantis uses the politically correct ‘retention policy’ rather than ‘destruction policy.’

= = = =

FRCP R. 37(e) Failure to Preserve Electronically Stored Information. 

If electronically stored information that should have been preserved in the anticipation or conduct of litigation is lost because a party failed to take reasonable steps to preserve it, and it cannot be restored or replaced through additional discovery, the court:

(1) upon finding prejudice to another party from loss of the information, may order measures no greater than necessary to cure the prejudice; or

(2) only upon finding that the party acted with the intent to deprive another party of the information’s use in the litigation may:

(A) presume that the lost information was unfavorable to the party;

(B) instruct the jury that it may or must presume the information was unfavorable to the party; or

(C) dismiss the action or enter a default judgment.

44 thoughts on “Sanctions for Deleting Pre-Lawsuit Emails

  1. 3

    The term “retention policy” is more of a euphemism (similar to “friendly fire”), than an example of political correctness. But the phrase has been in common parlance since at least the late 1970s, so there’s no basis for Dennis to suggest any impropriety on the part of Ivantis for using that well-known phrase.

    It would have been unheard-of for the Federal Circuit to grant mandamus relief on the issue of a pretrial jury instruction. But the district court’s proposed instruction should simply have said, the jury can infer that the destroyed evidence was favorable to Glaukos and unfavorable to Ivantis. Full stop.

    But the instruction goes further by telling the jury it can infer the destroyed evidence was favorable to Glaukos/unfavorable to Ivantis “on the issue of whether Ivantis willfully infringed the Asserted Patents.” The problem with that last clause is that destroyed evidence on the issue of willful infringement would likely have been privileged and thus not subject to discovery. It’s inconceivable that a self-respecting company upon receiving notice of infringement would not have included counsel in any subsequent communications about the patents. As a result, even if emails on willful infringement had been preserved, the plaintiff likely wouldn’t have been entitled to them in discovery, and thus wasn’t deprived of their use as evidence at trial. But the district court’s instruction here lets the jury presume the existence of non-privileged internal emails specifically about willful infringement issues, which doesn’t seem to be an appropriate inference to allow the jury to draw without evidence suggesting those types of emails likely existed.

    1. 3.1

      Good point, LR . . . yet the Court’s remedy is based on much more than just the deleted (“non-retained”) e-mails; privileged or not.

      Indeed, given the egregiousness of the totality of the purposeful misdeeds of not just one, but multiple high-level folks, they should thank their lucky stars that Glaukos wasn’t awarded a default judgement or the case dismissed with prejudice.

      A remedy the CAFC would likely uphold.

    2. 3.2

      You’re likely right that a large amount of the emails would be protected under attorney-client privilege, but what about the emails that lead to hiring “patent litigation counsel” in the first place? I’m guessing there was extensive internal discussion before counsel was retained as to whether or not counsel was necessary, what kind of counsel was needed, and other related issues. Many of those emails would not have been covered by privilege. There was also likely extensive communication by the researchers during product development that could have touched upon the asserted patents and technologies. Those would definitely have not been covered by privilege and discoverable.

    3. 3.3

      “The problem with that last clause is that destroyed evidence on the issue of willful infringement would likely have been privileged and thus not subject to discovery.” The A/C privilege is not both sword and shield. If you’re going to rely on opinion of counsel, e.g., mens rea, you put the reasonableness of that reliance into question ergo, discoverable. Ergo, the adverse inference on the subject of mens rea sounds correct – IMHO.

      1. 3.3.1

        Right. There is what is commonly called at-issue waiver here.

  2. 2

    “Ivantis argued that immediate appeal was important because “a massive damages judgment and an injunction against sales of Ivantis’s only product will cast a dark shadow over the company, …”

    A dark shadow cast by Ivantis.

    1. 2.1

      And undermines the core argument – IMHO. “So we knew this was really really important, most important ever!, so we took the evidence to the wood chipper, because we wood chip everything every thursday. Sounds like a Banner argument.

  3. 1

    * Ivantis uses the politically correct ‘retention policy’ rather than ‘destruction policy.’

    That’s rather universal.

    1. 1.1

      20 bucks a pop, would you like to try again about who pays you to post?

      1. 1.1.1

        Asked and answered.

        Asked in a manner that reflects badly on you, my very obsessed pal.

        1. 1.1.1.1

          It’s your “colleagues” that pay you?

          1. 1.1.1.1.1

            Asked and answered.

            The better question is why they pay me.

            I have also given the answer to that better question.

            Why is it that you do not want to focus on the answer to the better question?

            Why is it that you go apoplectic with your one question, and yet dozens upon dozens directed to you go without cogent and meaningful answers from you?

            1. 1.1.1.1.1.1

              Do any of these imaginary “colleagues” that pay you to post have names?

              1. 1.1.1.1.1.1.1

                Asked and answered.

                Again.

                Is this your new tell/meme? Ask a question already answered and ask it across as many threads as possible?

                It was not very exciting the first time.

                It’s not aging well.

                1. I love it – you answer yes to my question of whether you know what your post does for me (hint: $), and yet you want to double down.

                  Thanks, I suppose.

                2. … is that what you meant when you replied that you would take ownership of your control of when I enterprise on your inanity?

                  Your control is your choice to be inane.

                  Sweet. My enterprise works perfectly then.

    2. 1.2

      If we paid you 30 bucks a pop would you quit posting nonsense such as “That’s rather universal?”

      1. 1.2.1

        It’s hardly nonsense, my 0bsessed friend.

        Look at Lode_Runner’s concurrence with: “ But the phrase has been in common parlance since at least the late 1970s, so there’s no basis for Dennis to suggest any impropriety on the part of Ivantis for using that well-known phrase.

        Do you really think that such is nonsense? Is that the best that you can do?

        1. 1.2.1.1

          Do you get paid 40 bucks a pop when you change the subject?

          1. 1.2.1.1.1

            Your assertion is false.

            There is no change of subject from me here.

            I am not sure where you learned your “debating” skills from, but your tactics are rather juvenile.

            What does this ‘tell’ about you?

            1. 1.2.1.1.1.1

              My colleagues are getting a bit bored with your not even trying anymore. Sorry.

              1. 1.2.1.1.1.1.1

                LOL – the only thing sorry here is you.

                This projecting of “not even trying” is just so you that it is rather blaise.

                Is that really what you are going to go with?

                1. Another false assertion combined with projection from you Shifty, as I am most definitely not the one here playing clueless.

                  Quite in fact, your game is exposed (across this and every other thread that you have attempted to play ‘gotcha’ on).

                  You are ‘O-for’ in your attempts.

                  You’ve lost the ‘perfection’ of your comments being SOLELY to or about me for about seven weeks straight with two comments the day before actually attempting to engage others, but you still have that ‘perfection’ of scoring any type of victory in our duels.

                  You are like the Monty Python black knight: link to youtu.be

                2. Repeating yourself while paying no heed to my response is…

                  … the epitome of being non-responsive.

                  What was your role at the patent office before you retired?

                3. We did pay heed to your response, Snowflake. That’s why we understand it’s not an act.

                  Try to keep up.

                4. Why would ‘now’ be my chance?

                  Lol, oh wait, this tell/meme of yours is near the bottom of your barrel.

                  Got’cha.

                5. You are out of ideas. Time for one of those tells you have become famous for. How about one of those patented Vague Smiley Faces?

                6. How about one of those patented Vague Smiley Faces?

                  LOVE IT!

                  You do realize that IF you understood emoticons, you would not post so wrongly as you do here, right? There is nothing ‘vague’ about an emoticon, because providing the emoticon requires a specific and non-vague construction.

                  I am not the one that is out of ideas, my pal.

                  That would be you — and even here, ALL that you are doing is falling back to your ‘projection’ meme/tell. You do realize that ALL that this last post of yours does is repeat my post to you, but throw in your own lack of understanding on top of it.

                  You are quite literally the epitome of a train wreck.

                7. Ah yes, back to your confusion of memes and tells, while highlighting the fact that you don’t understand emoticons (there is nothing vague about emoticons and if you knew how to blog with them, you would not be so insistent on showing your
                  ig
                  nor
                  ance

    3. 1.3

      I have the name of a counselor that might be able to explain the difference between a “meme” and one of your tells. Call me.

      1. 1.3.1

        No need for me to call anyone – please provide ANY (cogent) answer to the question L O N G put to you as to the difference between memes and tells.

        Note here that your attempt to paint this as merely (and solely) an artifact of MY posting just does not fly. That’s kind of the point being put to you. A point that your unwillingness (or inability) to grasp, has made this banter so enjoyable for me.

        Thank$

        1. 1.3.1.1

          Yeah. You made a lot of sense there.

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