A recent Federal Circuit decision denying a petition for a writ of mandamus should serve as a cautionary tale and reminder for corporate entities regarding the critical importance of preserving documentary evidence in a timely and appropriate manner.

In In re: (Ivantis), Inc., Case No. 2020-147 (Fed. Cir. Nov. 3, 2020) (Wallach, J.) (Ivantis), the Federal Circuit denied Ivantis's petition to vacate an opinion and order by the district court, which found that Ivantis had “destroyed evidence” and “intended to deprive Glaukos [the patentee] of […] potential evidence concerning copying and willfulness.” Id. at 2. Accordingly, the district court “ordered that the jury could presume the destroyed evidence was favorable to Glaukos and unfavorable to Ivantis,” including on the issue of whether Ivantis willfully infringed Glaukos's patents. Id.


Among the many pitfalls and challenges inherent in litigation discovery and case management, evidence spoliation is one that can lead to powerful adverse sanctions. “Spoliation is ‘the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or future litigation.'” (Glaukos) Corp. v. Ivantis, Inc., Case No. 8:18-cv-00620-JVSJDE, at 2 (C.D. Cal. June 17, 2020) (Glaukos) (quoting Kearney v. Foley & Lardner, LLP, 590 F.3d 638, 649 (9th Cir. 2009)).

To avoid spoliation, parties must preserve evidence when litigation becomes reasonably foreseeable. Thus, at the outset of litigation, parties often initiate so-called “litigation holds,” which are directives to maintain and preserve documentary and electronic evidence and to suspend corporate document retention policies that may lead to the destruction of evidence. While this practice generally is necessary, it may not be sufficient to satisfy the duty to preserve evidence, depending on the timing, mechanisms, and substance of the litigation ho

Because the intentional or negligent destruction of evidence can have serious ramifications in a party's ability to defend or prosecute its case, courts have significant authority to impose sanctions, based in the Federal Rules of Civil Procedure, or alternatively but to a lesser degree, in their inherent judicial power.

Rule 37(e) identifies three nonexclusive sanctions for courts to consider imposing after a finding that a party acted with the “intent to deprive another party of the information's use in the litigation”: “presume that the lost information was unfavorable to the party; instruct the jury that it may or must presume the information was unfavorable to the party; or dismiss the action or enter a default judgment.”

Courts may also impose sanctions based on their inherent authority to manage their dockets — and such sanctions may be imposed without a finding of bad faith that the Federal Rules require. Although courts must exercise their inherent power “with restraint and discretion,” they have “broad discretion” to fashion sanctions for spoliation on a “case-bycase” determination based on considerations of fault, prejudice, and avoidance of substantial unfairness. See, Roadway Express, Inc. v. Piper, 447 U.S. 752, 764 (1980). 

In Glaukos, the general challenges of evidence spoliation were brought to bear in a high-value patent infringement suit between two competitors, highlighting the importance of ongoing assessment and vigilance regarding document retention.

Litigation in the District Court

Glaukos and Ivantis are both California-based companies providing technological and medical solutions for glaucoma and ophthalmic conditions. On April 14, 2018, Glaukos sued Ivantis, alleging that Ivantis's Hydrus Microstent product (Hydrus) used for treating glaucoma infringed two of Glaukos's patents. Glaukos alleged that Ivantis had been aware of Glaukos's technology and patents long before Ivantis developed its allegedly infringing Hydrus product. Glaukos at 6.

The concern about evidence spoliation first emerged during discovery when “Ivantis informed Glaukos that it was unable to produce emails prior to April 19, 2017.” Ivantis, at 2. Ivantis had instituted a litigation hold on April 19, 2018, five days Glaukos filed the complaint. The litigation hold suspended Ivantis's “email retention policy of deleting emails after 12 months.” Id. at 2. In light of the above, “Glaukos move[d] for an adverse inference jury instruction and preclusion sanctions based on Ivantis's failure to preserve emails when litigation allegedly became reasonably foreseeable.” Glaukos at 5.

The District Court Decision

The district court ultimately granted Glaukos's motion for an adverse inference instruction and exclusion of evidence based on Ivantis's spoliation of documents. See, Glaukos at 1.

At the heart of the district court's decision was Ivantis's document retention policy, which was instituted in 2013 and “automatically delete[d] emails after 12 months,” allegedly “to alleviate burdens on its IT systems.” Id. at 2. The district court found that “[i]t [was] impossible for Ivantis to recover any emails that were deleted,” but that “Ivantis made no effort to preserve documents related to Glaukos before Glaukos filed suit in April 2018.” Id

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Originally published by The Intellectual Property Strategist, January 4th, 2021.

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