Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-5_13-cv-01317/USCOURTS-cand-5_13-cv-01317-8/pdf.json

Nature of Suit Code: 830
Nature of Suit: Patent
Cause of Action: 35:183 Patent Infringement

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*E-Filed: February 13, 2014* 

NOT FOR CITATION 

IN THE UNITED STATES DISTRICT COURT 

FOR THE NORTHERN DISTRICT OF CALIFORNIA 

SAN JOSE DIVISION 

PERSONALWEB TECHNOLOGIES, LLC, 

and LEVEL 3 COMMUNICATIONS, LLC, 

 Plaintiffs, 

 v. 

GOOGLE INC. and YOUTUBE, LLC, 

 

 Defendants. 

____________________________________/

No. C13-01317-EJD (HRL) 

ORDER GRANTING IN PART 

DEFENDANTS’ MOTION FOR 

SANCTIONS 

[Re: Docket No. 209] 

PersonalWeb Technologies LLC (“PersonalWeb”) sues Google Inc. and YouTube LLC 

(collectively, “Google”) for infringement of its so-called “Truenames” patents. In the instant 

Motion for Sanctions Based on PersonalWeb’s Spoliation of Evidence, Google alleges that 

PersonalWeb systematically deleted relevant emails it was under a duty to preserve because it 

reasonably anticipated this litigation. Google seeks dismissal or, alternatively, an adverse inference 

instruction, issue preclusion, evidentiary sanctions, and/or monetary sanctions. PersonalWeb 

opposes the motion and denies any wrongdoing. PersonalWeb maintains that it had in place a 

legitimate e-mail retention policy and timely implemented a litigation hold shortly after filing the 

lawsuit against Google. The presiding judge referred this matter to the undersigned, who held a 

hearing on January 21, 2014. Based on the moving and responding papers, as well as the arguments 

of counsel at the hearing, Google’s motion is GRANTED IN PART. 

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BACKGROUND 

 PersonalWeb acquired several Truenames patents from a subsidiary of Brilliant Digital 

Entertainment (BDE) in July 2011. The last of the Truenames patents was issued in August, and the 

assignment of the entire Truenames patent portfolio was recorded in early September. BDE then 

issued a press release announcing the deal in which it also boasted that the Truenames patents had 

been referenced in the patent applications of major technology companies, including Google (as 

well as several other soon-to-be defendants). On December 6, 2011, PersonalWeb issued a press 

release touting the launch of its new product StudyPods, which utilizes the Truenames patents. Two 

days later, it filed lawsuits against Google and several other defendants for alleged infringement. 

In August 2011, PersonalWeb implemented a new e-mail retention policy, which generally 

required employees to save to storage emails which had “lasting value” and delete those with only 

“transitory value.” See Dkt. 248-4, at 32. On October 5, 2011, a secretary at PersonalWeb sent a 

companywide email “reminder to delete all unnecessary emails by next Wednesday the 12th or save 

the ones you absolutely need.” Dkt. 226-36. Mike Weiss, President and CEO of PersonalWeb, 

replied to all recipients of the email and referred them to the official email retention policy. On 

December 19, 2011, eleven days after filing the instant lawsuit,1

 Weiss sent an email announcing a 

litigation hold, which generally required employees to “preserve all records, information, 

documents, and other evidence relevant to [the litigation].” See Dkt. 226-37. 

In May 2012, former PersonalWeb employee Jake Drew approached Google suggesting that 

he and PersonalWeb may have committed some misconduct related to the litigation.2 At Drew’s 

deposition in September 2012, he testified that, as early as May 2011, Weiss had repeatedly told 

employees at weekly lunch meetings that PersonalWeb planned on filing lawsuits against major 

technology companies, and at one such meeting in October or November, Weiss specifically 

instructed employees to purge all of their emails. Weiss’ reason for the purge order was that he did 

 

1

 PersonalWeb’s Opposition states that the Weiss email implementing the litigation hold was sent 

the day after filing its complaint against Google. See Opposition at 7. However, the complaint was 

filed on December 8, 2011, and the email is dated December 19, 2011. 

2

 Drew apparently resigned over disputes with management as to ownership of technology he helped 

develop. When Drew approached Google, he refused to provide any information until represented 

by counsel. Google then paid for independent counsel to represent him. 

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not want massive amounts of email to go through in discovery. Drew also testified that he was 

tasked with analyzing a Google patent, and that all employees developing StudyPods were 

specifically instructed to incorporate the Truenames patents to ensure a bigger award in an 

infringement action. 

Drew’s testimony is corroborated in some respects by current PersonalWeb employee Josh 

Jarvis. He recalls some workplace chatter about litigation around the September press release, as 

well as some mention by Weiss of the email retention policy in the context of litigation at a weekly 

lunch meeting in October 2011. Jarvis also testified that he likely deleted emails pursuant to the 

email retention policy that he would have kept had the litigation hold been in effect. 

However, several other PersonalWeb employees firmly reject Drew’s allegation that Weiss 

instructed employees to “purge” their inboxes. On the contrary, they insist that Weiss emphasized 

the importance of retaining emails and repeatedly instructed employees to err on the side of 

retention or see him directly if they had any questions about complying with the email retention 

policy. 

LEGAL STANDARD 

 “Spoliation occurs when one destroys or materially alters evidence or fails to preserve 

property for another’s use as evidence in pending or reasonably foreseeable litigation.” Hynix 

Semiconductor Inc. v. Rambus, Inc., 897 F. Supp. 2d 939, 975 (N.D. Cal. 2012). “When litigation is 

‘reasonably foreseeable’ is a flexible fact-specific standard that allows a district court to exercise the 

discretion necessary to confront the myriad factual situations inherent in the spoliation inquiry.” 

Micron, 645 F.3d at 1320. “It is, of course, not wrongful for a manager to instruct his employees to 

comply with a valid document retention policy under ordinary circumstances.” Micron Tech., Inc. 

v. Rambus Inc., 645 F.3d 1311, 1319-20 (Fed. Cir. 2011) (quoting Arthur Andersen LLP v. United 

States, 544 U.S. 696, 704 (2005)). However, “[o]nce a party reasonably anticipates litigation, it 

must suspend its routine document retention/destruction policy and put in place a ‘litigation hold’ to 

ensure the preservation of relevant documents.” In re Napster, Inc. Copyright Litigation, 462 F. 

Supp. 2d 1060, 1071 (N.D. Cal. 2006) (quoting Zubulake v. UBS Warburg LLC, 220 F.R.D. 212, 

218 (S.D.N.Y. 2003)). 

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 “A federal trial court has the inherent discretionary power to make appropriate evidentiary 

rulings in response to the destruction or spoliation of evidence.” Glover v. BIC Corp., 6 F.3d 1318, 

1329 (9th Cir. 1993); see also Apple Inc. v. Samsung Elec. Co., 888 F. Supp. 2d 976, 987 (finding 

that magistrate judges have inherent authority to impose sanctions for spoliation). “In considering 

what spoliation sanction to impose, if any, courts generally consider three factors: (1) the degree of 

fault of the party who altered or destroyed the evidence; (2) the degree of prejudice suffered by the 

opposing party; and (3) whether there is a lesser sanction that will avoid substantial unfairness to the 

opposing party.” Apple, 888 F. Supp. 2d at 992 (internal quotation marks omitted). “In the Ninth 

Circuit, spoliation of evidence raises a presumption that the destroyed evidence goes to the merits of 

the case, and further, that such evidence was adverse to the party that destroyed it.” Id. (quoting 

Dong Ah Tire & Rubber Co. v. Glasforms, Inc., No. C 06-3359 JF (RS), 2009 WL 1949124 (N.D. 

Cal. July 2, 2009)). 

DISCUSSION 

A. Duty to Preserve 

PersonalWeb’s duty to preserve evidence arose when litigation became reasonably 

foreseeable. Google asserts that PersonalWeb anticipated litigation no later than June 2011, before 

it even acquired the patents-in-suit, as evidenced by Drew’s testimony that Weiss began discussing 

future litigation against major technology companies during weekly lunch meetings around May or 

June 2011. Google alleges that this litigation was the object of a comprehensive business strategy 

whereby PersonalWeb comparatively analyzed the Truenames patents and related technologies 

(including Google-owned patents), developed its StudyPods project to make use of the Truenames 

patents, acquired the patents having predetermined it would pursue litigation, and filed suit as soon 

as StudyPods was ready for launch. PersonalWeb does little to dispute Google’s characterization of 

its strategy and is virtually silent as to the issue of when it reasonably anticipated this litigation. 

The Court agrees that PersonalWeb probably acquired the patents with an eye toward 

litigation. However, it is difficult to say that litigation was reasonably foreseeable before 

PersonalWeb even acquired the thing which would give it standing to sue. Thus, since 

PersonalWeb’s acquisition of the patents was a condition precedent to its ability to even initiate the 

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litigation, the Court thinks it was likewise a condition precedent to PersonalWeb’s duty to preserve 

evidence. Accordingly, because PersonalWeb was analyzing Google technology as early as April 

and openly discussing litigation as early as May, the Court finds that litigation was reasonably 

foreseeable so as to trigger a duty to preserve evidence when PersonalWeb first acquired Truenames 

patents in July 2011. See Micron, 645 F.3d at 1323 (“Once the patent issued, the gun was loaded; 

when the targets were acquired, it was cocked; all that was left was to pull the trigger by filing the 

complaint.”) 

B. Destruction of Evidence 

Google asserts that PersonalWeb engaged in a systematic mass deletion of emails in October 

2011, well after its duty to preserve evidence arose. This was first reported by Drew, who testified 

that Weiss ordered a purging of emails at a weekly meeting in October or November, and it was 

confirmed by Weiss’ secretary’s “reminder to delete all unnecessary emails by next Wednesday 

[October] 12th or save the ones you absolutely need.” PersonalWeb counters that it had a legitimate 

email retention policy in place at the time, and Weiss was quick to clarify his secretary’s email by 

referring all employees to comply with that policy. Moreover, besides Drew, every employee to 

weigh in on the matter denies that Weiss ever ordered a mass purging and asserts that he 

consistently emphasized the importance of retention. 

The Court is not convinced that PersonalWeb engaged in as willful and malicious an act of 

destruction as Google suggests. Nevertheless, the Court still finds that PersonalWeb spoliated 

evidence as a result of its failure to timely implement a litigation hold. See Napster, 462 F. Supp. 2d 

at 1071. Litigation was reasonably foreseeable in July 2011, yet rather than put a litigation hold in 

place, PersonalWeb waited a month to implement its first email retention policy, which despite the 

name, mandates the destruction of some emails without a backup. An additional four months lapsed 

before PersonalWeb finally ensured the preservation of evidence by implementing the litigation 

hold. 

PersonalWeb insists that no relevant documents were destroyed pursuant to the email 

retention policy, and in practice, the litigation hold did nothing to alter the retention habits of 

PersonalWeb employees who all already saved all but the most trivial of emails, such as lunch 

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orders and commercial solicitations. While this may be true for the most part, Jarvis did agree it 

was likely that he saved some emails as a result of the litigation hold that he otherwise would have 

deleted pursuant to the normal retention policy. Moreover, regardless of the practice of most 

employees, at least one, Drew, deleted somewhere between 100 and 1,000 emails. And regardless 

of whether he fundamentally misunderstood Weiss’ direction as to retention versus deletion of 

emails, he was still a PersonalWeb employee who destroyed hundreds of potentially relevant emails 

that would have been saved had the litigation hold been in effect, and PersonalWeb offers no reason 

why it should not be held responsible for his actions. Accordingly, the Court finds that 

PersonalWeb did engage in spoliation of evidence. 

C. Appropriate Sanction 

1. PersonalWeb’s Degree of Fault 

As discussed above, the Court does not conclude that PersonalWeb undertook a mass 

destruction of relevant evidence to gain an unfair advantage in its upcoming litigation, at least not 

with respect to the substance of the case. At worst, the record indicates that PersonalWeb’s 

motivation behind the email retention/destruction policy was to save itself the costs associated with 

wading through countless documents in discovery. Under ordinary circumstances, this may be a 

legitimate business purpose. However, as here, where a party implements such a policy for that 

specific purpose in view of upcoming litigation, it does so in bad faith because it knowingly risks 

the destruction of potentially relevant information that would otherwise be saved by a litigation 

hold. 

2. Prejudice to Google 

Despite PersonalWeb’s five month delay in implementing the litigation hold, there is little 

evidence of prejudice to Google. Granted it is difficult to demonstrate prejudice from spoliation 

because, by definition, the prejudiced party does not have access to the evidence. Accordingly, a 

party must only come forward with plausible, concrete suggestions as to what the destroyed 

evidence might have been before a heavy burden shifts to the spoliating party to show a lack of 

prejudice. See Micron, 645 F.3d at 1328. Here, Google suggests that PersonalWeb destroyed 

evidence of its analysis of Google technology, its analysis of the Truenames patents, and its 

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development of StudyPods, including the incorporation of Truenames technology into the project. 

However, PersonalWeb points out that Google, in its motion to transfer venue from the Eastern 

District of Texas, previously argued (apparently convincingly) that evidence of PersonalWeb’s 

analysis of the patents and its development of StudyPods was irrelevant to the main issues of this 

litigation, such as claim construction and infringement. Moreover, the Google patent analyzed by 

Drew, on which Google so heavily relies, does not concern technology at issue in this case. For the 

most part, the Court agrees with PersonalWeb on the issue of prejudice. Even assuming emails 

discussing the categories of information identified by Google were destroyed, the Court is not 

convinced that such emails would have significant bearing on the merits of this litigation. 

Accordingly, the Court finds that Google suffered little, if any, prejudice as a result of 

PersonalWeb’s spoliation. 

3. Lesser Sanctions 

In the absence of substantial prejudice, dismissal, the most severe sanction available, is 

certainly not warranted. Alternatively, Google requests an adverse inference, issue preclusion, 

evidentiary sanctions, and/or monetary sanctions. Because Google has suffered little or no 

substantive prejudice, and because it appears that PersonalWeb’s conscious disregard of its duty to 

preserve evidence was motivated by cost-saving, the Court thinks that monetary sanctions are 

sufficient and appropriate in order to punish PersonalWeb’s misconduct, deter future bad behavior, 

and make Google whole for its resulting additional discovery costs. 

Accordingly, Google shall be awarded monetary sanctions sufficient to reimburse it for 

reasonable attorney’s fees and costs associated with its spoliation-related discovery and motions 

practice. In its motion, Google includes the preparation for and taking of depositions of Jake Drew 

and Joshua Jarvis as spoliation-specific discovery. The Court agrees that Google should be 

reimbursed for these acts but only to the extent that they relate exclusively to the issue of spoliation 

as distinct from the merits and substance of the litigation. See Zubulake, 220 F.R.D. at 222 (finding 

adverse inference was not warranted but awarding costs for re-deposing witnesses for inquiry into 

issues raised by destruction of evidence). In other words, Google may only be reimbursed for 

reasonable expenses that would not have been incurred but for its inquiry into the allegations of 

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PersonalWeb’s spoliation. To this end, within seven days from the date of this order, Google shall 

submit a declaration with supporting documentation including an itemized list of all attorney’s fees 

and costs for which it believes it is entitled to reimbursement pursuant to this order. The declaration 

shall describe each item with sufficient particularity so as to allow the Court to make a 

determination that it was reasonable and exclusive to the issue of spoliation. Upon filing of the 

declaration, PersonalWeb will be given seven days to file a response not to exceed six pages in 

which it may oppose any specific request for reimbursement. Google will have five days thereafter 

to file a reply not to exceed three pages. 

IT IS SO ORDERED. 

Dated: February 13, 2014 

HOWARD R. LLOYD 

UNITED STATES MAGISTRATE JUDGE

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C13-01317-EJD (HRL) Notice will be electronically mailed to: 

Adam Hockensmith ahockensmith@susmangodfrey.com, jdunaven@susmangodfrey.com 

Allen Franklin Gardner allengardner@potterminton.com 

Ashley Lauren McMillian amcmillian@susmangodfrey.com 

Davida P Brook dbrook@susmangodfrey.com, eball@susmangodfrey.com 

Daymon Jeffrey Rambin jrambin@capshawlaw.com 

Elizabeth DeRieux ederieux@capshawlaw.com 

Joseph S. Grinstein jgrinstein@susmangodfrey.com, tadkins@susmangodfrey.com 

Justin Adatto Nelson jnelson@susmangodfrey.com 

Kalpana Srinivasan ksrinivasan@susmangodfrey.com, hdanielson@susmangodfrey.com 

Matthew M. Wolf matthew.wolf@aporter.com 

Max Lalon Tribble , Jr mtribble@susmangodfrey.com, tadkins@susmangodfrey.com 

Michael Anthony Berta michael.berta@aporter.com 

Michael E Jones mikejones@potterminton.com 

Nicholas Lee nicholas.lee@aporter.com 

Nicholas H Lee nicholas.lee@aporter.com, donna.johnson@aporter.com, 

elizabeth.tryon@aporter.com, john.fitzpatrick@aporter.com, MaryAnne.Donaldson@aporter.com 

Sandeep Seth sseth@susmangodfrey.com 

Sara Patricia Zogg sara.zogg@aporter.com 

Sidney Calvin Capshaw , III ccapshaw@capshawlaw.com 

Counsel are responsible for distributing copies of this document to co-counsel who have not 

registered for e-filing under the court’s CM/ECF program.

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