Rambus (RMBS) develops intellectual property related to memory and licenses it to memory makers such as Micron (MU).
Rambus has sued several companies for patent violations. Rambus has several billion dollars riding on the outcome of these law suits.
Spoliation is a legal term that means, destruction of documents. By law, companies such as Rambus are not allowed to destroy documents after a law suit begins.
District Court had ruled that Rambus had destroyed documents in its suit against Micron. Based on the document destruction had won dismissal of the Rambus case.
Today’s ruling comes from the Appeal. The Appeals Court said that it is undisputed that Rambus destroyed between 9,000 and 18,000 pounds of documents in 300 hundred boxes. Now the district court is again going to consider the matter. If the district court determines that Rambus acted in bad faith and or prejudice was caused to Micron the court may dismiss Rambus’s law suit against Micron and other memory manufacturers.
In such a scenario, Rambus will plunge to single digits. On the other hand, if Rambus ultimately prevails, Rambus is a $100.00 stock.
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