Adverse Inference and Monetary Sanctions Warranted for Failures to Issue Litigation Hold, Monitor Preservation
Zest IP Holdings, LLC v. Implant Direct Mfg., LLC, No. 10-0541-GPC(WVG), 2013 WL 6159177 (S.D. Cal. Nov. 25, 2013)
In this case, the court recommended that an adverse inference instruction be imposed and ordered monetary sanctions where Defendants “did not take adequate steps to avoid spoliation of evidence after it [sic] should have reasonably anticipated this lawsuit and did not issue a litigation hold nor implement nor monitor an adequate document preservation policy.”
In the fall of 2008, Defendants informed Plaintiffs that they intended to “make their own clone product” to compete with Plaintiffs’ products, for which Defendants were distributors. In August 2008, Plaintiffs informed Defendants that they considered Defendants’ planned product to be an infringement of their own. In October 2008, Plaintiffs sent a letter “stating that they would file a lawsuit for patent infringement against Defendants should Defendants continue their plan to commercialize their product.” In March 2010, Plaintiffs filed the underlying action in this case. In August 2012, Plaintiffs filed a motion for sanctions alleging that Defendants had failed to preserve relevant evidence. Read More