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SALT LAKE CITY (AP) -- One the eve of trial in a patent-infringement lawsuit against Gateway Inc., the judge has imposed sanctions on the computer retailer for alleged destruction of evidence.
U.S. District Judge Ted Stewart warned the Irvine, Calif., company that if more critical evidence is found missing, he will consider entering judgment in favor of plaintiff Phillip M. Adams -- which the former IBM engineer had sought for this purported offense.
"It is a sorry day when the court finds it necessary to issue such a warning, but Gateway and its counsel should consider themselves warned," said Stewart, who ordered the company to pay nearly $300,000 of Adams' attorneys fees and court costs in the evidence dispute.
Adams, founder of Adams & Associates in Bountiful, filed suit in February 2002 contending Gateway misappropriated his software fix for a data-destruction flaw in floppy-disk controllers.
In the lawsuit, which is scheduled to go to trial Monday, Adams contends he discovered the disk-controller defect in the late 1980s, then developed an application to detect and repair it.
He said other computer companies long ago paid $30 million to license it.
Adams said Gateway first inquired about the fix in late 1999, signed a nondisclosure agreement and was given demonstrations of Adams' programs solving the problem.
The lawsuit contends Gateway then wrote its suppliers asking for floppy disk controller-related testing and certification, and subsequent fixes applied to Gateway PCs violated the nondisclosure agreement and amounted to patent infringement.
The sanctions imposed by Stewart in a March 6 ruling that was just recently unsealed, were recommended 11 months ago by U.S. Magistrate Judge David Nuffer, who found nine instances of missing evidence.
Among them were a test program and an e-mail from Quanta Computers to a Gateway employee that Nuffer said were central to Adams' case.
Gateway claimed the apparent destruction of the evidence was unintentional, but Stewart said that there was ample circumstantial evidence that it was destroyed in bad faith.
Adams' Salt Lake City attorney, Gregory Phillips, said the ruling spoke for itself and he would only say that he and his client look forward to the trial.
John Spelich, Gateway's vice president for corporate communications, said the company continues to dispute the characterization of the evidence discovery battle, and, "We're pleased to finally have the court consider the merits of this case."
(Copyright 2006 by The Associated Press. All Rights Reserved.)
