Burst.com says Microsoft destroyed evidence

Top managers at Microsoft told employees to destroy evidence contained in old e-mail during 2000, even as the company faced several antitrust lawsuits at the time, court documents filed by Burst.com charge.

Burst.com, suing Microsoft for alleged patent and antitrust violations, accuses Microsoft managers of telling employees in 2000 to delete most or all e-mail after 30 days, in court documents made public this week. At the time, the U.S. Department of Justice was in the midst of its antitrust lawsuit against Microsoft, and the software giant faced dozens of class action lawsuits.

“Given this array of litigation, Microsoft had a concrete duty to preserve relevant documents,” Burst.com’s lawyers wrote in a motion filed in U.S. District Court for the District of Maryland. “But it did not. Instead, it implemented … practices to make sure that incriminating documents disappeared.”

A Microsoft spokeswoman disputed Burst.com’s allegations. “Over the past several years, we have produced literally millions and millions of documents and e-mails for the various legal cases we’ve been involved in, and we’ve been completely forthcoming in all document requests in this case as well,” spokeswoman Stacy Drake wrote by e-mail in response to questions about the Burst.com motion. “We have provided more than half a million pages of documents from more than 60 employee files specifically in response to Burst’s broad discover requests.”

Burst.com’s motion asks Judge Frederick Motz to instruct the jury when the case goes to trial that because Microsoft failed to retain documents relating to Burst.com’s lawsuit, “the jury is free to infer that Microsoft did so because the contents of the documents were adverse to Microsoft.”

Burst.com filed its lawsuit against Microsoft in June 2002, alleging that Microsoft stole patented technology and trade secrets concerning Internet-based video-on-demand for its Windows Media Player product. Microsoft learned all about Burst.com’s technology in two years of meetings and discussions, although it signed a nondisclosure agreement with Burst prior to those meetings, Burst.com alleges.

Burst.com’s new motion asks Motz to exclude former Microsoft executive Eric Engstrom as a witness during trial. Engstrom, the former general manager of MSN’s dial-up service, was a key employee in Microsoft negotiations with Intel Corp., after which Intel ceased development of its Java Media Framework Player in 1998, according to Bruce Wecker a lawyer representing Burst.com. Burst.com’s Burstware media player relied on the Intel Java framework.

With no e-mail to back up his testimony, Engstrom is “free to remember history in a way most convenient for Microsoft,” Burst.com’s lawyers write in the new motion. “We don’t think he should be able to appear in court and make up stuff,” added Wecker, with San Francisco law firm Hosie Frost Large & McArthur.

Burst.com’s motion accuses Microsoft of not allowing employees to archive e-mail and accuses James Allchin, group vice president of Microsoft’s Platforms Group, of ordering employees in January 2000 to destroy e-mail after 30 days. “This is not something you get to decide,” Allchin wrote to employees, according to the Burst.com motion. “Do not archive your mail. Do not be foolish. 30 days.”

But company policy is to retain e-mail relating to continuing legal actions, and Allchin’s instructions on deleting unneeded e-mail is consistent with company policy, Drake said.

“No company retains every e-mail or document it generates and there is no obligation to do so, particularly given the severity of the inefficiencies it would create,” Drake wrote. “Microsoft does keep those documents and e-mails that are necessary to retain for legal reasons – as has been shown throughout the U.S. antitrust and other legal cases. No party has ever previously claimed that Microsoft did not comply with its discovery obligations, and we have spent millions of dollars in doing so.”