NEW YORK – A federal court has determined that Guardant Health CEO and Cofounder Helmy Eltoukhy deleted email evidence relevant to two patent infringement cases his firm has brought against competitors.
Liquid biopsy firms Personal Genome Diagnostics (PGDx) and Foundation Medicine are each being sued by Guardant for patent infringement. In November 2019, they alleged to Magistrate Judge Christopher Burke of the US District Court for the District of Delaware that Eltoukhy had deleted from his personal Gmail account all emails prior to 2014, after he had been deposed for the cases in April 2019.
The defendants, who may have a joint defense agreement, argued that the emails are relevant to one of their defenses and their allegations that Eltoukhy inappropriately forwarded himself confidential documents while he was employed at Illumina, which were then allegedly used to invent technology for Guardant.
After a hearing on Dec. 9, 2019, Judge Burke said in an oral order, "It is clear that Dr. Eltoukhy's deletion of these emails … came after Dr. Eltoukhy was asked about the emails at a deposition; moreover, the deletion efforts were not the result of attorney advice or consultation and were in contravention of document preservation instructions that had been provided in these cases."
Guardant and Eltoukhy declined to comment, due to the ongoing litigation. In a Dec. 3 court filing prior to the hearing, Guardant said it "intends to find and produce all of the Gmail account emails" from a "newly located backup." Guardant has also subpoenaed Google to recover emails. Lawyers for the defendants did not respond to request for comment.
Whether or not Guardant recovers the emails, their deletion is troublesome for Guardant, according to lawyers not involved in the case. "Anytime anyone destroys evidence, negligent or intentional, that is a huge problem for the party," Maribeth Meluch, an attorney at Columbus, Ohio firm Isaac Wiles, said in an email.
"It certainly casts them in a poor light and I think it could potentially affect the outcome of the case," said Bernard Chao, a professor at the University of Denver law school and an expert on intellectual property law.
As previously reported, PGDx has alleged that Eltoukhy and his Cofounder AmirAli Talasaz, also Guardant's president and COO, defrauded the USPTO by omitting Eltoukhy as an inventor of three of the four patents at suit. PGDx also alleged that on June 27, 2012, Eltoukhy forwarded an Illumina PowerPoint presentation marked "confidential" to his personal Gmail account, just days before the July 2012 conception dates for three patents in the lawsuits. Guardant has previously said these allegations are "baseless and completely without merit."
If the case reaches trial, the judge could issue so-called adverse jury instructions, which would permit the jury to "infer that the evidence says what [the aggrieved party] thinks it proves," Chao explained. In other words, the jury could assume the worst. "You don't have to, but you can," he said.
Meluch added that when it's the plaintiff that destroys evidence, it can result in the claims getting dismissed.
Evidence destruction, also called spoliation, whether intentional or deliberate, is not common and is an issue raised in less than one quarter of 1 percent of civil cases in Federal district courts, according to a 2011 report published by the Federal Judicial Center, a research agency of the US judiciary. Getting a court to grant a motion for sanctions in response to evidence spoliation is ever rarer, occurring in only 18 percent of those cases.
But when it is alleged to have happened, it involves electronically stored information about half the time, the report said. About a third of allegations of spoliation were directed at the plaintiff. "Generally, destruction is inadvertent, i.e. a party forgets to turn off its automatic retention/destruction software," Meluch said.
Judge Burke ordered Guardant to download and preserve "the entirety" of not only Eltoukhy's personal Gmail account, but also that of his cofounder AmirAli Talasaz, Guardant's president and COO. Burke also granted the defendants' requests to lengthen an additional upcoming deposition of Eltoukhy and to forensically examine the laptop he used to delete emails.
For now, the defendants are focused on trying to recover evidence related to the emails, they said in a court filing. Separately, the defendants have asked the court to rule that they did not infringe three patents and declare that certain claims of the fourth patent are invalid. Chao said the defendants would likely ask for Guardant to cover attorneys' fees related to the issue of evidence destruction.
If PGDx and Foundation decide to make more out of it, they'll want to find out if Eltoukhy deleted the emails intentionally. "They're going to try to show this wasn't just happenstance, that these were emails he selected and deleted," Chao said. "If he's doing this to mess with the lawsuit, it's much more likely the sanctions will be severe." Meanwhile, Guardant and Eltoukhy will probably try to argue he deleted emails wholesale, without specificity, Chao said.
"The intent thing is going to be fairly important. And maybe that's what they need to find out at the deposition," Chao said. "There's a big difference between doing it to avoid an issue and just being sort of stupid."