Fourth Dimension Software v. Der Touristik Deutschland GmbH (N.D. Cal. 2021)

Key Insight: Plaintiff moved for sanctions against defendant alleging that it had a duty to preserve usage records for the software at issue in its breach of contract claim. The court found that defendant had a duty to preserve the usage records, it violated the duty by deleting the records, the deletion prejudiced plaintiff and defendant acted with intent to deprive plaintiff of the records’ use. The duty to preserve the records arose before the litigation was filed since (1) plaintiff gave notice to defendant of both license overuse and third-party use claims; (2) the parties proceeded to attempt to negotiate a settlement of the claims for nearly a year; and (3) plaintiff sent a letter in August 2018 stating that it intended to file a complaint. Shortly after receiving notice that plaintiff intended to file suit, defendant destroyed the records, supporting an inference that defendant intentionally destroyed the usage records. The court ordered that an adverse jury instruction would be an appropriate sanction for defendant’s conduct.

Nature of Case: Breach of Contract

Electronic Data Involved: Usage Records

Case Summary

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