Firm fined for poor records management.

• Position: LEGAL - Asus Computer International v. Dell Inc.

A recent ruling involving intellectual property rights and e-discovery may mean all companies will have to review how far they must go in preserving records and electronically stored information.

In the case Phillip M. Adams & Associates v. Dell Inc., Adams sued ASUSTEK Computer and ASUS Computer International (ASUS), accusing the company of destroying evidence its employees had used his technology illegally. During discovery, ASUS turned over scant information, and Adams suspected spoilation.

Adams discovered a floppy disk controller malfunction in many personal computers and patented several ways to fix the bug in the 1980s. According to Inside Counsel, he has filed many lawsuits accusing computer manufacturers of misappropriating his technology.

In March, a Utah federal magistrate judge ruled against ASUS, sanctioning the company for what it called inadequate day-to-day document retention policies. Inside Counsel reported the judge determined ASUS' retention policy was too decentralized.

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In an unusual decision, the judge sanctioned ASUS for what he considered an inadequate system for retaining documents in the absence of litigation. Usually, if litigation is not anticipated, companies are not legally bound to change or update their retention policies, as long as...