Microsoft's e-mail policy at issue in legal fight

Burst.com, a company suing Microsoft for patent infringement, is alleging that the software giant instructs its employees to routinely destroy internal e-mail every 30 days, despite a court order to retain such documents, according to documents filed earlier this week.

Burst.com, a streaming media software company, on Monday filed a pretrial motion with a U.S. District Court in Baltimore asking the judge to find Microsoft has destroyed evidence and to instruct a jury to take that into consideration once the antitrust and patent infringement trial begins.

		Special report Europe plays hard- ball with Microsoft Read our complete coverage of the EU's decision to fine Microsoft a record amount.

"There were critical documents and critical time periods from critical players that relate to our case. And these documents and e-mails were destroyed," said Bruce Wecker, a lawyer with Hosie Frost Large & McArthur who is representing Burst.com. "The question in our motion is whether this was unintentional, or by design, and, if so, what would the remedy be?"

A representative for the software giant, however, said that while the company does have a guideline that suggests deleting e-mails after 30 days, the policy is not a strict requirement and that correspondence related to lawsuits is not included.

"We have produced millions of documents and e-mails in cases we were involved in and have provided a half a million e-mails and documents to Burst already," said Stacy Drake, a Microsoft spokeswoman.

The dispute between the two companies dates back to June 2002. Burst.com is alleging that Microsoft infringed on its patent for streaming video and used its technology to resolve a problem of slow video transmissions over the Internet when using Windows. The company is also alleging that Microsoft violated a nondisclosure agreement and tried to patent Burst technology after a briefing. A trial date has yet to be set.

According to the filing, around the time the Justice Department initiated its first antitrust investigation into Microsoft, the company began directing its employees to forgo saving any e-mail on its corporate servers. And in January 2000, the filing states, Microsoft substantially expanded that policy--shortly after Judge Thomas Penfield Jackson issued his findings of fact in the historic Microsoft antitrust trial.

According to Burst.com's filing, Jim Allchin, Microsoft Windows chief, sent an e-mail to Microsoft's Windows division, saying employees needed to purge their e-mail every 30 days.

"This is not something you get to decide," the filing quotes Allchin's e-mail as saying. "This is company policy. Do not think this is something that only applies to a few people. Do not think it will be OK if I do this; it hasn't caused any problems so far. Do not archive your mail. Do not be foolish. 30 days."

Allchin, however, later modified that directive after consulting with company attorneys, the filing said, quoting a second e-mail as saying, "To the best of your ability, I would like us to follow the general rule of around 30 days for e-mail. Some of you may be in unique circumstances that require particular information be kept for longer than 30 days to do your job effectively. My direction to you is that I want you to think about this issue at least once a month and delete items that are no longer needed, including all of your general e-mail. Don't just blindly archive e-mail."

The filing further describes Microsoft's policy as specificying that mail older than 30 days shouldn't be kept on e-mail exchange servers, business group servers or their personal computers, in addition to corporate servers.

Burst.com's filing also states that Microsoft destroys catalogs of its backup tapes, and it questions the software giant's honesty.

"To protect and preserve its e-mail destruction policies, Microsoft has concealed or falsely described its document retention practices in past litigation and on many occasions in this litigation," Burst.com alleged in its complaint. "Microsoft violated both this court's order, and its common-law duty to preserve documents that may be relevant to anticipated or reasonably foreseeable litigation."

Microsoft, however, says its e-mail policy is necessary given the company's size and the need for efficiency.

"No company retains every e-mail or document it generates, especially with the inefficiencies it creates," Drake said. "Microsoft, however, does retain documents and e-mails that are involved in lawsuits and has demonstrated this throughout the antitrust trials and other legal issues."

Bill Gates, Microsoft's founder, serves as an example. In a 2002 trial involving Sun Microsystems, an e-mail Gates sent to company executives was discussed in detail.

'Legal issues' mentioned in policy
Burst is particularly interested in finding out more about Microsoft's OTG File Server Policies and Guidelines, which the filing quotes as saying, in part: "Due to legal issues, mail files (PST files) cannot be stored on any corporate servers that are backed up to tape. This applies to all servers in the data center."

According to Burst.com's filing, Doug Brown, Microsoft's backup operations manager, said in a deposition that the phrase "due to legal issues" was included in the guidelines by a lower-level worker acting on her own, as a means to prompt Microsoft executives to abide by the policies, since they were reluctant to purge their e-mail from the systems.

This low-level IT manager, without authorization from Microsoft's legal department or upper management, decided to use the "legal issues" terminology to prevent people from saving their e-mail on the server system and tying up resources, the filing quotes Brown as saying.

According to the filing, these e-mail policies had been in place for a couple of years prior to Burst.com's lawsuit, but Wecker, Burst's attorney, said other litigants fighting Microsoft may not have been aware of it.

"When larger companies are fighting Microsoft, they're dealing with millions of documents," Wecker said. "But in our case, we have a small company that had limited discussions with Microsoft and with only a few people. So, we could easily see where the gaps were in e-mail. We would have e-mail from Microsoft, but they would not have the corresponding e-mail."

Microsoft is expected to respond to Burst.com's motion at the beginning of next month.