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Intel is facing some big-time legal problems in its 2-year-old legal tussle with a major competitor, AMD—largely because its own internal e-mail archiving system apparently isnt doing the job.
A U.S. federal judge on March 7 gave the worlds largest microprocessor maker 30 days to try to recover about 1,000 lost e-mails that it was required to keep for an antitrust lawsuit filed by its biggest competitor, AMD, in 2005.
Judge Joseph Farnan of the U.S. District Court in Delaware referred the lost e-mail matter to the so-called special master—a court official who follows up such orders for the judge. The judge also ordered Intel to file a detailed report on how it will try to recover the e-mail evidence.
Now there are people coming forward to say that all these digital storage headaches could have been easily avoided with a dose of proactive planning, in light of new U.S. federal court rules enacted Dec. 1 that require companies to be able to quickly find such data when required by the federal court.
Intel, which has 99,900 employees worldwide, admittedly is having some difficulty controlling all its corporate e-mail records, much to the consternation of its legal foe and the court. The e-mails that the company claims are missing reportedly discuss details relevant to the AMDs lawsuit, which alleges that Intel engaged in anti-competitive practices to maintain a “monopolistic position” in the PC processor market, according to the suit.
Most of the missing e-mails were written after AMD filed suit against Intel on June 27, 2005, according to court documents.
In a statement sent to the court, AMD said: “Through what appears to be a combination of gross communication failures, an ill-conceived plan of document retention and lackluster oversight by outside counsel, Intel has apparently allowed evidence to be destroyed. Intel executives at the highest level failed to receive or to heed instructions essential for the preservation of their records, and Intel counsel failed to institute and police a reliable backup system as a failsafe against human error.”
Next Page: Intel upfront about the issues.
Intel Upfront About the
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Intel Upfront About the Issues
To its credit, Santa Clara, Calif.-based Intel is being upfront and transparent about the problems it is experiencing in maintaining and accessing old e-mail records. Its an issue that affects every business that uses e-mail in its daily routine, and that entails just about all businesses—even IT giants.
“I can just imagine the look on the face of the [storage] guy at Intel—or at any company—when hes asked, We have to get this [particular] e-mail out of the [tape] archives, and we have to get it fast,” Matt Smith, founder and president of e-mail archiving provider LiveOffice in Torrance, Calif., told eWEEK.
“Its a real needle in a haystack. Theres always a mountain of backup data involving tape cassettes, especially for a company the size of Intel. First, you have to find the right tapes; then, to find specific e-mails on those tapes is a real chore.”
A typical Microsoft Exchange or Lotus Notes environment (Intel uses MS Exchange Server, an Intel spokesperson told eWEEK) usually has to rely on individual backup, said Alan Armstrong, vice president of product management at e-mail archiving system maker Fortiva. This indeed was the case with Intel.
“Backup is expensive, to do it right,” Armstrong said from his home office in Toronto. “If you dont have a system in place, you have to rely on your users to back up their own documents in good faith and good practice in an organized behavior. But whenever theres trust involved, youre taking a risk.
“You dont trust all your users to sign checks, do you? Yet [many] companies trust their employees to backup their own documents.”
Fortiva CEO Eric Goodwin told eWEEK that Intels biggest mistake—as is the case with numerous companies—is that e-mail archiving is not considered a core competency.
“Im not nasty toward Intel at all,” Goodwin said. “I empathize with them. But lets face it: E-mail archiving is a third-class application; its not the CRM [customer relationship management] or ERP [enterprise resource planning] app that is more exciting for IT guys to work on, and which are considered core to a business that relies on SAAS [software as a service]. So companies put their second-tier IT guys on e-mail archiving. Its like, When we get some extra time, then well do the e-mail.”
LiveOffices Smith agreed that companies often make the mistake of not paying enough attention to archiving their data, so that it can be accessed in a reasonable amount of time.
“With the new [FRCP] guidelines, they [Intel] had to tell the court, We just dont have access to these certain e-mails … our system was not designed to retain it,” Smith said. “You throw in human error into the mix, theres just no way for them to find those e-mails. If you dont have a proactive system in place, taking the e-mails as they come in so that theres no chance to have human error, and then placing them into a redundant archive … then youll have the same issues Intel now has.”
Next Page: Financial services companies ahead of the curve.
Financial Services Companies Ahead
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Financial Services Companies Ahead of the Curve
In financial services, where Smith said LiveOffice has been very busy in the last five years, this “redundant” type of archiving system is now commonplace.
“They [the financial services companies] have the systems in place, theyre doing audit requests and legal discovery on a regular basis,” Smith said. “This new [federal] guideline really shifts the burden to companies now. No judge is going to say, What do you mean, you dont have e-mail?—especially to a technology company like Intel.”
eWEEK obtained a copy of a letter Intel sent to AMD and to Farnan on March 6. In it, the company said that despite a companywide effort to comply with AMDs requests for evidentiary documents—including tape backups of more than 1,000 of its employees correspondence documents—the company admitted there were “inadvertent mistakes in the implementation” of its preservation process.
For example, some employees obeyed the request to save their e-mails to a backup hard drive but did not save their “sent” e-mail folders—only the “incoming” mail folder. As a result, those “sent” e-mails were purged as part of Intels regular maintenance program. In the letter, Intel also said a few employees didnt follow the directive at all because they believed the IT department was automatically saving their e-mails on its own.
In the letter, Intel also said that it is reviewing its document-retention efforts related to former employees, because there “may be some lapses.”
“We have been very transparent all along in this process,” Intel media relations officer Chuck Mulloy told eWEEK. “We know we have some issues, but weve explained it all very clearly and are going to rectify the situation as quickly as possible.”
Goodwin said that in an ironic way, Intels issues are “good for our business, and excellent for companies who use SAAS.”
“This is bringing a lot of attention to the importance of e-mail archiving,” Goodwin said. “If one of the most respected, powerful IT companies in the world can have this problem, what about all the rest of us?”
Editors Note: This story was updated to include information about a deadline given to Intel by a federal judge.
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