Intel said Monday that it may have lost some internal e-mails that it was supposed to turn over as possible evidence in the landmark antitrust lawsuit filed by archrival Advanced Micro Devices.
AMD said Intel's revelation demonstrates "a combination of gross communication failures, an ill-conceived plan of document retention and lackluster oversight by outside counsel" that has allowed evidence from top executives and other workers to be permanently destroyed.
AMD's lawsuit, filed in June 2005, claims that Intel forced major customers into exclusive deals and offered secret rebates to undercut AMD in the market for microprocessors that act as the brains of computers.
The companies are currently swapping tens of millions of pages of documents in a legal process known as discovery. The two sides are scheduled to appear again before a judge in Delaware federal court on Wednesday, and the trial is scheduled to begin April 27, 2009.
Intel, the world's largest computer chipmaker, said in a filing on Monday that it has identified "a number of inadvertent mistakes" that caused employees to improperly handle e-mails generated after the lawsuit was filed that they were supposed to retain.
The Santa Clara-based company said it acted swiftly after AMD filed the lawsuit to implement measures for preserving documents it felt would be relevant to the case. However, Intel notified AMD last month that it had discovered missteps that may have caused some documents to be permanently lost.
For example, some 400 employees who were identified as having potentially relevant information were not instructed to retain those documents. The reason was a foul-up in checking the list of selected employees versus those who had received so-called retention notices.
In other cases, some employees who were notified mistakenly assumed that the company was archiving their e-mails, and those messages were automatically deleted after sitting too long in their mailboxes.
Other workers failed to move e-mails from their 'sent' box to their hard drive as instructed, and those messages were also automatically deleted.
Intel did not specify how many e-mails may have been lost, but said some might be retrieved from backup tapes or may exist within message strings with other employees and customers.
In its filing Intel said it is installing a new e-mail archiving system to replace the company's reliance on individual workers and backup tapes for preservation, and continues to examine existing backup tapes for the e-mail records.
"Intel is taking this matter very seriously," the filing said. "It very much regrets this happened."
Intel spokesman Chuck Mulloy said the company doesn't know yet how many e-mails may have been lost, but believes that it is likely a "very small percentage" of the tens of millions of pages Intel will turn over to AMD and "will not hinder AMD's ability to bring their case."
Through last week, Intel had delivered about 17 million pages of documents to AMD, Mulloy said.
AMD said that Intel's disclosure "demonstrates systemic evidence preservation breaches of troubling breadth and depth," and that Intel's practice of asking selected employees to voluntarily identify and save relevant materials amounted to a "half-hearted attempt at preservation."
"The damage does not appear confined to low-level or marginally important witnesses," AMD said in its filing. "To the contrary, Intel executives at the highest level failed to receive or to heed instructions essential for the preservation of their records, and Intel and its counsel failed to institute and police a reliable backup system as a failsafe against human error."
Sunnyvale-based AMD said the court should investigate Intel's practices and prepare and impose changes to the company's preservation methods to prevent the future loss of evidence.
Also Monday, AMD warned that it was unlikely to meet its first-quarter revenue guidance of $1.6 billion to $1.7 billion after sales of its processors to PC and server makers fell short of the company's "very aggressive" expectations.