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Following the collapse of major financial institutions and other business leaders on Wall Street, both government agencies and shareholders have tightened oversight of corporate America, demanding greater accountability for money spent and decisions made by executives. Now more than ever general counsels must help their companies set clearly defined standards for legal, financial and business processes. Document retention policies are particularly important for protecting companies that may be involved in litigation, as well as in providing transparency to regulators and stakeholders.
Meanwhile, despite the economic downturn, companies looking to bolster their valuation are still focused on expanding and protecting their patent portfolios at all costs. A company's licensing agreements ' often an important source of revenue ' can be put at risk if document retention policies are not clearly set and carefully followed. In addition, general counsel must be aware that new standards for transparency present new challenges to IP and general litigation strategies. Knowing what to save, how to save it, and for how long can make or break a case. Destruction of documents is a surefire way to land a seat in the defense chair.
To protect the company against these challenges, corporate counsels should note recent legal developments surrounding spoliation ' the destruction or significant alteration of evidence, or the failure to preserve property for another's use as evidence in pending or reasonably foreseeable litigation. This violation occurs when one party intentionally or negligently breaches its duty to preserve potentially discoverable evidence.
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