The opinion
UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF ILLINOIS
EASTERN DIVISION
SHURE INCORPORATED, )
)
Plaintiff, )
) No. 17-cv-03078
v. )
) Judge Edmond E. Chang
CLEARONE, INC., )
)
Defendant. )
MEMORANDUM OPINION AND ORDER
In August 2019, ClearOne secured a preliminary injunction against Shure in
this ongoing fight over audio-conferencing patents. R. 551, Order.1 The preliminary
injunction targeted Shure’s MXA910 system, which is a microphone array designed
to be mounted into the ceilings of conference rooms. Long story short, one of the
mounting configurations of the MXA910—in which the microphone board is fully
hidden within the ceiling grid and thus looks like a normal ceiling tile—very likely
infringes one of ClearOne’s patents. So, until the litigation is resolved, Shure is not
allowed to manufacture, market, or sell “the MXA910 to be used in its drop-ceiling
mounting configuration, including marketing and selling the MXA910 in a way that
encourages or allows integrators to install it in a drop-ceiling mounting
configuration.” Order at 64. According to ClearOne, though, Shure has since released
a new product, the MXA910-A, which is ostensibly distinct from the MXA910, but is
1Citations to the record are noted as “R.” followed by the docket number and the page
or paragraph number. Any citations to the sealed versions of the docket entries will be
identified with the parenthetical “(sealed).” Otherwise, in the absence of any parentheticals,
all citations are to the public versions of the docket entries.
in practice readily installable in the exact same “drop-ceiling” manner that the Court
has enjoined. ClearOne also takes issue with another Shure product, the MXA910-
60CM, for roughly the same reasons.
As a result of these alleged violations of the preliminary injunction, ClearOne
now moves to hold Shure in contempt. R. 707, Mot. Contempt. Separately, ClearOne
also requests leave to conduct additional fact discovery. Id. at 2. For the reasons
explained below, ClearOne’s contempt motion is granted in part, and entered and
continued in part to determine the scope of the violation and the appropriate relief.
ClearOne’s request for leave to conduct discovery is thus also granted.
I. Background
ClearOne is the owner of U.S. Patent No. 9,813,806 (the ’806 Patent). The ’806
Patent claims an invention that combines a beamforming microphone array (which
is a separate patented technology that is meant to pick up and process certain sounds
more effectively than traditional microphones) with a ceiling tile. The final integrated
product can be mounted into a ceiling grid like any other ceiling tile. Also like a
normal ceiling tile, none of the hardware dangles or protrudes down; the microphone
tile is meant to blend in rather seamlessly with the rest of the ceiling.
A. Preliminary Injunction
In September 2018, ClearOne moved for a preliminary injunction against
Shure, alleging that Shure’s MXA910 microphone array infringed on ClearOne’s ’806
Patent. R. 366. Among other arguments, ClearOne asserted that the MXA910
infringed on Claim 1, with most of the dispute turning on Limitation 5 of that claim.
Limitation 5 requires that “all or part of’ the microphone ceiling tile “is in the drop
space of the drop ceiling.” Order at 6.
Initially, the parties sharply disputed what the term “drop space” meant. To
understand “drop space,” it is necessary (at the risk of repetition) to back up a bit and
establish what “drop ceiling” means. Specifically, a “drop ceiling” refers to a ceiling
configuration in which there is a true, structural ceiling at the very top of the room.
From there, a ceiling grid system made up of T-bars hangs down from the structural
ceiling, and then ceiling tiles are placed inside that ceiling grid. Here is a diagram:
Order at 22.2 The thick horizontal black line is the structural ceiling of the room. The
three vertical lines that look like upside-down T’s represent the T-bars that suspend
from the true ceiling. The yellow blocks represent the ceiling tiles (or microphones)
that are “dropped” inside the ceiling grid to rest on the T-bars. So, a person sitting
inside the room would look up and see only the bottom of the yellow ceiling tiles. The
actual, structural building ceiling is hidden above the ceiling tiles, which are
2These images were originally provided by ClearOne in demonstrative slides offered
in support of the preliminary injunction motion. See Order at 22.
suspended via the ceiling grid system. Jd. at 20. The space in between all of that is
the drop space. To be more precise, as the Court explained in its August 2019 Order,
the term “drop space” refers to the space inside the ceiling grid—the upper boundary
is the structural ceiling of the building, and the lower boundary is the imaginary
horizontal plane created by the upside-down T-bars that hang down from the
structural ceiling. Id. at 22. In the diagram depicted above, the top and bottom bounds
of the drop space are represented by the red arrows.
So, what does it mean for “all or part of’ something to be “in” the drop space,
as required by Limitation 5? Here is another useful diagram:
Order at 25. This is the same T-bar ceiling grid configuration as in the diagram above.
Here, the left-most and right-most yellow blocks represent ceiling tiles that sit
entirely within the drop space—“all” of those ceiling tiles are situated in the drop
space, and nothing dips below the drop space. By contrast, the yellow block in the
center also sits within the drop space, but the bottom part of the block extends below
the horizontal plane created by the T-bars as well. So only “part of’ that block is in
the drop space, while another part of the block extends into the actual room below. In
this case, an MXAQ910 that is mounted in its drop-ceiling configuration sits entirely
within the drop space. Based on this definition of “drop space,” the Court concluded
that “any MXA910 mounted in the drop ceiling grid practices Limitation 5 of Claim
1.” Id. at 33.
Ultimately, the Court granted ClearOne’s preliminary injunction motion and
ordered Shure to “cease manufacturing, marketing, and selling the MXA910 to be
used in its drop-ceiling mounting configuration, including marketing and selling the
MXA910 in a way that encourages or allows integrators to install it in a drop-ceiling
mounting configuration.” Order at 64. By “drop-ceiling mounting configuration,” the
injunction referred to the “drop space” limitation described above. Here is a photo of
the enjoined drop-ceiling configuration:
R. 709, ClearOne Br. at 2. Shure is no longer allowed to make, market, or sell any
beamforming microphone array designed to sit either fully or partially in the drop
space of a drop-ceiling grid. But a microphone array that is suspended entirely
beneath the drop space (and thus extends down from the ceiling) is still fair game.
Order at 25 (“[A] BFMA that is not in the drop space at all—and is instead located
totally beneath it ... would not practice Limitation 5 of Claim 1 of the 806 Patent.”).
B. The MXA910-A Model
In a purported effort to design around the ’806 Patent, Shure released a new
microphone product, the MXA910-A, that was supposed to hang 100% beneath the
drop space of a drop ceiling. R. 732, Shure Resp. Br. at 3-4; R. 730, Klegon Decl. 4
7-8. Shure sought to accomplish this by adding two “flanges” to either side of the
microphone board. See R. 710, ClearOne Br., Exh. B, User Manual at 26. The flanges
are circled in red below:
eee
2 ones?)
ClearOne Br at 3. As the picture demonstrates, rather than having the microphone
board itself rest directly on the ceiling grid—which would result in the microphone
board sitting entirely inside the drop space—the new design allows the microphone
board to suspend from the ceiling grid via the two flanges on either side, which in
turn allows the microphone array board to hang entirely below the drop space. There
is no dispute that this particular configuration would not run afoul of Limitation 5.
8Technically, the exhibits accompanying ClearOne’s opening brief are attached to the
Rayburn Declaration at R. 710 and R. 714 (sealed). But the reply brief exhibits are attached
to a different Rayburn Declaration at R. 779. So, for ClearOne’s exhibits, this Opinion will
use the labels “ClearOne Br., Exh.” or “ClearOne Reply Br., Exh.” followed by the exhibit
number. The same goes for Shure’s exhibits. Because those exhibits are attached to multiple
Patel Declarations, at R. 733, R. 802 (sealed), and R. 815, this Opinion will identify Shure’s
exhibits as either “Shure Resp. Br., Exh.” or “Shure Sur-Reply Br., Exh.” followed by the
exhibit number.
1. Ceiling Grid Fitment Issues
The problem, according to ClearOne, is that Shure’s flange addition is
“functionally irrelevant” in way that, practically speaking, puts the MXA910-A right
back into the drop space. ClearOne Br. at 13. To understand this argument, it is
necessary to back up a bit and talk about ceiling grids again. Specifically, in standard
24 x 24-inch drop-ceiling setups (which is what we are dealing with in this case), the
T-bars that hang down from the structural ceiling to create the ceiling grid come in
two relevant sizes.‘ The first T-bar variety has a 15/,,-inch face length, while the
second comes with a slightly shorter °/,,-inch face length. R. 780, Fry Decl. { 6. (The
term “face” refers to the horizontal component on the bottom of a T-bar.) It turns out,
though, that these few millimeters end up making all the difference when it comes to
the installation of the MXA910-A.
Specifically, as the diagram above shows, the cross-section of the MXA910-A
microphone board is in a sort of trapezoidal shape, that is, the bottom plane is longer
than the top plane. With a °/,,-inch ceiling grid, the installation is apparently
straightforward. The integrator merely needs to lower the MXA910-A toward the
ceiling grid, and the microphone board itself will descend through the opening
between the T-bars and into the room below, at which point the two flanges will catch
onto the T-bar faces on either side. The end result is that the MXA910-A is suspended
‘There are actually more than just two varieties of T-bar face lengths, including a 1%-
inch option, but for purposes of this motion, only two are relevant.
by its flanges with the microphone array itself hanging completely below the drop
space. See ClearOne Reply Br., Exh. 9, Abraham Dep. Tr. at 12:18-25 (sealed).®
That simply does not work with the 15/,,-inch T-bars. With just a slightly
longer T-bar face, the width between the T-bars is too small for the trapezoidal
microphone array to make it past the ceiling-grid opening between the !°/,,-inch T-
bars. See ClearOne Br., Exh. D, Abraham Dep. Tr. at 15:15-23 (sealed). As a result,
if an installer simply lowers the MXA910-A onto the ceiling grid, then the product
will come to rest on the microphone array itself, while the flanges will be left floating
in midair inside the drop space, as half-depicted in this diagram:
ClearOne Br. at 5. Thus, the entire MXA910-A product, including the microphone
array and the two flanges, will sit entirely inside the drop space of the ceiling grid.
To borrow the terminology of the parties, we will refer to this supposedly incorrect
5Although this exhibit, as well as many others, were sealed (as noted throughout the
Opinion), the facts disclosed do not meet the Seventh Circuit’s requirements for sealing facts
that are the basis for judicial decision-making. So this Opinion is being issued without
redactions.
installation of the MXA910-A as the “flush” mount (because the microphone array
sits flush against the ceiling grid) to distinguish it from the “flange” mount.
What makes the fitment issue worse, according to ClearOne, is the fact that
15/,,-inch ceiling grids are substantially more common than %/,,-inch grids in
commercial buildings.® See Fry Decl. {| 7, 10-13 (15/,,-inch grid is the “most
commonly installed” size of ceiling grid in commercial buildings generally, making up
approximately 67% of enterprise/legal/financial spaces and at least 85% of
education/healthcare/government spaces); R. 781, Senkowski Decl. {J 13-15 (4/,¢-
inch grids are present in approximately 50% of enterprise/legal/financial/government
spaces and at least 90% of education/healthcare spaces); R. 782, Gordon Decl. 4 11-
14 (15/,,-inch grids are present in approximately 75% of enterprise/legal/financial
spaces and at least 80% of education/healthcare spaces); R. 783, Wall Decl. 4 10-13
(15/,,-inch grids are present in approximately 95% of enterprise/legal/financial spaces
and at least 99% of education/healthcare/government spaces). Indeed, ClearOne
points out that even Shure’s internal communications suggest that at least 50% and
as many as 90% of commercial ceiling grids use '5/,,-inch ceiling grids. ClearOne
Reply Br., Exhs. 4 (sealed), 7 (sealed). Thus, the MXA910-A fitment issue—which
only occurs with 1°/,,-inch grids—is not just limited to a select few installations;
rather, it is potentially widespread enough to affect the vast majority of MXA910-A
installations.
®Beamforming microphone arrays like the MXA910 models are only installed in
commercial spaces, not residential. See Fry Decl. {| 9.
2. Shure’s Response to Fitment Issues
Shure, however, denies that flush-mounting is a problem with the MXA910-A.
For one, Shure disputes ClearOne’s threshold premise that !5/,,-inch grids are more
common than %/,,-inch grids. See R. 736, Roy Supp. Report { 82 (sealed). To be clear,
Shure’s expert, Dr. Kenneth Roy, does not dispute that 19/,,-inch grids are the “most
commonly used system for residential and commercial applications.” Jd. (emphasis
added) (sealed). But the relevant market here, Roy explains, is solely commercial. Id.
(sealed). And within the commercial market, Roy notes that !5/,,-inch grids are “often
the low cost solution,” but that when you start to more carefully divide up the
commercial market, it turns out that there is actually a “strong preference” for °/,¢-
inch grids in the office-building segment in particular. Jd. In terms of how that
preference translates to actual installations, Roy explains that in “Class A” office
buildings, °/,,-inch grids make up 80 to 90% of the ceiling installations. Id.
And in any event, the prevalence of !5/,,-inch grids versus 9/,,-inch grids is
irrelevant, argues Shure. Shure Sur-Reply Br. at 1. Specifically, the fitment issues
with the !5/,,-inch T-bars can easily be avoided if the integrator simply goes through
the additional labor of removing one of the T-bars, putting the MXA910-A in the
correct flange-mount position, and then replacing the T-bar. Klegon Decl. 4 8. Those
extra steps allow the microphone board to fit through the T-bar opening in 15/,,-inch
T-bar setups, and then the MXA910-A can hang from its flanges as intended.
During the design process, Shure realized that this extra work could “be
perceived as less appealing to some” customers. Klegon Decl. { 4 (sealed). But Shure
10
was supposedly unable to reach a conclusion on the question of “how many potential
applications would have 1!°/,, inch grids.” Id. Which is not to say Shure did not try—
there are emails suggesting that Shure asked various integrators to “keep tabs on
how many grids are % versus 1 inch.” ClearOne Reply Br., Exh. 6 (sealed). See also
ClearOne Reply Br., Exh. 7 (“As per your request, we have discussed ceiling grid
variations with several of our installers out here and apparently the '5/,, version
makes up the vast majority of [what] is installed in our territory. A couple of [project
managers] mentioned ‘like 90%’ ...”) (sealed). Ultimately, Shure determined that the
tradeoff was worth it: some customers might choose not to buy the MXA910-A given
the additional labor requirement for 15/,,-inch grids, but overall, “offering a product
that may require minimal additional installation time would not significantly impact
sales.” Klegon Decl. 4 5 (sealed). This particular design of the MXA910-A, where
customers would need to do extra labor to flange mount it, would at least give Shure
a “fighting chance” in the competitive marketplace. Jd. J 6 (citing R. 715, ClearOne
Br., Exh. H) (sealed). According to Shure, “fighting chance’ specifically referred to the
idea that at least some, if not most, customers would not be deterred by the additional
labor and would opt to buy the MXA910-A for their 15/,,-inch ceiling grids. Id. □ 6
(sealed).
Indeed, Shure explains, it has been entirely transparent with its customers
about the extra labor that will be required. “Customers” in this context refers mainly
to professional integrators, who are the ones responsible for installing the microphone
arrays into the conference room ceilings of end users; Shure generally does not
11
interact directly with end users. Klegon Decl. § 11. In any event, here, the MXA910-
Auser manual, which is available in both print and online, indicates that: “The flange
sits on the ceiling grid, and the microphone hangs below it.” Jd. { 7. The same user
manual also includes the following instruction: “Depending on the width of the ceiling
erid T-bars, you may need to remove or adjust one side’s T-bar to install the [MXA910-
Id. § 8. Similarly, on Shure’s website, the Frequently Asked Questions section
explains that “[cleiling grids that use the 15/,, inch T-Bar are a tight fit and the
installer may need to remove the surrounding ceiling tiles to have more flexibility on
the grid and be able to press the mic into the desired position.” Jd. § 9. In addition,
Shure’s shipping announcement for the MXA910-A included the disclaimer that the
MXA910-A “is not intended to be flush-mounted as shown above [in a photograph of
a flush-mounted ceiling microphone array].” R. 815-5, Shure Sur-Reply Br., Exh. 5.
In all of these written communications, Shure did not go so far as to “include a step-
by-step process of how to remove the side T-bar of each manufacturer’s grid system,”
but according to Shure, that is because “Shure relies on the integrators and installers
to understand the specifics of how to install the product.” Klegon Decl. { 9.
In addition to the printed instructions, Shure also allegedly coordinated
multiple meetings with its sales representatives (referred to internally as “rep firms’)
to preview and discuss the additional labor needed to install the MXA910-A in □□□□□□
inch ceiling grids. R. 802-3, Shure Sur-Reply Br., Exh. 8 (sealed); R. 802-5, Shure Sur-
Reply Br., Exh. 10 (sealed). In particular, Shure apparently instructed its rep firms
to let their customers (the integrators) know about the MXA910-A fitment issues so
12
that nobody would be “blind-sided” during an installation job. Shure Sur-Reply Br.,
Exh. 10 (sealed). Shure claims that it also “held webinars” about the MXA910-A. R.
802-12, Shure Sur-Reply Br., Exh. 18 (email about “upcoming webinar’) (sealed).
In short, Shure believes that professional installers tend to seek out and follow
manufacturer instructions. Klegon Decl. 4 10, 12. And in the context of the MXA910-
A, that is precisely what Shure argues that its integrators are doing: they are
following Shure’s instructions and going through the additional labor required to
flange-mount the MXA910-A. See Shure Sur-Reply Br., Exhs. 7, 9, and 11 (emails
reporting on positive statements from integrators) (sealed). And to the extent that
any integrators are put off by that extra labor, they are simply not buying the
MXA910-A in the first place. Klegon Decl. 6 (sealed). But what has never been an
option, according to Shure, is incorrect flush mounting. Id. § 10 (“[A]t no time did we
believe that customers (installers) would install the product incorrectly or contrary
to the installation instructions.”).
3. Customer Experiences
ClearOne disputes all this. For one, ClearOne argues that the flange-mounting
process is not as simple as Shure makes it out to be. See ClearOne Reply Br., Exh. 7
(email from integrator stating that “it took 2 guys 30 minutes” to install the MXA910-
Aina 15/,,-inch grid) (sealed). ClearOne is also adamant that integrators who are put
off by the additional labor are not simply forgoing the MXA910-A altogether, as Shure
claims, but are instead opting for the less labor-intensive route of simply lowering the
MXA910-A into the ceiling grid and flush-mounting it within the drop space. R. 778,
13
ClearOne Reply Br. at 11. In short, ClearOne maintains that there are still
integrators out there who, whether on purpose or inadvertently, continue to install
the MXA910-A in the enjoined drop-ceiling configuration—and that Shure allows
these installations to happen. In support of this assertion, ClearOne points to its own
attempt at an installation, as well as a few examples of Shure customers either
having difficulty with the flange-mounting requirements or just flush-mounting the
MXAQ910-A.
a. ClearOne’s Own Installation
First, in December 2019, ClearOne itself tried to install an MXA910-A in its
offices, which have the standard 24 x 24-inch ceilings with 19/,,-inch grids. R. 711,
Graham Decl. {{ 4-5. ClearOne maintains that it was unable to install the MXA910-
A in any way other than the enjoined flush configuration. Jd. And then, once the
MXA910-A was flush-installed, there were “no visible gaps to indicate that this
installation is undesired or incorrect.” ClearOne Br. at 5 (citing Graham Decl., Exhs.
A, B, and C). What is more, ClearOne discovered that when the MXA910-A is
installed in flush configuration, the flanges actually have the effect of stabilizing the
microphone array in the flush arrangement. ClearOne Br. at 5. Later on, when
ClearOne tried to follow the “correct” installation instructions in Shure’s instruction
manual, it required “significant effort” on ClearOne’s part. Graham Decl. 6-9.
Specifically, it took ClearOne’s Facilities Assistant (who had 1.5 years of experience
as a drop-ceiling installer) more than 10 minutes to flange-mount the MXA910-A in
the 19/,,-inch ceiling grid. Id. 4 6. See also Graham Decl., Exhs. D-K (video exhibits).
14
b. Reddit User
In addition, ClearOne managed to locate a Reddit thread discussing the effects
of the preliminary injunction in this case. See ClearOne Br., Exh. K. In the thread,
one user posted that Shure had just released a new version of the microphone—that
is, the MXA910-A—that “does not fall under the remits of the injunction.” Id. at 1. In
response to that post, another user named “mistakenotmy” commented: “I just got a
few of those [MXA910-As] in. I have only put one up so far but in the tile location I
used, the mic won’t actually come through the tile to rest on the lip as pictured. So it
is actually flush mounted like the old ones.” Id. Then, beneath that, another user
responded: “That’s pretty much the point. The official mounting method causes the
mic to hang slightly below the ceiling grid. In reality, the installer can mount them
in any way they choose and there’s nothing ClearOne can do about it.” Id.
With authorization from the Court, ClearOne eventually tracked down and
deposed the user “mistakenotmy,” who turned out to be an Instructional Technology
Specialist at Moraine Park Technical College. See ClearOne Reply Br., Exh. 17, Dep.
Tr. at 12:11-13 (sealed). Specifically, this tech specialist’s job involved installing
audiovisual equipment in classrooms at the school. Id. at 12:14-15. According to the
specialist, he had dealt with the MXA910-A before; he described an instance where
he installed an MXA910-A in a classroom ceiling, and he “was debating whether to
pop [one of the ceiling grid T-bars] out” to mount the microphone the “correct” way,
“or just to leave it sitting on the grid, flush.” Id. at 23:8-16. The tech specialist
revealed that he ultimately decided to leave the MXA910-A flush in the grid because
it was “just easier” and still “looked fine.” Jd. at 23:16-18. He also stated that he did
not read the instructions that came with the MXA910-A because “it was pretty self-
explanatory,” and he knew how the “previous version” worked. Jd. at 26:8-12.
4. The MXA910-US
One final piece of background related to the MXA910-A is useful to know.
During a March 2020 status hearing, the Court asked Shure why the microphone
board of the MXA910-A angled out into the trapezoidal shape, as opposed to just
dropping straight down in a vertical line. R. 742 at 9:16-20. Without the outward
angling, the MXA910-A would presumably drop through a 15/,,-inch ceiling grid with
no extra work and rest on its flanges as intended, thus avoiding the flush-mount issue
altogether, as depicted in green in the diagram below:
ClearOne Reply Br. at 4. During the hearing, though, Shure informed the Court that
the board was angled outwards because it would require “substantial effort” to reduce
the diameter of the board, which in turn would involve repositioning the microphones
in the array. R. 742 at 9:21-10:8, 24:10-25:3.
It turns out that Shure’s statement to the Court that day was wrong, as Shure
itself acknowledges. R. 785, ClearOne Reply Br. at 5 (sealed); Shure Sur-Reply Br. at
12 (sealed). Shure did manage to reduce the diameter of the microphone board
without repositioning the microphones. ClearOne Reply Br. at 5 (sealed). This new
product was called the MXA910-US, and it was designed to fit Gin a flange
16
configuration) in both ?/,,-inch and 15/,,-inch grids with no additional labor. R. 786,
ClearOne Reply Br., Exh. 1 (sealed). Contrary to Shure’s March 2020 representations
to the Court, Shure had actually been planning the MXA910-US design as early as
December 2019, before it even released the MXA910-A. ClearOne Reply Br., Exh. 4 at
SHURE864002 (“We understand that [the MXA910-A is] an inconvenience to the
installer we are working to resolve this ... We expect a new universal fitment SKU
solution in the April/May timeframe’) (sealed).
C. The MXA910-60CM
In addition to the MXA910-A, ClearOne also alleges that Shure has allowed
integrators to flush-mount a different microphone product, the MXA910-60CM.
ClearOne Br. at 9. To be clear, the MXA910-60CM is not a “new” product like the
MXAQ910-A; it was already being marketed at the time that the MXA910 preliminary
injunction was issued. ClearOne Br., Exh. L. But according to ClearOne, the
MXA910-60CM is also capable of being flush-mounted in the enjoined configuration.
Graham Decl. § 10. As a result, in the August 2019 Order setting the preliminary
injunction bond amount, the Court ordered Shure to “prominently include” the
following statement in the instruction manuals and user guides for the MXA910-
60CM (referred to in the Order as the “European version”): “A federal court has
preliminarily found that this product cannot lawfully be used in a drop-ceiling
mounted configuration. This includes using adapters of any kind to fit the product
into a drop-ceiling mounted configuration.” R. 592-1 at 2.
17
There is no dispute that Shure did include a variation of that statement in the
relevant customer communications, but ClearOne now argues that Shure has
nonetheless allowed its integrators to continue mounting the MXA910-60CM in a
flush configuration. ClearOne Br. at 10. In support of this theory, ClearOne once
again managed to locate a relevant Reddit thread where users were discussing
ClearOne’s patents (in an exceptionally unfavorable light). ClearOne Br., Exh. M.
This time, in the comments section, a user with the handle “buschdogg” posted that
they had “designed a mounting system that can be used on the MXA910-60CM (UK
version) that mounts … flush (I hear that is illegal to install, though..).” Id. at 1.
What’s more, when the user showed the “solution to a Shure rep he said, ‘That’s
actually better than our long term solution.’” Id. See also ClearOne Reply Br., Exh.
19, DeBusschere Dep. Tr. at 51:10-24 (sealed).
Again, ClearOne eventually tracked down and deposed “buschdogg,” who
turned out to be a former project engineer named Joshua DeBusschere. DeBusschere
Dep. Tr. at 59:22-24 (sealed). DeBusschere worked for Avidex, a large integrator. Id.
(sealed). During the deposition, DeBusschere confirmed what he had written in his
Reddit post. Apparently, in September 2019, his supervisor told him to create a
solution to flush-mount the MXA910-60CM, since the MXA910 would no longer be
available. R. 787, ClearOne Reply Br., Exh. 21 (sealed). That same day, DeBusschere
reached out to a Shure sales representative to ask about the possibility of creating an
adaptor for MXA910-60CM installations.7 R. 787, ClearOne Reply Br., Exh. 22
(sealed). Instead of replying to the email, the sales representative called DeBusschere
on the phone to talk about the MXA910-60CM solution. DeBusschere Dep. Tr. at
116:11-21 (sealed). During the call, the Shure representative did not tell DeBusschere
not to make the adaptor; in fact, he “wasn’t against us making it. He just didn’t want
to compromise his position or do anything illegal on his part by recommending them
… I could tell he just didn’t want to do anything that might get him or Shure in
trouble.” Id. at 119:2-8 (sealed). Later, as referenced in the Reddit post, when
DeBusschere came up with the “solution” to mount the MXA910-60CM flush, he
showed it to the Shure representative, who said something like, “Wow, that’s actually
better than our long-term solution.” Id. at 51:16-24 (sealed). At that point, too,
DeBusschere was not told that his flush-mounting solution was a violation of any
court order or injunction. Id. at 52:1-11 (sealed).
D. The MXA910
Finally, it is worth mentioning one final set of allegations that ClearOne has
raised against Shure. Specifically, ClearOne alleges that right after the Court issued
the preliminary injunction order but before the order went into effect, Shure
encouraged integrators to stock up on as many MXA910s as possible. ClearOne Reply
Br. at 13 (sealed). (In balancing the equitable interests, the order exempted from the
injunction any MXA910s that had already been installed. See Order at 64.) Thus, on
7Specifically, DeBusschere emailed a representative from The Farm AV, which was
one of the “rep firms” doing sales for Shure. See Shure Sur-Reply Br., Exh. 10 at
SHURE864019 (sealed).
August 6, 2019 the day after the order was issued, Shure reached out to several
integrators to let them know of an upcoming “shortage in production” of the
MXA910s. R. 787, ClearOne Reply Br., Exh. 20 (sealed). According to an internal
email from Avidex (an integrator), Shure had “notified their top partners to start
stocking inventory.” Id. (sealed) In that same email chain, another Avidex employee
replied: “There will probably be a shortage of MXA910 ceiling pieces as the law suit
will most likely hold Shure from selling them. … The idea is to get them into stock
now.” Id. (sealed). Indeed, Shure apparently managed to sell out its inventory over
the next few days. R. 787, ClearOne Reply Br., Exh. 28 (sealed). On this point,
ClearOne points to an August 8 internal email from McFadden (a sales firm),
summarizing notes from a call with Shure that was “[p]robably not to be shared.” Id.
(sealed). Apparently, during the call, Shure told McFadden to “NOT tell people to
return product. If they have stock, they are sitting on gold. All are sold out, they sold
800 of them in the last 2-3 days.” Id. (capitalization in original) (sealed). The next
day, on August 9, Shure filed a brief with the Court arguing that a recall of
uninstalled MXA910s in the hands of integrators was unnecessary, because “[i]t is
not the nature of this market for integrators to hold or warehouse products, and
certainly not expensive ones like the MXA910.” R. 575 at 12.
II. Analysis
Based on all of this, ClearOne now argues that Shure has violated the court
order enjoining Shure from “manufacturing, marketing, and selling the MXA910 to
be used in its drop-ceiling mounting configuration, including marketing and selling
the MXA910 in a way that encourages or allows integrators to install it in a drop-
ceiling mounting configuration.” Order at 64. Shure, of course, maintains that the
MXA910-A is a completely different product from the MXA910. According to Shure,
as long as the new product is suspended from its flanges as designed, then there is no
Limitation 5 problem; the MXA910-A microphone array hangs entirely outside of the
drop space of the ceiling grid. (Recall that Limitation 5 of Claim 1 requires that “all
or part of” the microphone array be installed in the drop space of a ceiling grid.)
ClearOne, however, has a different view. Even though Shure has purported to design
a new product in the MXA910-A by adding two flanges to a slightly smaller
microphone array, ClearOne contends that none of those design changes mean
anything because Shure’s customers are incentivized by Shure’s design choices to
ignore the flanges and continue to install the MXA910-A in a flush configuration
inside ceiling grids. In other words, Shure allows integrators to install the MXA910-
A in a flush-mount fashion.
This motion essentially boils down to the factual question of whether or not
Shure “allows” integrators to install its speaker products (including the MXA910-A
and the MXA910-60CM) in a drop-ceiling mounting configuration in violation of the
preliminary injunction order. For the reasons explained below, the record is clear and
convincing that Shure—through its design choices—violated the injunction order by
allowing integrators to install the MXA910-A in the enjoined flush configuration. The
record is also clear as to the MXA910-60CM, but in an abundance of caution, the
Court will refrain from granting that aspect of the contempt motion to allow for
additional discovery.
A. Legal Standard for Contempt
In general, a contempt finding requires “clear and convincing evidence that the
opposing party violated a court order.” Goluba v. Sch. Dist. of Ripon, 45 F.3d 1035,
1037 (7th Cir. 1995) (cleaned up).8 There is no need to “find that the violation was
willful,” as long as the party “has not been reasonably diligent and energetic in
attempting to accomplish what was ordered.” Id. (cleaned up). At the same time, the
Court bears in mind that contempt is a “severe remedy that should not be resorted to
where there is a fair ground of doubt as to the wrongfulness of the defendant's
conduct.” Taggart v. Lorenzen, 139 S. Ct. 1795, 1801-02 (2019).
In the specific context of evaluating whether an injunction against patent
infringement has been violated by a newly designed product, ClearOne must
additionally satisfy the two-step test articulated by the Federal Circuit in TiVo Inc.
v. EchoStar Corp., 646 F.3d 869 (Fed. Cir. 2011) (en banc). First, ClearOne must show
that “the newly accused product is not more than colorably different from the product
found to infringe.” Id. at 882. The colorable-difference analysis must focus on “those
aspects of the accused product that were previously alleged to be, and were a basis
for, the prior finding of infringement, and the modified features of the newly accused
product.” Id. If the differences are more than colorable, then contempt is “not the
8This Opinion uses (cleaned up) to indicate that internal quotation marks, alterations,
and citations have been omitted from quotations. See Jack Metzler, Cleaning Up Quotations,
18 Journal of Appellate Practice and Process 143 (2017).
appropriate remedy,” and ClearOne must instead bring a separate claim of
infringement based on the new product. Proveris Sct. Corp. v. Innovasystems, Inc.,
739 F.3d 1367, 1371 (Fed. Cir. 2014) (cleaned up). But if the differences are not more
than colorable, then the Court proceeds to the second step, which asks whether the
newly accused product “in fact infringes the relevant claims.” TiVo, 646 F.3d. at 883.
Here, too, “a lack of intent to violate an injunction alone cannot save an infringer from
a finding of contempt.” Jd. at 880.
B. The MXA910-A
There is no dispute that the MXA910-A contains design elements that were
not present in the MXA910: Shure slightly reduced the size of the microphone array
board and also added two flanges to the sides of the array to enable flange mounting
instead of flush mounting. The question here, though, is whether those design
additions make any difference from a functional perspective. Where two products are
“functionally identical,” a redesigned product is “not more than colorably different.”
Proveris, 739 F.3d at 1371.
ClearOne argues that the MXA910-A is indeed “functionally identical” to the
MXA910 because in most MXA910-A installations, Shure’s customers are ignoring
the flanges and installing the MXA910-A in the exact same flush configuration that
they previously used for the MXA910. ClearOne Br. at 12. In support, ClearOne offers
several pieces of circumstantial evidence: (1) the fact that 15/,,-inch ceiling grids are
more common than %/,,-inch grids; (2) the relative difficulty of flange-mounting the
MXA910-A compared to the relative ease of flush-mounting in those !5/,,-inch grids;
23
(3) an actual instance of a customer flush-mounting the MXA910-A; (4) the fact that
Shure could have designed around the possibility of flush-mounting, which it
eventually did via the MXA910-US; and (5) Shure’s post-injunction behavior with the
MXA910-60CM and MXA910.
Piecing all of this evidence together, the record strongly suggests that the
MXA910-A is not colorably different from the MXA910. Yes, Shure added the flanges.
But the circumstantial evidence clearly shows that Shure allowed integrators to
ignore the flanges and continue to flush mount the microphones. For one, there seems
to be no dispute that the MXA910-A is readily capable of being flush mounted in a
15/,,-inch ceiling grid. Similarly, Shure does not really offer any evidence to
undermine ClearOne’s point that it is harder to flange-mount the MXA910-A in a
15/,,-inch grid than it is to flush-mount the product. That is, both parties agree that
in order to flange-mount the MXA910-A, the installer must go through the extra step
of removing part of the ceiling grid in order to arrange the microphone array in the
right position. Whether that additional labor is easy or difficult or takes ten minutes
or 30 minutes, the point remains that, from a purely relative standpoint, it is much
more difficult to flange-mount than to flush-mount the MXA910-A. Thus, from a
design standpoint, Shure has provided an incentive for integrators to choose the no-
effort option of simply lowering the MXA910-A flush against a ceiling grid instead of
going through the extra labor of mounting the product by its flanges.
But of course, this flush-mounting issue only comes up with 1!%/,,-inch ceiling
grids and not °/,,-inch grids. There could be a universe in which every relevant ceiling
24
has a 9/,,-inch grid, which means that every time an MXA910-A is installed, it hangs
from its flanges and thus avoids the drop-space limitation of ClearOne’s patent. In
that scenario, the MXA910-A would certainly be functionally and thus colorably
different from the MXAQ910. But, as it turns out, the reverse is true. In the relevant
market of spaces where MXA910-As are installed—commercial spaces—15/,,-inch
grids are substantially more common than °/,,-inch grids. Even if Shure’s expert, Dr.
Roy, is correct about the prevalence of 9/,,-inch grids in “Class A” office buildings, Roy
Supp. Report { 82 (sealed), ClearOne has offered substantial evidence that for
commercial spaces as a whole, !9/,,-inch grids are more common. See Fry Decl. 7,
10-13; Senkowski Decl. 4] 13-15; Gordon Decl. 94] 11-14; Wall Decl. {J 10-13.
Shure, for its part, argues that even if !5/,,-inch ceiling grids are more common
compared to 9/,,-inch grids, that fact is irrelevant because there is no basis to assume
that the mere presence of a !5/,,-inch grid automatically means the MXA910-A is
being installed flush. Shure Sur-Reply at 4. It is true that ClearOne has not provided
evidence directly showing that for every !5/,,-inch grid out there, a flush installation
of an MXA910-A is occurring. But ClearOne has provided a substantial amount of
circumstantial evidence showing that for every 15/,,-inch grid out there, it would be
extremely easy for a flush installation of an MXA910-A to occur purely because of the
way that the MXA910-A is designed. So, the prevalence of !9/,,-inch grids is relevant
because the more 1!°/,,-inch grids there are, the more likely it is that an integrator
installing a MXA910-A will be faced with the choice to flush-mount or flange-mount.
25
And between that choice, it is in turn more likely that an integrator would choose to
flush-mount because it is much easier than flange-mounting.
Indeed, not only did ClearOne point to evidence from customers suggesting
that the flange-mounting process is not a trivial process, see Graham Decl. 94 4-5;
ClearOne Reply Br., Exh. 7 (sealed), but more importantly, ClearOne also managed
to identify a concrete example of a customer actually admitting to flush-mounting the
MXA910-A, see Dep. Tr. at 23:16-20 (sealed); ClearOne Br., Exh. K. To be clear, the
Court is not holding Shure in contempt based solely on just this one instance of flush-
mounting. Rather, this example is important because it provides extra confirmation
of the fitment issue with the '5/,,-inch grids and also makes it much more likely that
there are other instances of flush-mounting.
In response to all this, Shure points out that ClearOne’s motion focuses solely
on incorrect installations of the MXA910-A, when the relevant inquiry should be
whether the correct installation of the MXA910-A is colorably different from the
MXA910. Shure Resp. Br. at 12. And Shure argues that even if there are people out
there installing the MXA910-A in the enjoined configuration, that does not amount
to a violation on Shure’s part because the preliminary injunction order does not
extend any duty to “police its customers to verify that they follow Shure’s installation
instructions.” Jd. at 10.
Both of these arguments miss the mark. The issue is with Shure’s own design
choices. Specifically, Shure deliberately chose to design the MXA910-A so that, in
order to install it in the majority of ceiling grids, the installer would need to go
26
through the extra labor of removing part of the grid. Shure asserts that it made the
“fighting chance” calculation that there would only be two possible outcomes related
to the MXA910-A: either integrators are willing to put in a slight amount of extra
labor to install the MXA910-A, or integrators will just choose to not buy the product,
in which case Shure will simply eat those lost sales. Klegon Decl. 4 6, 10 (sealed).
But this seems disingenuous. Surely, Shure contemplated the third possibility
(indeed, probability): that customers would ignore the instructions and simply flush-
mount the MXA910-A in the enjoined configuration. Indeed, ClearOne points to
evidence that Shure did ask integrators to look into the extent of the 5/,,-inch-grid
problem and did receive word from integrators that flange-mounting was not easy,
ClearOne Reply Br., Exh. 7 (sealed). In other words, the relevant inquiry is not so
much correct versus incorrect installation, but rather, what would have been the
plainly foreseeable result from Shure’s perspective? This is not to say that Shure has
some affirmative duty to make sure customers and end users are following its
instructions and not misusing its products. But Shure does have an affirmative duty
to not design a product that allows such easy flush-mounting that, in effect, it is no
different than the enjoined MXA910. Shure has done just that, and simply adding
instructions to the user manual does not insulate Shure from a contempt finding.
To illustrate the point, consider this: if Shure had made no design changes to
the original MXA910 and simply added a note in its instruction manual that users
should take care not to flush-mount the MXA910, then of course those two products
would not be colorably different. Same here. The MXA910-A now has flanges, but
27
from a practical perspective, it is much easier to flush-mount the product than to
flange-mount it. Installation instructions and webinars do not change that fact of
design. Of course, the other extreme would also be true. If Shure were to design a
product that is extremely difficult to flush mount—such as the MXA910-US—then of
course there would be no basis to find Shure in contempt if an end user moved
mountains to design a cumbersome and expensive work-around to continue flush-
mounting the product. Here, though, the record evidence shows that the MXA910-A
was not colorably different from the MXA910, and mere installation instructions
cannot paper over that fact.
What’s more, the record suggests that Shure’s intentions with the MXA910-A
were not fully in the spirit of a good-faith design-around. For one, if Shure were truly
willing to give up some sales instead of taking the risk of allowing customers to
improperly flush-mount the MXA910-A, then Shure would not have released the
MXA910-A at all and instead marketed and waited for the MXA910-US (which would
have avoided all of these problems) to come out. ClearOne Reply Br. at 5-6 (sealed).
Given the evidence that Shure was already planning the MXA910-US design when it
released the MXA910-A, the MXA910-A was from the beginning meant to be a stop-
gap measure until Shure could finalize a truly non-infringing product.9 At the very
9Shure’s counsel maintains that they were not informed of the developments with the
MXA910-US until after the March 2020 hearing in which Shure represented to the Court
that a drop-down design (like the MXA910-US) would be extremely burdensome and difficult
to execute. Shure Sur-Reply Br. at 12 n.10. Unfortunately, that means that Shure either gave
dishonest information to counsel or was negligent in the extreme in providing that
information, given the intense and widespread attention paid by Shure to the preliminary
injunction and the design-around efforts. Also, to the extent that the costs of developing drop-
down re-design would have exceeded the calculated bond amount, the solution there would
least, the MXA910-US story is additional circumstantial evidence that Shure knew
there would be substantial risks of flush-mounting with the MXA910-A—hence why
Shure ultimately developed a product that is fully capable of being flush-mounted in
both %/,¢-inch and 19/,,-inch ceiling grids.
There are two more pieces of circumstantial evidence suggesting that Shure
did not intend for the MXA910-A to be a good-faith work-around of the preliminary
injunction. First, after the order came into effect, the record suggests that Shure
allowed at least some integrators to develop adapters to flush-mount the MXA910-
60CM, see DeBuscherre Dep. Tr. at 51:16-24 (sealed), despite an explicit court order
requiring Shure to market the MXA910-60CM to avoid infringement, R. 592-1 at 2.
(As explained in more detail below, the Court will allow additional discovery on this
point to determine whether an independent court order violation occurred with the
MXA910-60CM.)
Second, although ClearOne’s initial contempt motion did not address this
point, after more discovery, the record now suggests that Shure also took steps to
evade the preliminary injunction by quick-selling its existing inventory of the original
MXA910s. Remember that the Court crafted a public-interest exemption into the
preliminary injunction order for “already installed” products:
But Shure customers that have already installed the MXAQ910 in a drop-ceiling
mounting configuration shall be permitted to continue using their MXA910s in
that way, and Shure will be able to continue servicing those already-installed
products the order would not apply to MXA910s that had already been
have been to ask the Court to increase the bond amount—not to withhold from the Court the
knowledge that that solution, which the Court specifically asked about, was both physically
possible and in the process of being developed.
29
installed in a flush-configuration, and those products could continue to receive
servicing from Shure.
Order at 64 (emphasis added). The idea behind this exemption was to minimize the
hardship to Shure’s current customers with already-installed products. As described
earlier, on August 6, 2019—the day after the injunction was entered—Shure allegedly
reached out to several integrators to let them know of an upcoming “shortage in
production” of the MXA910s. R. 787, ClearOne Reply Br., Exh. 20 (sealed). According
to an email of one of those integrators, Shure had “notified their top partners to start
stocking inventory,” because the lawsuit would probably soon ban further sales of the
MXA910. Id. (sealed). The sales push apparently worked. According to a sales firm’s
internal email on August 8, 2019, which summarized notes from a call with Shure
that was “[p]robably not to be shared,” Shure told McFadden to “NOT tell people to
return product. If they have stock, they are sitting on gold. All are sold out, they sold
800 of them in the last 2-3 days.” R. 787, ClearOne Reply Br., Exh. 28 (capitalization
in original) (sealed). Despite the push for customers to stock up on the MXA910, the
next day, on August 9, Shure filed a brief with the Court arguing that a recall of
uninstalled MXA910s in the hands of integrators was unnecessary, because “[i]t is
not the nature of this market for integrators to hold or warehouse products, and
certainly not expensive ones like the MXA910.” R. 575 at 12. Yet it appears that Shure
was encouraging exactly that.
Having said that, more facts and more briefing are needed on this potential
violation of the preliminary injunction. It is possible that Shure did not do anything
wrong: the preliminary injunction order did ask the parties to brief the bond amount
“before the preliminary injunction goes into effect,” Order at 64 (emphasis added),
which suggests that the preliminary injunction was not in effect at the time that the
order was issued. In hindsight, maybe the Court should have foreseen this
contingency (of Shure pushing hard to sell out its inventory before the posting of the
bond) by explicitly banning it. But Shure at the least pushed the bounds of the public-
interest exemption by deliberately increasing the population of “customers that have
already installed the MXA910,” Order at 64, to then take advantage of the exemption.
Nor did Shure file a motion with the Court to clarify whether Shure could rapidly sell
off its inventory before the posting of the bond. And Shure might have crossed a line
when it represented to the Court that a recall was not necessary because integrators
do not warehouse MXA910s—immediately after pushing for customers to stock up.
Also, the record does not reveal whether every MXA910 sold in that time was also
installed in a flush-mount configuration prior to the order coming into effect, or if
some integrators, believing themselves to be exempt, felt free to flush-mount the
MXA910s even after the bond was posted.
So, there is a possibility that Shure also violated the preliminary injunction
order through its post-issuance actions, but that answer requires both additional
legal and factual development. The Court does recognize that ClearOne’s evidence on
this point comes mainly from non-party emails provided by an integrator, and
perhaps further factual development would tell a different story. For that reason, and
because the relevant time period here is truly limited to a few days and a single
model, the Court will grant ClearOne’s request to take additional discovery on
Shure’s post-order marketing of the MXA910. ClearOne Reply Br. at 15. ClearOne
may issue discovery requests to Shure and additional non-party discovery as
necessary to examine Shure’s post-order marketing of the MXA910.
For all the reasons discussed, the record evidence is clear and convincing that
Shure violated the August 2019 preliminary injunction order by designing the
MXA910-A in a way that allowed integrators to easily flush-mount the product in the
enjoined configuration, thus making the MXA910-A not colorably different from the
MXA910. What’s more, because the MXA910-A could be flush-mounted in the same
way as the MXA910, the same infringement of the drop-space limitation (Limitation
5 of Claim 1) occurs when the MXA910-A is installed flush. Going forward, ClearOne
is authorized to conduct discovery into the extent and scope of the violation.
Specifically, ClearOne may request discovery from Shure, its integrators, and its end
users on the questions of how many integrators flush-mounted the MXA910-A and
the extent of Shure’s knowledge of those installations.
C. The MXA910-60CM
Turning to the MXA910-60CM, ClearOne has also put forth a prima facie case
that Shure violated the August 2019 preliminary injunction bond order, in which the
Court required Shure to add in some language to its user guides warning customers
not to flush-mount the MXA910-60CM. R. 592-1 at 2. But because the parties overall
devoted substantially less briefing to this argument, the Court will enter and
continue this part of the motion to allow further discovery.
To be clear, because the MXA910-60CM is not a new product, the inquiry in
this context is simply whether there is clear and convincing evidence that Shure has
violated the court order, Goluba, 45 F.3d at 1037, and not whether the MXA910-
60CM is colorably different from the MXA910 under Tivo. Here, ClearOne argues
that, despite nominally including the required language in the user guides, Shure
continues to allow and perhaps even encourage its customers to mount the MXA910-
60CM flush. ClearOne Br. at 10; ClearOne Br., Exh. M at 1. Shure, for its part, asserts
that it has already complied fully with the court order by adding the required
language in its user guides. Shure Resp. Br. at 11. Beyond that, Shure argues that it
has no duty to police the behavior of third-parties who choose to ignore the
instructions. Id. at 10-11. Again, the Court disagrees. It is true that the order does
not explicitly require Shure to “police” third-party behavior to make sure no violations
are happening. But the order does “require that Shure market the [MXA910-60CM]
to avoid infringing in concert with integrators and installers.” R. 592-1 at 2. A Shure
sales representative telling an integrator that the integrator’s self-created flush-
mounting system is “actually better than our long-term solution” does not count as
Shure marketing the product to “avoid” infringement. See DeBuscherre Dep. Tr. at
51:16-24 (sealed). See also id. at 52:1-4 (“Q. And did he then say, Hey, you can’t do
that, that’s against the terms of the injunction? A. No.”) (sealed). It goes without
saying that the Court in its Order did not mean: “Make sure to insert this written
notice against flush-mounting in your user guide, but after that, feel free to look the
other way when a customer tells you that they are still flush-mounting.” Finally,
there is at least some suggestion that the continued flush-mounting issue is not
limited to this one integrator. Id. at 283:7-284:11 (“I think that unless specifically
told they absolutely couldn’t do this, I think that our installers would likely—
probably put it flush mount, because that’s what they’re used to doing.”) (sealed).
Having said that, given how demanding the clear-and-convincing standard is,
the Court will not hold Shure in contempt—at this point—based on what is really one
example (albeit a strong one) from a third-party integrator reporting on what a Shure
representative allegedly said. ClearOne is, however, allowed to take additional
discovery from both integrators and end users (as well as from Shure itself) into how
the MXA910-60CM is marketed and installed. See ClearOne Reply Br. at 15.
III. Conclusion
ClearOne’s motion to hold Shure in contempt is granted in part and entered
and continued in part to determine the scope of the violation and potential relief.
ClearOne’s request for leave to conduct additional discovery is granted in part and
denied in part. Specifically, Shure has violated the preliminary injunction order and
is found in contempt because it designed the MXA910-A in such a way that allows it
to be easily installed flush in most ceiling grids. Shure shall no longer manufacture,
market, or sell the MXA910-A (to the extent that it still has any MXA910-As to sell).
Going forward, ClearOne is now entitled to take discovery, including from
integrators and end users, into how widespread the violation is and what would be
the appropriate relief arising from the violation. As for the MXA910-60CM, the record
also strongly suggests (but not yet to the level of clear-and-convincing evidence) that
Shure violated the court order governing that model. So, out of an abundance of
caution, the Court will enter and continue the contempt motion as to the MXA910-
60CM to allow for more discovery.
To sum up, ClearOne is authorized to take discovery from Shure, its
integrators, and its end users on: (1) how many MXA910-As have been installed in
the enjoined flush configuration; (2) how many MXA910-60CMs have been installed
in the enjoined flush configuration, and the extent of Shure’s knowledge of those
installations; and (3) what, if anything, Shure did with the MXA910 inventory,
including trying to sell it, in the days immediately after the preliminary injunction
order was issued but before it took effect, and whether any of those units were
ultimately flush-mounted after the Order took effect. For now, the request to conduct
discovery related to the MXA910-US is denied. The parties shall confer on a proposed
discovery schedule and file a proposed schedule on or before September 14, 2020.
After discovery is completed, the parties will have a chance to supplement the
contempt briefing with any new evidence obtained during this next round of
discovery. To track the discovery schedule only (no appearance is required, the case
will not be called), a status hearing is set for September 25, 2020, at 8:30 a.m. (with
the other tracking status of October 30, 2020, to remain on the books).
ENTERED:
s/Edmond E. Chang
Honorable Edmond E. Chang
United States District Judge
DATE: September 1, 2020