On Sept. 1, Judge Edmond E. Chang of the U.S. District Court of the Northern District of Illinois said “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” (the “Contempt Order”).
The “preliminary injunction order” referenced (the “PI Order”) is the August 2019 Order that enjoined Shure from, among other things, “manufacturing, marketing, and selling the MXA910 in a way that encourages or allows integrators to install it in a drop-ceiling mounting configuration” in a way that infringes ClearOne’s U.S. Patent No. 9,813,806 (the “’806 Patent”). In response to that Order, Shure released the MXA910-A, claiming publicly that “[t]he Court ruled on November 3, 2019, that the new MXA910W-A is not included under the preliminary injunction.”
In the Contempt Order, the Court told Shure: “[T]he 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.”
Ultimately, the Court ordered that “Shure shall no longer manufacture, market, or sell the MXA910-A...”
“We believe that this Contempt Order finally puts to bed Shure’s claim that the MXA910-A is not subject to the PI Order,” said Zee Hakimoglu, CEO and chair of ClearOne.
In a statement, Shure said "Shure is disappointed by and disagrees with the Court’s ruling regarding our previously discontinued MXA910-A product in the United States. Shure specifically designed the MXA910-A in an earnest effort to comply with the Court’s orders and provided clear instructions to facilitate proper installation. However, the Court’s ruling reflects its concern about the possibility that some professionals may have improperly installed the MXA910-A in a flush-mounted configuration rather than on the product’s flanges as intended by Shure’s design. This ruling pertains solely to Shure, so customers can continue to use the MXA910-A in accordance with its intended design consistent with the instructions in the user manual. However, Shure believes the Order also provides clarification of ClearOne’s patent rights and verifies that Shure’s current MXA910-US product cannot be improperly mounted and thereby cannot infringe ClearOne’s patent. The MXA910-US, which accommodates ease of installation in all suspended ceiling grid sizes, remains widely available for purchase by customers."
In addition, the Court held that “[t]he 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” on that and the “possibility that Shure also violated the preliminary injunction order” by “pushing” sales of the MXA910 immediately after the issuance of the PI Order—discovery to which ClearOne would not have otherwise been entitled.
“The Order—rightfully in my view—described Shure’s efforts with the MXA910-A as ‘not fully in the spirit of a good-faith design around’ and concluded that Shure ‘either gave dishonest information to [its own] counsel or was negligent in the extreme in providing that information,'" Hakimoglu added. "ClearOne is pleased that the Court continues to hold Shure responsible for its unlawful conduct, and we will continue to vigorously pursue all available legal remedies to defend our strategic patents from infringement."
Shure concluded, "To be clear, the Court’s ruling is not a finding that the MXA910-A infringes ClearOne’s ‘806 patent. Rather, the Court ruling addresses compliance with the Court’s previous preliminary injunction order. Shure continues to believe it has not violated any ClearOne patents and that ClearOne’s patents underlying this litigation are invalid. We look forward to presenting our case before a jury early next year and putting this matter to rest. As always, our top priority remains providing an uninterrupted supply of innovative products to our customers.”