Shure Incorporated v. ClearOne, Inc.

MEMORANDUM

N.D. Ill.August 19, 2019

1 UNITED STATES DISTRICT COURT NORTHERN DISTRICT OF ILLINOIS EASTERN DIVISION Shure Incorporated, Plaintiff, vs. ClearOne, Inc., Defendant. Civil Number 1:17-cv-03078 Jury Trial Demanded Hon. Edmond E. Chang Mag. Judge Hon. Maria Valdez ClearOne, Inc., Counter-Plaintiff, vs. Shure Incorporated Counter-Defendant. MEMORANDUM IN SUPPORT OF CLEARONE’S MOTION TO COMPEL SOURCE CODE DISCOVERY AND DEPOSITION RELATING TO SHURE’S NEW NONINFRINGEMENT THEORIES Case: 1:17-cv-03078 Document #: 599 Filed: 08/19/19 Page 1 of 13 PageID #:30632 1 I. INTRODUCTION On March 18, 2018, this Court issued a Memorandum Opinion and Order regarding ClearOne’s request for a preliminary injunction related to its U.S. Patent No. 9,635,186 (the “’186 Patent”). ECF No. 278. In that order, the Court held that Shure’s accused devices practiced all challenged elements of at least one claim of the ’186 Patent. Id. at 16-20. On June 12, 2019, more than a year later, and almost two months after the close of discovery in this case, Shure announced and released a firmware update to its accused Microflex Advance MXA910 product. Through that firmware update, which Shure made available via a remote download of updated source code, Shure allegedly modified two MXA910 functionalities that ClearOne had identified as practicing elements of the ’186 Patent claims—the acoustic echo cancellation (“AEC”) and beamforming functionalities. Shure then added two new noninfringement arguments based solely on this source code change. See ECF No. 545 (Shure’s Motion for Leave to Supplement Final Non-Infringement Contentions as to the ’186 Patent). Despite the fact that Shure now argues that changes to its source code have rendered the MXA910 non-infringing, Shure refuses to produce that source code. Shure also refuses to produce a witness for a deposition relating to the modified AEC functionality.1 ClearOne hereby moves to compel production of that source code and deposition. Earlier in this case, the Court determined that “there is no need to produce source code at this time.” ECF No. 139. The situation is different now. Previously, ClearOne was able to rely for its infringement analysis on numerous Shure technical documents and emails—created outside of the context of litigation—that described in detail the functionality at issue. The 1 Shure has agreed only to a limited deposition relating to the modified beamforming functionality. Case: 1:17-cv-03078 Document #: 599 Filed: 08/19/19 Page 2 of 13 PageID #:30632 2 documents that Shure has recently produced related to the modified functionalities—which were created in the context of this litigation—do not offer this level of detail. Indeed, because of the recency of the firmware update, many of the documents talk about how the functionalities will or may be implemented, rather than how they actually were implemented. ClearOne is entitled to a clear understanding of how Shure actually implemented its claimed design-around, in order to evaluate whether that design-around was effective. Detail is important in the current context of the case for an additional reason. In light of Shure’s source code change, ClearOne’s infringement arguments may rely more heavily on a doctrine of equivalents argument. And a doctrine of equivalents argument—which addresses whether the accused device performs the same function as a patent claim, in the same way, and with the same result—is more likely to require source code-level detail. Shure’s source code is both central to Shure’s new noninfringement arguments and the best evidence to test them. Shure cannot use its source code both as a sword and a shield by: (1) basing new noninfringement arguments on changes effected solely by source code; while (2) refusing to produce that source code. ClearOne respectfully moves the Court to compel Shure to produce: (1) source code relating to the new beamforming, AEC, and related post-processing functionalities in the MXA910; and (2) a witness for deposition under Rule 30(b)(6) relating to the AEC aspects of Shure’s recent firmware update. II. BACKGROUND FACTS A. The Court’s prior ruling regarding source code On August 25, 2017, ClearOne served its first set of Requests for Production on Shure, including Request No. 53, which requested source code relating to, among other things, the beamforming and AEC functionality of the MXA910. Case: 1:17-cv-03078 Document #: 599 Filed: 08/19/19 Page 3 of 13 PageID #:30632 3 In October 2017, the parties submitted a joint position paper regarding the necessity of source code discovery. ECF No. 123. On November 14, 2017, the Court issued a minute order, ruling that “[o]n the source code dispute, the protective order need not be expanded to deal with source code because there is no need to produce source code at this time, if ever. It does not appear that the litigation over Claim 7 [of the ’186 Patent] will require disclosure of source code, because the claim’s limitations are not described at that level of detail. Whether the accused products perform in a way that infringe does not depend on *how* the source code generates (or does not generate) the alleged performance.” ECF No. 139 (emphasis added). During the meet and confer for this Motion, Shure repeatedly cited the Court’s prior ruling as a reason why it need not produce source code now. See, e.g., Rayburn Decl. Ex. 1 at 1. B. Shure’s firmware update In this case, ClearOne accuses Shure’s MXA910 beamforming microphone array, when used in combination with a digital signal processing product, of infringing the ’186 Patent. ClearOne served its Final Infringement Contentions related to the ’186 Patent on November 21, 2018. Shure served its Final Noninfringement Contentions related to the ’186 Patent on March 15, 2019. Patent-related fact discovery closed on April 16, 2019. ECF No. 474. Shure’s Opening Claim Construction Brief was due on May 7, 2019. Id. ClearOne’s Responsive Claim Construction Brief was due on June 4, 2019. Id. The day after ClearOne submitted its Claim Construction Brief, Shure allegedly modified the beamforming and AEC functionalities of its accused MXA910 product, introducing an "Autofocus feature and a post-mix AEC feature.” See ECF No. 546 at 2-3. Shure also made those modifications available to existing customers via a firmware update. See Rayburn Decl. Ex. 2 at 1. Shure did not notify ClearOne of the firmware update. Rayburn Decl. ¶ 2. Nor did Case: 1:17-cv-03078 Document #: 599 Filed: 08/19/19 Page 4 of 13 PageID #:30632 4 Shure take the initiative to supplement its document production or Final Noninfringement Contentions at that time. Id. Instead, ClearOne discovered Shure’s public announcement of the firmware update, and on June 18, 2019, wrote to Shure to request immediate production of “all documents relating to the features, functionalities, and ‘improvements’ provided by Shure’s firmware version 4.0.12 . . . .” Id. Ex. 3 at 2. Shure made its first production responsive to that request almost a month later, on July 11, 2019. Id. ¶ 3. On July 19, 2019, after reviewing Shure’s production, ClearOne again wrote Shure, seeking additional discovery relating to Shure’s new firmware because “[w]hile the [produced] documents provide high-level descriptions of these technologies, they do not provide sufficient detail on how the technologies actually perform the functions described.” Id. Ex. 4 at 1. ClearOne also advised that “if Shure intends to argue at trial that the new firmware upgrade would render the accused Shure products non-infringing under ClearOne’s current infringement theories, we believe Shure should update its Final Non-Infringement Contentions as part of Shure’s ongoing obligation to supplement disclosures.” Id. at 2. On July 25, 2019, Shure made an additional—but not final—document production related to the firmware update. See id. Ex. 1 at 3-4. On July 31, 2019, Shure filed a motion for leave to amend its Final Noninfringement Contentions (which was granted on August 8), attaching a revised claim chart with new non- infringement arguments based on the MXA910’s recent firmware update. See ECF Nos. 545-46, 568. C. Meet and confer efforts The parties met and conferred extensively regarding the additional discovery necessitated by Shure’s recent firmware update and new noninfringement theories. See Rayburn Decl. ¶ 3 Case: 1:17-cv-03078 Document #: 599 Filed: 08/19/19 Page 5 of 13 PageID #:30632 5 and Ex. 5 at 2-4. Despite the meet and confer efforts, Shure refused to produce any source code or a witness to testify about Shure’s new AEC functionality. See id. Ex. 1 at 1. III. LEGAL STANDARDS A party may seek an order to compel discovery when an opposing party fails to respond to discovery requests or has provided evasive or incomplete responses. Fed. R. Civ. P. 37(a)(2)- (3). Under Rule 26, “[p]arties may obtain discovery regarding any nonprivileged matter that is relevant to any party’s claim or defense and proportional to the needs of the case, considering the importance of the issues at stake in the action, the amount in controversy, the parties’ relative access to relevant information, the parties’ resources, the importance of the discovery in resolving the issues, and whether the burden or expense of the proposed discovery outweighs its likely benefit.” Fed. R. Civ. P. 26(b)(1). “When confidential information is being sought, the burden is on the party seeking discovery to establish that the information is sufficiently relevant and necessary to his case to outweigh the harm disclosure would cause to the person from whom he is seeking the information.” Metavante Corp. v. Emigrant Savings Bank, Case No. 05-CV-1221, at *5 (E.D. Wis. May. 5, 2008) (internal quotations and citations omitted). IV. ARGUMENT A. Source code discovery is relevant and necessary to determine infringement in light of Shure’s recent firmware update. It is undisputed that Shure’s source code relating to the operations of the accused product is relevant. See ECF No. 123 at 2-7 (no objection to relevance from Shure in prior briefing). Because Shure has put its firmware update—in essence, changes in code—at the center of its new noninfringement theories, examination of Shure’s source code is necessary to both Shure’s noninfringement theory and ClearOne’s infringement claims. See Coca-Cola Bottling Co. v. Case: 1:17-cv-03078 Document #: 599 Filed: 08/19/19 Page 6 of 13 PageID #:30632 6 Coca-Cola Co., 107 F.R.D. 288, 292-93 (D. Del. 1985) (“The level of necessity that must be shown is that the information must be necessary for the movant to prepare its case for trial, which includes proving its theories and rebutting its opponent’s theories.”). Although the Court previously determined that source code discovery was unnecessary (see ECF No. 139) and was indeed able to determine, on a preliminary basis, that Shure’s MXA910 infringes the ’186 Patent without source code discovery (see ECF No. 279 at 49), the context of the case and the infringement analysis have evolved. On June 5, 2019, Shure allegedly added two features—Autofocus and post-mix AEC—to the MXA910 through a firmware update. In its Supplemental Final Noninfringement Contentions, Shure now argues that Autofocus “ ” and “ ” See, e.g., ECF No. 546-2 at 5. Shure also argues that the optional post-mix AEC “ ” and that, as “ See, e.g., id. These new features were not implemented through any modifications to hardware; they were implemented in source code updates made available for download. See Ex. 2 (last visited August 16, 2019); see also Schonfeld Decl. ¶ 15 (a firmware update is essentially changes in some lines of code). When the sole basis for Shure’s new noninfringing arguments is changes in source code, the source code “pertains to the central issues,” and should be produced. Metavante, Case No. 05-CV-1221, at *5-6 (granting motion to compel source code when the source code “pertains to the central issues”); see also Optimize Tech. Solutions, LLC. v. Staples, Inc., Case No. 14-mc-80095-LHK (HRL), at *3 (N.D. Cal. Apr. 14, 2014) (granting motion to compel source code where “[t]he Recommendations source code is Case: 1:17-cv-03078 Document #: 599 Filed: 08/19/19 Page 7 of 13 PageID #:30632 7 directly relevant to infringement”). Fairness also requires that ClearOne have an opportunity to test Shure’s firmware-based noninfringement theories by examining the directly relevant source code. Source code is also the best evidence here. Metavante, Case No. 05-CV-1221, at *5-6 (granting motion to compel source code when source code “appears to be the best evidence”). Generally, source code has long been recognized as authoritative in describing the actual operations of a system. Schonfeld Decl. ¶ 14. For example, in Dynamic Microprocessor Associates v. EKD Computer Sales, the district court granted a motion to compel source code discovery based on credible expert affidavit stating that “a considerable amount of functionality is not obvious from the interface and information in the source has been lost or hidden in the executable” and that “[s]ince all remote access programs have the same result when operated, we cannot tell them apart by watching them operate.” 919 F. Supp. 101, 104 (E.D.N.Y. 1996). So too here. The operations of the new beamforming and AEC features—which are likely carried out by processors—cannot be determined by simply observing or listening to a Shure MXA910. Schonfeld Decl. ¶ 17. Nor can it be determined by the documents relating to the modified functionalities that Shure has produced to date. Id. Under these circumstances, source code is the best evidence. Id. Moreover, because Shure appears to have made only minor tweaks to the beamforming and AEC functionalities, ClearOne has moved to amend its Final Infringement Contentions to assert infringement under the doctrine of equivalents (in addition to literal infringement). See, e.g., ECF Nos. 555 at 1 and 555-1 at 2. For the doctrine of equivalents infringement claim, how Shure carries out the beamforming and AEC functionalities is especially critical to determining whether Shure’s new beamforming or AEC element meets the “function, way, and result” or Case: 1:17-cv-03078 Document #: 599 Filed: 08/19/19 Page 8 of 13 PageID #:30632 8 “insubstantial difference” tests for doctrine of equivalents. See, e.g., Hilton Chem. Co. v. Warner-Jenkinson Co., Inc., 62 F.3d 1512, 1517-19 (Fed. Cir. 1995) (discussing the two tests under the doctrine of equivalents). For example, Shure argues that, with its new Autofocus functionality, the MXA910 does not practice the “fixed beam” element of the claims, because Autofocus “ .” See Dkt. 546-2 at 5. But Shure’s documents show that, to the extent Autofocus (see, e.g., Dkt. 555-2 at 39-42 (citing Shure documents)). Without source code, ClearOne cannot drill into the limited nature of the change that Shure has made, including by evaluating the specific parameters of the Autofocus feature that purportedly “continually fine- tunes the position of each lobe in real time.” Schonfeld Decl. ¶ 17. This is especially so because—given the recency of the firmware update—many of Shure’s produced documents discuss how the modified functionality . Id. at 40 (basing amended infringement contentions on Shure-produced document SHURE779367, which ).2 Nor can ClearOne determine whether Shure in fact modified its beamforming algorithm or simply included an add-on feature without changing the underlying beamforming algorithm. Schonfeld Decl. ¶ 17. These are important questions that only the source code can answer. Id. Indeed, without the source code, ClearOne and the Court will simply have to rely on 2 For both of Shure’s recent document productions related to the firmware update, Shure failed to produce metadata reflecting the document dates, in contradiction with the standing practice for both parties in this litigation and in spite of ClearOne’s specific request for metadata in connection with any ESI production. This failure makes it even more difficult for ClearOne to evaluate whether the documents that Shure has produced: (1) accurately describe implemented source code modifications; or (2) reflect aspirational statements about how future source code modifications will be implemented. For this reason as well, source code is necessary. Case: 1:17-cv-03078 Document #: 599 Filed: 08/19/19 Page 9 of 13 PageID #:30632 9 Shure’s representations as to how the modified product functions, without any ability to test whether those representations are accurate. See Baron Servs., Inc. v. Media Weather Innovations LLC, 717 F.3d 907, 914 (Fed. Cir. 2013) (holding that it was “improper” for the district court to rule on summary judgment “until [plaintiff] had the opportunity to access [defendant’s] source code” where “[e]xamining the source code would have enabled [plaintiff] to determine if [defendant’s] noninfringement position was correct”). This is particularly problematic here, where all of Shure’s representations about how its modified product functions were created in the context of litigation, and in the specific context of attempting to design-around ClearOne’s patent. Shure’s produced documents, which contain broad, self-serving statements regarding how the modified product functions, may well omit details that would support ClearOne’s infringement theories. Given the context of this case, source code will be the best evidence to show exactly how the new beamforming and post-mix AEC features operate. Schonfeld Decl. ¶¶ 17-18. B. Deposition testimony regarding Shure’s new AEC function is also relevant and necessary to determine infringement in light of Shure’s firmware update. Similarly, Shure does not dispute the relevance of deposition testimony about its new firmware update. Indeed, Shure agreed to provide a witness on its new beamforming functionality. The only dispute is whether Shure should provide a witness on the new AEC functionality. Shure argues that ClearOne already had an opportunity to depose Shure witnesses about the new AEC functionality, and therefore should not depose Shure again on the same topic. Rayburn Decl. Ex. 1 at 1. But the depositions to which Shure refers—the October 20, 2018 deposition of David Cerra and the January 4, 2019 deposition of Mathew (“Bob”) Abraham— Case: 1:17-cv-03078 Document #: 599 Filed: 08/19/19 Page 10 of 13 PageID #:30632 10 took place at least four months before Shure’s firmware update to include the new AEC functionality, and six months before Shure amended its Final Noninfringement Contentions to rely on it. Rayburn Decl. ¶ 8. At the time of those depositions, the new AEC functionality was not implemented in any Shure product, and was not yet a basis for any noninfringement theory. Moreover, Shure’s own attorney, Mike Turner, elicited testimony from Mr. Abraham that features including post-mix AEC were . Rayburn Decl. Ex. 6 at 198:3-24 (“ ”) While the depositions may have tangentially touched on the proposed AEC functionality as part of Shure’s future product development, that functionality was not a focus of the deposition, because the feature was . ClearOne should be allowed to depose Shure on the new AEC functionality in relation to Shure’s actual noninfringement theory and based on the way it was actually implemented. V. CONCLUSION For the reasons set forth above, ClearOne respectfully requests that the Court grant its Motion to compel Shure to provide: (1) source code relating to the new beamforming, AEC, and related post-processing functionalities in the MXA910; and (2) a witness for deposition under Rule 30(b)(6) relating to the AEC aspects of Shure’s recent firmware update. Dated: August 19, 2019 By: /s/ Christina V. Rayburn John C. Hueston, pro hac vice Douglas J. Dixon, pro hac vice Christina V. Rayburn, pro hac vice jhueston@hueston.com ddixon@hueston.com crayburn@hueston.com Case: 1:17-cv-03078 Document #: 599 Filed: 08/19/19 Page 11 of 13 PageID #:30632 11 Hueston Hennigan LLP 523 West 6th Street, Suite #400 Los Angeles, CA 90014 Telephone: (213) 788-4340 And Xinlin L. Morrow, pro hac vice xinlin@morrowfirm.com The Morrow Firm, P.C. 1880 Century Park E, Ste 815 Los Angeles, CA 90067 Telephone: (213) 282-8166 And Garret A. Leach, P.C. (IL Bar No. 6237520) garret.leach@kirkland.com KIRKLAND & ELLIS LLP 300 North LaSalle Chicago, Illinois 60654 Telephone: (312) 862-2000 Facsimile: (312) 862-2200 Attorneys for ClearOne, Inc. Case: 1:17-cv-03078 Document #: 599 Filed: 08/19/19 Page 12 of 13 PageID #:30632 12 CERTIFICATE OF SERVICE I, Christina V. Rayburn, hereby certify that on August 19, 2019, the foregoing document was filed electronically through the Court’s Electronic Case Filing System. Service of this document is being made upon all counsel of record in this case by the Notice of Electronic Filing issued through the Court’s Electronic Case Filing System on this date. By: /s/ Christina V. Rayburn Case: 1:17-cv-03078 Document #: 599 Filed: 08/19/19 Page 13 of 13 PageID #:30632