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ClearOne Inc. v. Shure, Inc.

United States District Court, D. Utah, Central Division

May 15, 2017

CLEARONE, INC., a Utah corporation, Plaintiff,
v.
SHURE INC., an Illinois corporation, BIAMP SYSTEMS CORPORATION, a Delaware corporation, and QSC AUDIO PRODUCTS, LLC, a California limited liability company, Defendants.

          Clark Waddoups Judge

          MEMORANDUM DECISION & ORDER

          Dustin B. Pead United States Magistrate Judge

         INTRODUCTION

         This matter was referred to the court under 28 U.S.C. § 636(b)(1)(A). (ECF No. 8.) This matter is presently before the court on Defendant Shure Incorporated's Motion to Stay. (ECF No. 9.) The court initially scheduled oral argument on this motion but, after reviewing the parties' briefing, found it unnecessary. The court will grant Shure's request for a stay to allow the Northern District of Illinois an opportunity to rule on the motion to enjoin pending before it.

         FACTS

         Correspondence regarding anticipated patent

         On March 10, 2017, ClearOne's counsel sent Defendants a notice letter notifying them of a certain of ClearOne's pending patent applications (an application that later led to Patent Number 9, 635, 186 (the “'186 Patent”) at issue here). (Giza Decl., Ex. 3.) The letter described ClearOne's theory that Defendants were infringing on the anticipated patent and included a claim chart. (Id.) The letter demanded Defendants cease and desist from the alleged infringement and stated, “ClearOne reserve[d] the right to seek appropriate injunctive and other relief.” (Id.) On March 21, 2017, Shure responded by letter stating Shure needed time to investigate and respond in a detailed manner. (Giza Decl., Ex. 7.)

         On April 5 the USPTO issued a public notice that the '186 Patent would issue on April 25. (Giza Decl., Ex. 8.) On April 10 Shure's emailed ClearOne's counsel requesting a telephone call. (Giza Decl., Ex. 9.) On April 13 ClearOne's counsel responded requesting a time for a telephone call on April 18 or 19. (Giza Decl., Ex. 10.) Shure did not respond to the email or call ClearOne's counsel. On April 17 Shure sent a letter to ClearOne's counsel stating Shure had not infringed any patent. Shure demanded that ClearOne refrain from contacting third parties alleging patent infringement and otherwise acting in a manner “intended to disrupt sales channels and other valuable business relationships.” (Giza Decl., Ex. 11.) Similar to ClearOne, “Shure reserve[d] all of its rights to ensure that ClearOne discontinues these objectionable efforts.” (Id.)

         April 25

         On April 25, 2017, the United States Patent and Trademark Office issued the '186 Patent. (ECF No. 28 at 4-5.) Shure apparently believes this occurred at 12:01 a.m. EDT.[1] At 12:01 a.m. EDT on April 25, 2017, Shure filed declaratory-judgment action in Northern District of Illinois. (ECF No. 28 at 4.) At 11:05 a.m. EDT (9:05 a.m. local time) on April 25, 2017, ClearOne filed this lawsuit in Central District of Utah against Shure, Biamp and QSC audio. (ECF No. 2.) Shure served its complaint on the same day ClearOne served Shure with its complaint in this lawsuit, April 26, 2017. (See ECF Nos. 22-24, & 28 at 5.)

         PARTIES' ARGUMENTS

         Shure argues that this court should stay this case until the Northern District of Illinois decides Shure's motion to enjoin ClearOne from prosecuting this action in the District of Utah.

         Shure contends that the matter in the Northern District of Illinois takes precedence over this one under the first-to-file rule. Shure asks the court to grant a stay “pending resolution of forum[-]related issues” in a matter pending before the Northern District of Illinois. (ECF No. 9 at 1.) Shure's reply further urges this court to “defer consideration of forum-related disputes” by refusing to consider exceptions to the first-to-file rule. (ECF No. 31 at 4.) In its reply, Shure also argues the merits of the forum dispute, but the court will not reach those issues.

         ClearOne argues the court should deny the motion to stay because this court is the proper forum under an exception to the first-to-file rule. ClearOne makes several arguments in its opposition about which is the proper district to hear this case, but as previously stated, the court will not ...


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