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Spatial confinement of the paths traveled by infrared signals enables reuse of bandwidth and resources in adjacent indoor environments. This property can also result in undesirable shadowing that occurs whenever an obstacle blocks signal paths between transceivers. Shadowing compromises link reliability by increasing the error rate, and can result in service interruption. We propose spatial coding to improve link performance and alleviate the shadowing effect in multi spot diffusing, a multi-input, multi-output architecture. Spatial coding performance is compared to receiver multi-level combining. Our results show that when a channel is shadowed, 4-level combining at the receiver fails to maintain a reliable link irrespective of transmitted power. Using spatial coding over 6 channels, a reliable link is possible in the presence of a shadowed channel with an optical power penalty of 4.5 dB.