Contract analysis

I. INTRODUCTION AND PURPOSE OF THIS APPENDIX This Appendix B sets forth a detailed analysis of all fifteen factors articulated by the United States District Court for the Southern District of New York in Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970), as applied to the hypothetical negotiation between Optiwave Semiconductor Corp. ("OWS" or "Optiwave") and Lumicore Technologies

II. HYPOTHETICAL NEGOTIATION FRAMEWORK A. Hypothetical Negotiation Date Consistent with established Federal Circuit precedent, the hypothetical negotiation date is set at the point just before the first act of infringement by the accused infringer. See Lucent Techs., 580 F.3d at 1325; Applied Signal Tech., Inc. v. Hewlett-Packard Co., No. C 09-01690 SBA, 2013 WL 2181584, at *16 (N.D. Cal. May 20, 2013). In this case,

1. Willing Licensor: Optiwave Semiconductor Corp. Optiwave Semiconductor Corp. is a Delaware corporation headquartered at 4810 Bayside Technology Parkway, Suite 300, Santa Clara, California 95054. OWS was founded in 2011 and has grown into the third-largest United States-based supplier of silicon-photonics transceiver modules for hyperscale data-center applications. The company employs approximately 1,250 people acro

2. Willing Licensee: Lumicore Technologies, Inc. Lumicore Technologies, Inc. is a Delaware corporation headquartered at 9200 Spectrum Boulevard, Building C, Austin, Texas 78759. Lumicore was founded in 2015 and has emerged as a fast-growing entrant in the silicon-photonics transceiver market, positioning itself as a disruptive competitor to established players including OWS, Drayton Group, Northpoint Group, and Ridge

III. DETAILED ANALYSIS OF THE FIFTEEN GEORGIA-PACIFIC FACTORS I now turn to a detailed analysis of each of the fifteen factors set forth in Georgia-Pacific, 318 F. Supp. at 1120, as applied to the hypothetical negotiation between OWS and Lumicore. Factor 1: The Royalties Received by the Patentee for the Licensing of the Patent in Suit, Proving or Tending to Prove an Established Royalty Georgia-Pacific Factor 1 direct

1. Synthesis of Factors 1–14. The preceding analysis of Factors 1 through 14 yields the following key conclusions: • Established royalty range (Factor 1): OWS's own prior licenses establish a royalty range of 6.5% to 9.0%, with the most comparable license (Helix) at an effective rate above 7.75%. • Licensee's comparable rates (Factor 2): Lumicore's own inbound patent licenses range from 5.0% to 7.5%, but cover less s