Contract analysis

I. INTRODUCTION Defendant Lumicore Technologies, Inc. ("Lumicore") asks this Court for a protective order that would shield from discovery product-level revenue, cost-of-goods-sold, and gross-margin data for its three accused product lines — the LumiLink 400G-ZR+, the LumiLink 800G-DR8, and the LumiEdge 1600G-LR. Lumicore's motion (D.E. 42) should be denied in all material respects. The data that Lumicore seeks to wi

II. FACTUAL BACKGROUND A. The Parties and the Litigation Plaintiff Optiwave Semiconductor Corp. ("OWS") is a corporation organized and existing under the laws of the State of Delaware, with its principal place of business at 4810 Bayside Technology Parkway, Suite 300, Santa Clara, California 95054. OWS is a fabless semiconductor company specializing in the design and development of silicon photonics chipsets for data

III. LEGAL STANDARD A. Scope of discovery Under Fed. R. Civ. P. 26(b)(1) Federal Rule of Civil Procedure 26(b)(1) provides that "[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." The Rule instructs courts to consider the following factors in assessing proportionality: (1) the importance of the issues at stake

IV. ARGUMENT A. Lumicore's Product-Level Financial Data Is Directly Relevant and Essential to OWS's Damages Case The financial data that Lumicore seeks to withhold — product-level revenue, cost of goods sold, gross margins, average selling prices, and customer-by-customer sales breakdowns for the LumiLink 400G-ZR+, LumiLink 800G-DR8, and LumiEdge 1600G-LR — sits at the heart of OWS's damages case. Without this data,

1. Lost-Profits Analysis (Panduit) Requires Product-Level Data. Under the Panduit framework, a patentee seeking lost profits must demonstrate: (1) demand for the patented product; (2) the absence of acceptable non-infringing substitutes; (3) the patentee's manufacturing and marketing capability to exploit the demand; and (4) the amount of profit the patentee would have made. Panduit Corp. v. Stahlin Bros. Fibre Works

2. Reasonable-Royalty Analysis (Georgia-Pacific) Requires Product-Level Data. The Georgia-Pacific framework requires consideration of fifteen factors in the context of a hypothetical negotiation between a willing licensor and a willing licensee. Georgia-Pacific Corp. v. U.S. Plywood Corp., 318 F. Supp. 1116, 1120 (S.D.N.Y. 1970). Many of these factors depend directly on the accused infringer's product-level financial

3. Willful Infringement / Enhanced Damages Analysis Requires Product-Level Data. OWS seeks enhanced damages under 35 U.S.C. § 284 based on Lumicore's willful infringement following receipt of notice. The Supreme Court held in Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. 93, 103 (2016), that enhanced damages are available in "egregious cases of culpable behavior," which may include continued infringemen

4. Apportionment and SSPPU/EMVR Analysis Requires Product-Level Data. To the extent Lumicore challenges OWS's damages theories on apportionment grounds — as accused infringers frequently do in patent cases — OWS must have access to Lumicore's product-level cost data, including bill-of-materials information, component costs, and margin data. Under the Federal Circuit's apportionment jurisprudence, a damages award must

1. Lumicore's Assertions of Competitive Harm Are Conclusory. Lumicore's motion relies on generalized assertions that its product-level financial data is "competitively sensitive" and that disclosure, even under the terms of a protective order, would cause "irreparable competitive harm." These assertions are precisely the type of "stereotyped and conclusory statements" that courts have repeatedly held insufficient to

2. Lumicore's Proposed Alternative — Aggregated Company-Wide Data — Is Inadequate. As an alternative to producing product-level financial data, Lumicore proposes that OWS accept only aggregated company-wide revenue and cost figures as reported in Lumicore's public 10-K filing. This alternative is wholly inadequate for the reasons already discussed. Lumicore's total fiscal year 2023 revenue was approximately $312.6 mi

3. The Three-Tier Protective Order Adequately Addresses Any Legitimate Confidentiality Concerns. The Proposed Stipulated Protective Order (D.E. 30), which the parties jointly submitted to the Court on August 19, 2024, already provides a robust and well-tailored framework for the protection of confidential information, including financial data. The AEO tier of the proposed order restricts access to sensitive financial

1. Amount in Controversy. OWS seeks approximately $210 million in damages in this action. The financial stakes are substantial for both parties. For Lumicore, a publicly traded company with a market capitalization of approximately $3.4 billion, the accused products represent approximately 84.7% of its total fiscal year 2023 revenue and the foundation of its business. For OWS, this litigation represents a critical eff

2. Relative Access to Information. Lumicore has exclusive access to its own product-level financial data. OWS has no independent means of obtaining this information. While OWS can estimate certain financial metrics from publicly available sources — such as Lumicore's SEC filings, analyst reports, and industry publications — these estimates are necessarily imprecise and cannot substitute for the actual data that Lumic

3. Importance to Resolving Damages Issues. Without product-level financial data from Lumicore, OWS's damages case cannot proceed. Dr. Keating cannot prepare his expert report — due June 15, 2025 — without this data. Any further delay in Lumicore's production of the financial data will prejudice OWS by compressing the time available for expert analysis and may necessitate extensions of the expert discovery schedule, d

4. Burden of Production. Lumicore is a sophisticated, publicly traded corporation with a Chief Financial Officer (Janet Moreno), audited financial statements prepared by its independent auditor Brennan Kellogg & Associates LLP, and established enterprise resource planning and financial reporting systems. As a public company subject to SEC reporting requirements, Lumicore is required to maintain detailed financial rec

V. CONCLUSION For the foregoing reasons, Plaintiff Optiwave Semiconductor Corp. respectfully requests that the Court enter an order:

1. Granting Lumicore's Motion in Part — to the extent Lumicore seeks designation of its product-level financial data as "Highly Confidential — Attorneys' Eyes Only" under the Proposed Stipulated Protective Order (D.E. 30), the Court should grant the motion and enter the Proposed Stipulated Protective Order;

2. Denying Lumicore's Motion in Part — to the extent Lumicore seeks to withhold product-level financial data entirely, or to substitute aggregated company-wide data for product-level data, the Court should deny the motion;

3. Ordering Production — the Court should order Lumicore to produce product-level financial data for the LumiLink 400G-ZR+, the LumiLink 800G-DR8, and the LumiEdge 1600G-LR product lines, including unit sales, revenue by product and by customer, cost of goods sold, gross margins, and average selling prices, subject to AEO designation under the Stipulated Protective Order; and

4. Setting a Production Deadline — the Court should set a deadline for Lumicore's production of the financial data consistent with the existing discovery schedule, allowing sufficient time for Dr. Keating to receive, analyze, and incorporate the data into his expert report, which is due June 15, 2025. OWS proposes that the Court order production within fourteen (14) days of entry of the order, or such other period as

1. Defendant's Motion for Protective Order (D.E. 42) is GRANTED IN PART and DENIED IN PART.

2. The Court hereby ENTERS the Stipulated Protective Order as jointly proposed by the parties and filed at Docket Entry 30, with any modifications the Court deems appropriate. The three-tier confidentiality framework set forth therein — "Confidential," "Highly Confidential — Attorneys' Eyes Only," and "Highly Confidential — Source Code" — shall govern the treatment of confidential information produced in discovery in

3. Defendant Lumicore Technologies, Inc. is hereby ORDERED to produce to Plaintiff product-level financial data for the following accused product lines: (a) LumiLink 400G-ZR+; (b) LumiLink 800G-DR8; and (c) LumiEdge 1600G-LR. Such production shall include, without limitation: (i) Unit sales data for each accused product, by quarter, from Q3 2022 through the most recently completed quarter at the time of production; (

4. All product-level financial data produced pursuant to this Order shall be designated "Highly Confidential — Attorneys' Eyes Only" under the Stipulated Protective Order. Access to such data shall be limited to Plaintiff's outside counsel, Plaintiff's retained damages expert (Dr. Lawrence Keating of Meridian Economic Consulting Group, LLC, and members of his team who sign the required undertaking), and the Court and

5. Defendant's request to withhold product-level financial data entirely, or to produce only aggregated company-wide financial data in lieu of product-level data, is DENIED.

6. Defendant shall complete production of the financial data described in Paragraph 3 above within fourteen (14) days of the date of this Order, or by such other date as the Court may set upon a showing of good cause.

7. The parties shall meet and confer in good faith regarding any disputes that arise concerning the scope, format, or completeness of the production required by this Order before seeking further judicial intervention. IT IS SO ORDERED. SIGNED this _ day of _____, 2024. ________________________________________ HON. JAMES R. GILSTRAP UNITED STATES DISTRICT JUDGE Page(s) Bayer Healthcare LLC v. Baxalta Inc., No. 1:18-cv