Contract analysis

I. INTRODUCTION Plaintiff Optiwave Semiconductor Corp. ("OWS" or "Plaintiff") respectfully submits this Motion for Finding of Willful Infringement and for Enhanced Damages Under 35 U.S.C. § 284, and in support thereof states as follows: OWS is a Delaware corporation headquartered at 4810 Bayside Technology Parkway, Suite 300, Santa Clara, California 95054. Founded in 2009, OWS is a fabless semiconductor company speci

II. LEGAL STANDARD A. Willful Infringement Under *Halo Electronics, Inc. v. Pulse Electronics, Inc.*, 579 U.S. 93 (2016) The standard for determining willful infringement and the appropriateness of enhanced damages under 35 U.S.C. § 284 is governed by the Supreme Court's decision in Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. 93 (2016). In Halo, the Supreme Court abrogated the Federal Circuit's rigid

1. Whether the infringer deliberately copied the ideas or design of another;

2. Whether the infringer, when he knew of the other's patent protection, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed;

3. The infringer's behavior as a party to the litigation;

4. The defendant's size and financial condition;

5. The closeness of the case;

6. The duration of the defendant's misconduct;

7. Remedial action by the defendant;

8. The defendant's motivation for harm; and

9. Whether the defendant attempted to conceal its misconduct. Read, 970 F.2d at 826–27. These factors are not exhaustive, and no single factor is dispositive. Rather, the Court considers the totality of the circumstances, weighing each factor as appropriate to the facts of the case. Id. at 827. Not all factors need favor enhancement for an award to be appropriate; the Court may determine that certain factors weigh mo

III. STATEMENT OF FACTS SUPPORTING WILLFUL INFRINGEMENT A. OWS's Patent Portfolio and the Asserted Patents OWS's four asserted patents represent core innovations in the field of silicon photonics — specifically, in the design and manufacture of high-bandwidth optical transceiver modules used in data-center interconnect applications. Each patent was developed through extensive research and development efforts, prosecu

1. Lumicore's Design-Phase Awareness of OWS Patent Applications. The evidence establishes that Lumicore was aware of OWS's patent claims during the very design phase of its first accused product, the LumiLink 400G-ZR+. Melissa Chen is a former Lumicore engineer who worked on the LumiLink 400G-ZR+ design team from 2020 to 2024. Ms. Chen left Lumicore in early 2024 and is now employed at Veridian Photonics, Inc. Ms. Ch

2. FairPoint Licensing Group's First Notice Letter (January 15, 2023). On January 15, 2023, FairPoint Licensing Group, LLC ("FairPoint"), acting as OWS's authorized licensing agent, sent a formal licensing and notice letter to Lumicore's General Counsel, Raymond Bautista. FairPoint is a patent licensing firm managed by Angela Reeves, with offices at 500 Sansome Street, Suite 1400, San Francisco, California 94111. Fai

3. Lumicore's Initial Response Disputing Infringement (February 28, 2023). On February 28, 2023, approximately six weeks after receiving the FairPoint licensing letter, Lumicore responded through its outside counsel, Hawthorne Vega & Cruz LLP. The response letter, signed by Catherine "Kate" Rourke of Hawthorne Vega & Cruz, disputed infringement and raised questions regarding the validity of the identified patents. Cr

4. In-Person Licensing Meeting (April 20, 2023). On April 20, 2023, an in-person licensing meeting was held in Austin, Texas, to discuss the patent assertions and explore the possibility of a licensing arrangement. The meeting was attended by Angela Reeves of FairPoint Licensing Group, Rebecca Tanaka, OWS's General Counsel, Raymond Bautista, Lumicore's General Counsel, and Catherine "Kate" Rourke of Hawthorne Vega &

5. FairPoint's Second Notice Letter (May 15, 2023). On May 15, 2023, FairPoint sent a second formal licensing letter to Lumicore. This letter expanded the scope of the patent assertions in two significant respects. First, the letter added the '015 Patent (U.S. Patent No. 11,402,015, issued August 2, 2022) to the list of asserted patents. The '015 Patent had issued approximately nine months prior to the date of this s

6. Lumicore's Declination Letter and Claimed "Competent Legal Opinions" (July 10, 2023). On July 10, 2023, Lumicore formally declined to take a license. In its declination letter — attached hereto as Exhibit 3 — Lumicore stated that it had obtained "competent legal opinions" that its products do not infringe the asserted patents. This statement was the first and only time Lumicore referenced the existence of opinion-

1. Continued Sale of LumiLink 400G-ZR+ and LumiLink 800G-DR8. After receiving the first FairPoint licensing letter on January 15, 2023, and after receiving actual notice of all four asserted patents by no later than May 15, 2023, Lumicore continued to manufacture, use, sell, offer to sell, and import the LumiLink 400G-ZR+ and LumiLink 800G-DR8 transceiver modules without any modification whatsoever. Lumicore did not

2. Launch of the LumiEdge 1600G-LR (Q4 2023) — Post-Notice New Product Launch. Perhaps the most compelling evidence of Lumicore's willfulness is its decision to launch an entirely new accused product — the LumiEdge 1600G-LR transceiver module — in Q4 2023, after having received notice of all four asserted patents, after having attended an in-person licensing meeting, and after having formally declined to take a licen

3. Total Post-Notice Revenue. The post-notice period in this case runs from January 15, 2023 (the date of the first FairPoint licensing letter) through the projected trial date. During this period, Lumicore has continued to sell all three accused products without interruption. According to the preliminary damages analysis prepared by Dr. Lawrence Keating, Managing Director of Meridian Economic Consulting Group, LLC,

IV. APPLICATION OF THE READ FACTORS The nine Read factors, applied to the facts of this case, weigh heavily in favor of enhanced damages. OWS addresses each factor in turn below. A. Factor 1: Deliberate Copying The first Read factor asks whether the infringer deliberately copied the ideas or design of another. The evidence in this case strongly supports a finding of deliberate copying. First, Lumicore's design team r

I. Factor 9: Concealment of Misconduct The ninth Read factor considers whether the defendant attempted to conceal its misconduct. This factor is distinct from the question of whether the infringing products were sold openly in the market; it encompasses any efforts by the defendant to hide the nature or scope of its infringing activities. OWS acknowledges that Lumicore's accused products are commercially available an

V. ENHANCED DAMAGES CALCULATION A. Damages Base for Enhancement OWS's damages case, as set forth in the preliminary analysis prepared by its damages expert, Dr. Lawrence Keating, Managing Director of Meridian Economic Consulting Group, LLC, encompasses two complementary theories: lost profits and reasonable royalty. Lost Profits. Under the Panduit analysis, Dr. Keating has calculated lost profits of approximately $12