Contract analysis

I. EXECUTIVE SUMMARY OWS's willful infringement theory against Lumicore rests on a straightforward factual narrative: Lumicore had actual knowledge of OWS's patents, was put on repeated formal notice of infringement through multiple channels and over an extended period, and nevertheless continued to manufacture, sell, and launch new infringing products — including entirely new product lines — without conducting any m

II. LEGAL FRAMEWORK FOR WILLFUL INFRINGEMENT A. The *Halo Electronics* Standard In Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. 93 (2016), the Supreme Court fundamentally reshaped the law governing enhanced damages for patent infringement. The Court rejected the two-part test established by the Federal Circuit in In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en banc), which had require

1. Notice of the patent(s) and specific infringement allegations. Whether the infringer was put on notice of the asserted patents and the specific basis for the infringement allegations — through cease-and-desist letters, licensing correspondence, published patent applications, or other communications — is among the most important factors in the analysis. Actual notice of the patents is often treated as a threshold r

2. Investigation and advice of counsel. Whether the infringer investigated the matter upon receiving notice, or obtained competent legal advice regarding infringement, validity, and enforceability, is a significant factor. An infringer that receives notice and takes no steps to evaluate the allegations acts at its peril.

3. Continued or expanded infringing activity after notice. Courts view post-notice continuation or expansion of infringing activity as strong evidence of willfulness. The launch of new infringing products after notice is particularly probative, as it demonstrates an affirmative, deliberate decision to proceed with infringing conduct rather than merely a failure to cease existing activity.

4. Design-around efforts. Whether the infringer made good-faith efforts to design around the asserted patents is relevant to the question of culpability. The absence of any design-around analysis — particularly before launching new products — supports an inference of willful disregard.

5. Concealment or destruction of evidence. Spoliation, concealment, or deliberate destruction of evidence bearing on the infringer's knowledge and intent is a significant aggravating factor. While not alleged in this case at present, the ongoing document review may reveal evidence of concealment or selective production.

6. Closeness of the case on the merits. Where the infringement case is strong and the defenses are weak, willfulness is more readily established. Conversely, a close case on the merits — particularly on validity — may weigh against a finding of willfulness. The strength of OWS's infringement case and the weakness of Lumicore's invalidity defenses are addressed in separate memoranda.

7. The nine *Read* factors. Many district courts, including courts in the Eastern District of Texas, continue to apply the nine factors identified in Read Corp. v. Portec, Inc., 970 F.2d 816, 826–27 (Fed. Cir. 1992), as a framework for analyzing enhanced damages. These factors include: (i) whether the infringer deliberately copied the patented invention; (ii) whether the infringer investigated the scope of the patent

III. CHRONOLOGICAL TIMELINE OF EVIDENCE The following timeline sets forth, in chronological order, each material event, communication, product launch, and deposition admission bearing on OWS's willful infringement theory against Lumicore. Each entry identifies the date, the event, the relevant evidence, and the significance of the event for the willfulness analysis. Cross-references to the evidentiary sources compile

1. FairPoint's first licensing/notice letter (January 15, 2023), identifying three patents and the LumiLink 400G-ZR+;

2. Lumicore's response through HVC (February 28, 2023), disputing infringement without detailed analysis;

3. The in-person licensing meeting in Austin, TX (April 20, 2023), at which Lumicore showed "no interest in negotiating";

4. FairPoint's second licensing letter (May 15, 2023), adding the '015 Patent and the LumiLink 800G-DR8; and

5. Lumicore's formal declination (July 10, 2023), referencing "competent legal opinions" without disclosure. Raymond Bautista admitted in his December 3, 2024 deposition that no formal design-around analysis was commissioned before the LumiEdge 1600G-LR launch. This admission is critical: it establishes that Lumicore launched an entirely new product line incorporating allegedly infringing technology without taking ev

I. Deposition Evidence: Dr. Sandra Michaud Admissions Entry 13: November 19, 2024 — Deposition of Dr. Sandra Michaud (Lumicore CTO). — CRITICAL DEPOSITION TESTIMONY — Dr. Sandra Michaud, Lumicore's Chief Technology Officer, was deposed on November 19, 2024. Dr. Michaud has served as Lumicore's CTO since the company's founding and was directly responsible for overseeing the development of all three accused product lin

1. Review of OWS Published Application. Dr. Michaud admitted that she reviewed OWS's Published Application No. 2018/0123456 (corresponding to the '193 Patent, U.S. Patent No. 10,891,193, "High-Bandwidth Coherent Optical Transceiver Integrated on Silicon Substrate") during the LumiLink 400G-ZR+ design phase. She testified that she reviewed the published application as part of a competitive landscape analysis conducted

2. Denial of Knowledge of Issued Patents. Dr. Michaud denied knowledge of the issued '193 Patent (as opposed to the published application) until Lumicore received the FairPoint letter dated January 15, 2023. This denial is undermined by the fact that the published application she admitted reviewing contains substantially the same claim language as the issued '193 Patent. The progression from published application to

3. Inability to Identify Non-Infringing Alternatives. When questioned about non-infringing design alternatives, Dr. Michaud could not identify any specific non-infringing alternatives to the accused features in any of the three accused product lines. She testified that the accused structures were selected based on performance optimization and industry best practices, but she could not articulate any alternative appro

1. Receipt of Notice. Mr. Bautista confirmed receipt of FairPoint's January 15, 2023 letter. He testified that he received the letter on or about January 17, 2023 and confirmed forwarding it to Lumicore's outside counsel at Hawthorne Vega & Cruz LLP within three business days of receipt.

2. Privilege Assertion over Opinion Letters. Mr. Bautista refused to answer questions about the substance of the opinion-of-counsel letters referenced in Lumicore's July 10, 2023 declination letter, asserting attorney-client privilege. He would not confirm the identity of the attorneys who prepared the opinions, the date the opinions were received, or the scope of the analysis conducted. This blanket privilege assert

3. No Design-Around before LumiEdge Launch. Mr. Bautista admitted that no formal design-around analysis was commissioned before the launch of the LumiEdge 1600G-LR in Q4 2023. He testified that the product development process proceeded on its normal timeline and that the pending patent dispute was not a factor in the product launch decision. This admission is particularly damaging because it demonstrates that Lumicor

1. Count I: Direct infringement of the '847 Patent (U.S. 10,234,847)

2. Count II: Direct infringement of the '193 Patent (U.S. 10,891,193)

3. Count III: Direct infringement of the '562 Patent (U.S. 9,678,562)

4. Count IV: Direct infringement of the '015 Patent (U.S. 11,402,015)

5. Count V: Induced infringement under 35 U.S.C. § 271(b)

6. Count VI: Contributory infringement under 35 U.S.C. § 271(c)

7. Count VII: Willful infringement and enhanced damages under 35 U.S.C. § 284 The Complaint seeks approximately $210 million in damages, including enhanced damages for willful infringement, as well as a permanent injunction against continued infringement. Local counsel for OWS is James "Jim" Callahan of Whitmore & Callahan LLP, located at 110 North College Avenue, Suite 800, Tyler, TX 75702.

IV. SUMMARY OF NOTICE CHAIN AND WILLFULNESS INDICATORS A. Consolidated Notice Timeline Table The following table consolidates the critical events in the notice chain and identifies the willfulness significance of each event: B. Categories of Willfulness Evidence The evidence supporting OWS's willful infringement allegations against Lumicore falls into seven distinct but mutually reinforcing categories:

1. Actual Notice via Formal Correspondence. OWS, through its licensing agent FairPoint, sent two detailed licensing/notice letters to Lumicore's General Counsel — the first on January 15, 2023 and the second on May 15, 2023. Together, these letters identified all four asserted patents ('847, '193, '562, and '015) and two of the three accused products (LumiLink 400G-ZR+ and LumiLink 800G-DR8). The letters attached rel

2. In-Person Confrontation. On April 20, 2023, OWS's General Counsel and licensing agent met face-to-face with Lumicore's General Counsel and outside patent counsel in Austin, Texas. OWS presented a detailed infringement analysis, and Lumicore's representatives showed "no interest in negotiating." This in-person meeting elevates the notice beyond mere written correspondence — Lumicore's decision-makers and their coun

3. Deliberate Declination with Opaque Shield. On July 10, 2023, Lumicore formally declined to take a license, referencing "competent legal opinions" that its products do not infringe. However, Lumicore has refused to disclose the substance of these opinions, has not produced them in discovery, and has asserted privilege over their contents. The reference to "competent legal opinions" without disclosure or detailed ba

4. Post-Notice Product Launches. Two of the three accused products — the LumiLink 800G-DR8 (Q1 2023) and the LumiEdge 1600G-LR (Q4 2023) — were launched after Lumicore received formal notice of OWS's patents and infringement allegations. The launch of new products incorporating allegedly infringing technology after notice demonstrates an affirmative decision to expand infringing activity rather than merely continue e

5. Absence of Design-Around Efforts. Raymond Bautista admitted in deposition that no formal design-around analysis was commissioned before the launch of the LumiEdge 1600G-LR. This admission eliminates any argument that Lumicore made good-faith efforts to design around OWS's patents before introducing new products into the market. The absence of design-around efforts is particularly significant in light of the extens

6. Pre-Notice Knowledge of OWS IP. Dr. Sandra Michaud (Lumicore CTO) admitted in deposition that she reviewed OWS's Published Application No. 2018/0123456 (corresponding to the '193 Patent) during the LumiLink 400G-ZR+ design phase in 2021–2022. Melissa Chen (former Lumicore engineer) is expected to testify that the broader design team also reviewed OWS's published applications during the design phase. This evidence

7. Inability to Identify Non-Infringing Alternatives. Dr. Michaud could not identify any specific non-infringing design alternatives when questioned in deposition. This supports the inference that Lumicore knew its designs implicated OWS's patents and that no practical alternative existed — making the decision to proceed without a license all the more culpable.

V. EVIDENTIARY SOURCES AND DOCUMENT REFERENCES A. Documentary Evidence The following documents have been identified as the principal documentary evidence supporting OWS's willful infringement theory. Each document is listed with its date, source or custodian, and its relevance to the timeline:

1. FairPoint Licensing Group first licensing letter, dated January 15, 2023. Sent by Angela Reeves (Managing Director, FairPoint) to Raymond Bautista (General Counsel, Lumicore). This letter is the operative notice document and will be authenticated by a declaration of Angela Reeves (draft initiated, see Document 105 in the case management system).

2. FairPoint Licensing Group second licensing letter, dated May 15, 2023. Sent by Angela Reeves to Raymond Bautista. This letter expanded the scope of asserted patents (adding the '015 Patent) and accused products (adding the LumiLink 800G-DR8). Authentication will follow the same chain as the first letter.

3. Lumicore's February 28, 2023 response letter via Hawthorne Vega & Cruz LLP. Authored by Catherine "Kate" Rourke. Disputes infringement and questions validity without detailed analysis. Produced by Lumicore in discovery.

4. Lumicore's July 10, 2023 declination letter. Authored by HVC on behalf of Lumicore. Formally declines to license and references "competent legal opinions" of non-infringement. Produced by Lumicore in discovery. The opinion letters referenced in this correspondence are the subject of OWS's pending Motion to Compel (D.E. filed October 21, 2024).

5. Benchmark Semiconductor Analysis teardown report, dated December 12, 2022. Prepared by Kevin Ng, Lead Engineer, Benchmark Semiconductor Analysis, LLC. Confirms structural correlations between the LumiLink 400G-ZR+ and the claims of the '847 Patent and '562 Patent. Authenticated by Kevin Ng in his January 7, 2025 deposition.

6. Internal OWS communications (October 2022). Email exchanges and internal memoranda between Dr. Nikolai Petrov (VP of Engineering, Photonics Division) and Rebecca Tanaka (General Counsel) identifying potential infringement of OWS's patent portfolio by the LumiLink 400G-ZR+. Custodians: Dr. Nikolai Petrov, Rebecca Tanaka. Produced by OWS in discovery.

7. Lumicore product launch announcements and press releases. Public-facing announcements for the LumiLink 400G-ZR+ (Q3 2022), the LumiLink 800G-DR8 (Q1 2023), and the LumiEdge 1600G-LR (Q4 2023). These documents establish the launch dates and product descriptions for the accused products. Available from public sources and also produced by Lumicore in discovery.

8. Lumicore's financial disclosures and segment revenue data. Revenue data for each accused product, including quarterly and annual figures, produced by Lumicore in discovery under the three-tier confidentiality order entered in this case. These data support the damages calculations and the quantification of post-notice lost profits. B. Deposition Testimony The following depositions have been taken to date, and each

1. Dr. Sandra Michaud (CTO, Lumicore Technologies, Inc.) — Deposed November 19, 2024. Key testimony: admission of reviewing OWS Published Application No. 2018/0123456 during the LumiLink 400G-ZR+ design phase; denial of knowledge of issued patents until FairPoint's January 15, 2023 letter; inability to identify non-infringing design alternatives.

2. Raymond Bautista (General Counsel, Lumicore Technologies, Inc.) — Deposed December 3, 2024. Key testimony: confirmation of receipt of FairPoint's January 15, 2023 letter; confirmation of forwarding to outside counsel within three business days; privilege assertion over opinion-of-counsel letters; admission that no formal design-around analysis was commissioned before the LumiEdge 1600G-LR launch.

3. Angela Reeves (Managing Director, FairPoint Licensing Group, LLC) — Deposed December 10, 2024. Key testimony: confirmation of sending both licensing letters; description of the April 20, 2023 in-person meeting and Lumicore's refusal to negotiate; characterization of Lumicore's representatives as showing "no interest in negotiating."

4. Kevin Ng (Lead Engineer, Benchmark Semiconductor Analysis, LLC) — Deposed January 7, 2025. Key testimony: confirmation of teardown methodology, chain of custody for the commercially purchased LumiLink 400G-ZR+ unit, and structural identifications supporting the infringement basis for the '847 Patent and '562 Patent. C. Anticipated Evidence (Pending or Draft) The following evidence is anticipated but has not yet be

1. Melissa Chen subpoena duces tecum and deposition notice. Issued January 22, 2025 and served at Veridian Photonics, Inc. (Ms. Chen's current employer). Ms. Chen is expected to testify regarding the Lumicore design team's review of OWS published patent applications during the 2021–2022 design phase for the LumiLink 400G-ZR+. The deposition has not yet been taken. Scheduling is a priority (see Section VIII, Recommend

2. Opinion-of-counsel letters. Referenced in Lumicore's July 10, 2023 declination letter. Subject to OWS's pending Motion to Compel (D.E. filed October 21, 2024). If the motion is granted, these documents will be produced and analyzed. If the motion is denied, OWS will assess the availability of adverse inference arguments at trial.

3. Lumicore 30(b)(6) deposition on Topic 14 (non-infringing alternatives). Lumicore's initial 30(b)(6) designee on this topic may have been deficiently prepared; a potential supplemental deposition is under consideration, depending on the outcome of the document review and the adequacy of the testimony already obtained.

VI. GAP ANALYSIS AND OUTSTANDING INVESTIGATIVE STEPS A. Open Items The following items represent gaps in the current evidentiary record that must be addressed before the willfulness case can be finalized for trial or motion practice:

1. Melissa Chen Deposition. A subpoena duces tecum and deposition notice were issued to Melissa Chen on January 22, 2025. The deposition has not yet been taken. Ms. Chen's testimony is critical to establishing pre-notice knowledge of OWS's patent claims within the Lumicore engineering team. The deposition must be completed before the fact discovery close date of May 1, 2025. Counsel should coordinate with Ms. Chen's

2. Opinion-of-Counsel Letters. The Motion to Compel production of the opinion letters referenced in Lumicore's July 10, 2023 declination letter was filed on October 21, 2024 and remains pending. The outcome of this m