Contract analysis

From: Catherine Bloom <cbloom@calderwoodharkness.com> To: Alan Ngo <ango@calderwoodharkness.com> Date: Mon, 14 Aug 2023 10:17:00 -0000 Subject: OWS Patent Prosecution Docket — Immediate Wind-Down Protocol / Dormancy Instructions [Matter No. 1014-00005]

I want to get this out to everyone promptly so we can move in a coordinated fashion. Please read this in full — it will serve as our working reference for the foreseeable future.

On Friday, August 11, Sandra Koh (OWS IP Manager) and Marcus Whitfield (OWS General Counsel) informed me that OWS's majority equity sponsor, Harborview Partners, has imposed an immediate budget freeze under a company-wide cost-reduction initiative they are calling "Project Lighthouse." Effective August 11, the freeze caps all outside counsel discretionary IP spending at $25,000 per quarter — across all of OWS's outsi

OWS has directed us to pause all non-essential prosecution work immediately.

Sandra and Marcus have characterized this as temporary, but the timeline for lifting the freeze is uncertain. As you're likely aware, the broader sector has been under significant revenue pressure; OWS's FY 2023 revenue is tracking well below the $68.1M they posted in FY 2022. I don't have visibility into when Veltrano will relax these constraints.

Frustrating, but it is what it is. Here's what we need to do.

Cease all substantive drafting on the A1 Office Action response (U.S. App. No. 17/672,204) immediately. Save the current incomplete draft to the matter file in its present state. Please annotate the draft — or include a separate cover note — indicating precisely where work left off and what remains to complete (e.g., status of claim amendments, what portions of the remarks section are drafted vs. outlined, any outsta

(a) Complete and file the 2-month extension of time request for A1 (17/672,204). This is the one remaining task Sandra Koh has specifically authorized. The extension fee is $640 at the small entity rate. File this promptly — no later than the first week of September. Coordinate with Alan on billing treatment.

(b) Finalize any pending correspondence with our foreign associates. Specifically:

- **Breitenfeld & Vogt** (Dr. Matthias Vogt, Munich) — regarding the EPO applications; and - **Nakashima & Togawa** (Kenji Nakashima, Tokyo) — regarding the JPO applications.

Inform both firms of the hold status. I address the substance of the hold notices in more detail in Section 8 below.

(c) The EPO Rule 161/162 response for C2 (EP 23 765 901.7) — this was essentially complete before August 11. Peter, please confirm whether this can still be filed under the existing pre-freeze budget authorization. The work was performed and the response was substantively finalized prior to the freeze date, so I believe there is a reasonable argument it falls within previously approved spend. Check with Sandra Koh if

Effective immediately, no new billable work is to be performed on Matter No. 1014-00005 without my express authorization, which I will not give without prior client approval. If you're unsure whether something qualifies, ask me first.

**3. Work-in-Progress File Preservation**

All WIP files, draft documents, research memoranda, claim charts, and correspondence must be organized and saved to the central matter file system under our standard folder structure. I do not want loose files sitting on personal drives or in email folders.

*Christy:* Please prepare a brief status memo for each active U.S. application documenting:

(a) Current prosecution status; (b) Last action taken; (c) Next expected action/deadline; and (d) Any pending incomplete work product.

*Peter:* Please prepare the same for all international filings — PCT applications A4 and A5, EPO applications B3 and C2, and JPO applications B4 and C3.

**4. Statutory Deadline Calendar — This Is the Most Important Part**

I want to be very clear about this: the docket may be dormant, but statutory and regulatory deadlines do not pause. We have an ongoing obligation to monitor every deadline and notify the client in time to act. Failure here is not an option.

Peter and Christy — I need a comprehensive deadline calendar covering all 12 pending applications, delivered to me by end of day Friday, August 18. Below is my current understanding of the key deadlines and monitoring obligations. Please verify, correct, and supplement as needed:

- **A1 (U.S. 17/672,204):** Non-final Office Action response. Once the 2-month extension is filed, calculate remaining available extension periods and the absolute 6-month statutory deadline. By my calculation, with all extensions consumed, the hard statutory bar is **March 9, 2025**. Confirm. - **A2 (U.S. 17/672,311):** Awaiting first Office Action — estimated issuance Q2 2025. Monitor for receipt. - **A3 (U.S. 17/6

Once the calendar is finalized, set up reminders in our docketing system at **120 days, 90 days, 60 days, and 30 days** before each statutory bar date.

*Christy* — in addition, please send formal hold instructions to **Trident intellectual Property Services, LLC** (Lisa Cheng, account manager). Direct Trident to hold all non-critical filings but to continue monitoring all deadlines across the portfolio and to alert C&H of any approaching statutory bars per their normal protocol. Get that letter out this week.

**5. Client Notification Protocol During Dormancy**

Even though the docket is dormant, we will send written deadline reminder notices to Sandra Koh at each **90-day** and **30-day** mark before any statutory or absolute deadline.

If a deadline reaches the **60-day** mark without client authorization to act, I will escalate directly to Marcus Whitfield.

Document every notification — every email, every call, every voicemail — in the matter file. This protects both the client and the firm. No exceptions.

Please finalize and send the following as soon as possible:

- July 2023 invoice (Invoice No. 2023-07-04187) - August 2023 invoice (Invoice No. 2023-08-04187)

We also have approximately **$34,218.50 in unbilled WIP** that needs to be billed out. Once invoiced, total outstanding on the matter will be approximately **$56,958.50**.

Given the budget freeze, I expect collection may be slow. Alan — let's find time this week to discuss separately whether we need to adjust billing expectations or whether it makes sense to have a conversation with Daniel Everhart (OWS CFO) or Sandra Koh about a payment plan. I'd rather get ahead of this than let receivables age.

The 2-month extension filing for A1 (fee of $640) and Peter's associated time should be billed to Matter No. 1014-00005 as the final authorized charges unless and until we receive further client authorization.

A brief but important reminder: even in a dormancy or billing-dispute situation, we have continuing professional obligations as counsel of record and as registered patent practitioners before the USPTO. We cannot simply let deadlines lapse without adequate, documented notice to the client. That is true regardless of whether the client is paying invoices on time, regardless of the budget freeze, and regardless of any

I intend to prepare a more thorough analysis of our duties under the California Rules of Professional Conduct and the applicable USPTO regulations as the situation develops. For now, the notification protocol outlined in Section 5 above is our baseline. If anything about that protocol feels insufficient to any of you as the facts evolve, raise it with me immediately.

Peter — please send formal hold notices to both **Nakashima & Togawa** (attention: Kenji Nakashima) and **Breitenfeld & Vogt** (attention: Dr. Matthias Vogt) by the end of August. The notices should:

- Explain that the client has directed a pause on discretionary prosecution work; - Instruct both firms to hold on any discretionary work product; - Request that they continue monitoring all deadlines in their respective jurisdictions and inform C&H promptly of any approaching statutory or regulatory bars; and - Make clear that we expect to reactivate as soon as the client authorizes resumption.

Keep the tone professional and straightforward. These are good relationships and I want to preserve them.

I know this is a frustrating development. We built real momentum on this docket, and the prosecution strategy — particularly the design-around claims vis-à-vis Pinnacle Optics — is at a critical stage. You all did strong work getting these applications filed and the overall strategy in place, and none of that effort is lost. When OWS gives us the green light, we'll be ready to pick up exactly where we left off becaus

- **Comprehensive deadline calendar for all 12 applications** — Peter and Christy — by **end of day Friday, August 18** - **Application-by-application status memos** — Christy (U.S.) and Peter (international) — by **August 18** - **Formal hold letter to Trident IPS (Lisa Cheng)** — Christy — this week - **Hold notices to Nakashima & Togawa and Breitenfeld & Vogt** — Peter — by **end of August** - **July and August in

I'm available to discuss any of this. If something in the above doesn't make sense or you see an issue I've missed, come find me.

--- Catherine Bloom Partner | Intellectual Property Group Calderwood Harkness LLP cbloom@calderwoodharkness.com Direct: (415) 555-0178