1014-00003 · Optiwave Semiconductor Corp · Matter Administration

final-fee-reconciliation-retainer-return.docx DOCUMENT Litigation

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CALDERWOOD & HARKNESS LLP One Embarcadero Center, 34th Floor San Francisco, California 94111

Office of Marcus Delgado Partner, intellectual Property Group

Direct Dial: (415) 296-4718 Direct Fax: (415) 296-4719

Email: mdelgado@calderwoodharkness.com

April 21, 2023

Sandra Ellison, Esq. General Counsel Optiwave Semiconductor Corp. 2775 Augustine Drive, Suite 400 San Jose, California 95054

Re: Final Fee Reconciliation and Retainer Return — Matter No. 1014-00003 Optiwave Semiconductor Corp. v. Lumos Photonics, Inc., Case No. 5:22-cv-03417-EJD (N.D. Cal.)

Dear Ms. Ellison:

I write on behalf of Calderwood & Harkness LLP ("Calderwood & Harkness" or "C&H" or the "Firm") to provide the final fee reconciliation for the above-referenced matter, Matter No. 1014-00003, following the closure of the captioned litigation. As you are aware, the Honorable Edward J. Torvelis entered the Stipulated Order of Dismissal with Prejudice on April 18, 2023, thereby concluding all proceedings in this action. Accordingly, the matter has been formally closed in Calderwood & Harkness's practice management and billing systems as of that date. This letter is being transmitted in accordance with our obligations under the Engagement Letter dated May 12, 2022, which was executed by Alan Ngo (Responsible Partner) and the undersigned (Billing Partner) on behalf of Calderwood & Harkness, and by you on behalf of Optiwave Semiconductor Corp. ("OWS" or the "Company"). Enclosed with this letter you will find the final invoice for the matter, a trust account check representing the return of the remaining retainer balance, and a consolidated itemized fee summary covering the full duration of the engagement, each of which is described in greater detail below.

1. Summary of Fee Arrangement

For ease of reference, the following recapitulates the fee arrangement as set forth in Section 3 of the Engagement Letter dated May 12, 2022. Calderwood & Harkness agreed to represent OWS in connection with the assertion of OWS's patent infringement claims against Lumos Photonics, Inc. ("Lumos Photonics") on a blended hourly rate basis, subject to a ten percent (10%) volume discount applied to the Firm's standard billing rates. This volume discount was extended in recognition of the longstanding relationship between Calderwood & Harkness and OWS, as well as the anticipated scope and duration of the engagement.

The standard billing rates and corresponding effective rates (after application of the 10% volume discount) for each timekeeper assigned to this matter during the 2022 rate year were as follows:

No rate increases were implemented during the life of this engagement, as the matter concluded prior to the Firm's standard annual rate adjustment cycle.

In addition to the discounted hourly fee arrangement, the Engagement Letter provided for an evergreen retainer in the amount of One Hundred Thousand Dollars ($100,000), to be deposited into Calderwood & Harkness's client trust account upon execution of the Engagement Letter and replenished on a quarterly basis to maintain a minimum balance of $100,000. The retainer was to be held in trust and applied against outstanding fees and costs in accordance with the applicable provisions of the California Rules of Professional Conduct and the terms of the Engagement Letter. The reconciliation of the retainer account is addressed in detail in Section 7 below.

2. Engagement Period

The key dates relevant to the engagement period are summarized as follows:

• Engagement Commencement: May 12, 2022 (date of execution of the Engagement Letter)

• Complaint Filed: June 3, 2022 (Complaint for Patent Infringement filed in the United States District Court for the Northern District of California, Case No. 5:22-cv-03417-EJD)

• Matter Opened at C&H: June 3, 2022 (assigned Matter No. 1014-00003)

• Matter Closed: April 18, 2023 (date of the Court's entry of the Stipulated Order of Dismissal with Prejudice)

The total duration of the engagement was approximately eleven (11) months, spanning from the execution of the Engagement Letter in May 2022 through the entry of the dismissal order in April 2023. During this period, the litigation progressed through several significant phases, including pre-suit analysis and strategy development, complaint drafting and filing, initial case management and scheduling, claim construction briefing and the Markman hearing, fact discovery, post-Markman assessment, and ultimately the negotiation and execution of the settlement agreement and mutual release that gave rise to the stipulated dismissal.

3. Total Professional Fees Billed

Over the full life of Matter No. 1014-00003, Calderwood & Harkness billed total professional fees in the aggregate amount of $1,847,312.00. All fees reflect the application of the 10% volume discount to the standard hourly rates set forth in the Engagement Letter, as described in Section 1 above. No premium, success, or contingency fees were assessed at any point during the engagement.

The professional fees cover all phases of the litigation as conducted by the Calderwood & Harkness team, including but not limited to the following categories of work:

• Pre-suit analysis and patentability/infringement review of OWS's patent portfolio as it related to Lumos Photonics' accused products;

• Drafting and filing of the Complaint for Patent Infringement, including preparation of claim charts and accompanying exhibits;

• Case management conferences and compliance with the Court's standing orders and scheduling directives;

• Preparation of OWS's opening and reply claim construction briefs, including coordination with technical expert Dr. Harold Whitfield regarding claim interpretation and prosecution history analysis;

• Preparation for and attendance at the Markman hearing held on January 30, 2023, before the Honorable Edward J. Torvelis;

• Fact discovery, including the preparation and service of written discovery requests, review and production of OWS documents, and preparation for and defense of depositions taken by Lumos Photonics' counsel;

• Post-Markman assessment and strategic analysis following the Court's Claim Construction Order of February 17, 2023;

• Settlement negotiations with counsel for Lumos Photonics, culminating in the execution of the Settlement Agreement and Mutual Release and the filing of the Stipulation of Dismissal; and

• Matter closing activities, including preparation of the final invoice and this reconciliation letter.

The following table provides a summary-level breakdown of professional fees by timekeeper:

Detailed contemporaneous time entries for each timekeeper are reflected in the monthly invoices previously transmitted to your office over the course of the engagement, as well as in the enclosed final invoice covering the remaining billing period through matter close on April 18, 2023. In addition, the enclosed Consolidated Itemized Fee Summary (Enclosure 3) presents a comprehensive breakdown of fees by timekeeper and billing period for the full life of the matter.

4. Total Costs and Disbursements

Total costs and disbursements incurred and passed through to OWS over the life of the matter amounted to $289,456.00. These costs were incurred on behalf of OWS in the ordinary course of the litigation and were billed in accordance with the cost pass-through provisions set forth in Section 4 of the Engagement Letter. The principal categories of costs and disbursements are summarized below:

• Court Filing Fees: Filing fees associated with the Complaint for Patent Infringement, motions practice (including the joint claim construction brief and associated motions), and related court filings in the Northern District of California.

• Service of Process Fees: Fees incurred in connection with service of the Summons and Complaint on Lumos Photonics, Inc. via Ashgrove Services Inc., the designated registered agent for service of process in California.

• Deposition Costs: Court reporter fees, transcript preparation and delivery charges, and videography costs associated with depositions taken during the claim construction discovery phase in October 2022, including the depositions of Dr. Kevin Fong (Lumos Photonics' Vice President of Engineering), Hideo Tanaka (Lumos Photonics' Director of Product Development), and Dr. Amara Osei (OWS's named inventor on the asserted patents).

• Travel and Hearing Expenses: Travel, lodging, and related expenses incurred by Calderwood & Harkness attorneys and Dr. Harold Whitfield in connection with the Markman hearing held on January 30, 2023, before the Honorable Edward J. Torvelis at the Robert F. Peckham Federal Building and United States Courthouse in San Jose, California.

• Legal Research Database Charges: Charges for legal research conducted through Westmark Data Systems, Sundial Solutions, and specialized patent research databases, including Pemberton Data Systems and the USPTO's Patent Examination Data System (PEDS).

• Document Reproduction and Production Costs: Costs for copying, printing, scanning, and producing documents responsive to Lumos Photonics' discovery requests, as well as reproduction of documents for use in briefing and hearing preparation.

• ESI Hosting and Processing Costs: Costs for the collection, processing, hosting, review, and production of electronically stored information ("ESI") through the Firm's e-discovery platform, including the processing and hosting of approximately 1.2 terabytes of data collected from OWS's custodians.

• Demonstrative Exhibit Preparation: Costs associated with the design, preparation, and production of demonstrative exhibits and presentation materials used at the Markman hearing on January 30, 2023, including technical diagrams, annotated claim charts, and prosecution history timeline exhibits.

• Courier and Overnight Delivery Charges: Charges for courier service, Severin Partners LLC, and other overnight or expedited delivery services used to transmit filings, discovery materials, and correspondence throughout the engagement.

All costs and disbursements were itemized on the applicable monthly invoices previously provided to your office and are reflected in the enclosed Consolidated Itemized Fee Summary.

5. Expert Fees

Total expert fees incurred through the close of the matter amounted to $412,800.00. Two expert consulting firms were retained by Calderwood & Harkness on behalf of OWS during the course of this litigation, as follows:

Dr. Harold Whitfield — Whitfield Technical Consulting Group, Inc. (Palo Alto, California)

Dr. Whitfield was retained in August 2022 to serve as OWS's technical expert. His engagement encompassed claim construction support, including the preparation of detailed analyses of the asserted patent claims and the relevant prosecution history, as well as an infringement analysis of the Lumos Photonics accused products. Dr. Whitfield also prepared and delivered a technical tutorial for the Court at the commencement of the Markman hearing on January 30, 2023, and was present throughout the hearing to provide real-time technical support to the Calderwood & Harkness litigation team. Dr. Whitfield's total fees for the engagement were billed by Whitfield Technical Consulting Group, Inc. and passed through to OWS.

Dr. Lawrence Kessler — Apex Claim Analytics LLC (Chicago, Illinois)

Dr. Kessler was retained in October 2022 to serve as OWS's damages expert. His initial scope of work included the development of a reasonable royalty damages framework based on the Georgia-Pacific factor analysis, as well as preliminary quantification of patent infringement damages. Dr. Kessler conducted initial data analysis and prepared a preliminary damages methodology memorandum. However, following the Court's issuance of the Claim Construction Order on February 17, 2023, which adopted certain claim constructions unfavorable to OWS's infringement theories, Dr. Kessler's engagement was paused pending the Firm's strategic reassessment of the case. Dr. Kessler's engagement was not resumed prior to the settlement and closure of the matter.

In accordance with Section 4(b) of the Engagement Letter, all expert fees were billed directly by the respective expert firms to Calderwood & Harkness and were passed through to OWS at cost, without markup. These charges were reflected on the monthly invoices covering the applicable billing periods.

6. Grand Total Litigation Spend

The following table provides a summary reconciliation of the total litigation expenditures incurred on Matter No. 1014-00003 over the full course of the engagement:

As you will recall, the OWS Board of Directors approved a total litigation budget of $4,200,000.00 for this matter, which was intended to cover all fees, costs, and expenses through a jury trial in the Northern District of California. The grand total litigation spend of $2,549,568.00 represents approximately 60.7% of the Board-approved budget. The resolution of the matter at the post-Markman stage, rather than proceeding through the remaining phases of fact discovery, expert discovery, summary judgment, and trial, resulted in savings of approximately $1,650,432.00, or 39.3% of the approved budget. We trust that this outcome, while not the result the parties had envisioned at the outset, reflects a disciplined and cost-conscious approach to the management of the litigation.

7. Retainer Account Reconciliation

Pursuant to Section 5 of the Engagement Letter, OWS deposited funds into Calderwood & Harkness's client trust account on a quarterly basis to maintain the $100,000 evergreen retainer. The following table sets forth the retainer deposits received from OWS over the course of the engagement:

All retainer funds were held in Calderwood & Harkness's Interest on Lawyers' Trust Account ("IOLTA") at First Pacific Commerce Bank, N.A., in accordance with the requirements of the California Rules of Professional Conduct and the terms of the Engagement Letter.

Over the course of the engagement, Calderwood & Harkness applied retainer funds against outstanding fees and costs in the net aggregate amount of $337,512.00. The retainer balance remaining at the close of the matter is therefore calculated as follows:

Total Retainer Deposits: $400,000.00 Less: Net Retainer Applied Against Fees and Costs: ($337,512.00) Retainer Balance at Matter Close: $62,488.00

The remaining retainer balance of $62,488.00 is being returned to OWS in full. Enclosed with this letter is a trust account check in the amount of $62,488.00, payable to Optiwave Semiconductor Corp., drawn on Calderwood & Harkness LLP's Client Trust Account at First Pacific Commerce Bank, N.A. (Check No. 100847). We ask that you deposit or negotiate the enclosed check promptly upon receipt and confirm such receipt as noted below.

Upon the negotiation of the enclosed check, Calderwood & Harkness's trust account obligations to OWS in connection with Matter No. 1014-00003 will be fully satisfied, and the client trust account for this matter will be closed.

8. Fees Collected via Monthly Invoices

The total professional fees collected via monthly invoices issued during the course of the engagement — that is, fees paid by OWS outside of and in addition to retainer applications — amounted to $1,509,800.00. This figure is calculated as follows:

Total Professional Fees Billed: $1,847,312.00 Less: Net Retainer Applied Against Fees: ($337,512.00) Fees Collected via Monthly Invoices: $1,509,800.00

We confirm that all monthly invoices issued by Calderwood & Harkness to OWS over the course of the engagement have been paid in full. No outstanding balances, past-due amounts, or disputed charges remain on any previously issued invoice. The enclosed final invoice represents the last billing statement to be issued for this matter and reflects the final billing period through the matter close date of April 18, 2023.

9. Enclosures

The following documents are enclosed with this letter for your records:

1. Final Invoice — Calderwood & Harkness LLP Invoice for Matter No. 1014-00003, covering the final billing period through the matter close date of April 18, 2023. The final invoice reflects the remaining professional fees, costs, and disbursements incurred during the final billing period, including time expended on settlement documentation, the stipulation of dismissal, and matter closing activities.

2. Trust Account Check — Check No. 100847 in the amount of Sixty-Two Thousand Four Hundred Eighty-Eight Dollars ($62,488.00), payable to Optiwave Semiconductor Corp., representing the return of the unused retainer balance from Calderwood & Harkness LLP's Client Trust Account at First Pacific Commerce Bank, N.A.

3. Consolidated Itemized Fee Summary — A comprehensive fee summary organized by timekeeper and billing period for the full life of the matter (May 2022 through April 2023). This document provides a detailed breakdown of hours billed and fees charged by each timekeeper during each monthly billing period, as well as a summary of costs, disbursements, and expert fees by category and period.

Please review the enclosed materials at your convenience and do not hesitate to contact me or Alan Ngo should you have any questions regarding any line item, charge, or calculation reflected therein.

10. File Retention and Records

Calderwood & Harkness will retain the matter file for Matter No. 1014-00003 in accordance with the Firm's Document Retention Policy, as referenced in the Matter Closing Memorandum dated April 18, 2023, which was circulated internally upon the closing of the matter. Under the Firm's policy, closed matter files are retained in secure storage for a period of ten (10) years from the date of matter closure, after which they are scheduled for destruction unless otherwise directed by the client.

As a separate matter, you will be receiving correspondence from Omar Siddiqui regarding the return or destruction of confidential materials belonging to Lumos Photonics, Inc. that were received by Calderwood & Harkness and OWS under the terms of the Stipulated Protective Order entered by the Honorable Edward J. Torvelis on September 14, 2022. That correspondence will address the Firm's and OWS's obligations under Paragraph 13 of the Protective Order with respect to the disposition of designated "Confidential" and "Highly Confidential — Attorneys' Eyes Only" materials following the conclusion of the litigation.

Should you have any questions regarding the retention or disposition of the matter file, the return of any original documents or materials to OWS, or any other aspect of the file closing process, please do not hesitate to contact me directly at (415) 296-4718 or Alan Ngo at (415) 296-4801.

In closing, on behalf of the entire Calderwood & Harkness team — Alan Ngo, Omar Siddiqui, Christy Bauer, and myself — I wish to express our sincere appreciation for OWS's confidence in engaging Calderwood & Harkness to handle this important matter. We recognize that the outcome of the litigation was not what the parties had hoped, particularly in light of the Claim Construction Order issued on February 17, 2023, which narrowed the scope of several key asserted claims in a manner that materially affected the strength of OWS's infringement case. Nevertheless, the walk-away settlement that was achieved following the Markman ruling represented a pragmatic and efficient resolution that avoided the substantial additional costs, business disruption, and litigation risk that would have been associated with continued prosecution of the case through expert discovery, dispositive motions, and trial. We believe the resolution served the Company's interests well under the circumstances.

Calderwood & Harkness remains available to assist OWS with any future intellectual property matters, commercial litigation, or other legal needs that may arise. We value our relationship with OWS and look forward to the opportunity to continue serving the Company.

Finally, we respectfully request that you confirm receipt of this letter, the enclosed final invoice, and the trust account check (Check No. 100847) at your earliest convenience, either by responding to this letter directly or by contacting me at the number or email address listed above.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Marcus Delgado Partner, intellectual Property Group One Embarcadero Center, 34th Floor San Francisco, California 94111 Tel: (415) 296-4718

Email: mdelgado@calderwoodharkness.com

cc: Alan Ngo, Responsible Partner, Calderwood & Harkness LLP

Theodore "Ted" Marchetti, Vice President of intellectual Property, Optiwave Semiconductor Corp. Dr. Priya Ramanathan, Chief Executive Officer, Optiwave Semiconductor Corp.

Enclosures (3):

1. Final Invoice — Matter No. 1014-00003

2. Trust Account Check No. 100847 — $62,488.00

3. Consolidated Itemized Fee Summary (May 2022 – April 2023)

Timekeeper	Role	Standard Rate (2022)	Effective Rate (after 10% discount)
Alan Ngo	Responsible Partner	$1,150/hr	$1,035.00/hr
Marcus Delgado	Billing Partner	$1,050/hr	$945.00/hr
Omar Siddiqui	Senior Associate	$785/hr	$706.50/hr
Christy Bauer	Associate	$625/hr	$562.50/hr
Timekeeper	Role	Total Fees Billed
Alan Ngo	Responsible Partner	$496,800.00
Marcus Delgado	Billing Partner	$413,280.00
Omar Siddiqui	Senior Associate (Lead Associate)	$558,738.00
Christy Bauer	Associate (Working Associate)	$378,494.00
Total Professional Fees	$1,847,312.00
Category	Amount
Professional Fees (Calderwood & Harkness LLP)	$1,847,312.00
Costs and Disbursements	$289,456.00
Expert Fees (Whitfield Technical Consulting Group + Apex Claim Analytics)	$412,800.00
Grand Total Litigation Spend	$2,549,568.00
Quarter	Date of Deposit	Amount
Initial (Q2 2022)	May 15, 2022	$100,000.00
Q3 2022	August 12, 2022	$100,000.00
Q4 2022	November 9, 2022	$100,000.00
Q1 2023	February 8, 2023	$100,000.00
Total Retainer Deposits	$400,000.00

CALDERWOOD & HARKNESS LLP One Embarcadero Center, 34th Floor San Francisco, California 94111
Office of Marcus Delgado Partner, intellectual Property Group
Direct Dial: (415) 296-4718 Direct Fax: (415) 296-4719
Email: mdelgado@calderwoodharkness.com
April 21, 2023
Sandra Ellison, Esq. General Counsel Optiwave Semiconductor Corp. 2775 Augustine Drive, Suite 400 San Jose, California 95054
Re: Final Fee Reconciliation and Retainer Return — Matter No. 1014-00003 Optiwave Semiconductor Corp. v. Lumos Photonics, Inc., Case No. 5:22-cv-03417-EJD (N.D. Cal.)
Dear Ms. Ellison:
I write on behalf of Calderwood & Harkness LLP ("Calderwood & Harkness" or "C&H" or the "Firm") to provide the final fee reconciliation for the above-referenced matter, Matter No. 1014-00003, following the closure of the captioned litigation. As you are aware, the Honorable Edward J. Torvelis entered the Stipulated Order of Dismissal with Prejudice on April 18, 2023, thereby concluding all proceedings in this action. Accordingly, the matter has been formally closed in Calderwood & Harkness's practice management and billing systems as of that date. This letter is being transmitted in accordance with our obligations under the Engagement Letter dated May 12, 2022, which was executed by Alan Ngo (Responsible Partner) and the undersigned (Billing Partner) on behalf of Calderwood & Harkness, and by you on behalf of Optiwave Semiconductor Corp. ("OWS" or the "Company"). Enclosed with this letter you will find the final invoice for the matter, a trust account check representing the return of the remaining retainer balance, and a consolidated itemized fee summary covering the full duration of the engagement, each of which is described in greater detail below.
1. Summary of Fee Arrangement
For ease of reference, the following recapitulates the fee arrangement as set forth in Section 3 of the Engagement Letter dated May 12, 2022. Calderwood & Harkness agreed to represent OWS in connection with the assertion of OWS's patent infringement claims against Lumos Photonics, Inc. ("Lumos Photonics") on a blended hourly rate basis, subject to a ten percent (10%) volume discount applied to the Firm's standard billing rates. This volume discount was extended in recognition of the longstanding relationship between Calderwood & Harkness and OWS, as well as the anticipated scope and duration of the engagement.
The standard billing rates and corresponding effective rates (after application of the 10% volume discount) for each timekeeper assigned to this matter during the 2022 rate year were as follows:
No rate increases were implemented during the life of this engagement, as the matter concluded prior to the Firm's standard annual rate adjustment cycle.
In addition to the discounted hourly fee arrangement, the Engagement Letter provided for an evergreen retainer in the amount of One Hundred Thousand Dollars ($100,000), to be deposited into Calderwood & Harkness's client trust account upon execution of the Engagement Letter and replenished on a quarterly basis to maintain a minimum balance of $100,000. The retainer was to be held in trust and applied against outstanding fees and costs in accordance with the applicable provisions of the California Rules of Professional Conduct and the terms of the Engagement Letter. The reconciliation of the retainer account is addressed in detail in Section 7 below.
2. Engagement Period
The key dates relevant to the engagement period are summarized as follows:
• Engagement Commencement: May 12, 2022 (date of execution of the Engagement Letter)
• Complaint Filed: June 3, 2022 (Complaint for Patent Infringement filed in the United States District Court for the Northern District of California, Case No. 5:22-cv-03417-EJD)
• Matter Opened at C&H: June 3, 2022 (assigned Matter No. 1014-00003)
• Matter Closed: April 18, 2023 (date of the Court's entry of the Stipulated Order of Dismissal with Prejudice)
The total duration of the engagement was approximately eleven (11) months, spanning from the execution of the Engagement Letter in May 2022 through the entry of the dismissal order in April 2023. During this period, the litigation progressed through several significant phases, including pre-suit analysis and strategy development, complaint drafting and filing, initial case management and scheduling, claim construction briefing and the Markman hearing, fact discovery, post-Markman assessment, and ultimately the negotiation and execution of the settlement agreement and mutual release that gave rise to the stipulated dismissal.
3. Total Professional Fees Billed
Over the full life of Matter No. 1014-00003, Calderwood & Harkness billed total professional fees in the aggregate amount of $1,847,312.00. All fees reflect the application of the 10% volume discount to the standard hourly rates set forth in the Engagement Letter, as described in Section 1 above. No premium, success, or contingency fees were assessed at any point during the engagement.
The professional fees cover all phases of the litigation as conducted by the Calderwood & Harkness team, including but not limited to the following categories of work:
• Pre-suit analysis and patentability/infringement review of OWS's patent portfolio as it related to Lumos Photonics' accused products;
• Drafting and filing of the Complaint for Patent Infringement, including preparation of claim charts and accompanying exhibits;
• Case management conferences and compliance with the Court's standing orders and scheduling directives;
• Preparation of OWS's opening and reply claim construction briefs, including coordination with technical expert Dr. Harold Whitfield regarding claim interpretation and prosecution history analysis;
• Preparation for and attendance at the Markman hearing held on January 30, 2023, before the Honorable Edward J. Torvelis;
• Fact discovery, including the preparation and service of written discovery requests, review and production of OWS documents, and preparation for and defense of depositions taken by Lumos Photonics' counsel;
• Post-Markman assessment and strategic analysis following the Court's Claim Construction Order of February 17, 2023;
• Settlement negotiations with counsel for Lumos Photonics, culminating in the execution of the Settlement Agreement and Mutual Release and the filing of the Stipulation of Dismissal; and
• Matter closing activities, including preparation of the final invoice and this reconciliation letter.
The following table provides a summary-level breakdown of professional fees by timekeeper:
Detailed contemporaneous time entries for each timekeeper are reflected in the monthly invoices previously transmitted to your office over the course of the engagement, as well as in the enclosed final invoice covering the remaining billing period through matter close on April 18, 2023. In addition, the enclosed Consolidated Itemized Fee Summary (Enclosure 3) presents a comprehensive breakdown of fees by timekeeper and billing period for the full life of the matter.
4. Total Costs and Disbursements
Total costs and disbursements incurred and passed through to OWS over the life of the matter amounted to $289,456.00. These costs were incurred on behalf of OWS in the ordinary course of the litigation and were billed in accordance with the cost pass-through provisions set forth in Section 4 of the Engagement Letter. The principal categories of costs and disbursements are summarized below:
• Court Filing Fees: Filing fees associated with the Complaint for Patent Infringement, motions practice (including the joint claim construction brief and associated motions), and related court filings in the Northern District of California.
• Service of Process Fees: Fees incurred in connection with service of the Summons and Complaint on Lumos Photonics, Inc. via Ashgrove Services Inc., the designated registered agent for service of process in California.
• Deposition Costs: Court reporter fees, transcript preparation and delivery charges, and videography costs associated with depositions taken during the claim construction discovery phase in October 2022, including the depositions of Dr. Kevin Fong (Lumos Photonics' Vice President of Engineering), Hideo Tanaka (Lumos Photonics' Director of Product Development), and Dr. Amara Osei (OWS's named inventor on the asserted patents).
• Travel and Hearing Expenses: Travel, lodging, and related expenses incurred by Calderwood & Harkness attorneys and Dr. Harold Whitfield in connection with the Markman hearing held on January 30, 2023, before the Honorable Edward J. Torvelis at the Robert F. Peckham Federal Building and United States Courthouse in San Jose, California.
• Legal Research Database Charges: Charges for legal research conducted through Westmark Data Systems, Sundial Solutions, and specialized patent research databases, including Pemberton Data Systems and the USPTO's Patent Examination Data System (PEDS).
• Document Reproduction and Production Costs: Costs for copying, printing, scanning, and producing documents responsive to Lumos Photonics' discovery requests, as well as reproduction of documents for use in briefing and hearing preparation.
• ESI Hosting and Processing Costs: Costs for the collection, processing, hosting, review, and production of electronically stored information ("ESI") through the Firm's e-discovery platform, including the processing and hosting of approximately 1.2 terabytes of data collected from OWS's custodians.
• Demonstrative Exhibit Preparation: Costs associated with the design, preparation, and production of demonstrative exhibits and presentation materials used at the Markman hearing on January 30, 2023, including technical diagrams, annotated claim charts, and prosecution history timeline exhibits.
• Courier and Overnight Delivery Charges: Charges for courier service, Severin Partners LLC, and other overnight or expedited delivery services used to transmit filings, discovery materials, and correspondence throughout the engagement.
All costs and disbursements were itemized on the applicable monthly invoices previously provided to your office and are reflected in the enclosed Consolidated Itemized Fee Summary.
5. Expert Fees
Total expert fees incurred through the close of the matter amounted to $412,800.00. Two expert consulting firms were retained by Calderwood & Harkness on behalf of OWS during the course of this litigation, as follows:
Dr. Harold Whitfield — Whitfield Technical Consulting Group, Inc. (Palo Alto, California)
Dr. Whitfield was retained in August 2022 to serve as OWS's technical expert. His engagement encompassed claim construction support, including the preparation of detailed analyses of the asserted patent claims and the relevant prosecution history, as well as an infringement analysis of the Lumos Photonics accused products. Dr. Whitfield also prepared and delivered a technical tutorial for the Court at the commencement of the Markman hearing on January 30, 2023, and was present throughout the hearing to provide real-time technical support to the Calderwood & Harkness litigation team. Dr. Whitfield's total fees for the engagement were billed by Whitfield Technical Consulting Group, Inc. and passed through to OWS.
Dr. Lawrence Kessler — Apex Claim Analytics LLC (Chicago, Illinois)
Dr. Kessler was retained in October 2022 to serve as OWS's damages expert. His initial scope of work included the development of a reasonable royalty damages framework based on the Georgia-Pacific factor analysis, as well as preliminary quantification of patent infringement damages. Dr. Kessler conducted initial data analysis and prepared a preliminary damages methodology memorandum. However, following the Court's issuance of the Claim Construction Order on February 17, 2023, which adopted certain claim constructions unfavorable to OWS's infringement theories, Dr. Kessler's engagement was paused pending the Firm's strategic reassessment of the case. Dr. Kessler's engagement was not resumed prior to the settlement and closure of the matter.
In accordance with Section 4(b) of the Engagement Letter, all expert fees were billed directly by the respective expert firms to Calderwood & Harkness and were passed through to OWS at cost, without markup. These charges were reflected on the monthly invoices covering the applicable billing periods.
6. Grand Total Litigation Spend
The following table provides a summary reconciliation of the total litigation expenditures incurred on Matter No. 1014-00003 over the full course of the engagement:
As you will recall, the OWS Board of Directors approved a total litigation budget of $4,200,000.00 for this matter, which was intended to cover all fees, costs, and expenses through a jury trial in the Northern District of California. The grand total litigation spend of $2,549,568.00 represents approximately 60.7% of the Board-approved budget. The resolution of the matter at the post-Markman stage, rather than proceeding through the remaining phases of fact discovery, expert discovery, summary judgment, and trial, resulted in savings of approximately $1,650,432.00, or 39.3% of the approved budget. We trust that this outcome, while not the result the parties had envisioned at the outset, reflects a disciplined and cost-conscious approach to the management of the litigation.
7. Retainer Account Reconciliation
Pursuant to Section 5 of the Engagement Letter, OWS deposited funds into Calderwood & Harkness's client trust account on a quarterly basis to maintain the $100,000 evergreen retainer. The following table sets forth the retainer deposits received from OWS over the course of the engagement:
All retainer funds were held in Calderwood & Harkness's Interest on Lawyers' Trust Account ("IOLTA") at First Pacific Commerce Bank, N.A., in accordance with the requirements of the California Rules of Professional Conduct and the terms of the Engagement Letter.
Over the course of the engagement, Calderwood & Harkness applied retainer funds against outstanding fees and costs in the net aggregate amount of $337,512.00. The retainer balance remaining at the close of the matter is therefore calculated as follows:
Total Retainer Deposits: $400,000.00 Less: Net Retainer Applied Against Fees and Costs: ($337,512.00) Retainer Balance at Matter Close: $62,488.00
The remaining retainer balance of $62,488.00 is being returned to OWS in full. Enclosed with this letter is a trust account check in the amount of $62,488.00, payable to Optiwave Semiconductor Corp., drawn on Calderwood & Harkness LLP's Client Trust Account at First Pacific Commerce Bank, N.A. (Check No. 100847). We ask that you deposit or negotiate the enclosed check promptly upon receipt and confirm such receipt as noted below.
Upon the negotiation of the enclosed check, Calderwood & Harkness's trust account obligations to OWS in connection with Matter No. 1014-00003 will be fully satisfied, and the client trust account for this matter will be closed.
8. Fees Collected via Monthly Invoices
The total professional fees collected via monthly invoices issued during the course of the engagement — that is, fees paid by OWS outside of and in addition to retainer applications — amounted to $1,509,800.00. This figure is calculated as follows:
Total Professional Fees Billed: $1,847,312.00 Less: Net Retainer Applied Against Fees: ($337,512.00) Fees Collected via Monthly Invoices: $1,509,800.00
We confirm that all monthly invoices issued by Calderwood & Harkness to OWS over the course of the engagement have been paid in full. No outstanding balances, past-due amounts, or disputed charges remain on any previously issued invoice. The enclosed final invoice represents the last billing statement to be issued for this matter and reflects the final billing period through the matter close date of April 18, 2023.
9. Enclosures
The following documents are enclosed with this letter for your records:
1. Final Invoice — Calderwood & Harkness LLP Invoice for Matter No. 1014-00003, covering the final billing period through the matter close date of April 18, 2023. The final invoice reflects the remaining professional fees, costs, and disbursements incurred during the final billing period, including time expended on settlement documentation, the stipulation of dismissal, and matter closing activities.
2. Trust Account Check — Check No. 100847 in the amount of Sixty-Two Thousand Four Hundred Eighty-Eight Dollars ($62,488.00), payable to Optiwave Semiconductor Corp., representing the return of the unused retainer balance from Calderwood & Harkness LLP's Client Trust Account at First Pacific Commerce Bank, N.A.
3. Consolidated Itemized Fee Summary — A comprehensive fee summary organized by timekeeper and billing period for the full life of the matter (May 2022 through April 2023). This document provides a detailed breakdown of hours billed and fees charged by each timekeeper during each monthly billing period, as well as a summary of costs, disbursements, and expert fees by category and period.
Please review the enclosed materials at your convenience and do not hesitate to contact me or Alan Ngo should you have any questions regarding any line item, charge, or calculation reflected therein.
10. File Retention and Records
Calderwood & Harkness will retain the matter file for Matter No. 1014-00003 in accordance with the Firm's Document Retention Policy, as referenced in the Matter Closing Memorandum dated April 18, 2023, which was circulated internally upon the closing of the matter. Under the Firm's policy, closed matter files are retained in secure storage for a period of ten (10) years from the date of matter closure, after which they are scheduled for destruction unless otherwise directed by the client.
As a separate matter, you will be receiving correspondence from Omar Siddiqui regarding the return or destruction of confidential materials belonging to Lumos Photonics, Inc. that were received by Calderwood & Harkness and OWS under the terms of the Stipulated Protective Order entered by the Honorable Edward J. Torvelis on September 14, 2022. That correspondence will address the Firm's and OWS's obligations under Paragraph 13 of the Protective Order with respect to the disposition of designated "Confidential" and "Highly Confidential — Attorneys' Eyes Only" materials following the conclusion of the litigation.
Should you have any questions regarding the retention or disposition of the matter file, the return of any original documents or materials to OWS, or any other aspect of the file closing process, please do not hesitate to contact me directly at (415) 296-4718 or Alan Ngo at (415) 296-4801.
In closing, on behalf of the entire Calderwood & Harkness team — Alan Ngo, Omar Siddiqui, Christy Bauer, and myself — I wish to express our sincere appreciation for OWS's confidence in engaging Calderwood & Harkness to handle this important matter. We recognize that the outcome of the litigation was not what the parties had hoped, particularly in light of the Claim Construction Order issued on February 17, 2023, which narrowed the scope of several key asserted claims in a manner that materially affected the strength of OWS's infringement case. Nevertheless, the walk-away settlement that was achieved following the Markman ruling represented a pragmatic and efficient resolution that avoided the substantial additional costs, business disruption, and litigation risk that would have been associated with continued prosecution of the case through expert discovery, dispositive motions, and trial. We believe the resolution served the Company's interests well under the circumstances.
Calderwood & Harkness remains available to assist OWS with any future intellectual property matters, commercial litigation, or other legal needs that may arise. We value our relationship with OWS and look forward to the opportunity to continue serving the Company.
Finally, we respectfully request that you confirm receipt of this letter, the enclosed final invoice, and the trust account check (Check No. 100847) at your earliest convenience, either by responding to this letter directly or by contacting me at the number or email address listed above.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Marcus Delgado Partner, intellectual Property Group One Embarcadero Center, 34th Floor San Francisco, California 94111 Tel: (415) 296-4718
Email: mdelgado@calderwoodharkness.com
cc: Alan Ngo, Responsible Partner, Calderwood & Harkness LLP
Theodore "Ted" Marchetti, Vice President of intellectual Property, Optiwave Semiconductor Corp. Dr. Priya Ramanathan, Chief Executive Officer, Optiwave Semiconductor Corp.
Enclosures (3):
1. Final Invoice — Matter No. 1014-00003
2. Trust Account Check No. 100847 — $62,488.00
3. Consolidated Itemized Fee Summary (May 2022 – April 2023)
Timekeeper | Role | Standard Rate (2022) | Effective Rate (after 10% discount)
Alan Ngo | Responsible Partner | $1,150/hr | $1,035.00/hr
Marcus Delgado | Billing Partner | $1,050/hr | $945.00/hr
Omar Siddiqui | Senior Associate | $785/hr | $706.50/hr
Christy Bauer | Associate | $625/hr | $562.50/hr
Timekeeper | Role | Total Fees Billed
Alan Ngo | Responsible Partner | $496,800.00
Marcus Delgado | Billing Partner | $413,280.00
Omar Siddiqui | Senior Associate (Lead Associate) | $558,738.00
Christy Bauer | Associate (Working Associate) | $378,494.00
Total Professional Fees | $1,847,312.00
Category | Amount
Professional Fees (Calderwood & Harkness LLP) | $1,847,312.00
Costs and Disbursements | $289,456.00
Expert Fees (Whitfield Technical Consulting Group + Apex Claim Analytics) | $412,800.00
Grand Total Litigation Spend | $2,549,568.00
Quarter | Date of Deposit | Amount
Initial (Q2 2022) | May 15, 2022 | $100,000.00
Q3 2022 | August 12, 2022 | $100,000.00
Q4 2022 | November 9, 2022 | $100,000.00
Q1 2023 | February 8, 2023 | $100,000.00
Total Retainer Deposits | $400,000.00

CALDERWOOD & HARKNESS LLP One Embarcadero Center, 34th Floor San Francisco, California 94111

CALDERWOOD & HARKNESS LLP

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