CONFIDENTIAL — SUBJECT TO FEDERAL RULE OF EVIDENCE 408

CALDERWOOD & HARKNESS LLP Attorneys at Law

One Embarcadero Center, 34th Floor San Francisco, California 94111 Telephone: (415) 732-4400 Facsimile: (415) 732-4401 www.calderwoodharkness.com

March 6, 2023

Victoria "Tori" Ashworth, Esq. Brannick Howell & Stein LLP 555 California Street, Suite 2800 San Francisco, CA 94104

Re: Optiwave Semiconductor Corp. v. Lumos Photonics, Inc., Case No. 5:22-cv-03417-EJD (N.D. Cal.)

Dear Tori:

I write on behalf of our client, Optiwave Semiconductor Corp. ("OWS"), the plaintiff in the above-captioned action, to memorialize the substance of the telephone conversation that you and I had earlier today, March 6, 2023, and to formally propose a framework for structured settlement discussions between OWS and your client, Lumos Photonics, Inc. ("Lumos"). As I expressed during our call, OWS has a genuine interest in exploring whether the parties can reach a resolution of this litigation that avoids the considerable cost, burden, and uncertainty of continued proceedings for both sides. We believe that the present posture of the case presents a meaningful opportunity for the parties to engage in productive and good-faith negotiations, and we hope that Lumos shares this view.

The Court's Markman Order and the Current Posture of the Case

As you are well aware, on February 17, 2023, the Honorable Edward J. Torvelis issued his Markman Order (Dkt. No. 98), construing all eleven disputed claim terms across the four patents-in-suit — namely, U.S. Patent Nos. 10,234,567; 10,891,234; 11,045,678; and 11,312,890. The Court's thirty-four page Order addressed each of the claim terms briefed and argued by the parties at the January 19, 2023 claim construction hearing and provided detailed reasoning supporting each construction adopted.

We recognize that the Court's claim constructions have meaningfully shaped the landscape of this case. The parties now have substantially greater clarity regarding the scope and meaning of the asserted claims, and each side is better positioned to evaluate the strengths and risks of its respective positions as the case moves forward. In light of that clarity, OWS believes it would be prudent and in the interests of both parties to engage in a candid discussion of potential resolution before the case enters its next — and significantly more expensive — phases, including the completion of fact discovery, the commencement and completion of expert discovery, the filing and briefing of dispositive motions, and ultimately trial preparation and trial itself.

To be clear, OWS remains fully confident in its claims and in its ability to prove infringement, obtain substantial damages, and secure the injunctive relief it has sought. This invitation to discuss settlement reflects not a concession of weakness but rather a pragmatic recognition that litigation of this magnitude imposes significant costs and burdens on both parties, and that there may be a path to a resolution that serves the legitimate business interests of OWS and Lumos alike. We extend this invitation in a spirit of professional cooperation and with the hope that it will be received in kind.

Proposed Settlement Discussion Window

I propose that the parties establish a thirty (30) day settlement discussion window, to commence upon mutual written agreement of the parties. Our target would be for the window to open on or about March 10, 2023, and to conclude on or about April 10, 2023. This period is intended to be long enough to permit the exchange of meaningful proposals and counterproposals, but short enough to avoid any undue delay of the litigation in the event that the discussions do not result in a resolution.

During this window, the parties would engage in good-faith settlement discussions, including the exchange of written settlement proposals and counterproposals, as well as telephonic or in-person meetings as may be agreed upon by the parties from time to time. The primary points of contact for the settlement discussions would be counsel — that is, myself on behalf of OWS, and you on behalf of Lumos — with the participation of the parties' respective in-house representatives as needed and appropriate. For OWS, that representative would be Sandra Ellison, OWS's General Counsel; I understand from our call today that Richard Talbot, Lumos's General Counsel, would serve in a comparable capacity on your side. Both Ms. Ellison and Mr. Talbot would be kept informed of the progress of discussions and would be available for decision-making at critical junctures.

All settlement discussions conducted during the proposed window — whether oral or written, formal or informal — would be treated as confidential and would be subject to the protections of Federal Rule of Evidence 408, which renders settlement negotiations inadmissible to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction. The parties would agree that no statement, proposal, counterproposal, concession, or other communication made during the settlement discussions may be used in this action or any other proceeding for any purpose other than to enforce the terms of any settlement agreement reached by the parties.

Request for Stipulated Stay of discovery

In connection with the proposed settlement discussion window, and as we discussed by telephone today, I respectfully request that the parties jointly prepare and file a Stipulation and Proposed Order Staying All discovery Deadlines Pending Settlement Discussions (the "Joint Stipulation") for submission to Judge Torvelis. The Joint Stipulation would stay all discovery activity and deadlines under the Court's current scheduling order during the thirty-day settlement period.

There are several compelling reasons supporting a temporary stay of this nature:

First, a stay of discovery will permit both parties to devote their time, attention, and resources to the settlement discussions rather than dividing those resources between active litigation and negotiation. Settlement discussions are most productive when the parties and their counsel can engage with the process fully and without the distraction and competing demands of ongoing discovery.

Second, a stay will avoid the incurrence of unnecessary costs and burdens associated with continued discovery activity while the parties are exploring resolution. Both sides have already incurred significant costs in this litigation, and it would not serve either party's interests to continue generating discovery expenses during a period when a resolution may be achievable.

Third, given the limited duration of the proposed settlement window — thirty days — neither party will suffer any meaningful prejudice from a temporary pause in discovery. If the settlement discussions are unsuccessful, the stay would lift automatically upon the expiration of the thirty-day window (or upon earlier written notice by either party that it wishes to terminate the discussions), and the parties would resume discovery under whatever schedule the Court sets, whether by resetting the existing deadlines or by issuing a modified scheduling order.

I propose that the parties finalize and submit the Joint Stipulation and Proposed Order promptly — ideally on or about March 10, 2023, contemporaneously with the commencement of the settlement window. In the interest of efficiency, I am happy to prepare the initial draft of the Joint Stipulation and Proposed Order and circulate it to you for your review and comment. If you would prefer to prepare the initial draft, or if you would prefer that we work collaboratively on a joint draft from the outset, I am amenable to either approach.

Scope of Settlement Discussions

OWS enters these discussions with an open mind and a willingness to explore a range of potential resolution structures. While I will not attempt to define the full universe of possible outcomes in this letter, I can confirm that OWS is prepared to discuss, among other things, licensing arrangements (including both one-way and cross-licensing structures), royalty-based frameworks, lump-sum payments, and other forms of business resolution that may address the interests of both parties. OWS hopes that Lumos will approach these discussions with a similarly open and creative posture.

In order to ensure that discussions proceed efficiently, I propose that both sides exchange initial written settlement proposals within the first week of the settlement window — that is, on or before March 17, 2023. This will give each side an early understanding of the other's expectations and priorities, and will allow the parties to use the remaining time in the window for substantive negotiation.

For the avoidance of doubt, OWS expressly reserves all of its rights, claims, and defenses in this litigation. Neither this letter nor any subsequent settlement discussions, proposals, counterproposals, or other communications shall constitute a waiver of any right, claim, defense, or remedy available to OWS, nor shall they constitute an admission of any fact, position, or contention. OWS's willingness to explore settlement does not reflect and should not be interpreted as reflecting any change in OWS's assessment of the merits of its claims or the strength of its litigation position.

Confirmation of Points Agreed Upon During Today's Telephone Call

For the record, I wish to confirm the following points that you and I discussed and agreed upon in principle during our telephone conversation earlier today:

1. Both sides expressed a genuine interest in exploring settlement of this litigation.

2. Both sides agreed in principle to a thirty (30) day settlement discussion window, targeted to commence on or about March 10, 2023, and conclude on or about April 10, 2023.

3. Both sides agreed in principle that the parties would jointly seek a stipulated stay of discovery during the settlement discussion window.

4. Both sides agreed that all settlement discussions would be conducted under the protections of Federal Rule of Evidence 408 and would be treated as strictly confidential.

5. Both sides agreed that the principals of their respective clients — Ms. Ellison for OWS and Mr. Talbot for Lumos — would be kept informed of the progress of discussions and would remain available for decision-making throughout the settlement window.

If your recollection of our conversation differs from the foregoing in any respect, or if I have omitted any point that you believe should be included, please do not hesitate to let me know so that we can ensure that both sides are proceeding from a common understanding.

Request for Written Response

I would appreciate it if you could confirm Lumos's agreement to the proposed framework — or, if Lumos has any modifications or counterproposals, communicate those — in writing by no later than Wednesday, March 8, 2023. A timely response will allow the parties to finalize the Joint Stipulation and submit it to the Court on or about March 10, 2023, as discussed.

If there are aspects of the proposed framework that you would like to discuss further before providing a written response, I am of course available by telephone at your convenience. I want to ensure that the framework works for both sides and that we begin the settlement discussions on a cooperative footing.

Reservation of Rights

Nothing in this letter shall be construed as an admission of any fact, claim, defense, or legal position by OWS or any of its officers, directors, employees, agents, or representatives. OWS expressly reserves all rights, remedies, claims, and defenses available to it in the above-captioned action, including but not limited to its claims for patent infringement under 35 U.S.C. § 271, its claims for damages (including enhanced damages under 35 U.S.C. § 284), its request for injunctive relief under 35 U.S.C. § 283, and its request for attorneys' fees under 35 U.S.C. § 285. This letter is made solely in the context of settlement discussions and is protected in its entirety by Federal Rule of Evidence 408 and all other applicable federal and state laws, rules, and doctrines governing the confidentiality and inadmissibility of settlement communications.

I am hopeful that the parties can work together efficiently and in good faith toward a resolution of this matter that is mutually acceptable and that serves the legitimate interests of both OWS and Lumos. I look forward to hearing from you.

Very truly yours,

CALDERWOOD & HARKNESS LLP

By: ________

Alan Ngo Partner, intellectual Property Group Calderwood & Harkness LLP One Embarcadero Center, 34th Floor San Francisco, CA 94111 Telephone: (415) 732-4418

Email: ango@calderwoodharkness.com

Registered Patent Attorney, USPTO Reg. No. 52,871

cc: Sandra Ellison, General Counsel, Optiwave Semiconductor Corp. Marcus Delgado, Partner, Calderwood & Harkness LLP Omar Siddiqui, Associate, Calderwood & Harkness LLP

Enclosures: None

CONFIDENTIAL — SUBJECT TO FEDERAL RULE OF EVIDENCE 408
CALDERWOOD & HARKNESS LLP Attorneys at Law
One Embarcadero Center, 34th Floor San Francisco, California 94111 Telephone: (415) 732-4400 Facsimile: (415) 732-4401 www.calderwoodharkness.com
March 6, 2023
Victoria "Tori" Ashworth, Esq. Brannick Howell & Stein LLP 555 California Street, Suite 2800 San Francisco, CA 94104
Re: Optiwave Semiconductor Corp. v. Lumos Photonics, Inc., Case No. 5:22-cv-03417-EJD (N.D. Cal.)
Dear Tori:
I write on behalf of our client, Optiwave Semiconductor Corp. ("OWS"), the plaintiff in the above-captioned action, to memorialize the substance of the telephone conversation that you and I had earlier today, March 6, 2023, and to formally propose a framework for structured settlement discussions between OWS and your client, Lumos Photonics, Inc. ("Lumos"). As I expressed during our call, OWS has a genuine interest in exploring whether the parties can reach a resolution of this litigation that avoids the considerable cost, burden, and uncertainty of continued proceedings for both sides. We believe that the present posture of the case presents a meaningful opportunity for the parties to engage in productive and good-faith negotiations, and we hope that Lumos shares this view.
The Court's Markman Order and the Current Posture of the Case
As you are well aware, on February 17, 2023, the Honorable Edward J. Torvelis issued his Markman Order (Dkt. No. 98), construing all eleven disputed claim terms across the four patents-in-suit — namely, U.S. Patent Nos. 10,234,567; 10,891,234; 11,045,678; and 11,312,890. The Court's thirty-four page Order addressed each of the claim terms briefed and argued by the parties at the January 19, 2023 claim construction hearing and provided detailed reasoning supporting each construction adopted.
We recognize that the Court's claim constructions have meaningfully shaped the landscape of this case. The parties now have substantially greater clarity regarding the scope and meaning of the asserted claims, and each side is better positioned to evaluate the strengths and risks of its respective positions as the case moves forward. In light of that clarity, OWS believes it would be prudent and in the interests of both parties to engage in a candid discussion of potential resolution before the case enters its next — and significantly more expensive — phases, including the completion of fact discovery, the commencement and completion of expert discovery, the filing and briefing of dispositive motions, and ultimately trial preparation and trial itself.
To be clear, OWS remains fully confident in its claims and in its ability to prove infringement, obtain substantial damages, and secure the injunctive relief it has sought. This invitation to discuss settlement reflects not a concession of weakness but rather a pragmatic recognition that litigation of this magnitude imposes significant costs and burdens on both parties, and that there may be a path to a resolution that serves the legitimate business interests of OWS and Lumos alike. We extend this invitation in a spirit of professional cooperation and with the hope that it will be received in kind.
Proposed Settlement Discussion Window
I propose that the parties establish a thirty (30) day settlement discussion window, to commence upon mutual written agreement of the parties. Our target would be for the window to open on or about March 10, 2023, and to conclude on or about April 10, 2023. This period is intended to be long enough to permit the exchange of meaningful proposals and counterproposals, but short enough to avoid any undue delay of the litigation in the event that the discussions do not result in a resolution.
During this window, the parties would engage in good-faith settlement discussions, including the exchange of written settlement proposals and counterproposals, as well as telephonic or in-person meetings as may be agreed upon by the parties from time to time. The primary points of contact for the settlement discussions would be counsel — that is, myself on behalf of OWS, and you on behalf of Lumos — with the participation of the parties' respective in-house representatives as needed and appropriate. For OWS, that representative would be Sandra Ellison, OWS's General Counsel; I understand from our call today that Richard Talbot, Lumos's General Counsel, would serve in a comparable capacity on your side. Both Ms. Ellison and Mr. Talbot would be kept informed of the progress of discussions and would be available for decision-making at critical junctures.
All settlement discussions conducted during the proposed window — whether oral or written, formal or informal — would be treated as confidential and would be subject to the protections of Federal Rule of Evidence 408, which renders settlement negotiations inadmissible to prove or disprove the validity or amount of a disputed claim or to impeach by a prior inconsistent statement or a contradiction. The parties would agree that no statement, proposal, counterproposal, concession, or other communication made during the settlement discussions may be used in this action or any other proceeding for any purpose other than to enforce the terms of any settlement agreement reached by the parties.
Request for Stipulated Stay of discovery
In connection with the proposed settlement discussion window, and as we discussed by telephone today, I respectfully request that the parties jointly prepare and file a Stipulation and Proposed Order Staying All discovery Deadlines Pending Settlement Discussions (the "Joint Stipulation") for submission to Judge Torvelis. The Joint Stipulation would stay all discovery activity and deadlines under the Court's current scheduling order during the thirty-day settlement period.
There are several compelling reasons supporting a temporary stay of this nature:
First, a stay of discovery will permit both parties to devote their time, attention, and resources to the settlement discussions rather than dividing those resources between active litigation and negotiation. Settlement discussions are most productive when the parties and their counsel can engage with the process fully and without the distraction and competing demands of ongoing discovery.
Second, a stay will avoid the incurrence of unnecessary costs and burdens associated with continued discovery activity while the parties are exploring resolution. Both sides have already incurred significant costs in this litigation, and it would not serve either party's interests to continue generating discovery expenses during a period when a resolution may be achievable.
Third, given the limited duration of the proposed settlement window — thirty days — neither party will suffer any meaningful prejudice from a temporary pause in discovery. If the settlement discussions are unsuccessful, the stay would lift automatically upon the expiration of the thirty-day window (or upon earlier written notice by either party that it wishes to terminate the discussions), and the parties would resume discovery under whatever schedule the Court sets, whether by resetting the existing deadlines or by issuing a modified scheduling order.
I propose that the parties finalize and submit the Joint Stipulation and Proposed Order promptly — ideally on or about March 10, 2023, contemporaneously with the commencement of the settlement window. In the interest of efficiency, I am happy to prepare the initial draft of the Joint Stipulation and Proposed Order and circulate it to you for your review and comment. If you would prefer to prepare the initial draft, or if you would prefer that we work collaboratively on a joint draft from the outset, I am amenable to either approach.
Scope of Settlement Discussions
OWS enters these discussions with an open mind and a willingness to explore a range of potential resolution structures. While I will not attempt to define the full universe of possible outcomes in this letter, I can confirm that OWS is prepared to discuss, among other things, licensing arrangements (including both one-way and cross-licensing structures), royalty-based frameworks, lump-sum payments, and other forms of business resolution that may address the interests of both parties. OWS hopes that Lumos will approach these discussions with a similarly open and creative posture.
In order to ensure that discussions proceed efficiently, I propose that both sides exchange initial written settlement proposals within the first week of the settlement window — that is, on or before March 17, 2023. This will give each side an early understanding of the other's expectations and priorities, and will allow the parties to use the remaining time in the window for substantive negotiation.
For the avoidance of doubt, OWS expressly reserves all of its rights, claims, and defenses in this litigation. Neither this letter nor any subsequent settlement discussions, proposals, counterproposals, or other communications shall constitute a waiver of any right, claim, defense, or remedy available to OWS, nor shall they constitute an admission of any fact, position, or contention. OWS's willingness to explore settlement does not reflect and should not be interpreted as reflecting any change in OWS's assessment of the merits of its claims or the strength of its litigation position.
Confirmation of Points Agreed Upon During Today's Telephone Call
For the record, I wish to confirm the following points that you and I discussed and agreed upon in principle during our telephone conversation earlier today:
1. Both sides expressed a genuine interest in exploring settlement of this litigation.
2. Both sides agreed in principle to a thirty (30) day settlement discussion window, targeted to commence on or about March 10, 2023, and conclude on or about April 10, 2023.
3. Both sides agreed in principle that the parties would jointly seek a stipulated stay of discovery during the settlement discussion window.
4. Both sides agreed that all settlement discussions would be conducted under the protections of Federal Rule of Evidence 408 and would be treated as strictly confidential.
5. Both sides agreed that the principals of their respective clients — Ms. Ellison for OWS and Mr. Talbot for Lumos — would be kept informed of the progress of discussions and would remain available for decision-making throughout the settlement window.
If your recollection of our conversation differs from the foregoing in any respect, or if I have omitted any point that you believe should be included, please do not hesitate to let me know so that we can ensure that both sides are proceeding from a common understanding.
Request for Written Response
I would appreciate it if you could confirm Lumos's agreement to the proposed framework — or, if Lumos has any modifications or counterproposals, communicate those — in writing by no later than Wednesday, March 8, 2023. A timely response will allow the parties to finalize the Joint Stipulation and submit it to the Court on or about March 10, 2023, as discussed.
If there are aspects of the proposed framework that you would like to discuss further before providing a written response, I am of course available by telephone at your convenience. I want to ensure that the framework works for both sides and that we begin the settlement discussions on a cooperative footing.
Reservation of Rights
Nothing in this letter shall be construed as an admission of any fact, claim, defense, or legal position by OWS or any of its officers, directors, employees, agents, or representatives. OWS expressly reserves all rights, remedies, claims, and defenses available to it in the above-captioned action, including but not limited to its claims for patent infringement under 35 U.S.C. § 271, its claims for damages (including enhanced damages under 35 U.S.C. § 284), its request for injunctive relief under 35 U.S.C. § 283, and its request for attorneys' fees under 35 U.S.C. § 285. This letter is made solely in the context of settlement discussions and is protected in its entirety by Federal Rule of Evidence 408 and all other applicable federal and state laws, rules, and doctrines governing the confidentiality and inadmissibility of settlement communications.
I am hopeful that the parties can work together efficiently and in good faith toward a resolution of this matter that is mutually acceptable and that serves the legitimate interests of both OWS and Lumos. I look forward to hearing from you.
Very truly yours,
CALDERWOOD & HARKNESS LLP
By: ________
Alan Ngo Partner, intellectual Property Group Calderwood & Harkness LLP One Embarcadero Center, 34th Floor San Francisco, CA 94111 Telephone: (415) 732-4418
Email: ango@calderwoodharkness.com
Registered Patent Attorney, USPTO Reg. No. 52,871
cc: Sandra Ellison, General Counsel, Optiwave Semiconductor Corp. Marcus Delgado, Partner, Calderwood & Harkness LLP Omar Siddiqui, Associate, Calderwood & Harkness LLP
Enclosures: None

CONFIDENTIAL — SUBJECT TO FEDERAL RULE OF EVIDENCE 408

CALDERWOOD & HARKNESS LLP

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