PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
MEMORANDUM
TO: Alan Ngo, Responsible Partner; Marcus Delgado, Billing Partner
FROM: Wendy Schultz, Lead Associate; Omar Siddiqui, Working Associate
DATE: February 14, 2025
RE: Optiwave Semiconductor Corp. v. Lumicore Technologies, Inc., Case No. 2:24-cv-00319-JRG (E.D. Tex.) — Damages Update Memorandum: Post-discovery Refresh of Dr. Keating's Damages Model
CLIENT: Optiwave Semiconductor Corp. ("OWS")
MATTER NO.: 1014-00004
CONFIDENTIALITY NOTICE: This memorandum constitutes attorney work product prepared in anticipation of litigation and is protected by the work-product doctrine and attorney-client privilege. Distribution is limited to the Calderwood & Harkness LLP case team and authorized client personnel (Rebecca Tanaka, General Counsel; David Leitner, VP of intellectual Property; and Franklin Osei, Ridgeline Capital Partners, LP) only. No portion of this memorandum may be disclosed, reproduced, or distributed to any other person or entity without the prior written consent of Calderwood & Harkness LLP.
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I. EXECUTIVE SUMMARY
The purpose of this memorandum is to update the damages analysis in Optiwave Semiconductor Corp. v. Lumicore Technologies, Inc., Case No. 2:24-cv-00319-JRG (E.D. Tex.), to incorporate actual fiscal year 2024 accused-product revenue data produced by Lumicore Technologies, Inc. ("Lumicore") during the course of discovery, to replace the preliminary estimates previously used in our damages modeling with verified figures, and to recalibrate the damages models that will serve as the foundation for Dr. Lawrence Keating's (Meridian Economic Consulting Group, LLC) expert report, which is due on June 15, 2025.
This memorandum supersedes the preliminary damages figures set forth in the Damages Theory Strategy Memorandum dated April 2024 and the initial model inputs used in Dr. Keating's draft report outline circulated internally in November 2024. All prior internal damages analyses referenced herein remain part of the case file and continue to inform our overall strategy, but the figures set forth in this memorandum should be treated as the current operative damages estimates for all case-team purposes, including settlement valuation, expert report preparation, and client reporting.
Key Takeaway: Actual FY 2024 accused-product revenues, as reflected in Lumicore's supplemental financial productions received in January 2025, exceeded our prior projections. As detailed in Section III below, total FY 2024 accused-product revenue reached approximately $347.2 million, compared to our prior projection of approximately $297.5 million for that period. This variance results in an upward revision of total projected accused-product revenue through trial (Q3 2022 through Q4 2025) from the previously estimated $714.6 million to an updated figure of approximately $826.3 million. The aggregate damages demand of approximately $210.0 million as pled in the complaint remains fully supportable and, depending on the willfulness multiplier applied, may materially understate actual provable damages. Under our expected-case scenario, the aggregate damages figure now totals approximately $240.7 million, and under a high-case scenario incorporating the maximum willfulness enhancement, the figure reaches approximately $323.9 million.
All figures derived from Lumicore's financial productions are designated "Highly Confidential — Attorneys' Eyes Only" under the three-tier confidentiality framework established by the Court's Stipulated Protective Order entered on August 19, 2024 (Dkt. No. 47). These figures must be handled in strict compliance with the terms of that Order, including the requirement that access be limited to outside counsel of record, retained experts who have executed the required undertakings, and specifically designated in-house counsel.
II. BACKGROUND AND PROCEDURAL CONTEXT
A. Case Posture
OWS filed its Complaint for Patent Infringement on April 22, 2024, in the United States District Court for the Eastern District of Texas, marshall Division, before the Honorable Judge James R. Gilstrap. The Complaint asserts seven counts of patent infringement against Lumicore, alleging willful infringement of four U.S. utility patents:
• U.S. Patent No. 10,234,847 (the "'847 Patent"), entitled "Waveguide Multiplexer Architecture for Multi-Channel Silicon-Photonic Transceiver Modules," issued March 19, 2019;
• U.S. Patent No. 10,891,193 (the "'193 Patent"), entitled "Integrated Thermal Management System for High-Bandwidth Optical Transceiver Assemblies," issued January 12, 2021;
• U.S. Patent No. 9,678,562 (the "'562 Patent"), entitled "Polarization-Diverse Grating Coupler with Enhanced Mode-Field Matching," issued June 13, 2017; and
• U.S. Patent No. 11,402,015 (the "'015 Patent"), entitled "Multi-Wavelength Coherent Transceiver Module with Adaptive Equalization," issued August 2, 2022.
Lumicore filed its Answer and Counterclaims on June 17, 2024 (Dkt. No. 23), asserting defenses of non-infringement, invalidity under 35 U.S.C. §§ 102 and 103, unenforceability based on alleged inequitable conduct, and a counterclaim for declaratory judgment of non-infringement. Lumicore's invalidity contentions identify twenty-three prior-art references across all four asserted patents, with the most significant references being the Yamamoto (2015), Kirschner (2014), and Chen (2016) publications, as well as two Lumicore-identified prior-use assertions relating to the Lightera Photonics demonstration at OFC 2016.
Claim construction proceedings have advanced significantly. The parties exchanged proposed claim constructions on September 27, 2024, participated in a meet-and-confer on October 11, 2024, and filed the Joint Claim Construction Chart (final version) on January 15, 2025 (Dkt. No. 78). Fourteen claim terms remain in dispute across the four asserted patents. The Markman hearing is scheduled for March 14, 2025. The outcome of the Markman hearing will have direct implications for the scope of our damages analysis, as several of the disputed terms bear on whether certain product features of the accused products fall within the asserted claims.
Fact discovery closes on May 1, 2025. Plaintiff's opening expert reports are due on June 15, 2025. Defendant's responsive expert reports are due on August 15, 2025, and rebuttal expert reports are due on September 15, 2025. The Daubert motion deadline is October 15, 2025. Trial is currently set for February 2, 2026, with an estimated duration of seven to ten days before a jury.
B. Current discovery Status Relevant to Damages
Discovery has been extensive and is now in its advanced stages. As of the date of this memorandum, the relevant discovery posture as it relates to damages is as follows:
Document Productions. OWS has produced approximately 182,000 documents totaling approximately 1.4 million pages. Lumicore has produced approximately 147,000 documents totaling approximately 980,000 pages. The productions on both sides are substantially complete as to documents responsive to the initial document requests served in June and July 2024, though supplemental productions continue to be exchanged as new responsive materials are identified.
Lumicore Financial Data. Lumicore's product-level financial data — including revenue, cost of goods sold, gross margin, average selling prices, and customer-by-customer breakdowns for the accused product lines — was produced under the "Highly Confidential — Attorneys' Eyes Only" designation pursuant to the Court's Stipulated Protective Order (Dkt. No. 47, entered August 19, 2024). The production of this data was the subject of significant motion practice. OWS filed an Opposition to Lumicore's Motion for Protective Order re: Financial Data on October 7, 2024 (Dkt. No. 56), arguing that Lumicore's initial designation of virtually all financial data as "Highly Confidential" was overbroad and that the three-tier framework proposed by OWS would adequately protect Lumicore's legitimate confidentiality interests while allowing the case to proceed efficiently. The Court granted the motion in part on November 4, 2024 (Dkt. No. 62), ordering production under the three-tier framework and specifically directing that product-level revenue and margin data be produced at the "Highly Confidential — Attorneys' Eyes Only" level, while aggregate financial data already available in Lumicore's public SEC filings could be treated at the "Confidential" tier.
Critically, Lumicore's FY 2024 financial data — including quarterly segment disclosures and internal management reports broken down by product line — was received in supplemental productions in January 2025. These productions include Lumicore's internal quarterly revenue reconciliations (LUMI-FIN-004821 through LUMI-FIN-004897), product-line P&L statements (LUMI-FIN-005102 through LUMI-FIN-005134), and customer-level revenue summaries (LUMI-FIN-005200 through LUMI-FIN-005267). This data forms the basis for the updated revenue figures set forth in Section III of this memorandum.
OWS Financial Data. OWS's competing-product financial data, including revenue, margin, and unit-volume data for the OWS-400ZR, OWS-800XR, and OWS-1600DR product families, was produced in OWS's September 30, 2024 production. This data has been integrated into the lost-profits model and was used in the prior Market Share Displacement Analysis (June 2024) and Price Erosion Analysis (January 2025).
Key Depositions Bearing on Damages. The following depositions bearing on damages have been completed:
• Dr. Sandra Michaud (Lumicore Chief Technology Officer), deposed November 19, 2024. Key testimony: (i) confirmed Lumicore's engineering team reviewed OWS Published Application No. 2018/0123456 (corresponding to the '193 Patent) during the design phase for the LumiLink 400G-ZR+; (ii) could not identify any specific non-infringing design alternatives to the patented waveguide multiplexer architecture or thermal management system; (iii) estimated 18–24 months would be required to redesign the accused products to avoid the asserted patent claims if an injunction were granted.
• Raymond Bautista (Lumicore General Counsel), deposed December 3, 2024. Key testimony: (i) confirmed receipt of FairPoint Licensing Group, LLC's January 15, 2023 notice letter within three business days and that it was forwarded to Lumicore's outside patent counsel at Quinn Mercer LLP; (ii) admitted that no formal design-around analysis was commissioned before the launch of LumiEdge 1600G-LR in Q4 2023; (iii) referenced "competent legal opinions" supporting Lumicore's non-infringement position but asserted privilege and refused to identify the opinions or their authors.
• Angela Reeves (FairPoint Licensing Group, LLC, licensing consultant retained by OWS), deposed December 10, 2024. Key testimony: (i) described the in-person licensing meeting held on April 20, 2023 in Austin, Texas, attended by Reeves and Rebecca Tanaka for OWS and Bautista and Kate Rourke for Lumicore; (ii) testified that Lumicore representatives showed "no interest in negotiating" a license and stated they believed OWS's patents were "not relevant" to Lumicore's products; (iii) confirmed that Lumicore formally declined to take a license on July 10, 2023.
• Kevin Ng (Benchmark Semiconductor Analysis, LLC, technical consultant), deposed January 7, 2025. Key testimony: (i) described the teardown analysis of each accused product line confirming the presence of the claimed waveguide multiplexer, thermal management, and polarization-diverse grating coupler features; (ii) testified regarding the contribution of these features to the overall performance specifications of the accused transceiver modules.
Approximately twelve additional fact depositions remain to be completed before the May 1, 2025 fact-discovery cutoff, along with all expert depositions, which will follow the exchange of expert reports. Among the remaining fact depositions, the most significant for damages purposes is the anticipated deposition of Melissa Chen, a former Lumicore engineer now employed by Veridian Photonics, Inc. A subpoena was issued to Ms. Chen on January 22, 2025, and we anticipate her testimony will further corroborate that Lumicore's design team had access to and reviewed OWS's published patent applications during the design of the accused products in 2021–2022.
C. Prior Damages Work Product
The following internal work-product memoranda and analyses have been prepared by the case team in connection with the damages analysis. This memorandum builds upon and, where indicated, supersedes the figures set forth in these prior documents:
1. Damages Theory Strategy Memorandum (internal, April 2024): Established the three-pronged damages approach — lost profits under the Panduit framework, reasonable royalty under the Georgia-Pacific framework, and enhanced damages for willful infringement — and set the aggregate damages demand at approximately $210 million.
2. Lost Profits — Panduit Factor Analysis (internal, May 2024): Detailed analysis of each of the four Panduit factors, concluding that OWS satisfies all four and is entitled to lost profits on a substantial portion of accused-product sales.
3. Market Share Displacement Analysis (internal, June 2024): Concluded that OWS would have captured approximately 38.2% of Lumicore's accused-product sales absent infringement, based on head-to-head competition at twelve of the top twenty hyperscale data-center operators and relative market-share data.
4. Comparable License Analysis (internal, July 2024): Identified and analyzed five comparable licenses supporting an 8.5% running royalty rate.
5. Apportionment Analysis Memorandum (internal, August 2024): Analyzed the smallest salable patent-practicing unit (SSPPU) and the entire-market-value rule (EMVR), concluding that the transceiver module is the proper royalty base and that patented features drive demand for the entire module.
6. Lumicore Financial Data Summary (internal, December 2024): Initial review of Lumicore's product-level financial data produced in discovery, covering FY 2023 actuals and partial FY 2024 data.
7. Price Erosion Analysis (internal, January 2025): Documented an 18.7% decline in average selling prices for 400G-ZR transceivers from Q3 2022 to Q4 2023, attributable in part to Lumicore's entry into the market with infringing products.
8. Hypothetical Negotiation Scenario (internal, May 2024): Detailed walkthrough of the hypothetical negotiation between a willing licensor and willing licensee as of Q2 2022, applying each of the fifteen Georgia-Pacific factors.
9. Willful Infringement Damages Scenario Analysis (internal, April 15, 2024): Modeled enhancement multiplier scenarios under 35 U.S.C. § 284 and the Halo framework.
III. UPDATED ACCUSED-PRODUCT REVENUE DATA
This section sets forth the updated accused-product revenue data that will serve as the foundation for the recalibrated damages models. The revenue figures presented herein are derived from Lumicore's discovery productions and, for the projection period, from a combination of Lumicore's publicly disclosed financial guidance, observed growth trends, and third-party industry analyst reports.
A. Accused Products and Infringement Period
The infringement period for damages purposes begins in Q3 2022, which corresponds to the commercial launch of the first accused product, the LumiLink 400G-ZR+, and runs through the projected trial date of February 2, 2026. For purposes of revenue projection, the model uses Q4 2025 as the terminal period, as trial is set for early February 2026, and any additional damages accruing during the trial period will be de minimis relative to the total and can be addressed through supplemental calculations if necessary.
The three accused product lines and their respective infringement profiles are as follows:
The LumiLink 400G-ZR+ is a 400-gigabit single-wavelength coherent transceiver module designed for hyperscale data-center interconnect applications. It was Lumicore's first entry into the silicon-photonics transceiver market and competes directly with OWS's OWS-400ZR product family. The LumiLink 800G-DR8 is an 800-gigabit parallel-optics transceiver module utilizing eight channels of 100G PAM4 signaling, competing with OWS's OWS-800XR family. The LumiEdge 1600G-LR is Lumicore's most advanced accused product, a 1.6-terabit long-reach transceiver module that competes with OWS's recently launched OWS-1600DR family. All three product lines utilize the patented waveguide multiplexer architecture, integrated thermal management system, and (in the case of the LumiLink products) the polarization-diverse grating coupler that are the subject of the asserted patents.
B. Historical Revenue — FY 2023 (Previously Known)
The FY 2023 accused-product revenue figures were previously established based on Lumicore's segment disclosures in its Annual Report on Form 10-K filed with the SEC for the fiscal year ended December 31, 2023, and were confirmed by Lumicore's product-level financial productions in discovery. These figures are as follows:
These figures were incorporated into Dr. Keating's preliminary analysis and the prior damages work product. They remain unchanged in this updated analysis.
For context, Lumicore's total consolidated revenue for FY 2023 was $312.6 million per its 10-K, meaning that the accused products accounted for approximately 84.7% of Lumicore's total revenue during this period. This high concentration ratio is relevant to several aspects of the damages analysis, including the Georgia-Pacific Factor 11 analysis (extent of the infringer's use and the value of that use to the infringer) and the willfulness enhancement analysis (where the degree to which the infringer's business depends on the infringing products is a relevant consideration).
C. Actual Revenue — FY 2024 (Newly Produced Data)
The FY 2024 accused-product revenue data set forth below is derived from Lumicore's supplemental production received in January 2025, specifically from Lumicore's internal quarterly revenue reconciliations (Bates Nos. LUMI-FIN-004821 through LUMI-FIN-004897) and product-line profit-and-loss statements (Bates Nos. LUMI-FIN-005102 through LUMI-FIN-005134). All figures in this subsection are designated "Highly Confidential — Attorneys' Eyes Only" under the Stipulated Protective Order and must be handled accordingly.
The growth trajectory of each product line is consistent with our expectations, though the aggregate total of $347.2 million exceeded our prior projection of approximately $297.5 million for FY 2024, representing a variance of approximately $49.7 million (16.7% above projection). The key drivers of this variance are analyzed below.
LumiLink 400G-ZR+. Revenue for this product line declined from $94.8 million in FY 2023 to $76.2 million in FY 2024, representing a year-over-year decline of approximately 19.6%. This decline is consistent with the maturation of the 400G transceiver market as hyperscale customers increasingly migrate to higher-bandwidth solutions (800G and 1600G). The quarterly trajectory shows a steady decline from $21.3 million in Q1 2024 to $16.7 million in Q4 2024. Average selling prices for the LumiLink 400G-ZR+ declined by approximately 12.3% over the course of FY 2024, from approximately $485 per unit in Q1 to approximately $425 per unit in Q4, per Lumicore's internal pricing data (LUMI-FIN-005156). This ASP erosion is consistent with the broader 400G market price declines documented in our January 2025 Price Erosion Analysis, which found an 18.7% ASP decline across the 400G-ZR market from Q3 2022 to Q4 2023. The continued decline through FY 2024 further supports OWS's price-erosion damages theory.
LumiLink 800G-DR8. This product line exhibited strong growth, with revenue increasing from $128.4 million in FY 2023 to $190.7 million in FY 2024, a year-over-year increase of approximately 48.5%. The quarterly trajectory shows a sustained ramp-up, from $41.6 million in Q1 2024 to $53.1 million in Q4 2024. The LumiLink 800G-DR8 has become Lumicore's flagship accused product and is the single largest contributor to the damages model. Unit volumes increased significantly as Lumicore expanded its customer base among hyperscale data-center operators, with Lumicore's customer-level revenue data (LUMI-FIN-005200 through LUMI-FIN-005267) showing that Lumicore added qualification at three additional Tier-1 hyperscale accounts during FY 2024 (discussed further in Section IV.F below). Average selling prices for the 800G-DR8 remained relatively stable throughout FY 2024, declining only approximately 4.1% from Q1 to Q4, reflecting the earlier stage of the 800G product cycle compared to the 400G market.
LumiEdge 1600G-LR. This product line exhibited the most rapid growth, increasing from $41.7 million in FY 2023 (representing only a partial year of sales following its Q4 2023 launch) to $80.3 million in FY 2024, its first full year of commercial availability. The quarterly trajectory shows a pronounced ramp, from $12.4 million in Q1 2024 to $27.8 million in Q4 2024, reflecting the early-stage adoption curve for 1.6T transceiver technology. We note that this product was launched after Lumicore received notice of OWS's patent rights (the FairPoint letters were sent in January and May 2023; the LumiEdge 1600G-LR launched in Q4 2023), a fact that is highly relevant to the willfulness analysis discussed in Section VI.
Comparison to Projections. Our prior projection for FY 2024 total accused-product revenue was approximately $297.5 million, based on year-over-year growth rates derived from Lumicore's historical trajectory and industry analyst forecasts available at the time of the April 2024 Damages Theory Strategy Memorandum. The actual figure of $347.2 million represents a 16.7% positive variance, driven primarily by the stronger-than-projected ramp of the LumiLink 800G-DR8 (which exceeded its projection by approximately $28.3 million) and the faster-than-expected adoption of the LumiEdge 1600G-LR (which exceeded its projection by approximately $18.6 million). These variances are attributable to the overall acceleration in hyperscale data-center capital expenditures driven by the buildout of AI training and inference infrastructure, which has increased demand for high-bandwidth optical interconnect solutions across the industry.
Lumicore's overall market capitalization as of the filing date (April 22, 2024) was approximately $3.4 billion, based on approximately 91.8 million shares outstanding at a closing price of approximately $37 per share. By February 2025, Lumicore's share price had risen to approximately $52, reflecting in part the strong FY 2024 results, bringing the company's market capitalization to approximately $4.8 billion. This growth in Lumicore's valuation is driven in significant part by the commercial success of the very products accused of infringement.
D. Pre-FY 2023 Revenue (Q3 2022 – Q4 2022)
During the period from Q3 2022 (the commencement of the infringement period) through Q4 2022, only the LumiLink 400G-ZR+ was on the market. Revenue for this sub-period was previously estimated at approximately $34.2 million based on Lumicore's publicly disclosed quarterly segment data from its 10-Q filings.
Lumicore's discovery production included internal revenue reports covering this period (LUMI-FIN-004523 through LUMI-FIN-004527), which allow us to reconcile the previously estimated figure with actual data. The reconciled actual revenue for Q3–Q4 2022 is as follows:
The actual figure of $36.4 million is approximately $2.2 million higher than our prior estimate of $34.2 million. The variance is attributable to a slightly faster initial ramp of the LumiLink 400G-ZR+ than was discernible from Lumicore's publicly filed quarterly segment disclosures, which aggregated the 400G-ZR+ revenue with other product lines.
For reference, total accused-product revenue for the period Q3 2022 through Q4 2023 (incorporating the updated Q3–Q4 2022 figure and the previously known FY 2023 figures) is $36.4 million + $264.9 million = $301.3 million. Dr. Keating's prior preliminary analysis had estimated this figure at approximately $378.2 million through Q1 2024; the updated figure through Q4 2023 alone is $301.3 million, and when the first quarter of FY 2024 is added ($75.3 million), the total through Q1 2024 is $376.6 million — confirming that Dr. Keating's prior estimate was materially accurate.
E. Revised Projections — FY 2025 (Q1–Q4 2025, Through Trial)
To project accused-product revenue through the trial date, we employ a methodology that incorporates: (1) FY 2024 actual results as the baseline; (2) Lumicore's publicly disclosed revenue guidance for FY 2025 (to the extent available from its February 6, 2025 earnings call transcript and Form 10-K, which has not yet been filed as of this writing); (3) year-over-year growth rates observed from FY 2023 to FY 2024 for each product line; and (4) industry analyst reports, including projections from Granite Harbor Management Consulting and Dunmore Consulting Group provided by Gregory Falk.
Lumicore's management stated on its February 6, 2025 earnings call that it expects "consolidated revenue growth of 15% to 22% in fiscal year 2025, driven primarily by the continued ramp of our 800-gig and 1.6-terabit platforms." Lumicore's total consolidated revenue for FY 2024 was approximately $412.8 million (per the same earnings call). Applying the midpoint of this guidance (18.5%) to the total would yield approximately $489.2 million in consolidated revenue for FY 2025. However, because accused products represented approximately 84.1% of total revenue in FY 2024 ($347.2M / $412.8M), and because the growth is expected to be concentrated in the accused product lines (which are Lumicore's core silicon-photonics offerings), we project accused-product revenue growth at a rate moderately higher than the consolidated guidance.
Our product-line projections for FY 2025 are as follows:
We note that the LumiEdge 1600G-LR projection carries the highest uncertainty, as this product is still in the early-adoption phase and revenue could vary significantly depending on the timing of customer qualifications and the pace of 1.6T infrastructure deployment. To account for this uncertainty, we also present conservative and high-case scenarios:
F. Revised Total Projected Accused-Product Revenue (Q3 2022 – Q4 2025)
Based on the foregoing analysis, the revised total projected accused-product revenue through the trial period is as follows:
The prior estimate of total projected accused-product revenue was approximately $714.6 million. Under the expected scenario, the revised total of approximately $1,090.0 million represents an upward revision of approximately $375.4 million (52.5%). This substantial revision is driven by two factors: (1) actual FY 2024 revenue exceeding projections by approximately $49.7 million, as discussed above; and (2) the need to project FY 2025 revenue from a materially higher baseline than was assumed in April 2024, when the original estimates were prepared and only Q3–Q4 2022 partial data and FY 2023 partial data were available, and FY 2025 was not yet in the model's projection window. We note that the prior $714.6 million figure appears to have been based on a narrower projection window extending only through approximately Q2 2025 and using more conservative growth assumptions; the revised figure extends through Q4 2025 and incorporates the faster-than-anticipated growth trajectory now confirmed by actual FY 2024 data.
G. Gross Margin Data — Lumicore Accused Products
Per the Lumicore Financial Data Summary (December 2024), gross margins on the accused products for FY 2023 ranged from 52.1% (LumiLink 400G-ZR+) to 58.3% (LumiEdge 1600G-LR). The FY 2024 production data (LUMI-FIN-005102 through LUMI-FIN-005134) allows us to update these figures:
The blended average gross margin of approximately 54.9% for FY 2024 is essentially unchanged from the FY 2023 figure of 54.6%. The slight decline in the LumiLink 400G-ZR+ gross margin (from 52.1% to 49.8%) reflects the impact of ASP erosion in the maturing 400G market, partially offset by ongoing cost-reduction efforts. The stability of the LumiLink 800G-DR8 margin and the robust margin on the LumiEdge 1600G-LR indicate that Lumicore is earning substantial profits from its infringing products.
These gross margins are relevant to the reasonable royalty analysis under Georgia-Pacific Factor 11 (the extent to which the infringer has made use of the invention and any evidence probative of the value of that use) and Factor 13 (the portion of the realizable profit that should be credited to the invention). Lumicore's gross margins of approximately 50%–57% on the accused products demonstrate that Lumicore can absorb a royalty of 8.5% and remain highly profitable on accused-product sales. Even after paying an 8.5% royalty, Lumicore would retain gross margins ranging from approximately 41.3% to 48.6% on the accused products — well above the industry average of approximately 38%–42% for silicon-photonics transceiver modules, per Gregory Falk's market analysis.
IV. UPDATED LOST PROFITS ANALYSIS (PANDUIT)
A. Recap of Panduit Framework
To recover lost profits as compensatory damages under 35 U.S.C. § 284, a patent holder must prove a reasonable probability that, but for the infringement, it would have made the sales made by the infringer. The Federal Circuit's four-factor test from Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152 (6th Cir. 1978), adopted by the Federal Circuit in Rite-Hite Corp. v. Kelley, Inc., 56 F.3d 1538 (Fed. Cir. 1995) (en banc), requires the patentee to establish:
(1) demand for the patented product;
(2) absence of acceptable non-infringing substitutes;
(3) manufacturing and marketing capability to exploit the demand; and
(4) the amount of profit the patentee would have made.
As set forth in the May 2024 Lost Profits — Panduit Factor Analysis, OWS satisfies all four Panduit factors. The discussion below updates each factor in light of the discovery developments since that memorandum was prepared.
B. Factor 1 — Demand for the Patented Product
OWS's FY 2023 total revenue was $487.3 million, as reported in its audited financial statements prepared by Gresham & Whitfield LLP. Of this amount, approximately $310 million (63.6% of total revenue) was attributable to products that practice one or more of the asserted patents, specifically the OWS-400ZR and OWS-800XR product families. The OWS-1600DR product family, launched in early 2024, also practices the asserted patents (particularly the '193 and '015 Patents) but did not contribute meaningfully to FY 2023 revenue.
We are in the process of obtaining OWS's FY 2024 revenue data to update this analysis and have requested this information from Rebecca Tanaka and David Leitner. Preliminary indications from OWS's publicly disclosed Q3 2024 earnings are that OWS's total FY 2024 revenue is expected to be in the range of $525 million to $545 million, with the patent-practicing product families representing a comparable or growing proportion of total revenue. We will confirm these figures upon receipt of the audited FY 2024 financials.
Market demand for silicon-photonics transceiver modules in the hyperscale data-center segment remains strong and growing. Gregory Falk's market analysis, prepared for use in this litigation, estimates that the total addressable market for silicon-photonics transceiver modules (400G and above) for hyperscale data-center interconnect applications grew from approximately $4.2 billion in 2023 to approximately $5.8 billion in 2024, representing year-over-year growth of approximately 38%. This growth is driven primarily by the massive capital expenditure programs of hyperscale cloud providers (including Ridgeway Industries, Crestline Systems, Northgate Corporation, and Adriatic Enterprises) related to AI training and inference workloads, which require substantially greater network bandwidth than prior-generation workloads. Industry analysts project continued double-digit growth through at least 2027.
This strong and accelerating demand environment confirms that Factor 1 is robustly satisfied. There is clear and growing demand for products embodying the patented technology, and that demand is being served by both OWS and Lumicore.
C. Factor 2 — Absence of Acceptable Non-Infringing Substitutes
The May 2024 Panduit Factor Analysis identified and evaluated four potential non-infringing alternatives to the patented technology:
(i) Discrete-component multiplexer architectures — found to lack the integrated waveguide multiplexer claimed in the '847 Patent and to result in significantly larger module form factors inconsistent with industry-standard QSFP-DD and OSFP specifications;
(ii) Conventional thermoelectric cooling (TEC) systems — found to lack the adaptive thermal management feedback loop claimed in the '193 Patent, resulting in higher power consumption and reduced thermal stability at operating temperatures above 75°C;
(iii) Edge-coupling designs — found to lack the polarization-diverse grating coupler claimed in the '562 Patent, resulting in approximately 2–3 dB higher insertion loss and reduced coupling efficiency; and
(iv) Non-coherent direct-detection architectures — found to be unsuitable for the reach and bandwidth requirements of the relevant market segments (data-center interconnect at 400G and above over single-mode fiber), thus not constituting acceptable alternatives from the perspective of the relevant customers.
Discovery developments since the May 2024 analysis have significantly strengthened OWS's position on Factor 2:
Michaud Deposition (November 19, 2024). Dr. Sandra Michaud, Lumicore's CTO and the individual most knowledgeable about the design of the accused products, was unable to identify any specific non-infringing design alternatives when questioned during her deposition. When asked directly whether Lumicore could have designed around OWS's waveguide multiplexer architecture, Dr. Michaud testified that she was "not aware of an alternative approach that would have achieved the same performance characteristics within the QSFP-DD form factor." She further estimated that a redesign effort to develop non-infringing alternatives, if an injunction were granted, would require "eighteen to twenty-four months of development and re-qualification with customers." This testimony strongly supports the conclusion that there were no readily available non-infringing substitutes at the time of infringement.
Bautista Deposition (December 3, 2024). Raymond Bautista, Lumicore's General Counsel, admitted under questioning that Lumicore did not commission a formal design-around analysis before launching the LumiEdge 1600G-LR in Q4 2023 — even though Lumicore had by that time received two notice letters from FairPoint Licensing Group identifying OWS's patents and the specific accused products. This admission is significant because it demonstrates that Lumicore itself did not identify any viable non-infringing alternatives, and indeed proceeded to launch a new product incorporating the same allegedly infringing technology without even investigating whether alternatives existed.
Lumicore's Interrogatory Responses. In its responses to OWS's Interrogatory No. 14, which requested identification of all non-infringing alternatives to the patented technology, Lumicore identified only generic categories of alternative approaches (e.g., "alternative multiplexer designs," "alternative thermal management approaches") without specifying any concrete, commercially viable alternative design. We filed a motion to compel a more specific response on January 10, 2025 (Dkt. No. 82), which remains pending.
Based on the foregoing, we are confident that OWS can demonstrate the absence of acceptable non-infringing substitutes as required by Panduit Factor 2.
D. Factor 3 — Manufacturing and Marketing Capability
OWS is a fabless semiconductor company headquartered in San Jose, California, with established foundry partnerships with Drayton Holdings (for silicon-photonics wafer fabrication), Drayton Industries (for advanced packaging), and Fenmore Holdings (for module assembly and test). OWS has confirmed through David Leitner that its supply chain had sufficient capacity to serve the incremental demand that Lumicore's accused products displaced. Specifically, OWS's primary silicon-photonics wafer supply agreement with Drayton Holdings provides for capacity commitments that, as of FY 2023, were utilized at approximately 72% of contracted capacity. This indicates that OWS had approximately 28% unused capacity available to absorb additional production volumes.
OWS employs approximately 1,250 people across its San Jose headquarters, its applications-engineering center in Richardson, Texas, and its sales offices in major metropolitan markets. OWS maintains a dedicated sales and marketing infrastructure, including direct sales teams and established relationships with all of the major hyperscale data-center operators. OWS is the third-largest U.S. supplier of silicon-photonics transceiver modules for hyperscale data centers, behind Tidewater Group (now Marlowe & Co.) and Cisco (Ostrander Corporation), with an estimated domestic market share of approximately 14% in FY 2023.
No material updates are required to the Factor 3 analysis based on discovery developments since the May 2024 memorandum. Factor 3 remains firmly satisfied.
E. Factor 4 — Amount of Profit
OWS's gross margin on its competing products (OWS-400ZR, OWS-800XR, and OWS-1600DR families) was 47.3% in FY 2023, as reflected in OWS's internal financial data produced in discovery. This figure represents the blended gross margin across all three competing product families and is the appropriate input for the lost-profits calculation. OWS's overall FY 2023 net income was $61.4 million, representing a net margin of approximately 12.6%.
We will update the OWS gross margin figure upon receipt of FY 2024 data from Rebecca Tanaka and David Leitner. Preliminary indications are that OWS's gross margins on competing products may have experienced moderate compression (estimated at 1–2 percentage points) due to industry-wide ASP declines, though this may be partially offset by cost-reduction initiatives. For purposes of this memorandum, we continue to use the 47.3% gross margin figure, which we consider conservative.
F. Market Share Displacement — Updated
Our prior Market Share Displacement Analysis (June 2024) concluded that OWS would have captured approximately 38.2% of Lumicore's accused-product sales absent infringement. This figure was derived from an analysis of market-share data, customer overlap, and competitive dynamics, with the key finding being that OWS and Lumicore compete head-to-head at twelve of the top twenty hyperscale data-center operators. At these twelve accounts, OWS is an approved vendor and would have been positioned to capture the sales that Lumicore made with infringing products. At the remaining eight accounts, OWS either was not an approved vendor, had not yet qualified its products, or did not compete for those accounts for other reasons.
The FY 2024 customer-level revenue data produced by Lumicore (LUMI-FIN-005200 through LUMI-FIN-005267) provides an opportunity to reassess the 38.2% displacement figure. Our preliminary review of this data indicates the following:
• Lumicore added qualification at three additional Tier-1 hyperscale accounts during FY 2024 (designated as Customer K, Customer L, and Customer M in our confidential customer mapping). Of these three new accounts, OWS is an approved vendor at two (Customer K and Customer L) but not at the third (Customer M). This suggests that the number of head-to-head competitive accounts has increased from twelve to fourteen out of the top twenty.
• Lumicore's revenue from the twelve previously identified head-to-head competitive accounts grew from approximately $178.4 million in FY 2023 to approximately $231.9 million in FY 2024. Lumicore's revenue from the newly added accounts (Customers K, L, and M) totaled approximately $18.7 million in FY 2024.
• OWS's share of the combined OWS/Lumicore revenue at the twelve previously identified head-to-head accounts was approximately 39.1% in FY 2023 (based on OWS's produced financial data), suggesting that the 38.2% displacement figure used in our prior analysis may, if anything, be slightly conservative.
Based on this updated analysis, we recommend maintaining the 38.2% displacement figure as the central estimate for the expected scenario, while noting that the data supports a range of approximately 35% to 41%. The addition of two new head-to-head competitive accounts (Customers K and L) could support an upward adjustment, but the precise impact will depend on the detailed customer-level analysis that Dr. Keating will perform as part of his expert report. We will coordinate with Dr. Keating on this analysis during the working session scheduled for late February / early March 2025.
G. Revised Lost Profits Calculation
The lost-profits calculation follows the standard formula:
Lost Profits = Total Projected Accused-Product Revenue × Market Share Displacement % × OWS Gross Margin
The prior estimate was calculated as follows:
$714.6M × 38.2% × 47.3% ≈ $128.9M
The updated estimates, incorporating the revised revenue figures from Section III.F above, are as follows:
Under the expected scenario, the revised lost-profits figure is approximately $197.0 million, compared to the prior estimate of approximately $128.9 million — an increase of approximately $68.1 million (52.8%). This increase is driven entirely by the upward revision of total projected accused-product revenue; the displacement percentage and gross margin inputs remain unchanged.
We note that this sensitivity analysis shows that the lost-profits figure is sensitive to all three inputs but most sensitive to the revenue projection, which is the variable with the largest absolute magnitude. The range of outcomes from the conservative scenario ($172.4 million) to the high scenario ($220.3 million) spans approximately $47.9 million, with the primary sources of variance being the FY 2025 revenue projection and the displacement percentage.
Additional incremental damages may be available through the price-erosion theory (18.7% ASP decline documented in the January 2025 analysis), which captures the profit impact on OWS's own sales at reduced prices, not just the lost volume from diverted sales. This price-erosion component is incremental to the lost-unit-volume calculation presented above and will be addressed in Dr. Keating's expert report. Preliminary estimates suggest the price-erosion component could add $8 million to $15 million to the lost-profits calculation.
V. UPDATED REASONABLE ROYALTY ANALYSIS (GEORGIA-PACIFIC)
A. Applicable Scope
A reasonable royalty under Georgia-Pacific Lumber Co. v. United States Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970), serves as the floor of compensatory damages — the minimum recovery to which OWS is entitled under 35 U.S.C. § 284 even if lost profits cannot be established. In this case, the reasonable royalty is applied to the portion of accused-product sales for which OWS cannot demonstrate lost profits — specifically, sales to customers at which OWS was not an approved vendor or otherwise could not have competed for the business.
The reasonable royalty base is calculated as total accused-product revenue minus the revenue attributable to lost-profits-eligible sales:
Royalty Base = Total Accused-Product Revenue × (1 – Displacement %)
The prior calculation was:
($714.6M – $714.6M × 38.2%) × 8.5% = $441.6M × 8.5% ≈ $37.5M
B. Hypothetical Negotiation Date
The hypothetical negotiation date remains Q2 2022, immediately prior to the commercial launch of the first accused product (LumiLink 400G-ZR+) in Q3 2022. This date is consistent with the Federal Circuit's guidance that the hypothetical negotiation should be assumed to take place at the time infringement began. See Lucent Techs., Inc. v. Gateway, Inc., 580 F.3d 1301, 1324 (Fed. Cir. 2009). No change to this date is warranted by the discovery developments addressed in this memorandum.
C. Georgia-Pacific Factors — Updates from discovery
The fifteen Georgia-Pacific factors are the framework through which the hypothetical negotiation is evaluated. Our May 2024 Hypothetical Negotiation Scenario memorandum addressed each factor in detail. Below, we highlight the factors for which discovery developments since May 2024 have provided material updates.
Factor 1 — Royalties Received by the Patentee for the Patents in Suit. Three OWS comparable license agreements have been produced in discovery and confirmed as relevant to the royalty-rate analysis:
(a) OWS–Terralink Semiconductor License Agreement (2020): Running royalty of 6.5% on licensed-product revenue, applied to a licensed-product revenue base of approximately $45 million over the license term. The licensed technology included the '847 Patent and the '562 Patent.
(b) OWS–NovaWave Corp. License Agreement (2021): Running royalty of 9.0% on licensed-product revenue, applied to a licensed-product revenue base of approximately $22 million over the license term. The licensed technology included the '193 Patent and the '562 Patent. The higher royalty rate relative to the Terralink license reflects the inclusion of the '193 Patent, which covers the thermal management technology that is particularly valuable in high-density transceiver applications.
(c) OWS–Helix Integrated Photonics License Agreement (2022): Running royalty of 7.75% on licensed-product revenue, plus a $2.5 million upfront lump-sum payment, applied to a licensed-product revenue base of approximately $68 million over the license term. The licensed technology included the '847, '193, and '562 Patents. When the upfront payment is amortized over the expected license term and added to the running royalty, the effective royalty rate is approximately 8.1%.
The arithmetic mean of the running royalty rates from these three licenses is (6.5% + 9.0% + 7.75%) / 3 = 7.75%. When the Helix effective rate of 8.1% is substituted for the nominal 7.75%, the arithmetic mean becomes (6.5% + 9.0% + 8.1%) / 3 = 7.87%. Our proposed royalty rate of 8.5% is above these averages, which is appropriate because the Lumicore license would cover four patents (including the '015 Patent, which was not included in any of the three comparable licenses) and would involve a substantially larger revenue base.
Factor 2 — Rates Paid by the Licensee for Comparable Patents. Lumicore's licensing history is a relevant input under Factor 2. In its responses to OWS's Interrogatory No. 12, Lumicore identified two patent license agreements it entered into between 2020 and 2023, but provided only summary descriptions citing confidentiality restrictions. Our Motion to Compel production of the underlying agreements (filed as part of the broader discovery dispute resolved by the Court's November 4, 2024 Order) was granted in part, and Lumicore has produced the agreements under the "Highly Confidential — Attorneys' Eyes Only" designation. The agreements involve non-silicon-photonics technology and are of limited direct comparability, but they do establish that Lumicore has accepted royalty rates in the range of 4.0% to 6.5% for non-core technologies. This suggests that for core silicon-photonics technology — which is central to Lumicore's business — a rate above that range (such as the proposed 8.5%) would be warranted.
Factor 8 — Established Profitability of the Product Made Under the Patent; Its Commercial Success and Its Current Popularity. OWS's FY 2023 total revenue of $487.3 million, net income of $61.4 million, and approximately $310 million in revenue from patent-practicing products demonstrate strong commercial success. The patented technology is embodied in OWS's flagship product lines, which have earned widespread industry recognition and are deployed at the majority of the top-twenty hyperscale data-center operators. Updated FY 2024 figures, when available, are expected to show continued growth and profitability.
Factor 11 — The Extent to Which the Infringer Has Made Use of the Invention and Any Evidence Probative of the Value of That Use. As detailed in Section III.G above, Lumicore's gross margins on the accused products range from 49.8% to 57.1% in FY 2024. The accused products account for approximately 84.1% of Lumicore's total consolidated revenue, underscoring the centrality of the infringing technology to Lumicore's business. A willing licensee in Lumicore's position at the time of the hypothetical negotiation would have been motivated to accept a royalty rate of 8.5% given the substantial profitability the licensed technology would enable.
Factor 13 — The Portion of the Realizable Profit That Should Be Credited to the Invention as Distinguished from Non-Patented Elements, Manufacturing Processes, Business Risks, or Significant Features or Improvements Added by the Infringer. This factor relates directly to the apportionment analysis. As set forth in the Apportionment Analysis Memorandum (August 2024), the patented features — the waveguide multiplexer architecture ('847 Patent), the integrated thermal management system ('193 Patent), the polarization-diverse grating coupler ('562 Patent), and the adaptive equalization system ('015 Patent) — are the core differentiating features that drive customer demand for the accused transceiver modules. Benchmark Semiconductor Analysis's teardown reports confirm that these features are integrated throughout the transceiver module and are not separable sub-components that can be isolated from the rest of the module. The EMVR is properly applied at the module level because the patented features are the basis for customer demand for the entire module. This analysis is further supported by Kevin Ng's deposition testimony (January 7, 2025), in which he confirmed the contribution of the patented features to the overall performance specifications of the accused products.
Industry Comparable Licenses. In addition to the three OWS-specific comparable licenses, two industry comparable licenses support the proposed 8.5% royalty rate:
(d) Stratos Photonics v. ArcLight Systems Settlement (2019): 8.0% running royalty on accused-product sales. This litigation involved silicon-photonics transceiver technology in the 100G/400G market segment. While the licensed patents are not identical to OWS's patents, the technology area and market application are closely analogous.
(e) Coreline Technologies v. Prisma Semiconductor Cross-License (2021): 10.2% effective royalty rate (calculated from the asymmetric running-royalty balancing payments in the cross-license). This agreement involved coherent transceiver technology, including multiplexer and thermal management features analogous to those claimed in the '847 and '193 Patents.
Taking all five comparable licenses together, the rates range from 6.5% to 10.2%, with a mean of 8.3% and a median of 8.0%. The broader industry range for patent licenses in the silicon-photonics and optical transceiver space, as surveyed by Dr. Keating, extends from approximately 4.0% to 12.5%, with the higher end reflecting licenses involving broader patent portfolios or more critical technology. Our proposed rate of 8.5% falls comfortably within both the range established by the comparable licenses and the broader industry range.
D. Proposed Royalty Rate
Based on the foregoing analysis, we recommend maintaining the proposed royalty rate of 8.5% for use in Dr. Keating's expert report. This rate is well-supported by the comparable license evidence, is consistent with the industry range, and appropriately reflects the value of the patented technology to the accused products.
We have considered whether any evidence from discovery warrants an adjustment to the proposed rate. The strongest argument for a higher rate would be based on the willfulness evidence, which could support the conclusion that, in a real-world negotiation (as opposed to the hypothetical willing-licensor/willing-licensee framework), OWS would have demanded — and obtained — a premium above the rates reflected in its prior licenses. However, the hypothetical negotiation framework assumes a willing licensor and a willing licensee negotiating in good faith, and the standard approach is to present the willfulness premium through the § 284 enhancement mechanism rather than baking it into the royalty rate. We therefore recommend maintaining 8.5% as the base royalty rate and addressing the willfulness premium separately through the enhanced-damages analysis in Section VI.
The strongest argument for a lower rate would be Lumicore's expected position that the royalty base should be disaggregated to reflect only the value attributable to the patented features, rather than applied to the entire module revenue. We address this anticipated argument in Section V.F below and conclude that the EMVR applies and the module-level royalty base is appropriate.
E. Revised Reasonable Royalty Calculation
The updated reasonable royalty calculations are as follows:
Under the expected scenario, the revised reasonable royalty is approximately $57.3 million, compared to the prior estimate of approximately $37.5 million — an increase of approximately $19.8 million (52.8%). As with the lost-profits calculation, the increase is driven by the upward revision of total projected accused-product revenue.
We note an apparent anomaly in the table above: the reasonable royalty decreases slightly from the conservative to the high scenario, even though total revenue increases. This is because the high-case scenario uses a higher displacement percentage (41% rather than 35%), which increases the lost-profits-eligible portion and correspondingly reduces the royalty base. In the high-case scenario, OWS recovers more through lost profits and less through reasonable royalty, but the aggregate damages figure is higher. This is the expected and appropriate outcome under the Rite-Hite two-tier damages framework.
F. Apportionment / EMVR Considerations
As set forth in the Apportionment Analysis Memorandum (August 2024), OWS's position is that the transceiver module is the smallest salable patent-practicing unit (SSPPU) and that the entire market value rule (EMVR) permits the use of the module-level revenue as the royalty base because the patented features are the basis for customer demand for the entire module. This conclusion is supported by the following evidence:
1. The patented waveguide multiplexer architecture ('847 Patent) is a foundational component of the transceiver module's optical engine and cannot be separated from the module for purposes of identifying a smaller salable unit.
2. The integrated thermal management system ('193 Patent) is distributed throughout the module package and directly controls the operating conditions for all active components, including the laser, modulator, and photodetector elements.
3. The polarization-diverse grating coupler ('562 Patent) is integrated at the fiber-coupling interface and is essential to the module's ability to maintain signal integrity across polarization states.
4. The adaptive equalization system ('015 Patent) operates at the DSP level and enhances the module's overall link performance by compensating for chromatic dispersion and polarization-mode dispersion across the entire optical link.
5. Customer purchase decisions, as documented in the sales and marketing materials produced by Lumicore (LUMI-MKT-002100 through LUMI-MKT-002387), are based on the module's overall performance specifications (bandwidth, reach, power consumption, thermal stability), all of which are materially influenced by the patented features.
We anticipate that Lumicore will challenge the EMVR application, likely through (i) a summary judgment motion arguing that the module-level royalty base is legally impermissible and that only a sub-component-level base (e.g., the optical engine alone or the DSP alone) should be used, and (ii) Daubert challenges to Dr. Keating's methodology. Lumicore's damages expert, Dr. Natasha Volkov of Pinnacle Analytics Partners LLP, is expected to present an alternative damages analysis using a disaggregated royalty base that attributes only a fraction of the module revenue to the patented features. Based on Dr. Volkov's prior publications and expert testimony in analogous cases (including Prisma Semiconductor v. ArcLight Systems, N.D. Cal. 2022), we expect her to argue for a royalty base of approximately 30%–40% of module revenue, which would substantially reduce the reasonable royalty calculation.
Our position remains that the EMVR applies and that the module-level royalty base is appropriate and legally defensible. The Federal Circuit has consistently held that the EMVR applies when the patented feature creates the basis for customer demand for the product as a whole. See Virnetx, Inc. v. Cisco Sys., Inc., 767 F.3d 1308, 1326–27 (Fed. Cir. 2014). Dr. Keating will present detailed demand-driver analysis in his expert report, supported by customer survey data, Lumicore's marketing materials, and the teardown reports from Benchmark Semiconductor Analysis. We are confident that this analysis will survive Daubert scrutiny, though the risk of an adverse ruling on apportionment remains one of the key downside risk factors for the damages case, as discussed in Section VIII.B below.
VI. UPDATED ENHANCED DAMAGES ANALYSIS (WILLFUL INFRINGEMENT)
A. Willfulness Evidence — Summary of Post-discovery Developments
Under 35 U.S.C. § 284, the court may increase damages up to three times the amount found or assessed. The Supreme Court's decision in Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. 93 (2016), clarified that enhanced damages are appropriate in cases of "egregious infringement behavior" involving conduct that is "willful, wanton, malicious, bad-faith, deliberate, consciously wrongful, flagrant, or — indeed — characteristic of a pirate." The evidence developed in discovery strongly supports a finding of willfulness in this case.
The key willfulness evidence, as developed through discovery, is summarized below:
Pre-Suit Notice. FairPoint Licensing Group, LLC, acting as OWS's authorized licensing agent, sent Lumicore a detailed notice letter on January 15, 2023, identifying the '847, '193, and '562 Patents and specifically accusing the LumiLink 400G-ZR+ of infringement. This letter included a claim chart mapping the claims of each identified patent to specific features of the LumiLink 400G-ZR+, as identified from publicly available datasheets and product documentation. Raymond Bautista confirmed at his December 3, 2024 deposition that the letter was received by Lumicore and forwarded to outside patent counsel at Quinn Mercer LLP within three business days.
FairPoint sent a supplemental notice letter on May 15, 2023, adding the '015 Patent (which issued on August 2, 2022 but was not included in the initial letter) and expanding the accused-product list to include the LumiLink 800G-DR8, which had launched in Q1 2023.
In-Person Licensing Meeting. On April 20, 2023, an in-person licensing meeting was held in Austin, Texas. The meeting was attended by Angela Reeves (FairPoint) and Rebecca Tanaka (OWS General Counsel) for OWS, and by Raymond Bautista (Lumicore General Counsel) and Kate Rourke (Lumicore VP of Business Development) for Lumicore. Per Reeves's December 10, 2024 deposition testimony, OWS presented detailed claim charts and offered to discuss licensing terms, but Lumicore's repre