PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
CALDERWOOD & HARKNESS LLP
INTERNAL MEMORANDUM — CASE TEAM STATUS REPORT
Matter: Optiwave Semiconductor Corp. v. Lumicore Technologies, Inc., Case No. 2:24-cv-00319-JRG (E.D. Tex.)
To: Alan Ngo, Responsible Partner, IP Litigation
From: Wendy Schultz, Lead Associate, IP Litigation; Omar Siddiqui, Working Associate, IP Litigation
CC: Marcus Delgado, Billing Partner, IP Litigation
Date: January 3, 2025
Re: Quarterly Case Team Status Report — Q4 2024 (October 1 – December 31, 2024)
CONFIDENTIALITY NOTICE: This memorandum constitutes attorney work product prepared in anticipation of litigation and is protected by the attorney-client privilege. It is intended solely for internal use by the Calderwood & Harkness LLP case team working on this matter. Do not distribute outside the case team without prior approval from Alan Ngo.
I. Executive Summary
Optiwave Semiconductor Corp. ("OWS" or "the Company") filed this patent infringement action on April 22, 2024, against Lumicore Technologies, Inc. ("Lumicore" or "Defendant") in the United States District Court for the Eastern District of Texas, marshall Division, before the Honorable James R. Gilstrap. OWS asserts infringement of four U.S. utility patents: U.S. Patent No. 10,234,847 (the "'847 Patent"), U.S. Patent No. 10,891,193 (the "'193 Patent"), U.S. Patent No. 9,678,562 (the "'562 Patent"), and U.S. Patent No. 11,402,015 (the "'015 Patent"). These patents cover a range of innovations in silicon photonics transceiver architecture and waveguide multiplexing technologies, which are core to OWS's product portfolio and represent a significant portion of the Company's competitive advantage in the high-speed optical transceiver market. OWS seeks approximately $210 million in aggregate damages — comprising lost profits, reasonable royalties, and enhanced damages for willful infringement — together with a permanent injunction barring further infringement.
The accused products are Lumicore's LumiLink 400G-ZR+, LumiLink 800G-DR8, and LumiEdge 1600G-LR transceiver modules. These products are Lumicore's primary offerings in the high-speed data-center interconnect market and collectively represent a substantial portion of Lumicore's annual revenues.
Client. Optiwave Semiconductor Corp. is a Delaware corporation headquartered at 4810 Bayside Technology Parkway, Suite 300, Santa Clara, California 95054. OWS designs, manufactures, and sells silicon photonics-based transceiver modules for hyperscale data-center and telecommunications applications. OWS is majority-owned by its private equity sponsor, Ridgeline Capital Partners, LP, which acquired a 55% equity stake in 2019 for approximately $780 million. The Board of Directors is chaired by Franklin Osei. The Company is led by Chief Executive Officer Dr. Priya Ramaswamy, and the General Counsel is Rebecca Tanaka. Ms. Tanaka serves as the primary client contact for this matter.
Defendant. Lumicore Technologies, Inc. is a Delaware corporation headquartered at 9200 Spectrum Boulevard, Building C, Austin, Texas 78759. Lumicore is a publicly traded company with an approximate market capitalization of $3.4 billion as of the filing of the complaint. Lumicore's Chief Executive Officer is Thomas "Tom" Kessler, and its General Counsel is Raymond Bautista.
Defense Counsel. Lumicore is represented by Hawthorne Vega & Cruz LLP ("HVC"), with lead partner Catherine "Kate" Rourke, second chair Darren Cho, lead associate Samantha Briggs, and working associate Rohan Iyer. Lumicore's local counsel is Trask Eddington LLP (Maria Garza).
Our Local Counsel. Whitmore & Callahan LLP (Jim Callahan), located in Tyler, Texas, serves as C&H's local counsel in the Eastern District of Texas.
Engagement. The engagement letter was executed on March 18, 2024. The OWS Board of Directors, upon recommendation by Ridgeline Capital Partners, approved a total litigation budget of $18.5 million for this matter pursuant to Board Resolution No. 2024-07, dated April 2, 2024. That budget encompasses all phases of the litigation through trial, post-trial motions, and any potential appeal.
Q4 2024 Overview. The fourth quarter of 2024 was a period of intensive case development across multiple workstreams. The principal activities during Q4 included: (a) service by Lumicore of its invalidity contentions and OWS's detailed analysis thereof; (b) initiation and substantial completion of claim construction briefing, including the filing of OWS's opening brief, Lumicore's responsive brief, and OWS's reply brief; (c) the completion of four significant fact depositions — Dr. Jian-Wei Huang (OWS CTO), Dr. Sandra Michaud (Lumicore CTO), Raymond Bautista (Lumicore GC), and Angela Reeves (FairPoint Licensing Group); and (d) prosecution of significant discovery disputes, most notably OWS's pending Motion to Compel production of Lumicore's opinion-of-counsel letters and the Court's resolution of Lumicore's motion for a protective order regarding financial data.
Schedule. The case remains on track for the March 14, 2025 Markman hearing before Judge Gilstrap and the February 2, 2026 jury trial date. No continuances have been sought or granted, and there is no indication from the Court or opposing counsel that the current schedule is in jeopardy.
Overall Assessment. The case is in a strong posture at the close of Q4 2024. Our claim construction positions are well-supported by the intrinsic record and by Dr. Ashford's expert testimony. The deposition testimony obtained from Lumicore's CTO (Dr. Sandra Michaud) and General Counsel (Raymond Bautista) yielded favorable admissions that materially advance both our infringement and willful infringement theories. Key risk areas that require ongoing attention include: (1) prosecution history estoppel on our doctrine of equivalents contentions for certain claims of the '193 and '015 Patents, and (2) Lumicore's potential filing of inter partes review petitions at the Patent Trial and Appeal Board, for which the statutory deadline under 35 U.S.C. § 315(b) falls on May 1, 2025. These risks are discussed in detail in Sections VI and IX below.
II. Current Case Posture and Procedural Status
A. Docket Summary for Q4 2024
The following summarizes the principal docket activity during Q4 2024, together with relevant earlier procedural milestones for context:
Earlier Procedural Milestones (Pre-Q4 2024):
• April 22, 2024: OWS filed its Complaint (D.E. 1).
• May 1, 2024: Lumicore was served with the Summons and Complaint.
• June 17, 2024: Lumicore filed its Answer and Counterclaims (D.E. 12), including an inequitable-conduct/unenforceability counterclaim.
• August 5, 2024: Judge Gilstrap denied Lumicore's Motion to Transfer Venue to the Western District of Texas (D.E. 22).
• August 12, 2024: The Court entered its Scheduling Order (D.E. 24), setting, among other dates, the Markman hearing for March 14, 2025 and the jury trial for February 2, 2026.
• August 15, 2024: The parties entered into an ESI Protocol Agreement governing the format and methodology for electronically stored information production.
• August 2024: The three-tier Stipulated Protective Order — encompassing Confidential, Highly Confidential — Attorneys' Eyes Only ("AEO"), and Highly Confidential — Source Code designations — was entered by the Court and remains in effect.
• September 16, 2024: OWS served its P.R. 3-1 Infringement Contentions, identifying each asserted claim, each accused product, and the specific basis for infringement on a claim-by-claim, limitation-by-limitation basis.
Q4 2024 Docket Activity:
• October 14, 2024 (D.E. 36): Lumicore served its P.R. 3-3 Invalidity Contentions, citing 23 prior-art references across the four asserted patents. These contentions are discussed in detail in Section V.B below.
• October 21, 2024 (D.E. 38): OWS filed its Motion to Compel Production of Opinion-of-Counsel Letters, together with a supporting Memorandum of Law (D.E. 39) and the Declaration of Wendy Schultz (D.E. 40). This motion argues that Lumicore waived the attorney-client privilege with respect to opinion-of-counsel letters received regarding OWS's asserted patents. The motion remains pending as of the date of this memorandum. This dispute is discussed in detail in Section IV.C below.
• October 28, 2024 (D.E. 40): The parties filed their Joint Claim Construction Statement, identifying 14 disputed claim terms across the four asserted patents. Of these, 2 terms were agreed upon by the parties, leaving 12 terms in dispute for resolution by the Court. The claim construction process is discussed in detail in Section VI below.
• November 15, 2024 (D.E. 44): OWS filed its Opening Claim Construction Brief (50 pages), supported by the Declaration of Dr. Caroline Ashford (Northfield Institute of Technology), who serves as OWS's technical expert on claim construction and infringement, and the Declaration of Dr. Jian-Wei Huang (OWS's CTO and a named inventor on the asserted patents). OWS's opening brief was further supported by appendices of intrinsic evidence (patent claims, specifications, prosecution histories, including examiner interviews, office actions, and response amendments) and extrinsic evidence (technical dictionaries, IEEE standards, textbooks, and journal articles).
• November 18, 2024: OWS filed its Reply in Support of its Motion to Compel production of opinion-of-counsel letters, responding to Lumicore's opposition brief and addressing Lumicore's scope-of-waiver and work-product protection arguments.
• December 6, 2024 (D.E. 48): Lumicore filed its Responsive Claim Construction Brief. Lumicore's brief relies heavily on the opinions of its technical expert, Dr. Rajesh Sundaram (Pacific Western University), who seeks narrow constructions of the 12 disputed terms and employs a different definition of the person of ordinary skill in the art ("POSITA") than the definition advanced by Dr. Ashford.
• December 20, 2024 (D.E. 52): OWS filed its Reply Claim Construction Brief, accompanied by a Supplemental Declaration of Dr. Caroline Ashford. The supplemental declaration responds point by point to the opinions of Dr. Sundaram and addresses his POSITA definition, demonstrating that Dr. Sundaram's proposed POSITA is unduly narrow and inconsistent with the contemporaneous understanding in the field of silicon photonics at the relevant priority dates.
The three-tier Stipulated Protective Order entered in August 2024 continues to govern the treatment of confidential and sensitive materials exchanged in discovery. The Protective Order has generally functioned without significant dispute, with the exception of the financial data dispute discussed in Section IV.D below, which was resolved by the Court's partial grant of Lumicore's motion for a protective order.
B. Upcoming Key Deadlines
The following table summarizes the key upcoming deadlines in the case:
The convergence of the fact discovery close and the IPR petition deadline on May 1, 2025 is noteworthy, as it creates a critical juncture in the case that will require heightened attention. If Lumicore files IPR petitions, it is expected to simultaneously move for a stay of the district court proceedings — a motion we are prepared to oppose, as discussed in Section IX.
III. Budget and Billing Status
A. Fees and Costs Through Q4 2024
As of December 31, 2024, cumulative Calderwood & Harkness LLP fees incurred on this matter total approximately $3.0 million, with approximately $185,000 in costs. These figures are estimated pending finalization of December billing; the final January billing statement incorporating all Q4 2024 charges is expected to be completed by February 10, 2025.
Updated through January 2025, based on projected January work in progress, the cumulative financial picture is as follows:
• Cumulative C&H fees (projected through January 2025): approximately $3,201,600
• Cumulative costs (projected through January 2025): approximately $198,400
• Total billed (projected through January 2025): approximately $3,400,000
The blended cap rate of $925 per hour, as negotiated with Ridgeline Capital Partners, LP in the engagement letter, has been applied consistently across all monthly invoices. Each monthly invoice is verified against the cap rate to ensure compliance. Where actual blended rates in a given billing period have exceeded $925 per hour, the excess has been written off in accordance with the engagement terms.
Current Calderwood & Harkness billing rates for 2024 are as follows:
All billing practices conform to the Outside Counsel Guidelines provided by OWS and Ridgeline Capital Partners, and no billing disputes have been raised by the client to date.
B. Budget Burn Rate and Remaining Allocation
The total approved litigation budget for this matter is $18.5 million, as authorized by OWS Board Resolution No. 2024-07 (April 2, 2024). The remaining budget allocation and burn-rate analysis are summarized below:
• Total approved litigation budget: $18,500,000
• Total billed through January 2025 (projected): $3,400,000
• Remaining budget: $18,500,000 − $3,400,000 = $15,100,000
• Budget burn rate: Approximately 18.4% of the total budget has been expended through roughly 10 months of active litigation (March 2024 – January 2025). This is within the anticipated trajectory established in the original Litigation Budget and Staffing Plan dated March 25, 2024, which projected approximately 20% budget expenditure by this point.
The following table provides a phase-by-phase comparison of budgeted versus actual spend:
The current budget posture is favorable. The pre-suit and pleadings phases were completed under budget, providing approximately $400,000 of cumulative savings that can be reallocated to subsequent phases if necessary. However, significant expenditures remain ahead, particularly in the fact discovery phase (which will see substantial deposition activity in Q1 and Q2 2025), the expert discovery phase (expert reports due June 15, 2025), and the trial preparation and trial phase. Budget discipline will be critical through the remainder of the case, and the team will continue to provide monthly burn-rate updates to Marcus Delgado for inclusion in the firm's matter-management reporting.
Success Fee Component. The engagement letter provides for a success fee of 5% of net recovery above $150 million. This component has not yet been triggered and will be assessed at the conclusion of the matter.
C. Expert Fee Budget
The total expert fee budget for this matter is approximately $2.8 million, allocated among the following retained experts:
Benchmark Semiconductor Analysis, LLC has completed teardowns of all three accused products (LumiLink 400G-ZR+, LumiLink 800G-DR8, and LumiEdge 1600G-LR). The teardown reports have been finalized and formed the basis for OWS's infringement contentions and will be relied upon in expert reports. The Benchmark budget has been substantially consumed ($290,000 of $375,000), with the remaining $85,000 reserved for supplemental analysis, trial preparation support, and potential rebuttal work.
Expert reports are due June 15, 2025. Significant expert spend is expected in Q2 2025 as Dr. Ashford and Dr. Keating move into full report preparation. Gregory Falk's engagement will intensify as the industry and market context sections of the expert reports are developed. We anticipate that expert expenditures will accelerate substantially beginning in March 2025 and will closely monitor spend against the $2.8 million budget.
D. Local Counsel Fees
Whitmore & Callahan LLP (Jim Callahan, partner) serves as Calderwood & Harkness's local counsel in the Eastern District of Texas. Whitmore & Callahan's billing rates are as follows:
• Partner (Jim Callahan): $575/hr
• Associate: $400/hr
• Paralegal: $275/hr
Total fees billed by Whitmore & Callahan through Q4 2024 are approximately $87,000. These fees relate primarily to local filings, participation in the Scheduling Order conference, and substantive support on OWS's opposition to Lumicore's motion to transfer venue. We expect local counsel fees to increase modestly in Q1 2025 in connection with the Markman hearing and to increase more substantially in the trial preparation and trial phases.
IV. Discovery Status
A. Document Productions
The parties have made substantial document productions to date. As of the end of Q4 2024, the production volumes are as follows:
• OWS productions: Approximately 182,000 documents (approximately 1.4 million pages).
• Lumicore productions: Approximately 147,000 documents (approximately 980,000 pages).
The ESI Protocol Agreement, entered into by the parties on August 15, 2024, governs the format and methodology for all document productions. The key terms of the protocol include: (a) use of the Relativity e-discovery platform for document review and production; (b) a search-term methodology with iterative refinement, under which the parties have agreed to meet and confer regarding the adequacy and scope of search terms on a rolling basis; (c) native-format production for source code and related technical files; and (d) TIFF-format production with load files for all other documents. The protocol has generally functioned well, though there have been periodic disputes regarding the adequacy of Lumicore's search-term methodology, which have been addressed through the meet-and-confer process.
OWS's Initial Privilege Log was served on October 31, 2024 and identifies 1,247 documents withheld or redacted on the basis of attorney-client privilege, attorney work product, or both. A Supplemental Privilege Log was served on December 15, 2024, adding 318 entries following supplemental productions responsive to OWS's Second Set of Requests for Production. The total number of privileged entries across both logs is 1,565. We anticipate that Lumicore may challenge certain of OWS's privilege designations, particularly those relating to communications between OWS's in-house engineers and patent prosecution counsel, and we have flagged these entries for closer review.
B. Interrogatories, RFPs, and RFAs
The following summarizes the status of written discovery:
OWS's Written discovery Served on Lumicore:
• OWS's First Set of Interrogatories (25 interrogatories): Served August 26, 2024. Responses received from Lumicore on September 30, 2024. Several responses were evasive or incomplete, particularly with respect to Interrogatory Nos. 8 (design-around efforts), 12 (knowledge of OWS patents), and 19 (basis for invalidity defenses). Meet-and-confer letters were sent, and Lumicore served supplemental responses on November 12, 2024. The supplemental responses are adequate for present purposes but may need to be revisited as additional evidence is developed.
• OWS's First Set of Requests for Production (85 RFPs): Served August 26, 2024. Productions are substantially complete, but gaps have been identified in several categories, including (a) communications between Lumicore's engineering team and its patent counsel regarding the accused products, (b) internal design reviews and design-gate documents for the LumiEdge 1600G-LR, and (c) customer communications referencing competitive positioning against OWS products. These gaps prompted the service of supplemental RFPs.
• OWS's Second Set of Requests for Production (30 supplemental RFPs): Served November 4, 2024. These supplemental requests target source-code repositories, photonic-IC mask files, and fabrication run data for all three accused products, as well as the design review and customer communication gaps identified above. Production is ongoing. Lumicore has produced a subset of responsive documents and has represented that additional productions will be made on a rolling basis through Q1 2025. We are monitoring compliance closely.
• OWS's First Set of Requests for Admission (40 RFAs): Served September 23, 2024. Responses received from Lumicore on October 23, 2024. Lumicore denied the majority of the RFAs but made several notable admissions, including: (a) admission that Lumicore received the January 15, 2023 FairPoint licensing letter; (b) admission that Lumicore manufactures and sells the LumiLink 400G-ZR+, LumiLink 800G-DR8, and LumiEdge 1600G-LR in the United States; and (c) admission that Lumicore has not obtained a license to any of OWS's asserted patents.
OWS's Responses to Lumicore's Written discovery:
• OWS's Responses to Lumicore's First Set of Interrogatories and First Set of Requests for Production: Served September 30, 2024. OWS's responses and productions were comprehensive and have not been the subject of any discovery dispute by Lumicore to date.
C. Key discovery Dispute — Opinion-of-Counsel Letters
The most significant pending discovery dispute concerns OWS's Motion to Compel production of Lumicore's opinion-of-counsel letters. This motion was filed on October 21, 2024 (D.E. 38), with a supporting Memorandum of Law (D.E. 39) and the Declaration of Wendy Schultz (D.E. 40).
Basis for the Motion. OWS argues that Lumicore waived the attorney-client privilege with respect to its opinion-of-counsel letters through two independent acts: (1) Lumicore's July 10, 2023 declination letter, sent by Raymond Bautista to FairPoint Licensing Group, expressly referenced "competent legal opinions" as a basis for Lumicore's decision to decline a license to OWS's patents — this constitutes an at-issue waiver because Lumicore placed the substance of legal advice at issue in its communications with OWS's licensing agent; and (2) Lumicore has asserted reliance on advice of counsel as part of its defense to OWS's willful infringement allegations, which constitutes a subject-matter waiver under governing precedent.
Legal Support. OWS's supporting brief cites the Federal Circuit's en banc decision in In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007), and the Supreme Court's decision in Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. 93 (2016), for the proposition that a party who relies on advice of counsel to rebut allegations of willful infringement waives the privilege as to the underlying opinion letters and related communications.
Lumicore's Opposition. Lumicore opposes the motion on two principal grounds: (a) scope-of-waiver arguments, contending that even if some waiver occurred, it is limited to the specific opinions referenced in the July 10, 2023 declination letter and does not extend to all opinion letters on all four asserted patents; and (b) work-product protection arguments, contending that certain of the opinion letters constitute litigation-related work product prepared in anticipation of this action and are protected by the work-product doctrine independent of any privilege waiver.
Reply. OWS's Reply in Support of Motion to Compel was filed on November 18, 2024, addressing each of Lumicore's arguments and demonstrating that (a) the scope of waiver extends to all opinions regarding the same subject matter — namely, infringement of OWS's patents by the accused products — and cannot be artificially limited to specific patents, and (b) the work-product doctrine does not protect opinion letters prepared by litigation counsel where the party has affirmatively placed the substance of legal advice at issue.
Current Status. The Motion to Compel remains pending as of January 3, 2025. We expect a ruling from the Court in Q1 2025. Depending on the timing and substance of the ruling, it may have a significant impact on the willful infringement theory and enhanced damages case.
Significance. The opinion-of-counsel letters are critical to rebutting Lumicore's defense against willful infringement. If the Motion to Compel is granted, the opinion letters may reveal the scope and timing of Lumicore's legal analysis regarding OWS's patents, the identity of the attorneys who rendered the opinions, the specific claim-by-claim analysis (or lack thereof) that was conducted, and the degree to which Lumicore's engineering team relied upon or even received the opinions. If the opinions are inadequate, untimely, or were not shared with the design team, they will significantly undermine Lumicore's "good faith" narrative. Conversely, if the opinions are thorough and well-reasoned, they could mitigate our willful infringement theory, although the totality of the evidence — including the Michaud and Bautista deposition admissions — would still support a strong case.
D. Protective Order — Financial Data Dispute
Lumicore filed a Motion for Protective Order (D.E. 42) seeking to restrict the production of product-level financial data, including revenue, cost, and gross margin data broken down by individual accused product. Lumicore argued that this data was competitively sensitive and that aggregate financial data would be sufficient for damages analysis.
OWS filed its Opposition on October 7, 2024, arguing that product-level revenue, cost, and margin data are essential to all three prongs of OWS's damages analysis: (a) lost-profits analysis under Panduit, which requires granular data on the accused products' sales volumes, revenue, and market positioning; (b) reasonable royalty analysis under Georgia-Pacific, which requires an understanding of the profitability of the accused products to the infringer; and (c) the enhanced damages assessment, which requires evidence of the magnitude and duration of Lumicore's infringing activity.
The Court granted Lumicore's motion in part, ordering production of the requested product-level financial data but under the heightened confidentiality protections of the Highly Confidential — Attorneys' Eyes Only tier of the Stipulated Protective Order. This ruling was a favorable outcome for OWS, as it secured the essential data while accommodating Lumicore's legitimate confidentiality concerns.
Lumicore's product-level financial data is now in hand and has been made available to OWS's outside counsel and damages expert, Dr. Lawrence Keating, under the AEO designation. The data reveals that gross margins on the accused products are substantial, ranging from 52.1% for the LumiLink 400G-ZR+ to 58.3% for the LumiEdge 1600G-LR. These margins are relevant to multiple aspects of the damages analysis, including the determination of Lumicore's profits attributable to the infringing products and the calculation of a reasonable royalty.
E. Fact Depositions Completed in Q4 2024
Four fact depositions were completed during Q4 2024. Each deposition is summarized below, with an assessment of its significance to the case.
1. Dr. Jian-Wei Huang (OWS CTO) — November 5, 2024
Dr. Jian-Wei Huang is OWS's Chief Technology Officer and a named inventor on all four asserted patents. He was deposed by Hawthorne Vega & Cruz LLP on November 5, 2024. The deposition lasted approximately seven hours.
The examination focused on three principal areas: (a) the prosecution history of the asserted patents, including the amendments made during prosecution and the reasons therefor; (b) the state of the art in silicon photonics at the time of the relevant filing and priority dates; and (c) OWS's own product development, including the relationship between OWS's commercial products and the claimed inventions.
Dr. Huang performed well under examination. His testimony was consistent with the Declaration he submitted in support of OWS's Opening Claim Construction Brief, and he did not make any significant adverse admissions. Notably, Dr. Huang clearly articulated the inventive contribution of each asserted patent and distinguished the claimed inventions from the prior art cited in Lumicore's invalidity contentions, particularly the Takahashi, Bergmann, and Li Wei references. He was also effective in explaining the technical limitations that prior-art systems failed to achieve and how the patented inventions addressed those limitations.
Defense counsel's questioning appeared designed to elicit admissions that could support Lumicore's narrow claim constructions, particularly on the "integrated on a silicon substrate" term of the '193 Patent. Dr. Huang appropriately distinguished between monolithic integration and the broader concept of silicon-substrate integration as used in the patent claims, and his testimony is consistent with OWS's proposed construction.
No errata sheet issues are anticipated. The deposition transcript has been reviewed and designated for confidentiality under the Protective Order where appropriate.
2. Dr. Sandra Michaud (Lumicore CTO) — November 19, 2024
Dr. Sandra Michaud is Lumicore's Chief Technology Officer and a central figure in the development of the accused products. She was deposed on November 19, 2024 by Wendy Schultz on behalf of OWS. The deposition lasted the full seven hours permitted under the Federal Rules.
This was a critical deposition for both infringement and willfulness theories, and it yielded several important admissions:
Key Admissions:
• Patent Application Awareness: Michaud admitted that she and members of the Lumicore design team reviewed OWS's published patent application No. 2018/0123456 — which corresponds to the '193 Patent — during the design phase for the LumiLink 400G-ZR+ in 2021–2022. This admission is significant evidence supporting willful infringement, as it demonstrates that Lumicore's engineering team was aware of OWS's patent claims before designing the first accused product and did not modify its design approach to avoid the claimed inventions.
• Knowledge of Issued Patents: Michaud denied having knowledge of OWS's issued patents until Lumicore received FairPoint's January 15, 2023 licensing letter. However, her admission regarding review of the published patent application partially undermines this denial, as the published application contained substantially the same claims as the subsequently issued '193 Patent, and any competent review of the application would have revealed the scope of OWS's claimed inventions.
• Lack of Design-Around Alternatives: When questioned about non-infringing design alternatives, Michaud was unable to identify specific modifications that Lumicore could have made to the accused products to avoid the asserted claims. This testimony weakens Lumicore's design-around arguments and supports the irreparable harm element of OWS's injunction case, as it suggests that Lumicore has no readily available alternative designs.
Areas of Concern:
Michaud was well-prepared on the technical aspects of Lumicore's invalidity arguments and articulated a number of distinctions between Lumicore's designs and OWS's patent claims. In particular, she testified in detail about differences in the thermal management architecture of the accused products relative to the micro-channel heat sink structure described in the '562 Patent specification, and she offered technical distinctions regarding the waveguide multiplexer implementation in the LumiLink 800G-DR8. Defense counsel is likely to use these portions of Michaud's testimony to support non-infringement arguments on specific claim limitations. We will need to address these points through our technical expert, Dr. Ashford, in her expert report and at trial.
3. Raymond Bautista (Lumicore GC) — December 3, 2024
Raymond Bautista is Lumicore's General Counsel and a key witness on the willful infringement timeline. He was deposed on December 3, 2024 by Wendy Schultz on behalf of OWS. The deposition was limited in scope due to significant privilege issues but nonetheless yielded important admissions.
Key Admissions:
• Receipt of Licensing Letters: Bautista confirmed that he received FairPoint Licensing Group's January 15, 2023 licensing letter, which identified the '847, '193, and '562 Patents and accused the LumiLink 400G-ZR+ of infringement. He further confirmed that he forwarded the letter to Lumicore's outside counsel at Hawthorne Vega & Cruz LLP within three business days of receipt. This testimony establishes the timing of Lumicore's actual notice with precision and confirms that Lumicore promptly engaged outside litigation counsel, which is consistent with the seriousness with which Lumicore treated the infringement allegations.
• Refusal to Answer on Opinion Letters: Bautista refused to answer questions regarding the substance of the opinion-of-counsel letters received from outside counsel, on the basis of attorney-client privilege. Defense counsel Kate Rourke instructed Bautista not to answer a total of 17 questions related to the opinion letters, the scope of the legal analysis conducted, the timing of the opinions, and whether the opinions were communicated to Lumicore's engineering team. All objections were preserved on the record and form the factual basis for OWS's pending Motion to Compel (D.E. 38).
• No Design-Around Analysis Before LumiEdge Launch: Critically, Bautista admitted that no formal design-around analysis was commissioned by Lumicore before the launch of the LumiEdge 1600G-LR in Q4 2023. This admission is highly significant for the willful infringement theory because it demonstrates that Lumicore continued to expand its product line — launching a new product that incorporated the same allegedly infringing technology — without making any effort to design around OWS's patents, even after receiving two licensing letters, participating in an in-person licensing meeting, and declining to take a license.
Privilege Clawback Issue:
As noted, Lumicore's counsel instructed Bautista not to answer 17 questions on privilege grounds. These instructions are documented in the deposition transcript and have been incorporated by reference into OWS's pending Motion to Compel. In the event the Court grants the Motion to Compel, we anticipate that Bautista will need to sit for a continuation deposition to answer the previously withheld questions.
4. Angela Reeves (FairPoint Licensing Group) — December 10, 2024
Angela Reeves is the Managing Director of the FairPoint Licensing Group, the patent licensing firm retained by OWS to conduct pre-suit licensing outreach to Lumicore. Reeves was deposed on December 10, 2024 by both sides.
Key Testimony:
• Licensing Letters: Reeves confirmed sending two licensing letters to Lumicore on behalf of OWS. The first letter, dated January 15, 2023, identified the '847, '193, and '562 Patents and accused the LumiLink 400G-ZR+ of infringement. The second letter, dated May 15, 2023, added the '015 Patent and expanded the list of accused products to include the LumiLink 800G-DR8.
• In-Person Licensing Meeting: Reeves described the April 20, 2023 in-person licensing meeting held in Austin, Texas, which was attended by Rebecca Tanaka (OWS GC), Raymond Bautista (Lumicore GC), Kate Rourke (HVC), and Reeves herself. According to Reeves's testimony, OWS presented a detailed claim chart showing the basis for infringement and offered to negotiate a license on commercially reasonable terms. Lumicore's representatives, however, showed "no interest in negotiating" and did not engage substantively with the infringement analysis. Bautista acknowledged receipt of the licensing letters and stated that Lumicore had reviewed the identified patents.
• No Counteroffer: Reeves confirmed that Lumicore did not make any counteroffer or propose any alternative licensing terms at the meeting or at any point thereafter.
This testimony is critical for establishing the willful infringement timeline and supports OWS's enhanced damages theory. Reeves's account of the April 20, 2023 meeting, combined with Bautista's admissions regarding receipt of the licensing letters and the absence of any design-around analysis, paints a clear picture of a defendant that received detailed notice of patent infringement, evaluated the risk, and chose to continue its infringing conduct without modification.
F. Depositions Remaining
Approximately 12 fact depositions remain to be completed before the May 1, 2025 fact discovery cutoff. The following are the key remaining depositions:
• Kevin Ng (Benchmark Semiconductor Analysis, LLC): This deposition was completed on January 7, 2025, just after the close of Q4 2024. Ng, the lead engineer who conducted the teardowns of all three accused products, confirmed the teardown methodology, chain of custody of the accused product samples, and identified specific structures in each accused product corresponding to each asserted claim limitation. His testimony was clear and consistent with his written teardown reports, and no material concessions were made during cross-examination. A summary of this deposition will be included in the Q1 2025 status report.
• Melissa Chen (former Lumicore engineer, now at Veridian Photonics, Inc.): A subpoena duces tecum and deposition notice were served on January 22, 2025. Chen was a member of Lumicore's LumiLink 400G-ZR+ design team during the 2021–2022 design phase and is anticipated to testify about the design team's access to and review of OWS's published patent applications, corroborating Michaud's admission. She is a critical willfulness witness. Scheduling is underway; we anticipate this deposition will occur in Q1 or early Q2 2025.
• Dr. Nikolai Petrov (OWS VP of Engineering, Photonics Division): Dr. Petrov is anticipated to be deposed by defense counsel in Q1 or Q2 2025. We are preparing Dr. Petrov for his deposition and will coordinate scheduling with HVC.
• Dr. Eric Dalmqvist (Lumicore VP of Product Development): Deposition notice to be served. Dr. Dalmqvist is expected to have knowledge of the product development process for the LumiEdge 1600G-LR, including the decision to launch the product after receipt of the FairPoint licensing letters.
• Lumicore 30(b)(6) Designee(s): A Rule 30(b)(6) deposition notice was served on October 1, 2024, designating 18 topics for corporate testimony. The topics include, among others, Lumicore's product development processes, sales and marketing activities for the accused products, knowledge of OWS's patents, design-around efforts (or lack thereof), and licensing practices. We need to schedule this deposition and anticipate a potential dispute regarding the adequacy of Lumicore's designee preparation, particularly on Topic 14 (non-infringing alternatives). A contingency discovery dispute letter has been drafted and is held in reserve pending the meet-and-confer process.
All expert depositions will be taken following service of expert reports (June–August 2025) and within the expert discovery period closing August 15, 2025.
V. Infringement and Invalidity Contentions
A. OWS's Infringement Contentions (P.R. 3-1, September 16, 2024)
OWS served its P.R. 3-1 Infringement Contentions on September 16, 2024, identifying each asserted claim, each accused product, and the specific basis for infringement on a claim-by-claim, limitation-by-limitation basis, in accordance with the Patent Rules for the Eastern District of Texas. The infringement contentions are supported by detailed claim charts mapping the accused product structures (as identified through the Benchmark Semiconductor Analysis, LLC teardown reports) to each element of each asserted claim.
Asserted Claims by Patent:
Accused Products by Patent:
Doctrine of Equivalents Contentions. In addition to literal infringement, OWS has asserted infringement under the doctrine of equivalents ("DOE") for the following claims and limitations:
• Claims 3 and 7 of the '193 Patent, with respect to the "coherent detection module" limitation. OWS contends that even if the accused products do not literally satisfy this limitation under the Court's ultimate construction, the structure used in the accused products performs substantially the same function, in substantially the same way, to achieve substantially the same result as the claimed "coherent detection module."
• Claim 12 of the '015 Patent, with respect to the "two-dimensional sub-wavelength grating" limitation. OWS contends that the grating structure in the LumiLink 800G-DR8 and LumiEdge 1600G-LR, even if not literally a "two-dimensional sub-wavelength grating" as construed, is an insubstantial variation of the claimed structure.
These DOE contentions are supported by C&H's internal DOE Analysis Memorandum, dated September 5, 2024, which applies the function-way-result test and the all-limitations rule to each accused product and identifies the specific equivalents at issue.
Teardown Support. The infringement contentions are grounded in the Benchmark Semiconductor Analysis, LLC teardown reports for all three accused products. Kevin Ng, the lead engineer who conducted the teardowns, has confirmed his methodology and findings in his January 7, 2025 deposition.
Supplemental Contentions. We anticipate filing supplemental infringement contentions in approximately April 2025. These supplemental contentions will incorporate analysis of Lumicore's design files, including RTL schematics and photonic-IC layout files, which were produced under the Highly Confidential — Source Code designation and are currently under review by Dr. Ashford and the C&H technical team. The design files are expected to provide additional detail on the implementation of the accused structures and to strengthen the infringement case on specific claim limitations.
B. Lumicore's Invalidity Contentions (P.R. 3-3, October 14, 2024)
Lumicore served its P.R. 3-3 Invalidity Contentions on October 14, 2024, citing a total of 23 prior-art references across the four asserted patents. The contentions assert both anticipation under 35 U.S.C. § 102 and obviousness under 35 U.S.C. § 103. The following are the key prior-art references and the invalidity theories asserted:
Key Prior-Art References:
1. Takahashi et al., "Dense WDM Silicon Photonic MUX" (IEEE Photonics Technology Letters, March 2014): Asserted as anticipation (§ 102) against the '847 Patent. Lumicore contends that Takahashi discloses each limitation of independent Claim 1 of the '847 Patent. Takahashi is the strongest prior-art reference in Lumicore's invalidity case.
2. U.S. Patent No. 8,412,007 (Bergmann) (issued April 2, 2013): Asserted as obviousness (§ 103) against the '562 Patent, in combination with other references. Bergmann discloses a thermal management system for photonic integrated circuits but does not disclose the specific micro-channel heat sink structure recited in the '562 Patent claims.
3. PCT/EP2015/071234 (Simonsen) (September 17, 2015): Asserted as obviousness (§ 103) against the '847 Patent, in combination with Takahashi. Simonsen discloses waveguide multiplexing concepts but addresses a different application and uses a different substrate material.
4. Dr. Li Wei, "Thermal Solutions for PICs" (OFC 2013 conference paper, March 2013): Asserted as anticipation (§ 102) against the '562 Patent. Li Wei discusses thermal management approaches for photonic integrated circuits, including micro-channel cooling, but does not disclose the embedded micro-channel structure with the specific characteristics recited in the '562 Patent claims.
5. Lumicore's own internal design documents (dated 2016–2017): Asserted as a prior-conception defense against the '015 Patent under 35 U.S.C. § 102(g) (pre-AIA). Lumicore contends that its engineering team conceived of the claimed polarization-diverse grating coupler before OWS's priority date and can establish prior invention through these internal documents.
Internal Invalidity Analysis. The C&H case team, in consultation with Dr. Ashford, completed detailed invalidity analysis memoranda in November 2024 for each of the four asserted patents. The summary assessments are as follows:
• '847 Patent: The Takahashi reference is the most significant prior-art challenge. However, Takahashi lacks the "low insertion loss" limitation as recited in the asserted claims. Specifically, the waveguide multiplexer described in Takahashi exhibits insertion losses approximately 2.5 dB higher than the threshold specified in the '847 Patent claims. Moreover, the combination of Takahashi with Simonsen, as proposed by Lumicore, requires hindsight reconstruction and lacks a motivation to combine, as the references address different technical problems and use different substrate materials. Assessment: Moderate confidence in surviving invalidity.
• '193 Patent: Lumicore cites eight references against the '193 Patent, but no single reference anticipates the claimed combination of a coherent detection module with the specific transceiver architecture disclosed in the patent. The Takahashi anticipation argument has been addressed through identification of distinguishing limitations that are absent from Takahashi. Assessment: Strong confidence in surviving invalidity.
• '562 Patent: The Bergmann and Li Wei references do not disclose the specific "embedded micro-channel heat sink" structure recited in the claims of the '562 Patent. Bergmann uses a different cooling architecture (external heat-pipe system), and Li Wei describes micro-channel concepts at a high level without disclosing the embedded configuration with the hydraulic diameter and channel geometry specified in the claims. Additionally, OWS has priority date analysis and potential swearing-behind evidence available if needed to disqualify certain references. Assessment: Moderate-to-strong confidence in surviving invalidity.
• '015 Patent: Lumicore's primary invalidity theory is the prior-conception defense based on its own internal documents from 2016–2017. This defense faces significant corroboration hurdles under the Mahurkar standard, as the internal documents are uncorroborated by any independent witness and raise credibility issues related to document authenticity and dating. We have identified inconsistencies in the document metadata and formatting that suggest some documents may have been modified after their purported creation dates. Assessment: Strong confidence in surviving this defense.
Secondary Considerations of Non-Obviousness. In December 2024, the case team compiled evidence of secondary considerations of non-obviousness that will be presented through our experts in response to Lumicore's obviousness contentions. This evidence includes:
• Commercial Success: OWS products practicing the asserted patent technology generated approximately $310 million of OWS's $487.3 million FY 2023 revenue, demonstrating significant commercial success with a nexus to the patented inventions.
• Long-Felt Need: The industry had a long-felt need for low-insertion-loss waveguide multiplexing in silicon photonics platforms, as documented in multiple IEEE publications and industry white papers pre-dating the priority dates.
• Failure of Others: At least three competitors — including Meridian Optics, SynapticWave, and Coherent Dynamics — attempted to develop similar silicon photonics transceiver solutions and failed to achieve the performance metrics claimed in the asserted patents.
• Copying: Evidence that Lumicore copied the patented technology, supported by Michaud's deposition admission regarding review of OWS's published patent application during the design phase, and anticipated corroborating testimony from Melissa Chen.
C. Inequitable Conduct Counterclaim Assessment
Lumicore's Answer and Counterclaims, filed on June 17, 2024, include a counterclaim for inequitable conduct and unenforceability of the '193 Patent. Lumicore alleges that Dr. Jian-Wei Huang, the named inventor and prosecuting applicant, failed to disclose a material prior publication to the United States Patent and Trademark Office during prosecution of the '193 Patent. Specifically, Lumicore contends that Dr. Huang was aware of a 2016 conference presentation by Dr. K. Yamamoto of Osaka University discussing coherent detection architectures in silicon photonics and failed to disclose this reference in an Information Disclosure Statement.
C&H's internal analysis of this counterclaim, completed in August 2024, concludes that the Yamamoto reference is cumulative of prior art that was already cited by the examiner during prosecution of the '193 Patent, specifically references that disclose similar coherent detection concepts. Because the reference is cumulative, it is not material under the Brightmoor & Co. standard. Moreover, Lumicore has not identified, and is unlikely to be able to establish, specific intent to deceive the USPTO — the "single most reasonable inference" standard requires clear and convincing evidence of deceptive intent, which is absent here. Dr. Huang's failure to cite the Yamamoto reference is more readily explained by the reference's cumulative nature and the volume of prior art in the silicon photonics field than by any intent to mislead the examiner.
Assessment: Low risk. We do not believe this counterclaim presents a material threat to the enforceability of the '193 Patent.
VI. Claim Construction Status
A. Overview of Disputed Terms
The Joint Claim Construction Statement, filed on October 28, 2024 (D.E. 40), identifies 14 disputed claim terms across the four asserted patents. Of these, the parties have agreed on constructions for 2 terms, leaving 12 terms in dispute for resolution by the Court at the Markman hearing. While all 12 disputed terms require careful attention, four terms have been identified as having the highest potential case impact. These four terms are summarized in the following table, together with each party's proposed construction and an assessment of the case impact:
In addition to these four critical terms, the remaining eight disputed terms involve constructions that, while important, are less likely to be individually case-dispositive. We have addressed all 12 terms comprehensively in our claim construction briefs and will be prepared to argue all terms at the Markman hearing.
B. Briefing Status
The claim construction briefing is substantially complete, with only Lumicore's sur-reply remaining to be filed. The briefing history is as follows:
OWS's Opening Claim Construction Brief was filed on November 15, 2024 (D.E. 44) and totals 50 pages. The brief was supported by:
• Declaration of Dr. Caroline Ashford: Dr. Ashford, a professor of electrical engineering and photonics at the Northfield Institute of Technology, defined the person of ordinary skill in the art ("POSITA") as an individual holding an M.S. or Ph.D. in electrical engineering, photonics, or a closely related field, with at least three years of experience in silicon photonic integrated circuit design. Dr. Ashford provided an ordinary and customary meaning analysis for each of the 12 disputed terms, grounded in the intrinsic evidence and informed by the understanding of a POSITA at the relevant priority dates. Her declaration demonstrates that OWS's proposed constructions are consistent with how a POSITA would understand the terms as used in the patent claims and specifications.
• Declaration of Dr. Jian-Wei Huang: As the inventor and OWS's CTO, Dr. Huang provided context regarding the prosecution history of each patent, the state of the art at the time of invention, and the technological context in which the patent claims were drafted. His declaration supports OWS's position that the claim terms should be given their ordinary and customary meaning to a POSITA and should not be artificially narrowed based on specific embodiments disclosed in the specification.
• Appendices of Intrinsic Evidence: Comprehensive appendices were filed containing the full text of all asserted claims, relevant portions of the patent specifications, complete prosecution histories for all four asserted patents (including examiner interviews, office actions, applicant responses, and amendments), and certificates of correction.
• Appendices of Extrinsic Evidence: Technical dictionaries (including the Sterling Reach Industries Dictionary of Scientific and Technical Terms, the IEEE Dictionary of Electrical and Electronic Terms, and the Cobalt Ridge & Co. Encyclopedia of Telecommunications), IEEE standards (including IEEE 802.3 and ITU-T specifications for coherent transceivers), textbooks (including Silicon Photonics Design by Chrostowski and Hochberg), and journal articles from the relevant time period were submitted to provide context for the ordinary and customary meaning of the disputed terms.
Lumicore's Responsive Claim Construction Brief was filed on December 6, 2024 (D.E. 48). Lumicore's brief relies heavily on the opinions of its technical expert, Dr. Rajesh Sundaram of Pacific Western University, who seeks narrow constructions of all 12 disputed terms. Notably, Dr. Sundaram defines the POSITA differently from Dr. Ashford — as an individual holding a Ph.D. with at least five years of experience in silicon photonics design. This elevated POSITA definition, if adopted, would tend to narrow the scope of the claim terms by attributing a higher level of knowledge and sophistication to the hypothetical skilled artisan, potentially making it easier for Lumicore to argue that certain terms have narrower technical meanings. Lumicore's brief also relies extensively on extrinsic evidence — including conference presentations, vendor datasheets, and industry white papers — to argue that the disputed terms have narrow, specialized meanings that exclude the structures used in the accused products.
OWS's Reply Claim Construction Brief was filed on December 20, 2024 (D.E. 52), accompanied by a Supplemental Declaration of Dr. Caroline Ashford. The reply brief addresses Lumicore's arguments point by point, demonstrating that:
• Dr. Sundaram's proposed POSITA definition is unduly narrow and inconsistent with the level of skill reflected in the patent specifications and prosecution histories. The patents are directed to a skilled practitioner, not a leading academic researcher, and the language of the claims and specifications supports Dr. Ashford's POSITA definition.
• Lumicore improperly imports limitations from specific embodiments in the specifications into the claims, violating the well-established principle that claims should not be limited to preferred embodiments absent clear disclaimer or disavowal.
• Lumicore's reliance on extrinsic evidence is misplaced where the intrinsic record — claims, specification, and prosecution history — unambiguously supports OWS's proposed constructions.
Dr. Ashford's Supplemental Declaration specifically rebuts each of Dr. Sundaram's opinions on the four critical claim terms and provides additional technical analysis demonstrating that OWS's constructions are consistent with the understanding of a POSITA at the relevant priority dates.
Lumicore's Sur-Reply, filed by leave of Court, is due on January 10, 2025. We will review and assess the sur-reply upon receipt.
Final Joint Claim Construction Chart is due on January 15, 2025. Omar Siddiqui is responsible for coordinating with Lumicore's counsel to finalize this submission.
C. Markman Hearing Preparation
The Markman hearing is scheduled for March 14, 2025, before Judge Gilstrap. Preparation for this hearing is a top priority for the case team in Q1 2025.
Claim Construction Tutorial. The Court's standing order requires the parties to submit claim construction tutorials in advance of the Markman hearing. The tutorial submission is due in February 2025. A draft tutorial is in preparation with input from Dr. Caroline Ashford. The tutorial will include diagrams and animations covering the following technical topics, which are essential to the Court's understanding of the disputed claim terms:
• The fundamentals of silicon photonics, including the fabrication of photonic integrated circuits on silicon substrates
• Waveguide multiplexing technologies, including arrayed waveguide gratings, ring resonator-based multiplexers, and Mach-Zehnder interferometric multiplexers