CALDERWOOD & HARKNESS LLP ATTORNEY WORK PRODUCT — PRIVILEGED AND CONFIDENTIAL DRAFT — NOT FOR DISTRIBUTION
INTERNAL COVER MEMORANDUM
Prepared by: Wendy Schultz, Associate Date of Draft: March 3, 2025 For Review by: Alan Ngo, Responsible Partner
Purpose and Status
This memorandum accompanies a DRAFT contingency cease-and-desist and voluntary-cessation letter addressed to Catherine "Kate" Rourke, Lead Partner at Hawthorne Vega & Cruz LLP, litigation counsel for Lumicore Technologies, Inc. ("Lumicore"), with a copy to Raymond Bautista, General Counsel of Lumicore. The letter has been prepared in anticipation of a possible favorable claim construction ruling following the Markman hearing currently scheduled for March 14, 2025, before the Honorable Judge James R. Gilstrap of the United States District Court for the Eastern District of Texas.
This letter is a DRAFT and has not been approved for sending. It should not be circulated outside the distribution list identified below, and it should not be transmitted to opposing counsel, the client, or any third party without the express prior authorization of Alan Ngo.
The letter is to be finalized and sent only upon the occurrence of the following conditions:
(a) Receipt of a Markman order in Optiwave Semiconductor Corp. v. Lumicore Technologies, Inc., Case No. 2:24-cv-00319-JRG (E.D. Tex.), adopting Optiwave Semiconductor Corp.'s ("OWS") proposed claim constructions on the key disputed terms, or otherwise construing the disputed terms in a manner that substantially favors OWS's infringement theories;
(b) Express strategic authorization from Alan Ngo, the responsible partner for this engagement, following his review of the order and assessment of the tactical implications of sending the letter; and
(c) Client approval from Rebecca Tanaka, General Counsel of OWS, confirming OWS's authorization to send the demand.
The letter is designed to serve a dual purpose. First, it operates as a formal demand that Lumicore voluntarily cease and desist from all infringing activity with respect to the accused products in light of the Court's claim construction ruling. Second, the letter is intended to serve as additional evidence of notice for purposes of OWS's willful infringement claim and any subsequent motion for enhanced damages under 35 U.S.C. § 284. By formally notifying Lumicore that the Court's Markman ruling has eliminated its primary non-infringement defenses, OWS will strengthen its position that any post-ruling infringement is egregious, willful, and deserving of enhancement under the framework established by the Supreme Court in Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. 93 (2016).
The draft has been prepared with the expectation that it will require updating upon receipt of the actual Markman order. Bracketed placeholders and annotations throughout the letter indicate where specific rulings, dates, and citations must be inserted once the order issues. The finalization checklist appended to this memorandum identifies all required updates.
Distribution Note
Internal circulation of this draft memorandum and the accompanying draft letter is strictly limited to the following individuals:
• Alan Ngo, Partner, intellectual Property Litigation, Calderwood & Harkness LLP (Responsible Partner)
• Marcus Delgado, Senior Associate, intellectual Property Litigation, Calderwood & Harkness LLP
• Wendy Schultz, Associate, intellectual Property Litigation, Calderwood & Harkness LLP (drafter)
• Omar Siddiqui, Associate, intellectual Property Litigation, Calderwood & Harkness LLP
• James "Jim" Callahan, Partner, Whitmore & Callahan LLP, Tyler, TX (Local Counsel for OWS)
Client distribution will occur only upon approval by Alan Ngo. Upon such approval, the draft letter (or a finalized version) will be provided to:
• Rebecca Tanaka, General Counsel, Optiwave Semiconductor Corp., 4810 Bayside Technology Parkway, Suite 300, Santa Clara, CA 95054
• At Rebecca Tanaka's discretion, a copy may also be provided to Franklin Osei, Managing Partner, Ridgeline Capital Partners, LP (Board Chair of OWS), for board-level awareness.
No copies of this memorandum or the draft letter should be placed in any shared document repository, litigation hold folder, or external-facing system until the letter has been approved for sending.
[DRAFT — NOT FOR SENDING UNTIL AUTHORIZED]
CALDERWOOD & HARKNESS LLP 350 South Grand Avenue, 48th Floor Los Angeles, California 90071 Telephone: (213) 555-4800 Facsimile: (213) 555-4801
1201 F Street NW, Suite 700 Washington, DC 20004 Telephone: (202) 555-7100 Facsimile: (202) 555-7101
[DATE — to be inserted upon approval; anticipated late March or April 2025]
Via Email and FedEx Overnight Delivery
Catherine "Kate" Rourke, Esq. Hawthorne Vega & Cruz LLP 600 Congress Avenue, Suite 2400 Austin, TX 78701
Re: Optiwave Semiconductor Corp. v. Lumicore Technologies, Inc., Case No. 2:24-cv-00319-JRG (E.D. Tex.) — Demand for Voluntary Cessation of Infringement
Dear Ms. Rourke:
I. OPENING — IDENTIFICATION OF REPRESENTATION AND PURPOSE
We write on behalf of our client, Optiwave Semiconductor Corp. ("OWS"), the plaintiff in the above-captioned action pending before the Honorable Judge James R. Gilstrap in the United States District Court for the Eastern District of Texas. As you know, Calderwood & Harkness LLP serves as lead litigation counsel for OWS in this matter, together with our local counsel, Whitmore & Callahan LLP (James "Jim" Callahan, Esq.) of Tyler, Texas.
The purpose of this letter is to formally demand that your client, Lumicore Technologies, Inc. ("Lumicore"), voluntarily cease and desist from all activities that infringe OWS's patent rights, including the manufacture, use, sale, offer for sale, and importation of the accused products identified herein, in light of the Court's recent claim construction order. As set forth in detail below, the Court's Markman ruling has adopted claim constructions that confirm the scope of OWS's asserted patent claims and effectively foreclose Lumicore's primary non-infringement arguments. Under these constructions, OWS's infringement contentions map the accused products squarely onto the asserted claims, and continued infringement by Lumicore will only serve to increase its already substantial exposure to compensatory damages, enhanced damages for willful infringement, and a permanent injunction.
This letter supplements and reinforces the pre-suit notices of infringement previously provided to Lumicore by FairPoint Licensing Group, LLC, acting as OWS's licensing agent, beginning on January 15, 2023. Lumicore has been on notice of its infringement of OWS's patents for over two years, has declined to take a license, and has continued — and indeed expanded — its infringing activity throughout that period. The Court's Markman ruling now removes any remaining basis for Lumicore to contend that its products do not infringe the asserted patents.
II. SUMMARY OF THE COURT'S MARKMAN RULING
A. Reference to the Claim Construction Order
On March 14, 2025, the Court conducted a Markman hearing in this matter, at which the parties presented argument on the construction of twelve (12) disputed claim terms across OWS's four asserted United States patents. On [DATE OF ORDER — to be inserted], the Court issued its Claim Construction Order (D.E. [Docket Entry — to be inserted]), construing each of the disputed terms. The four asserted patents are:
• 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")
• U.S. Patent No. 11,402,015 (the "'015 Patent")
B. Key Constructions Adopted
The Court adopted constructions substantially consistent with OWS's proposed constructions on each of the critical disputed terms, rejecting in every material respect the narrow and results-driven constructions proposed by Lumicore. While the full text of the Court's order is enclosed herewith as Enclosure 1, we summarize the key constructions below:
1. "Waveguide multiplexer" ('847 Patent, Claims 1, 7, 12)
OWS proposed that "waveguide multiplexer" be construed to mean "an optical device that combines multiple optical signals of different wavelengths onto a single waveguide." The Court adopted this construction. Lumicore had urged a far narrower construction that would have limited the term to arrayed waveguide gratings incorporating slab couplers — a construction that had no support in the intrinsic record and was designed solely to exclude Lumicore's accused product architecture. The Court rejected Lumicore's construction, finding it inconsistent with the specification and the ordinary meaning of the term as understood by a person of ordinary skill in the art.
2. "Integrated on a silicon substrate" ('193 Patent, Claims 1, 4, 9, 15)
OWS proposed that "integrated on a silicon substrate" be construed to mean "formed on or within a silicon-based wafer using semiconductor fabrication processes." The Court adopted this construction. Lumicore had sought to restrict the term to monolithic fabrication, thereby excluding hybrid bonding, heterogeneous integration, and other well-known integration techniques that are widely employed in the silicon-photonics industry. The Court found Lumicore's proposed limitation unsupported by the claims, specification, or prosecution history, and noted that the specification expressly contemplates multiple integration methods.
3. "Micro-channel heat sink" ('562 Patent, Claims 1, 3, 8)
OWS proposed that "micro-channel heat sink" be construed to mean "a heat-dissipating structure containing channels with a hydraulic diameter of less than 1 mm." The Court adopted this construction. Lumicore had advocated for a restrictive construction requiring the channels to be part of a closed-loop liquid cooling system with channel dimensions between 10 µm and 200 µm. The Court rejected this construction as improperly importing limitations from a single preferred embodiment into the claim language, noting that the claims themselves impose no closed-loop requirement and that the specification discloses a range of channel sizes, including sizes exceeding 200 µm.
4. "Polarization-diverse grating coupler" ('015 Patent, Claims 1, 5, 11)
OWS proposed that "polarization-diverse grating coupler" be construed to mean "a grating coupler capable of coupling light of two orthogonal polarization states." The Court adopted this construction. Lumicore had attempted to limit the term to two-dimensional grating couplers that incorporate discrete polarization-splitting elements. The Court rejected this limitation, finding no basis in the claims or the specification for restricting the term to a single structural embodiment. The Court further noted that the term "polarization-diverse" describes a functional capability — the ability to couple light of two orthogonal polarization states — and does not prescribe a particular structural implementation.
A detailed comparison of the parties' proposed constructions and the Court's adopted constructions is provided in Enclosure 2.
C. Significance of the Ruling
The Court's Markman ruling is dispositive of the central non-infringement arguments that Lumicore has advanced throughout this litigation. In each instance, Lumicore's defense rested on the premise that the asserted claim terms should be construed so narrowly as to exclude its accused products — a strategy that the Court has now squarely rejected. Under the Court's constructions, OWS's infringement contentions — which were served on September 16, 2024, pursuant to the Court's scheduling order — map the accused products to each element of the asserted claims without any material dispute on claim scope.
In short, the Court's ruling confirms what OWS has maintained since the outset of this dispute: the accused Lumicore products fall within the scope of OWS's asserted claims, and Lumicore's continued manufacture, use, sale, offer for sale, and importation of those products constitutes infringement of OWS's valid and enforceable patents.
III. IDENTIFICATION OF THE ASSERTED PATENTS
OWS is the exclusive owner of each of the four asserted United States patents. Each patent is valid, enforceable, and in full force and effect. A brief description of each patent follows.
A. U.S. Patent No. 10,234,847 — The '847 Patent
Title: "Multi-Channel Silicon Photonic Waveguide Multiplexer with Low Insertion Loss"
Filed: September 14, 2016
Issued: March 19, 2019
Original Assignee: Optiwave Semiconductor Corp.
Current Assignee: Optiwave Semiconductor Corp.
The '847 Patent is directed to a multi-channel silicon photonic waveguide multiplexer design that achieves low insertion loss across multiple wavelength channels. The invention addresses a critical challenge in silicon-photonics transceiver design by enabling efficient wavelength-division multiplexing on a silicon platform. The '847 Patent is part of the same patent family as the '562 Patent and shares a common specification with that patent through a continuation relationship.
B. U.S. Patent No. 10,891,193 — The '193 Patent
Title: "High-Bandwidth Coherent Optical Transceiver Integrated on Silicon Substrate"
Filed: April 7, 2017
Issued: January 12, 2021
Priority: Claims the benefit of Provisional Application No. 62/499,117, filed April 7, 2017
Original Assignee: Optiwave Semiconductor Corp.
Current Assignee: Optiwave Semiconductor Corp.
The '193 Patent is directed to a high-bandwidth coherent optical transceiver that is integrated on a silicon substrate using semiconductor fabrication processes. The patent describes an architecture that enables the integration of key optical and electronic components on a single silicon-based platform, thereby reducing manufacturing cost and footprint while achieving data rates suitable for data-center interconnect applications. The '193 Patent shares a common priority date with the '015 Patent through Provisional Application No. 62/499,117.
C. U.S. Patent No. 9,678,562 — The '562 Patent
Title: "Method for Thermal Management of Photonic Integrated Circuits Using Embedded Micro-Channel Heat Sinks"
Filed: November 22, 2014
Issued: June 13, 2017
Original Assignee: Solara Optics, Inc.
Current Assignee: Optiwave Semiconductor Corp.
The '562 Patent was originally assigned to Solara Optics, Inc. OWS acquired the '562 Patent, along with eleven other patents in the Solara portfolio, pursuant to an Asset Purchase Agreement dated June 15, 2018. The total purchase price for the twelve-patent portfolio was $34.5 million, reflecting the significant value of the patented thermal management technology. The assignment was duly recorded with the United States Patent and Trademark Office, and OWS has been the sole owner of the '562 Patent since the date of acquisition.
The '562 Patent is directed to a method of thermal management for photonic integrated circuits using embedded micro-channel heat sinks. The invention enables efficient heat dissipation in high-density photonic integrated circuits, which is essential for reliable operation at the power levels required by modern data-center transceiver modules.
D. U.S. Patent No. 11,402,015 — The '015 Patent
Title: "Polarization-Diverse Grating Coupler for Silicon Photonic Transceivers"
Filed: August 30, 2019
Issued: August 2, 2022
Priority: Claims the benefit of Provisional Application No. 62/499,117, filed April 7, 2017 (shared with the '193 Patent)
Original Assignee: Optiwave Semiconductor Corp.
Current Assignee: Optiwave Semiconductor Corp.
The '015 Patent is directed to a polarization-diverse grating coupler designed for use in silicon photonic transceivers. The invention addresses polarization-dependent loss, a significant challenge in silicon-photonics design, by providing a grating coupler that is capable of efficiently coupling light of two orthogonal polarization states. The '015 Patent shares its priority date with the '193 Patent through Provisional Application No. 62/499,117.
E. Patent Maintenance and Status
All four asserted patents are utility patents issued by the United States Patent and Trademark Office. All required maintenance fees have been paid and are current. No inter partes review ("IPR") petitions have been filed against any of the asserted patents. Each patent is in full force and effect as of the date of this letter.
IV. IDENTIFICATION OF THE ACCUSED PRODUCTS
OWS has identified three Lumicore product lines that infringe the asserted patents. Each product has been subjected to independent reverse-engineering analysis by Benchmark Semiconductor Analysis, LLC ("Benchmark"), a nationally recognized semiconductor teardown and analysis firm, and infringement has been confirmed by claim charts mapping each accused product to the asserted claims.
A. LumiLink 400G-ZR+
The LumiLink 400G-ZR+ is a 400-gigabit coherent optical transceiver module designed for data-center interconnect applications. It was commercially launched by Lumicore in Q3 2022 and has been continuously sold, offered for sale, and imported into the United States since that date.
Fiscal Year 2023 Revenue: Approximately $94.8 million, as reported in Lumicore's segment-level disclosures in its annual report filed with the U.S. Securities and Exchange Commission.
Asserted Patents Infringed: '847 Patent, '193 Patent, '562 Patent.
Infringement of the LumiLink 400G-ZR+ was confirmed by a teardown report prepared by Benchmark Semiconductor Analysis, LLC, delivered on December 12, 2022. The Benchmark teardown identified the presence of waveguide multiplexer structures consistent with the claims of the '847 Patent, coherent transceiver integration on a silicon substrate consistent with the claims of the '193 Patent, and embedded micro-channel heat-sink structures consistent with the claims of the '562 Patent.
B. LumiLink 800G-DR8
The LumiLink 800G-DR8 is an 800-gigabit parallel single-mode optical transceiver module designed for intra-data-center connectivity. It was commercially launched by Lumicore in Q1 2023 and has been continuously sold, offered for sale, and imported into the United States since that date.
Fiscal Year 2023 Revenue: Approximately $128.4 million, as reported in Lumicore's public financial disclosures.
Asserted Patents Infringed: '847 Patent, '193 Patent, '562 Patent, '015 Patent.
Infringement of the LumiLink 800G-DR8 was confirmed by a follow-on teardown report prepared by Benchmark Semiconductor Analysis, LLC, delivered in June 2023. The Benchmark report identified each of the structures and features described above with respect to the LumiLink 400G-ZR+, as well as a polarization-diverse grating coupler consistent with the claims of the '015 Patent.
C. LumiEdge 1600G-LR
The LumiEdge 1600G-LR is a 1.6-terabit long-reach optical transceiver module designed for hyperscale data-center and metro-network applications. It was commercially launched by Lumicore in Q4 2023 — notably, this launch occurred after Lumicore had received multiple notices of infringement from FairPoint Licensing Group, LLC on behalf of OWS, and after Lumicore had formally declined to take a license on July 10, 2023. The decision to launch a new product incorporating additional infringing technology after receiving notice and declining a license is directly relevant to OWS's willful infringement claim.
Fiscal Year 2023 Revenue: Approximately $41.7 million (reflecting partial-year sales from the Q4 2023 launch).
Asserted Patents Infringed: '193 Patent, '015 Patent.
Infringement of the LumiEdge 1600G-LR was confirmed by a teardown report prepared by Benchmark Semiconductor Analysis, LLC, delivered in February 2024. The report identified coherent transceiver integration on a silicon substrate and polarization-diverse grating coupler features consistent with the claims of the '193 and '015 Patents.
D. Total Accused Product Revenue
The combined revenue generated by Lumicore from the three accused product lines for fiscal year 2023 alone was approximately $264.9 million ($94.8 million + $128.4 million + $41.7 million). Total accused-product revenue for the infringement period from Q3 2022 through Q1 2024 is approximately $378.2 million. Projected through the anticipated trial date in Q4 2025, total accused-product revenue is estimated to reach approximately $714.6 million, based on the analysis of OWS's damages expert, Dr. Lawrence Keating of Meridian Economic Consulting Group, LLC.
V. HISTORY OF NOTICE AND LUMICORE'S CONTINUED INFRINGEMENT
Lumicore has been on actual notice of its infringement of OWS's patents since at least January 2023 and, based on deposition testimony obtained in this litigation, had actual knowledge of OWS's patent portfolio dating back to the design phase of the LumiLink 400G-ZR+ in 2021–2022. Despite this knowledge, Lumicore has taken no steps to cease its infringing activity, has refused to engage in good-faith licensing discussions, and has launched additional infringing products.
A. Pre-Suit Notice via FairPoint Licensing Group, LLC
The chronology of pre-suit notice is as follows:
October 2022: OWS's engineering team, led by members of its silicon-photonics design group, identified potential infringement of the asserted patents by Lumicore's LumiLink 400G-ZR+ product following its commercial launch in Q3 2022. The identification was based on OWS's review of publicly available product datasheets, application notes, and conference presentations by Lumicore personnel.
November 2022: OWS retained Benchmark Semiconductor Analysis, LLC to perform a reverse-engineering teardown of the LumiLink 400G-ZR+ product for purposes of infringement analysis. Units of the product were acquired through commercial channels for analysis.
December 12, 2022: Benchmark delivered its teardown report, which confirmed the presence of waveguide multiplexer structures, silicon-substrate integration, and embedded micro-channel heat-sink features in the LumiLink 400G-ZR+ product that are consistent with the claims of the '847, '193, and '562 Patents.
January 15, 2023: FairPoint Licensing Group, LLC ("FairPoint"), OWS's licensing agent (Managing Director: Angela Reeves), sent a formal licensing and notice letter to Raymond Bautista, General Counsel of Lumicore Technologies, Inc. The letter identified the '847, '193, and '562 Patents; described the basis for OWS's belief that the LumiLink 400G-ZR+ product infringes those patents; and invited Lumicore to enter into licensing discussions on commercially reasonable terms. The letter was sent by certified mail, return receipt requested, and by email.
February 28, 2023: Lumicore responded to FairPoint's letter through its outside counsel, Hawthorne Vega & Cruz LLP. The response letter, signed by Kate Rourke, disputed infringement and raised generalized challenges to the validity of the asserted patents. The response did not engage substantively with the claim charts provided by FairPoint and did not identify any specific basis for Lumicore's non-infringement position.
April 20, 2023: An in-person licensing meeting was held in Austin, Texas, attended by Angela Reeves and Rebecca Tanaka on behalf of OWS, and by Raymond Bautista and Kate Rourke on behalf of Lumicore and Hawthorne Vega & Cruz LLP. The meeting lasted approximately ninety minutes. The Lumicore representatives indicated that they were not interested in negotiating a license on any terms. Angela Reeves testified in her deposition on December 10, 2024, that the Lumicore representatives showed "no interest in negotiating" and that Mr. Bautista stated words to the effect that Lumicore did not believe OWS's patents were valid or that Lumicore's products infringed.
May 15, 2023: FairPoint sent a second formal licensing letter to Lumicore. This letter expanded the scope of the notice by adding the '015 Patent (which had issued on August 2, 2022) and by identifying the LumiLink 800G-DR8 as an additional accused product. The letter reiterated OWS's invitation to negotiate a license and warned that OWS would pursue all available legal remedies if Lumicore continued to refuse to engage.
July 10, 2023: Lumicore formally declined to take a license. In a letter sent through Hawthorne Vega & Cruz LLP, Lumicore stated that it had obtained "competent legal opinions" concluding that its products do not infringe OWS's asserted patents and that Lumicore would not agree to license the patents on any terms offered by OWS or FairPoint.
B. Post-Declination Conduct
Despite having been placed on notice of four asserted patents across two accused product lines, and despite having formally declined a license, Lumicore took the following actions:
Q4 2023: Lumicore launched the LumiEdge 1600G-LR, a new and distinct product line incorporating additional technology that infringes the '193 and '015 Patents. This launch occurred approximately three months after Lumicore's formal refusal to take a license and in full knowledge of OWS's patent portfolio and infringement allegations.
Q3 2022 through the present: Lumicore has continued to sell all three accused product lines — the LumiLink 400G-ZR+, the LumiLink 800G-DR8, and the LumiEdge 1600G-LR — without interruption, generating hundreds of millions of dollars in revenue from infringing products. Lumicore has not undertaken any design-around effort, has not modified the accused products to avoid infringement, and has not sought a license from OWS.
C. Litigation Notice
April 22, 2024: OWS filed its complaint in this action, Case No. 2:24-cv-00319-JRG, in the United States District Court for the Eastern District of Texas. The complaint asserts seven counts: four counts of direct infringement (one for each asserted patent), one count of induced infringement, one count of contributory infringement, and one count of willful infringement with a request for enhanced damages under 35 U.S.C. § 284.
May 1, 2024: Lumicore was served with the summons and complaint.
Since being served, Lumicore has continued making, using, selling, offering to sell, and importing the accused products without cessation or modification. Lumicore's continued infringing activity during the pendency of this litigation further supports OWS's claim of willful infringement.
D. Deposition Testimony Confirming Awareness
Discovery in this action has yielded deposition testimony that further establishes Lumicore's knowledge of OWS's patents and its deliberate decision to proceed with infringing activity:
Dr. Sandra Michaud, Lumicore Chief Technology Officer (deposed November 19, 2024): Dr. Michaud admitted under oath that she personally reviewed OWS's published patent application No. 2018/0123456, which corresponds to the '193 Patent, during the design phase of the LumiLink 400G-ZR+ product. Dr. Michaud further acknowledged that she was aware of OWS's patent portfolio in the area of silicon-photonics transceiver design.
Raymond Bautista, Lumicore General Counsel (deposed December 3, 2024): Mr. Bautista confirmed receipt of FairPoint's January 15, 2023 letter identifying the asserted patents and the LumiLink 400G-ZR+ product. He testified that he forwarded the letter to outside counsel at Hawthorne Vega & Cruz LLP within three business days of receipt. Critically, Mr. Bautista admitted that no formal design-around analysis was commissioned before Lumicore launched the LumiEdge 1600G-LR in Q4 2023 — a product that was launched after Lumicore had declined a license and in full knowledge of the asserted patents.
Melissa Chen, former Lumicore engineer (now employed by Veridian Photonics, Inc.): OWS anticipates testimony from Ms. Chen, based on her deposition and pre-trial interview, that the LumiLink 400G-ZR+ design team at Lumicore accessed and reviewed OWS's published patent applications during the product design phase in 2021–2022. Ms. Chen's testimony is expected to corroborate Dr. Michaud's acknowledgment of awareness of OWS's patent portfolio.
The cumulative weight of this evidence establishes that Lumicore's infringement has been knowing, deliberate, and continuous from the outset.
VI. DEMAND FOR VOLUNTARY CESSATION
A. Specific Demanded Actions
In light of the foregoing, OWS hereby demands that Lumicore immediately and voluntarily cease and desist from making, using, selling, offering to sell, and importing into the United States each of the following accused products:
1. LumiLink 400G-ZR+ (all versions, configurations, and SKUs);
2. LumiLink 800G-DR8 (all versions, configurations, and SKUs);
3. LumiEdge 1600G-LR (all versions, configurations, and SKUs); and
4. Any colorable imitations, successors, next-generation versions, or derivative products that embody, incorporate, or practice any of the patented technology claimed in the '847, '193, '562, and '015 Patents.
This demand extends to any components, kits, subassemblies, or modules that are especially made or especially adapted for use in the accused products and that are not staple articles of commerce suitable for substantial non-infringing use. See 35 U.S.C. § 271(c).
OWS further demands that Lumicore provide written confirmation of cessation within thirty (30) calendar days of the date of this letter. Such confirmation should specify the steps Lumicore has taken or will take to effectuate cessation, including the disposition of existing inventory, the termination of pending orders, and the notification of customers and distribution partners.
B. Scope of Cessation
The demand for voluntary cessation encompasses all infringing activities within the United States, including but not limited to:
• Manufacturing, whether conducted directly by Lumicore, or through contract manufacturers, foundry partners, outsourced semiconductor assembly and test ("OSAT") providers, or any other third-party manufacturers acting at Lumicore's direction or on its behalf;
• Sales to all customers, including hyperscale data-center operators (such as cloud service providers and internet content providers), telecommunications carriers, network equipment manufacturers, and any other end users or resellers of the accused products;
• Offers for sale, including responses to requests for proposals ("RFPs"), design-in proposals, marketing materials, trade-show demonstrations, customer presentations, and any other activities constituting offers to sell the accused products within the meaning of 35 U.S.C. § 271(a);
• Importation of accused products, or components, subassemblies, or modules thereof, into the United States from any foreign country, whether by Lumicore directly or by any agent, distributor, or logistics provider acting on its behalf; and
• Provision of technical support, maintenance, firmware updates, and integration services that facilitate the continued use of the accused products by Lumicore's customers, to the extent such activities constitute use, sale, or inducement of infringement.
VII. CONSEQUENCES OF CONTINUED INFRINGEMENT
OWS urges Lumicore to give this demand serious and immediate consideration. Lumicore's continued infringement following the Court's Markman ruling will have significant legal and financial consequences.
A. Enhanced Damages for Willful Infringement
OWS has asserted willful infringement under 35 U.S.C. § 284, and the Supreme Court's decision in Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. 93 (2016), provides the governing framework. Under Halo, enhanced damages of up to three times the compensatory amount may be awarded in cases of egregious infringement, including cases in which the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent and this risk was either known or so obvious that it should have been known.
The Court's claim construction order now provides even stronger evidence that Lumicore's continued infringement is willful and without any reasonable basis. The non-infringement positions that Lumicore has advanced throughout this litigation — and that Lumicore apparently relied upon in declining to take a license — were predicated on narrow claim constructions that the Court has squarely rejected. Whatever arguable merit those positions may once have had, that basis has now been eliminated.
Continued infringement by Lumicore following the Markman ruling will be treated as additional evidence of egregious, willful, and deliberate conduct warranting enhanced damages. The post-notice period beginning with FairPoint's January 15, 2023 letter through the present reflects lost profits to OWS of approximately $109.2 million, which would serve as the base for potential enhancement. OWS's total compensatory damages demand is approximately $210 million, and enhanced damages under Section 284 could substantially increase that figure — potentially to $630 million at treble damages.
B. Permanent Injunction
OWS intends to seek a permanent injunction at trial, following the framework established by the Supreme Court in Northgate Group v. MercExchange, L.L.C., 547 U.S. 388 (2006). OWS will demonstrate entitlement to permanent injunctive relief by establishing each of the four Cascade Holdings factors:
(1) Irreparable Harm. OWS is a practicing entity and a direct competitor of Lumicore in the silicon-photonics transceiver market. OWS is the third-largest U.S. supplier of silicon-photonics transceiver modules for hyperscale data centers, with fiscal year 2023 revenue of $487.3 million. OWS will demonstrate irreparable harm through evidence of direct head-to-head competition, price erosion (the average selling price of OWS's competing products has declined by 18.7% from Q3 2022 to Q4 2023, a period corresponding to Lumicore's entry into the market with the accused products), customer diversion, and loss of design-in opportunities at major hyperscale customers. These harms are not adequately compensable by monetary damages alone.
(2) Inadequacy of Legal Remedies. The ongoing and escalating nature of Lumicore's infringement, the difficulty of quantifying future harm in a rapidly evolving market, and the loss of market position and customer relationships make monetary damages an inadequate remedy.
(3) Balance of Hardships. The balance of hardships favors OWS. OWS is the patent holder and innovator; Lumicore is the infringer. Lumicore's own internal estimates, produced in discovery, indicate that a permanent injunction affecting the accused products would impact approximately 42% of Lumicore's product revenue and that a redesign to avoid infringement of OWS's patents would require 18 to 24 months. While this disruption to Lumicore's business would be significant, it is a consequence of Lumicore's own decision to enter the market using OWS's patented technology without authorization.
(4) Public Interest. The public interest is served by enforcing valid patent rights and encouraging innovation. A permanent injunction would not deprive the market of needed products, as OWS and other licensed manufacturers are capable of meeting demand.
Voluntary cessation by Lumicore at this stage would serve to mitigate its exposure both to enhanced damages and to the business disruption that would result from a court-ordered permanent injunction.
C. Preliminary Injunction
OWS expressly reserves the right to seek preliminary injunctive relief, including a temporary restraining order, if Lumicore takes any action to accelerate sales, lock in customer commitments, frontload shipments, or otherwise attempt to maximize its infringing revenue in advance of the trial currently set for February 2, 2026. OWS has prepared a motion for preliminary injunctive relief that can be filed with the Court on short notice, together with supporting declarations, claim charts, and evidence of irreparable harm. Any effort by Lumicore to "race to market" in anticipation of an adverse trial outcome will be met with an immediate and vigorous response.
VIII. IMPACT OF CONTINUED INFRINGEMENT ON DAMAGES
A. Ongoing Accrual of Damages
Every additional day that Lumicore continues to sell the accused products increases its damages exposure. As noted above, total accused-product revenue is projected to reach approximately $714.6 million through Q4 2025, based on the analysis of Dr. Lawrence Keating of Meridian Economic Consulting Group, LLC, OWS's retained damages expert. This figure does not account for potential sales acceleration or new product launches by Lumicore.
OWS's damages theories, as set forth in its expert disclosures, include the following:
(1) Lost Profits under the *Panduit* Framework: OWS will seek lost profits of approximately $128.9 million, based on a market-share displacement analysis establishing that OWS would have captured 38.2% of Lumicore's infringing sales absent the infringement, combined with OWS's gross margin of 47.3% on its competing products. OWS satisfies each element of the Panduit Corp. v. Stahlin Bros. Fibre Works, Inc., 575 F.2d 1152 (6th Cir. 1978), framework: demand for the patented product, absence of acceptable non-infringing alternatives, manufacturing and marketing capacity, and quantifiable profit.
(2) Reasonable Royalty under the *Georgia-Pacific* Framework: For infringing sales not subject to the lost-profits analysis, OWS will seek a reasonable royalty at a rate of 8.5% of net sales, yielding approximately $37.5 million in reasonable royalty damages. This royalty rate is supported by comparable license agreements, the value of the patented technology to the accused products, and the other factors set forth in Georgia-Pacific Corp. v. United States Plywood Corp., 318 F. Supp. 1116 (S.D.N.Y. 1970).
(3) Enhanced Damages for Willful Infringement: As described above, OWS's total compensatory damages demand of approximately $210 million (combining lost profits and reasonable royalty) is subject to potential enhancement of up to three times under 35 U.S.C. § 284. The magnitude of the enhancement will depend in substantial part on Lumicore's conduct going forward, including whether Lumicore continues to infringe in the face of the Court's Markman ruling.
Voluntary cessation at this stage would have the effect of capping the accruing damages base and could potentially mitigate the enhancement analysis by demonstrating some degree of post-ruling good faith — though it would not excuse the prior willful conduct.
B. Attorneys' Fees and Costs
OWS reserves its right to seek exceptional-case designation and an award of attorneys' fees under 35 U.S.C. § 285. The record of Lumicore's willful and deliberate infringement — including its decision to launch a new infringing product after declining a license, its refusal to undertake any design-around analysis, and its reliance on non-infringement positions predicated on claim constructions that the Court has now rejected — supports a finding that this case is exceptional within the meaning of Octane Fitness, LLC v. ICON Health & Fitness, Inc., 572 U.S. 545 (2014). Continued infringement by Lumicore following the Markman ruling, particularly in the absence of any colorable non-infringement defense, will further strengthen OWS's case for an exceptional-case finding and fee shifting.
IX. INVITATION TO DISCUSS RESOLUTION
A. Licensing Alternative
While OWS is pursuing its legal remedies with the full vigor warranted by the circumstances, OWS remains willing to discuss a licensing arrangement with Lumicore on commercially reasonable terms. OWS is an innovator and an active participant in the silicon-photonics transceiver market, and it recognizes that licensing can serve the interests of both parties and of the industry more broadly.
OWS maintains an established patent licensing program, administered in part through FairPoint Licensing Group, LLC, and has entered into license agreements with other industry participants on terms that could serve as a framework for discussion with Lumicore. OWS's licensing agent, Angela Reeves, and OWS's General Counsel, Rebecca Tanaka, remain available for discussions at any time.
Any licensing discussion that may occur would not affect OWS's litigation rights, would not modify the existing case schedule, and would not alter the trial date of February 2, 2026, unless the parties mutually agree otherwise and seek modification from the Court.
B. Settlement Discussions
Without waiving any of its rights, claims, or remedies, OWS is amenable to good-faith settlement discussions with Lumicore at any time. OWS is also prepared to participate in mediation should the parties agree to engage a mediator or should the Court order the parties to participate in alternative dispute resolution. The parties may wish to consider whether the Court's Markman ruling provides a useful foundation for productive settlement negotiations.
Any settlement or licensing discussions would be conducted on a without-prejudice basis and would not constitute an admission by either party of the validity, invalidity, infringement, or non-infringement of any patent, or of any other fact, claim, or defense.
X. RESERVATION OF RIGHTS
OWS expressly reserves all rights, remedies, claims, and defenses available to it under law and equity, including but not limited to the following:
(a) All claims asserted in the complaint filed April 22, 2024 (D.E. 1), including direct infringement of the '847, '193, '562, and '015 Patents, induced infringement under 35 U.S.C. § 271(b), contributory infringement under 35 U.S.C. § 271(c), and willful infringement;
(b) The right to seek enhanced damages of up to three times the compensatory award under 35 U.S.C. § 284;
(c) The right to seek a permanent injunction prohibiting Lumicore from making, using, selling, offering to sell, or importing the accused products;
(d) The right to seek preliminary injunctive relief, including a temporary restraining order, upon appropriate showing to the Court;
(e) The right to seek an award of attorneys' fees, costs, and expenses under 35 U.S.C. § 285;
(f) The right to seek pre-judgment interest, post-judgment interest, and supplemental damages for any infringement occurring after the close of the damages period presented at trial;
(g) The right to supplement, amend, or modify OWS's infringement contentions in accordance with the Court's scheduling order and local patent rules;
(h) The right to assert infringement of additional patents in OWS's portfolio — which currently includes 142 issued U.S. patents and 58 pending patent applications — against Lumicore's existing products or any future products;
(i) The right to assert claims against any new products, derivative products, next-generation products, or successor products launched by Lumicore that practice any of the asserted patents or any other patents in OWS's portfolio; and
(j) All other rights and remedies available at law or in equity, whether or not specifically identified herein.
Nothing in this letter constitutes a waiver of any right, claim, remedy, or defense of OWS, and this letter shall not be construed as limiting OWS's claims or remedies in any respect. This letter, and any response thereto (or lack thereof), may be offered and used as evidence in the pending litigation, including in connection with OWS's claims for willful infringement, enhanced damages, attorneys' fees, and injunctive relief.
XI. DEADLINE FOR RESPONSE
OWS demands a written response from Lumicore's counsel within thirty (30) calendar days of the date of this letter.