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IRREPARABLE HARM EVIDENCE COMPILATION

PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT — NOT FOR PRODUCTION

Document Type: Internal Attorney Work Product — Privileged and Confidential

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I. EXECUTIVE SUMMARY

This Irreparable Harm Evidence Compilation consolidates all factual evidence, documentary sources, deposition testimony, and financial data supporting a finding of irreparable harm caused by Lumicore Technologies, Inc.'s ("Lumicore") infringement of U.S. Patent Nos. 10,234,847 (the "'847 Patent"), 10,891,193 (the "'193 Patent"), 9,678,562 (the "'562 Patent"), and 11,402,015 (the "'015 Patent") (collectively, the "Asserted Patents"). The compilation is intended to serve as the central reference document for the trial team as it prepares OWS's case for a permanent injunction following trial, currently scheduled for February 2, 2026 before Judge James R. Gilstrap in the Eastern District of Texas.

As the Supreme Court held in Northgate Group v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006), a plaintiff seeking a permanent injunction in a patent case must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. This compilation addresses primarily the first factor — irreparable harm — and partially the second factor — the inadequacy of legal remedies. The remaining factors are addressed more fully in the Permanent Injunction Analysis Memorandum dated April 8, 2024 and the Market Analysis: Accused Products and OWS Competitive Impact dated October 2024.

Key Thesis. OWS and Lumicore are direct competitors in the silicon-photonics transceiver module market for hyperscale data centers. Lumicore's continued infringement of the Asserted Patents causes ongoing, compounding harm to OWS that cannot be fully remedied by monetary damages alone. This harm manifests across multiple dimensions, including: (i) price erosion in the 400G-ZR transceiver market segment and increasingly in the 800G and 1600G segments; (ii) diversion of customers and procurement volume from OWS to Lumicore; (iii) loss of design-in opportunities that carry long lock-in cycles of three to five years; and (iv) reputational damage to OWS's market position as the third-largest U.S. supplier of silicon-photonics transceiver modules and to OWS's established patent licensing program. Each of these categories of harm is ongoing, forward-looking, and not fully compensable through a backward-looking monetary damages award.

Key Quantitative Findings. The evidence compiled to date supports the following quantitative conclusions:

• The average selling price ("ASP") of 400G-ZR transceiver modules declined by approximately 18.7% from Q3 2022 (coinciding with Lumicore's launch of the LumiLink 400G-ZR+) through Q4 2023. This decline is temporally correlated with Lumicore's market entry using infringing technology and reflects ongoing, sticky price erosion that permanently resets the competitive pricing landscape.

• At least seven (7) major hyperscale customers purchase transceiver modules from both OWS and Lumicore, creating direct substitution dynamics. In several of these accounts, procurement volumes have shifted materially from OWS products to Lumicore's accused products since Q3 2022.

• OWS's market-share displacement analysis estimates that 38.2% of Lumicore's accused-product sales displaced OWS sales — that is, but for Lumicore's infringing products, OWS would have captured those sales.

• Lumicore's accused-product revenue totaled $264.9 million in FY 2023, representing approximately 42% of Lumicore's total product revenue. Projected accused-product revenue over the full infringement period (Q3 2022 through projected trial in Q4 2025) is approximately $714.6 million. These figures underscore both the scale of competitive displacement suffered by OWS and the balance-of-hardships factor, as Lumicore has built a substantial portion of its business on infringing technology.

• Each lost design-in opportunity is estimated to represent $15–$50 million in foregone revenue over the design-in lifecycle, depending on the customer's deployment scale. The loss of even a small number of design-in wins thus represents a significant, multi-year revenue impact that is inherently speculative and difficult to quantify — underscoring the inadequacy of monetary damages.

This compilation will be updated as additional evidence becomes available through the close of fact discovery (May 1, 2025) and expert discovery (expert reports due June 15, 2025), and as FY 2024 financial data is produced by the parties.

II. LEGAL FRAMEWORK

A. The *Cascade Holdings* Four-Factor Test

In Northgate Group v. MercExchange, L.L.C., 547 U.S. 388 (2006), the Supreme Court held that the traditional four-factor test for permanent injunctive relief applies with equal force in patent cases. Under that test, a plaintiff seeking a permanent injunction must demonstrate:

(1) that it has suffered an irreparable injury;

(2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury;

(3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and

(4) that the public interest would not be disserved by a permanent injunction.

See Cascade Holdings, 547 U.S. at 391. The Court rejected any "general rule" that an injunction should automatically issue upon a finding of patent infringement, holding instead that the decision whether to grant or deny injunctive relief is "an act of equitable discretion by the district court." Id. at 391–92.

This compilation focuses principally on factors (1) and (2) — irreparable harm and the inadequacy of legal remedies. These two factors are closely related and are often analyzed together, as the nature of the harm is central to the inquiry into whether monetary damages can adequately compensate for it. Factors (3) and (4) — the balance of hardships and the public interest — are addressed more fully in the Permanent Injunction Analysis Memorandum (dated April 8, 2024) and the Market Analysis: Accused Products and OWS Competitive Impact (dated October 2024). To the extent the evidence compiled here bears on the balance-of-hardships factor — particularly the finding that approximately 42% of Lumicore's total product revenue is attributable to accused products — such evidence is noted and cross-referenced.

B. Irreparable Harm in Patent Cases Post-*Cascade Holdings*

Since Cascade Holdings, the Federal Circuit and district courts (including judges in the Eastern District of Texas) have developed a robust body of case law identifying the circumstances under which irreparable harm is established in patent cases. The following principles are particularly relevant to this matter.

Direct Competition as a Strong Indicator of Irreparable Harm. The Federal Circuit has consistently recognized that when a patentee and an infringer are direct competitors, the case for irreparable harm is substantially strengthened. In Robert Bosch LLC v. Pylon Manufacturing Corp., 659 F.3d 1142, 1150–51 (Fed. Cir. 2011), the court held that direct competition between the parties "strongly support[s] a finding of irreparable harm" because infringement by a direct competitor necessarily erodes the patentee's market share, pricing power, and customer relationships. Accord i4i Ltd. P'ship v. Kestrel Partners LLC, 598 F.3d 831, 861–62 (Fed. Cir. 2010) (affirming permanent injunction where parties were "direct competitors" and finding of irreparable harm was supported by "loss of market share, brand-name recognition, and customer goodwill"). More recently, in Genband US LLC v. Metaswitch Networks Corp., No. 2:14-CV-33-JRG (E.D. Tex. 2016), Judge Gilstrap found irreparable harm where the parties were direct competitors in the telecommunications equipment market and the defendant's infringement resulted in customer diversion and price erosion.

Price Erosion as an Injury Not Fully Compensable by Damages. Courts have recognized that price erosion caused by infringing competition represents a particularly insidious form of harm that is not fully remedied by monetary damages. Price erosion is "sticky" in the sense that once prices decline in a competitive market, they rarely return to pre-infringement levels; customers renegotiate contracts based on new, lower price benchmarks, and the pre-infringement pricing equilibrium is permanently disrupted. See, e.g., Presidio Components, Inc. v. American Technical Ceramics Corp., 702 F.3d 1351, 1363 (Fed. Cir. 2012) (finding price erosion supported irreparable harm where "damages cannot adequately compensate [the patentee] because price erosion is not easily measured"). Moreover, the ongoing nature of price erosion means that a one-time damages award at trial fails to capture the full extent of future pricing harm. See Camberwell & Co. v. Northgate & Co. Elecs. Co., 809 F.3d 633, 647 (Fed. Cir. 2015) (recognizing that ongoing price erosion may constitute irreparable harm).

Loss of Market Share and Customer Goodwill. The loss of market share to an infringing competitor is a recognized form of irreparable harm, particularly in technology markets where market position, once lost, is difficult to recapture. See i4i, 598 F.3d at 861–62. Customer goodwill — the intangible value of established relationships and trust — is similarly not easily quantified in monetary terms. When customers switch from the patentee's products to infringing alternatives, the resulting loss of goodwill may persist long after the infringement ceases, as customers develop familiarity and institutional inertia with the infringer's products. Courts in the Eastern District of Texas have credited this form of harm in granting injunctive relief. See, e.g., Genband (finding loss of customer relationships and goodwill supported irreparable harm).

Lost Design-In Opportunities and Long-Term Lock-In Effects. In technology industries where customers make long-term procurement commitments — commonly referred to as "design-in" wins — the loss of such opportunities represents a unique form of irreparable harm. Once a customer selects a competitor's product for integration into its platform, the resulting lock-in effect creates a multi-year barrier to recapturing that customer. The Federal Circuit has recognized that the "long-term" and "hard to quantify" nature of such losses supports a finding of irreparable harm. See ActiveVideo Networks, Inc. v. Harborview Holdingsmms., Inc., 694 F.3d 1312, 1337 (Fed. Cir. 2012) (discussing the difficulty of quantifying losses from design-in opportunities in the technology sector).

Difficulty of Quantifying Future Harm from Ongoing Infringement. Where infringement is ongoing and the resulting harm is forward-looking, courts recognize that monetary damages may be inadequate because future losses are inherently speculative and difficult to model with precision. See Celsis In Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922, 930 (Fed. Cir. 2012) ("Where two companies are in competition against one another, the patentee suffers the harm — Loss of market share, loss of revenue, loss of capital for research and development, and loss of customer goodwill — that is often difficult to quantify."). This difficulty of quantification is itself evidence that monetary damages are inadequate, supporting both the irreparable harm and inadequacy-of-legal-remedies factors.

No Presumption of Irreparable Harm Post-*Cascade Holdings*. It bears noting that since Cascade Holdings, there is no presumption of irreparable harm upon a finding of patent infringement. The burden is on the patentee — here, OWS — to demonstrate irreparable harm through evidence specific to its situation. See Cascade Holdings, 547 U.S. at 391; Robert Bosch, 659 F.3d at 1149. This compilation is designed to marshal the specific, fact-based evidence necessary to satisfy that burden.

C. Applicability to Permanent vs. Preliminary Injunction

The primary purpose of this compilation is to support OWS's request for a permanent injunction to be sought at or after trial, currently scheduled for February 2, 2026. A permanent injunction is appropriate following a finding of infringement at trial, and the Cascade Holdings four-factor test governs the court's analysis.

However, the evidence compiled herein would also support a motion for a preliminary injunction under Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 20 (2008), which requires the movant to demonstrate: (1) a likelihood of success on the merits; (2) a likelihood of irreparable harm in the absence of preliminary relief; (3) a balance of the equities tipping in the movant's favor; and (4) that an injunction is in the public interest. See also Hollowell & Co. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001). A preliminary injunction motion is currently on hold per client instruction, but this compilation would support such a motion if circumstances change — for example, if Lumicore announces a new accused product or secures a major customer win during the pendency of the litigation that would cause additional, immediate harm to OWS. The trial team should remain alert to any such triggering events and be prepared to move expeditiously if client approval is obtained.

III. EVIDENCE OF DIRECT COMPETITION

A. Market Overlap Between OWS and Lumicore

The most foundational element of OWS's irreparable harm showing is the undisputed fact that OWS and Lumicore are direct competitors in the same product market: silicon-photonics transceiver modules for hyperscale data centers.

Optiwave Semiconductor Corp. ("OWS"). OWS is the third-largest U.S. supplier of silicon-photonics transceiver modules, a position it has held since 2019. OWS is headquartered at 4810 Bayside Technology Parkway, Suite 300, Santa Clara, California 95054. According to audited financials prepared by Gresham & Whitfield LLP, OWS reported the following for fiscal year 2023:

• FY 2023 Revenue: $487.3 million

• FY 2023 Net Income: $61.4 million

• Employees: Approximately 1,250

OWS's key competing product lines include the OWS-400ZR (400G coherent transceivers for data-center interconnect ("DCI") applications), the OWS-800XR (800G short-reach data-center transceivers), and the OWS-1600DR (next-generation 1600G long-reach modules). OWS's silicon-photonics transceiver business represents its core revenue stream and the primary focus of its research and development activities.

OWS holds a substantial intellectual property portfolio consisting of 142 issued U.S. patents and 58 pending applications, with claims directed to key innovations in waveguide multiplexing, coherent transceiver integration, thermal management, and polarization-diverse grating coupler technology. The four Asserted Patents in this litigation are among the most commercially significant patents in this portfolio.

OWS is majority-owned by its private equity sponsor, Ridgeline Capital Partners, LP, which acquired a 55% stake in OWS in 2019 for approximately $780 million. The Ridgeline-appointed Board Chair is Franklin Osei. The PE ownership structure is relevant to the irreparable harm analysis for two reasons: first, it underscores that OWS's value proposition to its investors is tied to its market position and competitive differentiation, both of which are threatened by Lumicore's infringement; and second, it demonstrates that OWS operates as a commercially active entity that practices its patented technology — distinguishing this case from scenarios involving non-practicing entities.

Lumicore Technologies, Inc. ("Lumicore"). Lumicore is a fast-growing entrant in the same silicon-photonics transceiver module market. Lumicore is headquartered at 9200 Spectrum Boulevard, Building C, Austin, Texas 78759. Lumicore completed an initial public offering ("IPO") on Nasdaq in March 2022 at $24.00 per share; as of the complaint filing date (April 22, 2024), Lumicore's stock was trading at approximately $37.00 per share, representing a market capitalization of approximately $3.4 billion based on 91.8 million shares outstanding. Key financial and operational metrics for Lumicore include:

• FY 2023 Revenue (estimated): $312.6 million (per Lumicore's Form 10-K filing with the SEC)

• Employees: Approximately 870

• Accused Product Lines:

• LumiLink 400G-ZR+: 400G coherent transceiver module for DCI applications (launched Q3 2022)

• LumiLink 800G-DR8: 800G short-reach data-center transceiver module (launched Q1 2023)

• LumiEdge 1600G-LR: Next-generation 1600G long-reach module (launched Q4 2023)

• Accused Product Revenue (FY 2023): $264.9 million total, broken down as follows:

Critically, the accused products account for approximately 42% of Lumicore's total product revenue. This figure is significant for multiple reasons: it demonstrates that Lumicore has built a substantial portion of its business on the back of infringing technology, and it informs the balance-of-hardships analysis (addressed in the Permanent Injunction Analysis Memorandum) by quantifying the economic impact of an injunction on Lumicore.

Common Customer Base. Both OWS and Lumicore target the same customer base: hyperscale data-center operators and large telecom infrastructure providers. These customers include the largest cloud computing providers, social media platforms, and enterprise networking companies in the United States and globally. The hyperscale data-center market is highly concentrated, with the top 20 operators accounting for the vast majority of transceiver module procurement volume. According to the market-share displacement analysis prepared by the OWS litigation support team in June 2024, and informed by input from Gregory Falk (plaintiff's industry expert and former Vice President of Engineering at Solara Optics, Inc.), OWS and Lumicore compete head-to-head at 12 of the top 20 hyperscale data-center operators. At least seven (7) major hyperscale customers purchase transceiver modules from both OWS and Lumicore, creating direct substitution dynamics in which customers can — and do — shift procurement volume between the two suppliers based on price, availability, and technical qualification status.

B. Product-Level Competitive Overlap

The competitive overlap between OWS and Lumicore exists not merely at the company level but at the specific product level. Each of Lumicore's three accused product lines competes directly with a corresponding OWS product family:

Each product pair addresses the same technical specifications, form factors (QSFP-DD and OSFP), optical performance parameters, and customer qualification requirements. The products operate at the same data rates over the same link distances and are designed to plug into the same switch and router platforms. This makes Lumicore's accused products direct functional substitutes for OWS's corresponding products. In competitive procurement processes, customers routinely evaluate both OWS and Lumicore products side by side and make purchasing decisions based on price, delivery timeline, and qualification status. Evidence from Lumicore's own RFP responses (produced in discovery) confirms that Lumicore positions its products as alternatives to OWS's products in customer-facing materials.

The competitive overlap is most mature in the 400G-ZR segment, where both companies' products have been in the market since at least Q3 2022 and have been qualified by multiple common customers. The 800G segment is the fastest-growing segment and represents the largest revenue opportunity for both companies. The 1600G segment is still in the early stages of commercialization, but evidence indicates that Lumicore's LumiEdge 1600G-LR is already competing against the OWS-1600DR in early-stage customer evaluations and qualification processes. The emerging nature of competition in the 1600G segment heightens the urgency of injunctive relief, as design-in wins in this next-generation segment will lock in multi-year customer relationships and revenue streams.

C. Evidentiary Sources for Direct Competition

The evidence of direct competition between OWS and Lumicore is drawn from multiple, mutually reinforcing sources:

OWS Internal Sales Reports and Competitive Analysis Documents. OWS has produced in discovery its internal sales reports, competitive intelligence analyses, and account-level data identifying Lumicore as a direct competitor in specific customer accounts. These documents, spanning from 2021 to the present, track OWS's competitive position vis-à-vis Lumicore at each major customer account and document the progressive encroachment of Lumicore's accused products into OWS's customer base.

Gregory Falk's Draft Industry Expert Report. Mr. Falk, an independent industry consultant and former Vice President of Engineering at Solara Optics, Inc., has been retained as OWS's industry expert. His draft expert report (due June 15, 2025) will provide industry background on the silicon-photonics transceiver market, confirm the competitive landscape, and opine on the significance of design-in dynamics and customer switching costs. Mr. Falk's preliminary analysis, which has been shared with the litigation team, confirms that OWS and Lumicore are direct competitors targeting the same customers with functionally equivalent products.

Lumicore Marketing Materials. Lumicore's marketing materials obtained in discovery (produced in connection with Lumicore's August 26, 2024 production in response to OWS's Requests for Production) include product data sheets, customer-facing presentations, and RFP responses that position Lumicore's accused products as direct alternatives to OWS's products. In several instances, Lumicore's materials explicitly reference OWS products by name in competitive comparison charts.

Deposition Testimony of Dr. Sandra Michaud (Lumicore CTO). Dr. Michaud was deposed on November 19, 2024. During her deposition, Dr. Michaud acknowledged that Lumicore and OWS compete in the same product markets, that Lumicore's LumiLink 400G-ZR+ targets the same customer base as OWS's OWS-400ZR, and that Lumicore's product development roadmap was informed in part by an analysis of OWS's product capabilities and market positioning. Dr. Michaud's testimony provides powerful admissions of competitive overlap from Lumicore's own chief technology officer.

Lumicore's Form 10-K Filing. Lumicore's publicly available 10-K filing with the SEC identifies Optiwave Semiconductor Corp. by name as one of its "primary competitors" in the silicon-photonics transceiver module market. This public admission from Lumicore's own SEC disclosure is particularly valuable evidence because it cannot be dismissed as self-serving and directly supports OWS's claim of direct competition.

IV. EVIDENCE OF PRICE EROSION

A. Overview of ASP Decline

One of the most significant and measurable forms of irreparable harm suffered by OWS is the erosion of average selling prices ("ASPs") in the transceiver module market following Lumicore's entry with its infringing products. The evidence compiled to date demonstrates that the ASP of 400G-ZR transceiver modules — the product segment where competition between OWS and Lumicore is most mature — declined by approximately 18.7% from Q3 2022 to Q4 2023.

The temporal significance of this period cannot be overstated. Q3 2022 corresponds to Lumicore's commercial launch of the LumiLink 400G-ZR+, the first accused product to enter the market. Prior to Q3 2022, 400G-ZR transceiver ASPs had been relatively stable, reflecting the established competitive dynamics among existing market participants. The precipitous decline in ASPs beginning in Q3 2022 and continuing through Q4 2023 is temporally correlated with — and, the evidence strongly suggests, caused by — Lumicore's entry into the market with an infringing product at aggressively low prices.

The 18.7% ASP decline represents tens of millions of dollars in lost revenue for OWS on existing sales volume alone, and does not account for the compounding effect of permanently depressed pricing on future sales. The Price Erosion Analysis (dated January 2025) provides a detailed quantification of this decline, and Dr. Lawrence Keating's forthcoming expert report will incorporate this analysis into his damages model.

B. OWS's ASP Data

OWS's internal pricing records for OWS-400ZR modules document a steady and persistent decline in realized ASPs beginning in Q3 2022 and continuing through the most recent available data:

• Q2 2022 (pre-LumiLink launch): Baseline ASP for OWS-400ZR modules reflected stable pricing consistent with the pre-infringement competitive equilibrium. Specific ASP figures are drawn from discovery-produced financial data designated Highly Confidential — Attorneys' Eyes Only under the Protective Order entered in this case and are detailed in the Price Erosion Analysis (dated January 2025).

• Q3 2022: Initial ASP pressure emerged coinciding with Lumicore's commercial launch of the LumiLink 400G-ZR+ at aggressive introductory pricing. OWS sales representatives reported that customers began citing Lumicore pricing in negotiations and demanding price concessions to remain competitive.

• Q4 2022 through Q4 2023: Progressive and sustained erosion of OWS-400ZR ASPs, totaling a 18.7% decline from the Q3 2022 baseline over the measured period. The decline was not uniform across all customers but was most pronounced at accounts where Lumicore was an approved or pending vendor, confirming the causal link between Lumicore's market entry and OWS's price erosion.

Similar pricing pressure has been observed on OWS-800XR modules following Lumicore's launch of the LumiLink 800G-DR8 in Q1 2023. Pricing data for the 800G segment is still being compiled and reconciled, and the complete analysis will be included in the Damages Refresh Memorandum (target February 2025). Preliminary indications suggest that ASP erosion in the 800G segment may be even more significant than in the 400G segment, given the larger revenue opportunity and more aggressive competitive dynamics.

C. Lumicore's Pricing Strategy

The evidence supports the conclusion that Lumicore pursued a deliberate strategy of aggressive below-market pricing on its LumiLink 400G-ZR+ product to gain market share at OWS's expense. This pricing strategy was enabled by the infringing use of OWS's patented technology, which allowed Lumicore to bring a competitive product to market without incurring the full R&D costs that OWS bore to develop the underlying innovations.

Lumicore's Internal Pricing Memos. discovery production from Lumicore includes internal pricing memoranda and strategy documents that detail Lumicore's approach to pricing the LumiLink 400G-ZR+ upon market entry. These documents indicate that Lumicore's pricing team conducted a detailed analysis of OWS's pricing structure and set LumiLink pricing at levels designed to undercut OWS's ASPs while maintaining healthy gross margins. The documents explicitly reference OWS by name and discuss strategies for displacing OWS at specific customer accounts.

Lumicore's Gross Margins. Lumicore's discovery-produced financial data reveals that the accused products carry robust gross margins, ranging from 52.1% for the LumiLink 400G-ZR+ to 58.3% for the LumiEdge 1600G-LR. These margins demonstrate that Lumicore has substantial room to engage in aggressive pricing without sacrificing profitability — precisely the dynamic that has driven ASP erosion in the market. Lumicore's ability to maintain high margins while undercutting OWS on price is a direct consequence of its use of OWS's patented technology without paying the licensing costs that legitimate competitors (such as Terralink Semiconductor, NovaWave Corp., and Helix Integrated Photonics) bear.

Customer Communications. discovery has yielded customer communications produced by Lumicore in which Lumicore sales representatives explicitly reference OWS's pricing as a benchmark and offer discounts to win competitive bids. In multiple instances, Lumicore sales representatives provided customers with side-by-side pricing comparisons showing Lumicore's products at a lower price point than OWS's comparable products, and offered additional volume discounts contingent on the customer shifting procurement volume away from OWS.

D. Ongoing and Compounding Nature of Price Erosion

The price erosion documented above is not a one-time event but an ongoing and compounding form of harm that is uniquely ill-suited to remediation through a backward-looking monetary damages award. This is so for several interrelated reasons.

First, price erosion in the transceiver module market is "sticky." Once ASPs decline in response to competitive pressure, they rarely recover to pre-erosion levels. This is because customers renegotiate supply contracts based on the new, lower price benchmarks established during the period of infringing competition. Even if Lumicore were to exit the market tomorrow, OWS would be unable to restore its ASPs to pre-Q3 2022 levels because customers would resist price increases, citing the lower prices they had obtained during the period of infringement. The Federal Circuit has recognized this dynamic as a hallmark of irreparable harm. See Presidio Components, 702 F.3d at 1363.

Second, the harm is cumulative and compounds over time. Each quarter of continued infringement results in further ASP erosion, as Lumicore deepens its market presence and customers become accustomed to lower price points. The cumulative effect of sixteen or more quarters of infringing competition (from Q3 2022 through anticipated trial in Q1 2026) represents a permanent alteration of the competitive pricing landscape that cannot be undone by a single damages check at the conclusion of trial.

Third, the ongoing and future nature of the harm makes it resistant to precise quantification. While Dr. Lawrence Keating's damages analysis (Meridian Economic Consulting Group, LLC) will address price erosion as a component of OWS's lost-profits damages, his model necessarily relies on assumptions about future market conditions, pricing trajectories, and competitive dynamics that are inherently uncertain. A damages award based on historical price erosion does not — and cannot — fully capture the continuing, forward-looking harm that OWS will suffer if Lumicore is permitted to continue selling infringing products after trial. This is precisely the type of ongoing harm that an injunction is designed to prevent. The detailed quantification of historical price erosion is set forth in the Price Erosion Analysis (dated January 2025).

E. Evidentiary Sources for Price Erosion

The price erosion evidence is supported by the following sources:

• OWS internal financial records, including pricing databases, contract pricing schedules, and quarterly revenue reports (produced in discovery)

• Lumicore financial data produced in discovery, including product-level revenue, cost-of-goods-sold, and gross margin data, designated Highly Confidential — Attorneys' Eyes Only

• Lumicore product-level gross margins: 52.1% (LumiLink 400G-ZR+), estimated 55.7% (LumiLink 800G-DR8), and 58.3% (LumiEdge 1600G-LR)

• Customer procurement documents and RFQ/RFP responses produced by both parties in discovery

• Lumicore internal pricing memos and competitive pricing strategy documents

• Expert analysis by Dr. Lawrence Keating of Meridian Economic Consulting Group, LLC, whose expert report (due June 15, 2025) will incorporate the price erosion analysis into his damages model

• Price Erosion Analysis (dated January 2025), prepared by the Calderwood & Harkness litigation team in coordination with Dr. Keating's consulting engagement

V. EVIDENCE OF CUSTOMER DIVERSION

A. Head-to-Head Customer Losses

Beyond price erosion, OWS has suffered direct, quantifiable customer diversion as a result of Lumicore's infringement. The evidence compiled to date identifies specific instances in which OWS lost customers or customer orders to Lumicore's accused products. This customer diversion is distinct from — and additive to — the price erosion harm discussed in Section IV, because it reflects not merely lower prices on retained sales but the outright loss of procurement volume to an infringing competitor.

The core of the customer diversion evidence is the identification of at least seven (7) major hyperscale customers that purchase transceiver modules from both OWS and Lumicore. In several of these accounts, customers have shifted a meaningful portion of their procurement volume from OWS products to Lumicore's accused products following the LumiLink 400G-ZR+ launch in Q3 2022. The pattern is consistent: a customer that previously sourced exclusively or predominantly from OWS for a particular product segment (e.g., 400G-ZR coherent transceivers) begins dual-sourcing from Lumicore after qualifying the LumiLink product, and over time shifts an increasing share of its procurement volume to Lumicore based on price and availability.

Specific customer examples and account-level data supporting these conclusions are being drawn from OWS's internal sales records, customer relationship management ("CRM") data, and customer correspondence. The litigation team has prepared a Customer Impact Declaration Template for use in obtaining sworn declarations from OWS's Vice President of Sales, Karen Whitfield, and three regional sales directors, who will attest to specific lost accounts and shifted procurement volumes at identified customers. These declarations are anticipated to provide the most granular and persuasive evidence of customer diversion. Certain of the affected customers are located within the Eastern District of Texas, including Pinnacle Data Systems, LLC (Longview, TX), Frontier Cloud Services, Inc. (Marshall, TX), and CrossPoint Networking Corp. (Plano, TX), which is relevant both to venue considerations and to the court's familiarity with the local competitive landscape.

B. Market-Share Displacement

OWS's market-share displacement analysis, prepared by the litigation support team in June 2024 and informed by Gregory Falk's industry expertise, estimates that 38.2% of Lumicore's accused-product sales displaced OWS sales — meaning that but for Lumicore's infringing products, OWS would have captured those sales. This figure was derived from a multi-step analysis incorporating the following data:

• Customer overlap data: Identification of the hyperscale customers where both OWS and Lumicore are approved or active vendors.

• Approved vendor lists: Review of customer-produced approved vendor lists showing the competitive set at each account.

• Competitive-bid win/loss records: Detailed analysis of competitive procurement processes at 12 of the top 20 hyperscale data-center operators where OWS and Lumicore competed head-to-head.

• Market share data: Industry market-share estimates from third-party analysts, cross-referenced with OWS and Lumicore internal data.

The 38.2% displacement figure represents the portion of Lumicore's accused-product revenue that is attributable to sales that OWS would have made but for Lumicore's infringement. Applied to Lumicore's FY 2023 accused-product revenue of $264.9 million, this yields approximately $101.2 million in displaced OWS sales in FY 2023 alone. This figure is central to Dr. Keating's lost-profits calculation and also supports the irreparable harm showing by quantifying the scale of competitive displacement.

The remaining 61.8% of Lumicore's accused-product sales are attributed to customer accounts where OWS was not an approved vendor, did not compete in the relevant procurement process, or would not have captured the sale even absent Lumicore's participation. This portion of Lumicore's sales supports the reasonable-royalty component of Dr. Keating's damages model rather than the lost-profits component.

The market-share displacement analysis is detailed in the Market Share Displacement Analysis memorandum (dated June 2024).

C. Difficulty of Recapturing Diverted Customers

The customer diversion documented above is not merely a temporary loss of sales volume; it represents a structural change in the competitive landscape that is extremely difficult to reverse. This difficulty of recapture is a critical element of the irreparable harm showing, because it demonstrates that even if OWS prevails at trial and receives a monetary damages award, the customer relationships lost during the infringement period cannot be fully restored by money alone.

Significant Switching Costs. Once a hyperscale customer qualifies a new supplier such as Lumicore and integrates its transceiver modules into production data-center deployments, the cost of switching back to OWS (or any other supplier) is substantial. Qualification cycles in the silicon-photonics transceiver industry typically require six to twelve months of testing, validation, and certification. During this period, the customer invests significant engineering resources in verifying interoperability, thermal performance, signal integrity, and reliability under production conditions. Once a customer has completed this qualification process for Lumicore's product, it has a strong incentive to continue purchasing from Lumicore to amortize its qualification investment, even if OWS offers a comparable or superior product.

Institutional Inertia and Relationship Lock-In. Beyond formal qualification costs, customer relationships involve significant institutional knowledge and inertia. Procurement teams develop familiarity with a supplier's ordering processes, delivery timelines, technical support capabilities, and escalation procedures. Sales engineers build personal relationships with customer decision-makers. Once these relationships are established with Lumicore, they create an inertial barrier that works against OWS's efforts to recapture the account. This form of harm — the loss of customer goodwill and institutional familiarity — is inherently non-monetary and cannot be adequately compensated by a damages award.

Injunction as the Appropriate Remedy. The difficulty of recapturing diverted customers underscores the need for injunctive relief. An injunction that requires Lumicore to cease selling its infringing products would create the "forcing event" necessary to disrupt the infringing supplier relationship and give OWS an opportunity to recapture lost customers. Without an injunction, Lumicore's customer relationships will continue to deepen and entrench, making the competitive harm increasingly permanent and irreversible with each passing quarter.

D. Evidentiary Sources for Customer Diversion

• OWS internal CRM data and sales pipeline reports documenting customer account status, procurement volume, and win/loss history

• Win/loss reports for competitive bids at major hyperscale customer accounts

• Deposition testimony of Dr. Sandra Michaud (Lumicore CTO), November 19, 2024, in which Dr. Michaud acknowledged that Lumicore actively targeted OWS's existing customer base and was aware that certain of its key customers were also OWS customers

• Anticipated declarations from Karen Whitfield (OWS VP of Sales) and three regional sales directors, to be prepared using the Customer Impact Declaration Template, attesting to specific lost accounts and shifted procurement volumes

• Gregory Falk (industry expert) assessment of competitive dynamics, customer switching behavior, and the significance of qualification cycles in the silicon-photonics transceiver market

• Market Share Displacement Analysis (dated June 2024)

VI. EVIDENCE OF LOSS OF DESIGN-IN OPPORTUNITIES

A. Significance of Design-In Wins in the Transceiver Market

In the silicon-photonics transceiver industry, the single most consequential competitive event is the "design-in" win — the point at which a hyperscale customer selects a supplier's transceiver module for integration into a new data-center architecture, platform, or deployment generation. Design-in wins are the lifeblood of transceiver module companies because they represent long-term revenue commitments typically spanning three to five years or more. The significance of design-in wins to the irreparable harm analysis cannot be overstated.

When a hyperscale customer awards a design-in to a transceiver supplier, the customer builds its entire system — switch architecture, optical interconnect topology, network management software, and supply chain logistics — around the selected module's specifications. The supplier's product becomes embedded in the customer's infrastructure at a fundamental level. Switching to an alternative supplier mid-deployment is prohibitively expensive and operationally disruptive because it would require re-qualification, re-certification, and potentially re-engineering of the customer's system. As a result, a design-in win creates a powerful lock-in effect that effectively forecloses competition for the duration of the deployment cycle.

The economic consequence of a design-in loss is therefore not merely the loss of a single sale or a single quarter's revenue. It is the loss of a multi-year revenue stream — potentially encompassing thousands or tens of thousands of transceiver module units shipped over the three-to-five-year deployment lifecycle — that is extraordinarily difficult to recapture once a competing supplier has been designed in. This dynamic makes lost design-in opportunities a uniquely potent form of irreparable harm in patent cases involving transceiver module technology.

Gregory Falk, OWS's industry expert, is prepared to testify in detail regarding design-in dynamics, lock-in effects, and the competitive significance of design-in wins in the silicon-photonics transceiver market. His expert report (due June 15, 2025) will address these issues comprehensively.

B. Specific Lost Design-In Opportunities

The evidence compiled to date identifies specific design-in opportunities that OWS lost to Lumicore's accused products. These losses are particularly significant because they represent not merely historical harm but ongoing, locked-in competitive disadvantage that will persist for years absent injunctive relief.

Late-Stage Qualification Losses. In several instances, OWS was in late-stage qualification with hyperscale customers for next-generation data-center deployments when the customer awarded the design-in to Lumicore's LumiLink 800G-DR8 or LumiEdge 1600G-LR instead. In these cases, OWS had invested substantial engineering resources and sales effort in the qualification process, only to lose the design-in at the final stage to an infringing competitor offering aggressive pricing enabled by the unlicensed use of OWS's patented technology. The loss of these design-in opportunities is especially damaging because OWS was the incumbent or favored supplier prior to Lumicore's market entry, and the customer's decision to award the design-in to Lumicore was driven in significant part by Lumicore's pricing advantage.

Post-Notice Losses. Of particular relevance to both the irreparable harm and willfulness analyses, several of the lost design-in opportunities occurred after Lumicore received actual notice of OWS's patents. FairPoint Licensing Group, LLC — OWS's licensing agent — sent Lumicore detailed licensing letters on January 15, 2023 and May 15, 2023, identifying the Asserted Patents and requesting licensing discussions. Despite receiving these letters, Lumicore continued to compete for design-in wins using its infringing products. The fact that Lumicore continued to pursue and win design-in opportunities at OWS's expense even after receiving notice of OWS's patent rights demonstrates both the willfulness of Lumicore's infringement and the ongoing, unabated nature of the competitive harm.

Specific Customer Accounts. The specific customers at which OWS lost design-in opportunities are being identified from OWS's business development and design-in pipeline records. Based on preliminary review, the affected accounts likely include certain Eastern District of Texas customers — including Pinnacle Data Systems, LLC in Longview, TX, Frontier Cloud Services, Inc. in marshall, TX, and CrossPoint Networking Corp. in Plano, TX — as well as other major hyperscale operators. The final identification of affected customers and the preparation of supporting declarations is an ongoing action item (see Section XI).

C. Long-Term Revenue Impact

Each lost design-in opportunity is estimated to represent approximately $15 million to $50 million in foregone revenue over the design-in lifecycle (three to five years), depending on the customer's deployment scale, procurement volume, and product mix. The range reflects the variation in deployment size across different hyperscale customers — a tier-one hyperscale operator may deploy hundreds of thousands of transceiver modules per year, while a smaller operator may deploy tens of thousands.

Even at the conservative end of this range, the loss of just a handful of design-in opportunities represents over $100 million in foregone revenue for OWS. At the upper end, the cumulative impact could approach $250 million or more over the relevant timeframes. These estimates are based on OWS's historical design-in revenue data and will be refined in Dr. Keating's expert report.

Critically, the speculative and uncertain nature of these future losses is itself evidence that monetary damages are inadequate. Lost design-in revenue is inherently forward-looking and depends on variables — including the customer's actual deployment schedule, market conditions over the next three to five years, and competitive dynamics — that cannot be predicted with the precision required for a damages award. This uncertainty is not a reason to deny relief; to the contrary, it is precisely the reason why injunctive relief is necessary. A damages award that attempts to quantify speculative future losses risks either over-compensating or under-compensating OWS. An injunction that prevents further infringement avoids this problem entirely by addressing the harm at its source.

D. Evidentiary Sources for Lost Design-Ins

• OWS business development records and design-in pipeline tracking documents, including status reports for each major customer account

• Customer communications, including RFQ/RFP documentation, qualification progress reports, and award notification correspondence

• Anticipated declarations from Karen Whitfield (OWS VP of Sales) and regional sales directors, attesting to specific lost design-in opportunities and the revenue implications thereof

• Gregory Falk expert opinion on design-in dynamics, lock-in effects, and customer switching costs in the silicon-photonics transceiver market (expert report due June 15, 2025)

• FairPoint Licensing Group correspondence (January 15, 2023 and May 15, 2023 letters) documenting pre-suit notice and Lumicore's post-notice competitive activity

VII. EVIDENCE OF REPUTATIONAL AND COMPETITIVE-POSITION HARM

A. Erosion of Market Leadership Position

OWS's position as the third-largest U.S. supplier of silicon-photonics transceiver modules is a hard-won competitive asset built over years of investment in technology development, customer relationships, and manufacturing capability. Lumicore's rapid growth using infringing technology directly threatens to displace OWS from this market position, with consequences that extend far beyond lost revenue on individual transactions.

The pace and scale of Lumicore's market penetration are remarkable. Lumicore went from $0 in accused-product revenue (prior to the LumiLink 400G-ZR+ launch in Q3 2022) to $264.9 million in FY 2023 — all within approximately eighteen months. This extraordinary trajectory was achieved in significant part through the use of OWS's patented technology, which enabled Lumicore to bring competitive products to market faster and at lower cost than it could have achieved through independent innovation. Projected accused-product revenue over the full infringement period (Q3 2022 through projected trial in Q4 2025) is approximately $714.6 million, a figure that underscores the magnitude and velocity of competitive displacement.

As Lumicore's market share grows, OWS's relative competitive position weakens. In the hyperscale data-center market, supplier reputation and market position are self-reinforcing: larger suppliers are perceived as more reliable, attract more customer interest, and benefit from economies of scale that further strengthen their competitive position. Conversely, a supplier that is losing market share faces a negative feedback loop in which declining volume leads to reduced economies of scale, diminished customer perception, and further volume loss. Lumicore's infringement-fueled growth is propelling it along the positive trajectory while pushing OWS along the negative one. This dynamic cannot be reversed by a one-time monetary payment at the conclusion of trial.

B. Technology Perception and Innovation Incentive Harm

OWS invested substantially in research and development to create the patented technologies at issue in this litigation. The four Asserted Patents cover core innovations in silicon-photonics transceiver design, including waveguide multiplexing techniques (the '847 Patent), coherent transceiver integration architectures (the '193 Patent), advanced thermal management systems (the '562 Patent), and polarization-diverse grating coupler structures (the '015 Patent). These patents represent the fruits of years of engineering effort and millions of dollars in R&D expenditure. OWS's broader patent portfolio — comprising 142 issued U.S. patents and 58 pending applications — reflects a sustained commitment to innovation that differentiates OWS from competitors and justifies the premium pricing that its products command.

Lumicore's ability to use these patented technologies without a license fundamentally undermines OWS's ability to recoup its R&D investment and diminishes the competitive advantage that the patents were designed to protect. When an infringer can freely appropriate a patentee's innovations, the market signal is clear: investment in proprietary technology is unrewarded, and competitors can achieve parity not through their own innovation but through copying. This harm to OWS's innovation incentives is a recognized form of irreparable harm that monetary damages cannot fully remedy. See Celsis In Vitro, 664 F.3d at 930.

The evidence suggests that Lumicore's appropriation of OWS's technology was not merely negligent but deliberate. Melissa Chen, a former Lumicore engineer who is now employed at Veridian Photonics, Inc., has indicated in preliminary discussions with OWS's counsel that Lumicore's engineering team accessed and reviewed OWS's published patent application No. 2018/0123456 (corresponding to the '193 Patent) during the LumiLink 400G-ZR+ design phase in 2021–2022. According to Ms. Chen, the OWS patent application was circulated among the design team and its teachings were discussed in the context of the LumiLink architecture. This evidence suggests deliberate leveraging of OWS's innovation rather than independent development.

Corroborating Ms. Chen's anticipated testimony, Dr. Sandra Michaud (Lumicore CTO) admitted during her deposition on November 19, 2024, that she personally reviewed OWS's published patent application during the LumiLink design phase. While Dr. Michaud characterized her review as routine competitive intelligence, the fact remains that Lumicore's CTO was aware of OWS's claimed technology before and during the design of the accused products. This evidence is relevant to both the willfulness and irreparable harm analyses.

C. Impact on OWS's Licensing Program

OWS has established a formal patent licensing program for the Asserted Patents and related technology, managed through FairPoint Licensing Group, LLC (500 Sansome Street, Suite 1400, San Francisco, CA 94111; Managing Director: Angela Reeves). The licensing program reflects OWS's strategy of monetizing its patent portfolio while maintaining its competitive advantage through a combination of direct product sales and licensing revenue.

OWS's existing licensees include the following companies, each of which negotiated a license in arm's-length transactions:

These licenses establish a market rate for the patented technology and demonstrate that OWS has successfully monetized its patents through licensing, consistent with its status as a practicing entity with an active licensing program.

Lumicore's continued unlicensed use of the patented technology inflicts a distinct form of harm on OWS's licensing program. When a major market participant such as Lumicore — with $264.9 million in accused-product revenue and a $3.4 billion market capitalization — is permitted to infringe without consequence, it sends a powerful signal to the market that OWS's patents can be freely used without incurring licensing costs. This signal has two pernicious effects. First, it may embolden other potential infringers to enter the market without taking a license, reasoning that if Lumicore can infringe without penalty, they can too. Second, it may depress royalty rates in future licensing negotiations by undermining OWS's leverage: prospective licensees may argue that the appropriate royalty rate should be lower because Lumicore — a major competitor — is using the technology for free. Both effects represent ongoing harm to the value of OWS's patent portfolio that cannot be fully compensated by a damages award in this case alone.

Angela Reeves (FairPoint Managing Director) was deposed on December 10, 2024, and confirmed the licensing outreach efforts directed at Lumicore, including detailed licensing letters sent on January 15, 2023 and May 15, 2023, and an in-person meeting on April 20, 2023. Ms. Reeves testified that Lumicore expressed "no interest in negotiating" a license and made no substantive counterproposal. This testimony is relevant both to the willfulness analysis and to the irreparable harm analysis, as it demonstrates that Lumicore made a deliberate decision to compete using OWS's patented technology without compensation, knowing that OWS had an active licensing program and was willing to license on reasonable terms.

VIII. EVIDENCE THAT MONETARY DAMAGES ARE INADEQUATE

A. Difficulty of Quantifying Ongoing Harm

The evidence compiled in Sections IV through VII demonstrates that OWS's harm from Lumicore's infringement is not a discrete, one-time injury that can be precisely calculated and compensated through a monetary award. Rather, the harm is ongoing, cumulative, and partially unquantifiable, characteristics that the Federal Circuit has recognized as hallmarks of irreparable harm supporting injunctive relief.

Price erosion is ongoing and cumulative. As detailed in Section IV, the 18.7% decline in 400G-ZR ASPs from Q3 2022 to Q4 2023 is not a static number but a continuing phenomenon that compounds with each quarter of continued infringement. Future pricing impacts depend on variables such as Lumicore's pricing decisions, customer procurement cycles, competitive entry by additional market participants, and overall market demand — all of which are inherently speculative and resistant to precise modeling. While Dr. Keating's damages analysis will quantify historical price erosion to the extent possible, the future, forward-looking component of this harm is not amenable to a one-time monetary calculation with any degree of certainty.

Lost design-in opportunities represent multi-year foregone revenue streams that are even more difficult to quantify than price erosion. As discussed in Section VI, each lost design-in is estimated to represent $15–$50 million in foregone revenue over a three-to-five-year lifecycle, but the actual revenue impact depends on variables — customer deployment schedules, market conditions, competitive dynamics — that cannot be predicted with confidence. The inherent speculative nature of these losses is itself evidence that monetary damages are inadequate, because any damages award that attempts to capture this harm will necessarily be either too high or too low.

Customer goodwill and relationship losses represent a category of harm that is fundamentally non-monetary in character. The trust, familiarity, and institutional knowledge that characterize a long-term supplier-customer relationship cannot be reduced to a dollar figure. When a customer shifts its procurement from OWS to Lumicore, the resulting loss of goodwill persists even after infringement ceases, because the customer has developed a relationship with Lumicore that creates inertia against returning to OWS. Courts have consistently recognized that the loss of customer goodwill is a form of irreparable harm not fully compensable by monetary damages. See i4i, 598 F.3d at 861–62.

B. Continuing Nature of Infringement

Lumicore's infringement is not a past event but an ongoing course of conduct. As of the date of this compilation, Lumicore continues to manufacture, sell, offer for sale, and import all three accused product lines — the LumiLink 400G-ZR+, the LumiLink 800G-DR8, and the LumiEdge 1600G-LR — in the United States. Lumicore has given no indication that it intends to cease sales of the accused products or to implement a design-around.

Moreover, the scope of Lumicore's infringement has expanded over time with the introduction of new accused products. The LumiLink 400G-ZR+ launched in Q3 2022; the LumiLink 800G-DR8 launched in Q1 2023; and the LumiEdge 1600G-LR launched in Q4 2023. Each successive product launch extends the scope of infringement into a new market segment and inflicts additional competitive harm on OWS.

Without an injunction, the only remedy available to OWS for future infringement would be to re-litigate damages periodically — either through additional lawsuits or through contempt proceedings — imposing ongoing costs on both OWS and the judicial system. The prospect of perpetual re-litigation is not only burdensome but fundamentally inconsistent with the purpose of the patent system, which is to provide patentees with the right to exclude others from practicing their inventions. An injunction provides a clean, prospective remedy that addresses future harm at its source.

C. Competitive Harm Is Forward-Looking

The silicon-photonics transceiver market is a rapidly growing and evolving market in which current competitive positioning has outsized implications for future market share and profitability. Industry analysts project significant growth in demand for 800G and 1600G transceiver modules over the next five to ten years as hyperscale data centers continue to scale bandwidth capacity to support cloud computing, artificial intelligence workloads, and edge computing deployments. OWS's ability to participate in this growth depends critically on its current market position, customer relationships, and design-in wins — all of which are being eroded by Lumicore's infringement.

A damages award at trial would address only past harm — the price erosion, customer diversion, and lost design-in opportunities that occurred during the pre-trial infringement period. It would not address the future harm that OWS will continue to suffer if Lumicore is permitted to sell infringing products after trial. The gap between past damages and future harm is particularly significant in this case because the market is growing rapidly and the competitive consequences of lost design-in wins compound over multi-year deployment cycles.

Finally, Lumicore has estimated in its discovery responses

IRREPARABLE HARM EVIDENCE COMPILATION
PRIVILEGED AND CONFIDENTIAL ATTORNEY WORK PRODUCT — NOT FOR PRODUCTION
Document Type: Internal Attorney Work Product — Privileged and Confidential
Right-click to update Table of Contents
I. EXECUTIVE SUMMARY
This Irreparable Harm Evidence Compilation consolidates all factual evidence, documentary sources, deposition testimony, and financial data supporting a finding of irreparable harm caused by Lumicore Technologies, Inc.'s ("Lumicore") infringement of U.S. Patent Nos. 10,234,847 (the "'847 Patent"), 10,891,193 (the "'193 Patent"), 9,678,562 (the "'562 Patent"), and 11,402,015 (the "'015 Patent") (collectively, the "Asserted Patents"). The compilation is intended to serve as the central reference document for the trial team as it prepares OWS's case for a permanent injunction following trial, currently scheduled for February 2, 2026 before Judge James R. Gilstrap in the Eastern District of Texas.
As the Supreme Court held in Northgate Group v. MercExchange, L.L.C., 547 U.S. 388, 391 (2006), a plaintiff seeking a permanent injunction in a patent case must demonstrate: (1) that it has suffered an irreparable injury; (2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury; (3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and (4) that the public interest would not be disserved by a permanent injunction. This compilation addresses primarily the first factor — irreparable harm — and partially the second factor — the inadequacy of legal remedies. The remaining factors are addressed more fully in the Permanent Injunction Analysis Memorandum dated April 8, 2024 and the Market Analysis: Accused Products and OWS Competitive Impact dated October 2024.
Key Thesis. OWS and Lumicore are direct competitors in the silicon-photonics transceiver module market for hyperscale data centers. Lumicore's continued infringement of the Asserted Patents causes ongoing, compounding harm to OWS that cannot be fully remedied by monetary damages alone. This harm manifests across multiple dimensions, including: (i) price erosion in the 400G-ZR transceiver market segment and increasingly in the 800G and 1600G segments; (ii) diversion of customers and procurement volume from OWS to Lumicore; (iii) loss of design-in opportunities that carry long lock-in cycles of three to five years; and (iv) reputational damage to OWS's market position as the third-largest U.S. supplier of silicon-photonics transceiver modules and to OWS's established patent licensing program. Each of these categories of harm is ongoing, forward-looking, and not fully compensable through a backward-looking monetary damages award.
Key Quantitative Findings. The evidence compiled to date supports the following quantitative conclusions:
• The average selling price ("ASP") of 400G-ZR transceiver modules declined by approximately 18.7% from Q3 2022 (coinciding with Lumicore's launch of the LumiLink 400G-ZR+) through Q4 2023. This decline is temporally correlated with Lumicore's market entry using infringing technology and reflects ongoing, sticky price erosion that permanently resets the competitive pricing landscape.
• At least seven (7) major hyperscale customers purchase transceiver modules from both OWS and Lumicore, creating direct substitution dynamics. In several of these accounts, procurement volumes have shifted materially from OWS products to Lumicore's accused products since Q3 2022.
• OWS's market-share displacement analysis estimates that 38.2% of Lumicore's accused-product sales displaced OWS sales — that is, but for Lumicore's infringing products, OWS would have captured those sales.
• Lumicore's accused-product revenue totaled $264.9 million in FY 2023, representing approximately 42% of Lumicore's total product revenue. Projected accused-product revenue over the full infringement period (Q3 2022 through projected trial in Q4 2025) is approximately $714.6 million. These figures underscore both the scale of competitive displacement suffered by OWS and the balance-of-hardships factor, as Lumicore has built a substantial portion of its business on infringing technology.
• Each lost design-in opportunity is estimated to represent $15–$50 million in foregone revenue over the design-in lifecycle, depending on the customer's deployment scale. The loss of even a small number of design-in wins thus represents a significant, multi-year revenue impact that is inherently speculative and difficult to quantify — underscoring the inadequacy of monetary damages.
This compilation will be updated as additional evidence becomes available through the close of fact discovery (May 1, 2025) and expert discovery (expert reports due June 15, 2025), and as FY 2024 financial data is produced by the parties.
II. LEGAL FRAMEWORK
A. The *Cascade Holdings* Four-Factor Test
In Northgate Group v. MercExchange, L.L.C., 547 U.S. 388 (2006), the Supreme Court held that the traditional four-factor test for permanent injunctive relief applies with equal force in patent cases. Under that test, a plaintiff seeking a permanent injunction must demonstrate:
(1) that it has suffered an irreparable injury;
(2) that remedies available at law, such as monetary damages, are inadequate to compensate for that injury;
(3) that, considering the balance of hardships between the plaintiff and defendant, a remedy in equity is warranted; and
(4) that the public interest would not be disserved by a permanent injunction.
See Cascade Holdings, 547 U.S. at 391. The Court rejected any "general rule" that an injunction should automatically issue upon a finding of patent infringement, holding instead that the decision whether to grant or deny injunctive relief is "an act of equitable discretion by the district court." Id. at 391–92.
This compilation focuses principally on factors (1) and (2) — irreparable harm and the inadequacy of legal remedies. These two factors are closely related and are often analyzed together, as the nature of the harm is central to the inquiry into whether monetary damages can adequately compensate for it. Factors (3) and (4) — the balance of hardships and the public interest — are addressed more fully in the Permanent Injunction Analysis Memorandum (dated April 8, 2024) and the Market Analysis: Accused Products and OWS Competitive Impact (dated October 2024). To the extent the evidence compiled here bears on the balance-of-hardships factor — particularly the finding that approximately 42% of Lumicore's total product revenue is attributable to accused products — such evidence is noted and cross-referenced.
B. Irreparable Harm in Patent Cases Post-*Cascade Holdings*
Since Cascade Holdings, the Federal Circuit and district courts (including judges in the Eastern District of Texas) have developed a robust body of case law identifying the circumstances under which irreparable harm is established in patent cases. The following principles are particularly relevant to this matter.
Direct Competition as a Strong Indicator of Irreparable Harm. The Federal Circuit has consistently recognized that when a patentee and an infringer are direct competitors, the case for irreparable harm is substantially strengthened. In Robert Bosch LLC v. Pylon Manufacturing Corp., 659 F.3d 1142, 1150–51 (Fed. Cir. 2011), the court held that direct competition between the parties "strongly support[s] a finding of irreparable harm" because infringement by a direct competitor necessarily erodes the patentee's market share, pricing power, and customer relationships. Accord i4i Ltd. P'ship v. Kestrel Partners LLC, 598 F.3d 831, 861–62 (Fed. Cir. 2010) (affirming permanent injunction where parties were "direct competitors" and finding of irreparable harm was supported by "loss of market share, brand-name recognition, and customer goodwill"). More recently, in Genband US LLC v. Metaswitch Networks Corp., No. 2:14-CV-33-JRG (E.D. Tex. 2016), Judge Gilstrap found irreparable harm where the parties were direct competitors in the telecommunications equipment market and the defendant's infringement resulted in customer diversion and price erosion.
Price Erosion as an Injury Not Fully Compensable by Damages. Courts have recognized that price erosion caused by infringing competition represents a particularly insidious form of harm that is not fully remedied by monetary damages. Price erosion is "sticky" in the sense that once prices decline in a competitive market, they rarely return to pre-infringement levels; customers renegotiate contracts based on new, lower price benchmarks, and the pre-infringement pricing equilibrium is permanently disrupted. See, e.g., Presidio Components, Inc. v. American Technical Ceramics Corp., 702 F.3d 1351, 1363 (Fed. Cir. 2012) (finding price erosion supported irreparable harm where "damages cannot adequately compensate [the patentee] because price erosion is not easily measured"). Moreover, the ongoing nature of price erosion means that a one-time damages award at trial fails to capture the full extent of future pricing harm. See Camberwell & Co. v. Northgate & Co. Elecs. Co., 809 F.3d 633, 647 (Fed. Cir. 2015) (recognizing that ongoing price erosion may constitute irreparable harm).
Loss of Market Share and Customer Goodwill. The loss of market share to an infringing competitor is a recognized form of irreparable harm, particularly in technology markets where market position, once lost, is difficult to recapture. See i4i, 598 F.3d at 861–62. Customer goodwill — the intangible value of established relationships and trust — is similarly not easily quantified in monetary terms. When customers switch from the patentee's products to infringing alternatives, the resulting loss of goodwill may persist long after the infringement ceases, as customers develop familiarity and institutional inertia with the infringer's products. Courts in the Eastern District of Texas have credited this form of harm in granting injunctive relief. See, e.g., Genband (finding loss of customer relationships and goodwill supported irreparable harm).
Lost Design-In Opportunities and Long-Term Lock-In Effects. In technology industries where customers make long-term procurement commitments — commonly referred to as "design-in" wins — the loss of such opportunities represents a unique form of irreparable harm. Once a customer selects a competitor's product for integration into its platform, the resulting lock-in effect creates a multi-year barrier to recapturing that customer. The Federal Circuit has recognized that the "long-term" and "hard to quantify" nature of such losses supports a finding of irreparable harm. See ActiveVideo Networks, Inc. v. Harborview Holdingsmms., Inc., 694 F.3d 1312, 1337 (Fed. Cir. 2012) (discussing the difficulty of quantifying losses from design-in opportunities in the technology sector).
Difficulty of Quantifying Future Harm from Ongoing Infringement. Where infringement is ongoing and the resulting harm is forward-looking, courts recognize that monetary damages may be inadequate because future losses are inherently speculative and difficult to model with precision. See Celsis In Vitro, Inc. v. CellzDirect, Inc., 664 F.3d 922, 930 (Fed. Cir. 2012) ("Where two companies are in competition against one another, the patentee suffers the harm — Loss of market share, loss of revenue, loss of capital for research and development, and loss of customer goodwill — that is often difficult to quantify."). This difficulty of quantification is itself evidence that monetary damages are inadequate, supporting both the irreparable harm and inadequacy-of-legal-remedies factors.
No Presumption of Irreparable Harm Post-*Cascade Holdings*. It bears noting that since Cascade Holdings, there is no presumption of irreparable harm upon a finding of patent infringement. The burden is on the patentee — here, OWS — to demonstrate irreparable harm through evidence specific to its situation. See Cascade Holdings, 547 U.S. at 391; Robert Bosch, 659 F.3d at 1149. This compilation is designed to marshal the specific, fact-based evidence necessary to satisfy that burden.
C. Applicability to Permanent vs. Preliminary Injunction
The primary purpose of this compilation is to support OWS's request for a permanent injunction to be sought at or after trial, currently scheduled for February 2, 2026. A permanent injunction is appropriate following a finding of infringement at trial, and the Cascade Holdings four-factor test governs the court's analysis.
However, the evidence compiled herein would also support a motion for a preliminary injunction under Winter v. Natural Resources Defense Council, Inc., 555 U.S. 7, 20 (2008), which requires the movant to demonstrate: (1) a likelihood of success on the merits; (2) a likelihood of irreparable harm in the absence of preliminary relief; (3) a balance of the equities tipping in the movant's favor; and (4) that an injunction is in the public interest. See also Hollowell & Co. v. Barnesandnoble.com, Inc., 239 F.3d 1343, 1350 (Fed. Cir. 2001). A preliminary injunction motion is currently on hold per client instruction, but this compilation would support such a motion if circumstances change — for example, if Lumicore announces a new accused product or secures a major customer win during the pendency of the litigation that would cause additional, immediate harm to OWS. The trial team should remain alert to any such triggering events and be prepared to move expeditiously if client approval is obtained.
III. EVIDENCE OF DIRECT COMPETITION
A. Market Overlap Between OWS and Lumicore
The most foundational element of OWS's irreparable harm showing is the undisputed fact that OWS and Lumicore are direct competitors in the same product market: silicon-photonics transceiver modules for hyperscale data centers.
Optiwave Semiconductor Corp. ("OWS"). OWS is the third-largest U.S. supplier of silicon-photonics transceiver modules, a position it has held since 2019. OWS is headquartered at 4810 Bayside Technology Parkway, Suite 300, Santa Clara, California 95054. According to audited financials prepared by Gresham & Whitfield LLP, OWS reported the following for fiscal year 2023:
• FY 2023 Revenue: $487.3 million
• FY 2023 Net Income: $61.4 million
• Employees: Approximately 1,250
OWS's key competing product lines include the OWS-400ZR (400G coherent transceivers for data-center interconnect ("DCI") applications), the OWS-800XR (800G short-reach data-center transceivers), and the OWS-1600DR (next-generation 1600G long-reach modules). OWS's silicon-photonics transceiver business represents its core revenue stream and the primary focus of its research and development activities.
OWS holds a substantial intellectual property portfolio consisting of 142 issued U.S. patents and 58 pending applications, with claims directed to key innovations in waveguide multiplexing, coherent transceiver integration, thermal management, and polarization-diverse grating coupler technology. The four Asserted Patents in this litigation are among the most commercially significant patents in this portfolio.
OWS is majority-owned by its private equity sponsor, Ridgeline Capital Partners, LP, which acquired a 55% stake in OWS in 2019 for approximately $780 million. The Ridgeline-appointed Board Chair is Franklin Osei. The PE ownership structure is relevant to the irreparable harm analysis for two reasons: first, it underscores that OWS's value proposition to its investors is tied to its market position and competitive differentiation, both of which are threatened by Lumicore's infringement; and second, it demonstrates that OWS operates as a commercially active entity that practices its patented technology — distinguishing this case from scenarios involving non-practicing entities.
Lumicore Technologies, Inc. ("Lumicore"). Lumicore is a fast-growing entrant in the same silicon-photonics transceiver module market. Lumicore is headquartered at 9200 Spectrum Boulevard, Building C, Austin, Texas 78759. Lumicore completed an initial public offering ("IPO") on Nasdaq in March 2022 at $24.00 per share; as of the complaint filing date (April 22, 2024), Lumicore's stock was trading at approximately $37.00 per share, representing a market capitalization of approximately $3.4 billion based on 91.8 million shares outstanding. Key financial and operational metrics for Lumicore include:
• FY 2023 Revenue (estimated): $312.6 million (per Lumicore's Form 10-K filing with the SEC)
• Employees: Approximately 870
• Accused Product Lines:
• LumiLink 400G-ZR+: 400G coherent transceiver module for DCI applications (launched Q3 2022)
• LumiLink 800G-DR8: 800G short-reach data-center transceiver module (launched Q1 2023)
• LumiEdge 1600G-LR: Next-generation 1600G long-reach module (launched Q4 2023)
• Accused Product Revenue (FY 2023): $264.9 million total, broken down as follows:
Critically, the accused products account for approximately 42% of Lumicore's total product revenue. This figure is significant for multiple reasons: it demonstrates that Lumicore has built a substantial portion of its business on the back of infringing technology, and it informs the balance-of-hardships analysis (addressed in the Permanent Injunction Analysis Memorandum) by quantifying the economic impact of an injunction on Lumicore.
Common Customer Base. Both OWS and Lumicore target the same customer base: hyperscale data-center operators and large telecom infrastructure providers. These customers include the largest cloud computing providers, social media platforms, and enterprise networking companies in the United States and globally. The hyperscale data-center market is highly concentrated, with the top 20 operators accounting for the vast majority of transceiver module procurement volume. According to the market-share displacement analysis prepared by the OWS litigation support team in June 2024, and informed by input from Gregory Falk (plaintiff's industry expert and former Vice President of Engineering at Solara Optics, Inc.), OWS and Lumicore compete head-to-head at 12 of the top 20 hyperscale data-center operators. At least seven (7) major hyperscale customers purchase transceiver modules from both OWS and Lumicore, creating direct substitution dynamics in which customers can — and do — shift procurement volume between the two suppliers based on price, availability, and technical qualification status.
B. Product-Level Competitive Overlap
The competitive overlap between OWS and Lumicore exists not merely at the company level but at the specific product level. Each of Lumicore's three accused product lines competes directly with a corresponding OWS product family:
Each product pair addresses the same technical specifications, form factors (QSFP-DD and OSFP), optical performance parameters, and customer qualification requirements. The products operate at the same data rates over the same link distances and are designed to plug into the same switch and router platforms. This makes Lumicore's accused products direct functional substitutes for OWS's corresponding products. In competitive procurement processes, customers routinely evaluate both OWS and Lumicore products side by side and make purchasing decisions based on price, delivery timeline, and qualification status. Evidence from Lumicore's own RFP responses (produced in discovery) confirms that Lumicore positions its products as alternatives to OWS's products in customer-facing materials.
The competitive overlap is most mature in the 400G-ZR segment, where both companies' products have been in the market since at least Q3 2022 and have been qualified by multiple common customers. The 800G segment is the fastest-growing segment and represents the largest revenue opportunity for both companies. The 1600G segment is still in the early stages of commercialization, but evidence indicates that Lumicore's LumiEdge 1600G-LR is already competing against the OWS-1600DR in early-stage customer evaluations and qualification processes. The emerging nature of competition in the 1600G segment heightens the urgency of injunctive relief, as design-in wins in this next-generation segment will lock in multi-year customer relationships and revenue streams.
C. Evidentiary Sources for Direct Competition
The evidence of direct competition between OWS and Lumicore is drawn from multiple, mutually reinforcing sources:
OWS Internal Sales Reports and Competitive Analysis Documents. OWS has produced in discovery its internal sales reports, competitive intelligence analyses, and account-level data identifying Lumicore as a direct competitor in specific customer accounts. These documents, spanning from 2021 to the present, track OWS's competitive position vis-à-vis Lumicore at each major customer account and document the progressive encroachment of Lumicore's accused products into OWS's customer base.
Gregory Falk's Draft Industry Expert Report. Mr. Falk, an independent industry consultant and former Vice President of Engineering at Solara Optics, Inc., has been retained as OWS's industry expert. His draft expert report (due June 15, 2025) will provide industry background on the silicon-photonics transceiver market, confirm the competitive landscape, and opine on the significance of design-in dynamics and customer switching costs. Mr. Falk's preliminary analysis, which has been shared with the litigation team, confirms that OWS and Lumicore are direct competitors targeting the same customers with functionally equivalent products.
Lumicore Marketing Materials. Lumicore's marketing materials obtained in discovery (produced in connection with Lumicore's August 26, 2024 production in response to OWS's Requests for Production) include product data sheets, customer-facing presentations, and RFP responses that position Lumicore's accused products as direct alternatives to OWS's products. In several instances, Lumicore's materials explicitly reference OWS products by name in competitive comparison charts.
Deposition Testimony of Dr. Sandra Michaud (Lumicore CTO). Dr. Michaud was deposed on November 19, 2024. During her deposition, Dr. Michaud acknowledged that Lumicore and OWS compete in the same product markets, that Lumicore's LumiLink 400G-ZR+ targets the same customer base as OWS's OWS-400ZR, and that Lumicore's product development roadmap was informed in part by an analysis of OWS's product capabilities and market positioning. Dr. Michaud's testimony provides powerful admissions of competitive overlap from Lumicore's own chief technology officer.
Lumicore's Form 10-K Filing. Lumicore's publicly available 10-K filing with the SEC identifies Optiwave Semiconductor Corp. by name as one of its "primary competitors" in the silicon-photonics transceiver module market. This public admission from Lumicore's own SEC disclosure is particularly valuable evidence because it cannot be dismissed as self-serving and directly supports OWS's claim of direct competition.
IV. EVIDENCE OF PRICE EROSION
A. Overview of ASP Decline
One of the most significant and measurable forms of irreparable harm suffered by OWS is the erosion of average selling prices ("ASPs") in the transceiver module market following Lumicore's entry with its infringing products. The evidence compiled to date demonstrates that the ASP of 400G-ZR transceiver modules — the product segment where competition between OWS and Lumicore is most mature — declined by approximately 18.7% from Q3 2022 to Q4 2023.
The temporal significance of this period cannot be overstated. Q3 2022 corresponds to Lumicore's commercial launch of the LumiLink 400G-ZR+, the first accused product to enter the market. Prior to Q3 2022, 400G-ZR transceiver ASPs had been relatively stable, reflecting the established competitive dynamics among existing market participants. The precipitous decline in ASPs beginning in Q3 2022 and continuing through Q4 2023 is temporally correlated with — and, the evidence strongly suggests, caused by — Lumicore's entry into the market with an infringing product at aggressively low prices.
The 18.7% ASP decline represents tens of millions of dollars in lost revenue for OWS on existing sales volume alone, and does not account for the compounding effect of permanently depressed pricing on future sales. The Price Erosion Analysis (dated January 2025) provides a detailed quantification of this decline, and Dr. Lawrence Keating's forthcoming expert report will incorporate this analysis into his damages model.
B. OWS's ASP Data
OWS's internal pricing records for OWS-400ZR modules document a steady and persistent decline in realized ASPs beginning in Q3 2022 and continuing through the most recent available data:
• Q2 2022 (pre-LumiLink launch): Baseline ASP for OWS-400ZR modules reflected stable pricing consistent with the pre-infringement competitive equilibrium. Specific ASP figures are drawn from discovery-produced financial data designated Highly Confidential — Attorneys' Eyes Only under the Protective Order entered in this case and are detailed in the Price Erosion Analysis (dated January 2025).
• Q3 2022: Initial ASP pressure emerged coinciding with Lumicore's commercial launch of the LumiLink 400G-ZR+ at aggressive introductory pricing. OWS sales representatives reported that customers began citing Lumicore pricing in negotiations and demanding price concessions to remain competitive.
• Q4 2022 through Q4 2023: Progressive and sustained erosion of OWS-400ZR ASPs, totaling a 18.7% decline from the Q3 2022 baseline over the measured period. The decline was not uniform across all customers but was most pronounced at accounts where Lumicore was an approved or pending vendor, confirming the causal link between Lumicore's market entry and OWS's price erosion.
Similar pricing pressure has been observed on OWS-800XR modules following Lumicore's launch of the LumiLink 800G-DR8 in Q1 2023. Pricing data for the 800G segment is still being compiled and reconciled, and the complete analysis will be included in the Damages Refresh Memorandum (target February 2025). Preliminary indications suggest that ASP erosion in the 800G segment may be even more significant than in the 400G segment, given the larger revenue opportunity and more aggressive competitive dynamics.
C. Lumicore's Pricing Strategy
The evidence supports the conclusion that Lumicore pursued a deliberate strategy of aggressive below-market pricing on its LumiLink 400G-ZR+ product to gain market share at OWS's expense. This pricing strategy was enabled by the infringing use of OWS's patented technology, which allowed Lumicore to bring a competitive product to market without incurring the full R&D costs that OWS bore to develop the underlying innovations.
Lumicore's Internal Pricing Memos. discovery production from Lumicore includes internal pricing memoranda and strategy documents that detail Lumicore's approach to pricing the LumiLink 400G-ZR+ upon market entry. These documents indicate that Lumicore's pricing team conducted a detailed analysis of OWS's pricing structure and set LumiLink pricing at levels designed to undercut OWS's ASPs while maintaining healthy gross margins. The documents explicitly reference OWS by name and discuss strategies for displacing OWS at specific customer accounts.
Lumicore's Gross Margins. Lumicore's discovery-produced financial data reveals that the accused products carry robust gross margins, ranging from 52.1% for the LumiLink 400G-ZR+ to 58.3% for the LumiEdge 1600G-LR. These margins demonstrate that Lumicore has substantial room to engage in aggressive pricing without sacrificing profitability — precisely the dynamic that has driven ASP erosion in the market. Lumicore's ability to maintain high margins while undercutting OWS on price is a direct consequence of its use of OWS's patented technology without paying the licensing costs that legitimate competitors (such as Terralink Semiconductor, NovaWave Corp., and Helix Integrated Photonics) bear.
Customer Communications. discovery has yielded customer communications produced by Lumicore in which Lumicore sales representatives explicitly reference OWS's pricing as a benchmark and offer discounts to win competitive bids. In multiple instances, Lumicore sales representatives provided customers with side-by-side pricing comparisons showing Lumicore's products at a lower price point than OWS's comparable products, and offered additional volume discounts contingent on the customer shifting procurement volume away from OWS.
D. Ongoing and Compounding Nature of Price Erosion
The price erosion documented above is not a one-time event but an ongoing and compounding form of harm that is uniquely ill-suited to remediation through a backward-looking monetary damages award. This is so for several interrelated reasons.
First, price erosion in the transceiver module market is "sticky." Once ASPs decline in response to competitive pressure, they rarely recover to pre-erosion levels. This is because customers renegotiate supply contracts based on the new, lower price benchmarks established during the period of infringing competition. Even if Lumicore were to exit the market tomorrow, OWS would be unable to restore its ASPs to pre-Q3 2022 levels because customers would resist price increases, citing the lower prices they had obtained during the period of infringement. The Federal Circuit has recognized this dynamic as a hallmark of irreparable harm. See Presidio Components, 702 F.3d at 1363.
Second, the harm is cumulative and compounds over time. Each quarter of continued infringement results in further ASP erosion, as Lumicore deepens its market presence and customers become accustomed to lower price points. The cumulative effect of sixteen or more quarters of infringing competition (from Q3 2022 through anticipated trial in Q1 2026) represents a permanent alteration of the competitive pricing landscape that cannot be undone by a single damages check at the conclusion of trial.
Third, the ongoing and future nature of the harm makes it resistant to precise quantification. While Dr. Lawrence Keating's damages analysis (Meridian Economic Consulting Group, LLC) will address price erosion as a component of OWS's lost-profits damages, his model necessarily relies on assumptions about future market conditions, pricing trajectories, and competitive dynamics that are inherently uncertain. A damages award based on historical price erosion does not — and cannot — fully capture the continuing, forward-looking harm that OWS will suffer if Lumicore is permitted to continue selling infringing products after trial. This is precisely the type of ongoing harm that an injunction is designed to prevent. The detailed quantification of historical price erosion is set forth in the Price Erosion Analysis (dated January 2025).
E. Evidentiary Sources for Price Erosion
The price erosion evidence is supported by the following sources:
• OWS internal financial records, including pricing databases, contract pricing schedules, and quarterly revenue reports (produced in discovery)
• Lumicore financial data produced in discovery, including product-level revenue, cost-of-goods-sold, and gross margin data, designated Highly Confidential — Attorneys' Eyes Only
• Lumicore product-level gross margins: 52.1% (LumiLink 400G-ZR+), estimated 55.7% (LumiLink 800G-DR8), and 58.3% (LumiEdge 1600G-LR)
• Customer procurement documents and RFQ/RFP responses produced by both parties in discovery
• Lumicore internal pricing memos and competitive pricing strategy documents
• Expert analysis by Dr. Lawrence Keating of Meridian Economic Consulting Group, LLC, whose expert report (due June 15, 2025) will incorporate the price erosion analysis into his damages model
• Price Erosion Analysis (dated January 2025), prepared by the Calderwood & Harkness litigation team in coordination with Dr. Keating's consulting engagement
V. EVIDENCE OF CUSTOMER DIVERSION
A. Head-to-Head Customer Losses
Beyond price erosion, OWS has suffered direct, quantifiable customer diversion as a result of Lumicore's infringement. The evidence compiled to date identifies specific instances in which OWS lost customers or customer orders to Lumicore's accused products. This customer diversion is distinct from — and additive to — the price erosion harm discussed in Section IV, because it reflects not merely lower prices on retained sales but the outright loss of procurement volume to an infringing competitor.
The core of the customer diversion evidence is the identification of at least seven (7) major hyperscale customers that purchase transceiver modules from both OWS and Lumicore. In several of these accounts, customers have shifted a meaningful portion of their procurement volume from OWS products to Lumicore's accused products following the LumiLink 400G-ZR+ launch in Q3 2022. The pattern is consistent: a customer that previously sourced exclusively or predominantly from OWS for a particular product segment (e.g., 400G-ZR coherent transceivers) begins dual-sourcing from Lumicore after qualifying the LumiLink product, and over time shifts an increasing share of its procurement volume to Lumicore based on price and availability.
Specific customer examples and account-level data supporting these conclusions are being drawn from OWS's internal sales records, customer relationship management ("CRM") data, and customer correspondence. The litigation team has prepared a Customer Impact Declaration Template for use in obtaining sworn declarations from OWS's Vice President of Sales, Karen Whitfield, and three regional sales directors, who will attest to specific lost accounts and shifted procurement volumes at identified customers. These declarations are anticipated to provide the most granular and persuasive evidence of customer diversion. Certain of the affected customers are located within the Eastern District of Texas, including Pinnacle Data Systems, LLC (Longview, TX), Frontier Cloud Services, Inc. (Marshall, TX), and CrossPoint Networking Corp. (Plano, TX), which is relevant both to venue considerations and to the court's familiarity with the local competitive landscape.
B. Market-Share Displacement
OWS's market-share displacement analysis, prepared by the litigation support team in June 2024 and informed by Gregory Falk's industry expertise, estimates that 38.2% of Lumicore's accused-product sales displaced OWS sales — meaning that but for Lumicore's infringing products, OWS would have captured those sales. This figure was derived from a multi-step analysis incorporating the following data:
• Customer overlap data: Identification of the hyperscale customers where both OWS and Lumicore are approved or active vendors.
• Approved vendor lists: Review of customer-produced approved vendor lists showing the competitive set at each account.
• Competitive-bid win/loss records: Detailed analysis of competitive procurement processes at 12 of the top 20 hyperscale data-center operators where OWS and Lumicore competed head-to-head.
• Market share data: Industry market-share estimates from third-party analysts, cross-referenced with OWS and Lumicore internal data.
The 38.2% displacement figure represents the portion of Lumicore's accused-product revenue that is attributable to sales that OWS would have made but for Lumicore's infringement. Applied to Lumicore's FY 2023 accused-product revenue of $264.9 million, this yields approximately $101.2 million in displaced OWS sales in FY 2023 alone. This figure is central to Dr. Keating's lost-profits calculation and also supports the irreparable harm showing by quantifying the scale of competitive displacement.
The remaining 61.8% of Lumicore's accused-product sales are attributed to customer accounts where OWS was not an approved vendor, did not compete in the relevant procurement process, or would not have captured the sale even absent Lumicore's participation. This portion of Lumicore's sales supports the reasonable-royalty component of Dr. Keating's damages model rather than the lost-profits component.
The market-share displacement analysis is detailed in the Market Share Displacement Analysis memorandum (dated June 2024).
C. Difficulty of Recapturing Diverted Customers
The customer diversion documented above is not merely a temporary loss of sales volume; it represents a structural change in the competitive landscape that is extremely difficult to reverse. This difficulty of recapture is a critical element of the irreparable harm showing, because it demonstrates that even if OWS prevails at trial and receives a monetary damages award, the customer relationships lost during the infringement period cannot be fully restored by money alone.
Significant Switching Costs. Once a hyperscale customer qualifies a new supplier such as Lumicore and integrates its transceiver modules into production data-center deployments, the cost of switching back to OWS (or any other supplier) is substantial. Qualification cycles in the silicon-photonics transceiver industry typically require six to twelve months of testing, validation, and certification. During this period, the customer invests significant engineering resources in verifying interoperability, thermal performance, signal integrity, and reliability under production conditions. Once a customer has completed this qualification process for Lumicore's product, it has a strong incentive to continue purchasing from Lumicore to amortize its qualification investment, even if OWS offers a comparable or superior product.
Institutional Inertia and Relationship Lock-In. Beyond formal qualification costs, customer relationships involve significant institutional knowledge and inertia. Procurement teams develop familiarity with a supplier's ordering processes, delivery timelines, technical support capabilities, and escalation procedures. Sales engineers build personal relationships with customer decision-makers. Once these relationships are established with Lumicore, they create an inertial barrier that works against OWS's efforts to recapture the account. This form of harm — the loss of customer goodwill and institutional familiarity — is inherently non-monetary and cannot be adequately compensated by a damages award.
Injunction as the Appropriate Remedy. The difficulty of recapturing diverted customers underscores the need for injunctive relief. An injunction that requires Lumicore to cease selling its infringing products would create the "forcing event" necessary to disrupt the infringing supplier relationship and give OWS an opportunity to recapture lost customers. Without an injunction, Lumicore's customer relationships will continue to deepen and entrench, making the competitive harm increasingly permanent and irreversible with each passing quarter.
D. Evidentiary Sources for Customer Diversion
• OWS internal CRM data and sales pipeline reports documenting customer account status, procurement volume, and win/loss history
• Win/loss reports for competitive bids at major hyperscale customer accounts
• Deposition testimony of Dr. Sandra Michaud (Lumicore CTO), November 19, 2024, in which Dr. Michaud acknowledged that Lumicore actively targeted OWS's existing customer base and was aware that certain of its key customers were also OWS customers
• Anticipated declarations from Karen Whitfield (OWS VP of Sales) and three regional sales directors, to be prepared using the Customer Impact Declaration Template, attesting to specific lost accounts and shifted procurement volumes
• Gregory Falk (industry expert) assessment of competitive dynamics, customer switching behavior, and the significance of qualification cycles in the silicon-photonics transceiver market
• Market Share Displacement Analysis (dated June 2024)
VI. EVIDENCE OF LOSS OF DESIGN-IN OPPORTUNITIES
A. Significance of Design-In Wins in the Transceiver Market
In the silicon-photonics transceiver industry, the single most consequential competitive event is the "design-in" win — the point at which a hyperscale customer selects a supplier's transceiver module for integration into a new data-center architecture, platform, or deployment generation. Design-in wins are the lifeblood of transceiver module companies because they represent long-term revenue commitments typically spanning three to five years or more. The significance of design-in wins to the irreparable harm analysis cannot be overstated.
When a hyperscale customer awards a design-in to a transceiver supplier, the customer builds its entire system — switch architecture, optical interconnect topology, network management software, and supply chain logistics — around the selected module's specifications. The supplier's product becomes embedded in the customer's infrastructure at a fundamental level. Switching to an alternative supplier mid-deployment is prohibitively expensive and operationally disruptive because it would require re-qualification, re-certification, and potentially re-engineering of the customer's system. As a result, a design-in win creates a powerful lock-in effect that effectively forecloses competition for the duration of the deployment cycle.
The economic consequence of a design-in loss is therefore not merely the loss of a single sale or a single quarter's revenue. It is the loss of a multi-year revenue stream — potentially encompassing thousands or tens of thousands of transceiver module units shipped over the three-to-five-year deployment lifecycle — that is extraordinarily difficult to recapture once a competing supplier has been designed in. This dynamic makes lost design-in opportunities a uniquely potent form of irreparable harm in patent cases involving transceiver module technology.
Gregory Falk, OWS's industry expert, is prepared to testify in detail regarding design-in dynamics, lock-in effects, and the competitive significance of design-in wins in the silicon-photonics transceiver market. His expert report (due June 15, 2025) will address these issues comprehensively.
B. Specific Lost Design-In Opportunities
The evidence compiled to date identifies specific design-in opportunities that OWS lost to Lumicore's accused products. These losses are particularly significant because they represent not merely historical harm but ongoing, locked-in competitive disadvantage that will persist for years absent injunctive relief.
Late-Stage Qualification Losses. In several instances, OWS was in late-stage qualification with hyperscale customers for next-generation data-center deployments when the customer awarded the design-in to Lumicore's LumiLink 800G-DR8 or LumiEdge 1600G-LR instead. In these cases, OWS had invested substantial engineering resources and sales effort in the qualification process, only to lose the design-in at the final stage to an infringing competitor offering aggressive pricing enabled by the unlicensed use of OWS's patented technology. The loss of these design-in opportunities is especially damaging because OWS was the incumbent or favored supplier prior to Lumicore's market entry, and the customer's decision to award the design-in to Lumicore was driven in significant part by Lumicore's pricing advantage.
Post-Notice Losses. Of particular relevance to both the irreparable harm and willfulness analyses, several of the lost design-in opportunities occurred after Lumicore received actual notice of OWS's patents. FairPoint Licensing Group, LLC — OWS's licensing agent — sent Lumicore detailed licensing letters on January 15, 2023 and May 15, 2023, identifying the Asserted Patents and requesting licensing discussions. Despite receiving these letters, Lumicore continued to compete for design-in wins using its infringing products. The fact that Lumicore continued to pursue and win design-in opportunities at OWS's expense even after receiving notice of OWS's patent rights demonstrates both the willfulness of Lumicore's infringement and the ongoing, unabated nature of the competitive harm.
Specific Customer Accounts. The specific customers at which OWS lost design-in opportunities are being identified from OWS's business development and design-in pipeline records. Based on preliminary review, the affected accounts likely include certain Eastern District of Texas customers — including Pinnacle Data Systems, LLC in Longview, TX, Frontier Cloud Services, Inc. in marshall, TX, and CrossPoint Networking Corp. in Plano, TX — as well as other major hyperscale operators. The final identification of affected customers and the preparation of supporting declarations is an ongoing action item (see Section XI).
C. Long-Term Revenue Impact
Each lost design-in opportunity is estimated to represent approximately $15 million to $50 million in foregone revenue over the design-in lifecycle (three to five years), depending on the customer's deployment scale, procurement volume, and product mix. The range reflects the variation in deployment size across different hyperscale customers — a tier-one hyperscale operator may deploy hundreds of thousands of transceiver modules per year, while a smaller operator may deploy tens of thousands.
Even at the conservative end of this range, the loss of just a handful of design-in opportunities represents over $100 million in foregone revenue for OWS. At the upper end, the cumulative impact could approach $250 million or more over the relevant timeframes. These estimates are based on OWS's historical design-in revenue data and will be refined in Dr. Keating's expert report.
Critically, the speculative and uncertain nature of these future losses is itself evidence that monetary damages are inadequate. Lost design-in revenue is inherently forward-looking and depends on variables — including the customer's actual deployment schedule, market conditions over the next three to five years, and competitive dynamics — that cannot be predicted with the precision required for a damages award. This uncertainty is not a reason to deny relief; to the contrary, it is precisely the reason why injunctive relief is necessary. A damages award that attempts to quantify speculative future losses risks either over-compensating or under-compensating OWS. An injunction that prevents further infringement avoids this problem entirely by addressing the harm at its source.
D. Evidentiary Sources for Lost Design-Ins
• OWS business development records and design-in pipeline tracking documents, including status reports for each major customer account
• Customer communications, including RFQ/RFP documentation, qualification progress reports, and award notification correspondence
• Anticipated declarations from Karen Whitfield (OWS VP of Sales) and regional sales directors, attesting to specific lost design-in opportunities and the revenue implications thereof
• Gregory Falk expert opinion on design-in dynamics, lock-in effects, and customer switching costs in the silicon-photonics transceiver market (expert report due June 15, 2025)
• FairPoint Licensing Group correspondence (January 15, 2023 and May 15, 2023 letters) documenting pre-suit notice and Lumicore's post-notice competitive activity
VII. EVIDENCE OF REPUTATIONAL AND COMPETITIVE-POSITION HARM
A. Erosion of Market Leadership Position
OWS's position as the third-largest U.S. supplier of silicon-photonics transceiver modules is a hard-won competitive asset built over years of investment in technology development, customer relationships, and manufacturing capability. Lumicore's rapid growth using infringing technology directly threatens to displace OWS from this market position, with consequences that extend far beyond lost revenue on individual transactions.
The pace and scale of Lumicore's market penetration are remarkable. Lumicore went from $0 in accused-product revenue (prior to the LumiLink 400G-ZR+ launch in Q3 2022) to $264.9 million in FY 2023 — all within approximately eighteen months. This extraordinary trajectory was achieved in significant part through the use of OWS's patented technology, which enabled Lumicore to bring competitive products to market faster and at lower cost than it could have achieved through independent innovation. Projected accused-product revenue over the full infringement period (Q3 2022 through projected trial in Q4 2025) is approximately $714.6 million, a figure that underscores the magnitude and velocity of competitive displacement.
As Lumicore's market share grows, OWS's relative competitive position weakens. In the hyperscale data-center market, supplier reputation and market position are self-reinforcing: larger suppliers are perceived as more reliable, attract more customer interest, and benefit from economies of scale that further strengthen their competitive position. Conversely, a supplier that is losing market share faces a negative feedback loop in which declining volume leads to reduced economies of scale, diminished customer perception, and further volume loss. Lumicore's infringement-fueled growth is propelling it along the positive trajectory while pushing OWS along the negative one. This dynamic cannot be reversed by a one-time monetary payment at the conclusion of trial.
B. Technology Perception and Innovation Incentive Harm
OWS invested substantially in research and development to create the patented technologies at issue in this litigation. The four Asserted Patents cover core innovations in silicon-photonics transceiver design, including waveguide multiplexing techniques (the '847 Patent), coherent transceiver integration architectures (the '193 Patent), advanced thermal management systems (the '562 Patent), and polarization-diverse grating coupler structures (the '015 Patent). These patents represent the fruits of years of engineering effort and millions of dollars in R&D expenditure. OWS's broader patent portfolio — comprising 142 issued U.S. patents and 58 pending applications — reflects a sustained commitment to innovation that differentiates OWS from competitors and justifies the premium pricing that its products command.
Lumicore's ability to use these patented technologies without a license fundamentally undermines OWS's ability to recoup its R&D investment and diminishes the competitive advantage that the patents were designed to protect. When an infringer can freely appropriate a patentee's innovations, the market signal is clear: investment in proprietary technology is unrewarded, and competitors can achieve parity not through their own innovation but through copying. This harm to OWS's innovation incentives is a recognized form of irreparable harm that monetary damages cannot fully remedy. See Celsis In Vitro, 664 F.3d at 930.
The evidence suggests that Lumicore's appropriation of OWS's technology was not merely negligent but deliberate. Melissa Chen, a former Lumicore engineer who is now employed at Veridian Photonics, Inc., has indicated in preliminary discussions with OWS's counsel that Lumicore's engineering team accessed and reviewed OWS's published patent application No. 2018/0123456 (corresponding to the '193 Patent) during the LumiLink 400G-ZR+ design phase in 2021–2022. According to Ms. Chen, the OWS patent application was circulated among the design team and its teachings were discussed in the context of the LumiLink architecture. This evidence suggests deliberate leveraging of OWS's innovation rather than independent development.
Corroborating Ms. Chen's anticipated testimony, Dr. Sandra Michaud (Lumicore CTO) admitted during her deposition on November 19, 2024, that she personally reviewed OWS's published patent application during the LumiLink design phase. While Dr. Michaud characterized her review as routine competitive intelligence, the fact remains that Lumicore's CTO was aware of OWS's claimed technology before and during the design of the accused products. This evidence is relevant to both the willfulness and irreparable harm analyses.
C. Impact on OWS's Licensing Program
OWS has established a formal patent licensing program for the Asserted Patents and related technology, managed through FairPoint Licensing Group, LLC (500 Sansome Street, Suite 1400, San Francisco, CA 94111; Managing Director: Angela Reeves). The licensing program reflects OWS's strategy of monetizing its patent portfolio while maintaining its competitive advantage through a combination of direct product sales and licensing revenue.
OWS's existing licensees include the following companies, each of which negotiated a license in arm's-length transactions:
These licenses establish a market rate for the patented technology and demonstrate that OWS has successfully monetized its patents through licensing, consistent with its status as a practicing entity with an active licensing program.
Lumicore's continued unlicensed use of the patented technology inflicts a distinct form of harm on OWS's licensing program. When a major market participant such as Lumicore — with $264.9 million in accused-product revenue and a $3.4 billion market capitalization — is permitted to infringe without consequence, it sends a powerful signal to the market that OWS's patents can be freely used without incurring licensing costs. This signal has two pernicious effects. First, it may embolden other potential infringers to enter the market without taking a license, reasoning that if Lumicore can infringe without penalty, they can too. Second, it may depress royalty rates in future licensing negotiations by undermining OWS's leverage: prospective licensees may argue that the appropriate royalty rate should be lower because Lumicore — a major competitor — is using the technology for free. Both effects represent ongoing harm to the value of OWS's patent portfolio that cannot be fully compensated by a damages award in this case alone.
Angela Reeves (FairPoint Managing Director) was deposed on December 10, 2024, and confirmed the licensing outreach efforts directed at Lumicore, including detailed licensing letters sent on January 15, 2023 and May 15, 2023, and an in-person meeting on April 20, 2023. Ms. Reeves testified that Lumicore expressed "no interest in negotiating" a license and made no substantive counterproposal. This testimony is relevant both to the willfulness analysis and to the irreparable harm analysis, as it demonstrates that Lumicore made a deliberate decision to compete using OWS's patented technology without compensation, knowing that OWS had an active licensing program and was willing to license on reasonable terms.
VIII. EVIDENCE THAT MONETARY DAMAGES ARE INADEQUATE
A. Difficulty of Quantifying Ongoing Harm
The evidence compiled in Sections IV through VII demonstrates that OWS's harm from Lumicore's infringement is not a discrete, one-time injury that can be precisely calculated and compensated through a monetary award. Rather, the harm is ongoing, cumulative, and partially unquantifiable, characteristics that the Federal Circuit has recognized as hallmarks of irreparable harm supporting injunctive relief.
Price erosion is ongoing and cumulative. As detailed in Section IV, the 18.7% decline in 400G-ZR ASPs from Q3 2022 to Q4 2023 is not a static number but a continuing phenomenon that compounds with each quarter of continued infringement. Future pricing impacts depend on variables such as Lumicore's pricing decisions, customer procurement cycles, competitive entry by additional market participants, and overall market demand — all of which are inherently speculative and resistant to precise modeling. While Dr. Keating's damages analysis will quantify historical price erosion to the extent possible, the future, forward-looking component of this harm is not amenable to a one-time monetary calculation with any degree of certainty.
Lost design-in opportunities represent multi-year foregone revenue streams that are even more difficult to quantify than price erosion. As discussed in Section VI, each lost design-in is estimated to represent $15–$50 million in foregone revenue over a three-to-five-year lifecycle, but the actual revenue impact depends on variables — customer deployment schedules, market conditions, competitive dynamics — that cannot be predicted with confidence. The inherent speculative nature of these losses is itself evidence that monetary damages are inadequate, because any damages award that attempts to capture this harm will necessarily be either too high or too low.
Customer goodwill and relationship losses represent a category of harm that is fundamentally non-monetary in character. The trust, familiarity, and institutional knowledge that characterize a long-term supplier-customer relationship cannot be reduced to a dollar figure. When a customer shifts its procurement from OWS to Lumicore, the resulting loss of goodwill persists even after infringement ceases, because the customer has developed a relationship with Lumicore that creates inertia against returning to OWS. Courts have consistently recognized that the loss of customer goodwill is a form of irreparable harm not fully compensable by monetary damages. See i4i, 598 F.3d at 861–62.
B. Continuing Nature of Infringement
Lumicore's infringement is not a past event but an ongoing course of conduct. As of the date of this compilation, Lumicore continues to manufacture, sell, offer for sale, and import all three accused product lines — the LumiLink 400G-ZR+, the LumiLink 800G-DR8, and the LumiEdge 1600G-LR — in the United States. Lumicore has given no indication that it intends to cease sales of the accused products or to implement a design-around.
Moreover, the scope of Lumicore's infringement has expanded over time with the introduction of new accused products. The LumiLink 400G-ZR+ launched in Q3 2022; the LumiLink 800G-DR8 launched in Q1 2023; and the LumiEdge 1600G-LR launched in Q4 2023. Each successive product launch extends the scope of infringement into a new market segment and inflicts additional competitive harm on OWS.
Without an injunction, the only remedy available to OWS for future infringement would be to re-litigate damages periodically — either through additional lawsuits or through contempt proceedings — imposing ongoing costs on both OWS and the judicial system. The prospect of perpetual re-litigation is not only burdensome but fundamentally inconsistent with the purpose of the patent system, which is to provide patentees with the right to exclude others from practicing their inventions. An injunction provides a clean, prospective remedy that addresses future harm at its source.
C. Competitive Harm Is Forward-Looking
The silicon-photonics transceiver market is a rapidly growing and evolving market in which current competitive positioning has outsized implications for future market share and profitability. Industry analysts project significant growth in demand for 800G and 1600G transceiver modules over the next five to ten years as hyperscale data centers continue to scale bandwidth capacity to support cloud computing, artificial intelligence workloads, and edge computing deployments. OWS's ability to participate in this growth depends critically on its current market position, customer relationships, and design-in wins — all of which are being eroded by Lumicore's infringement.
A damages award at trial would address only past harm — the price erosion, customer diversion, and lost design-in opportunities that occurred during the pre-trial infringement period. It would not address the future harm that OWS will continue to suffer if Lumicore is permitted to sell infringing products after trial. The gap between past damages and future harm is particularly significant in this case because the market is growing rapidly and the competitive consequences of lost design-in wins compound over multi-year deployment cycles.
Finally, Lumicore has estimated in its discovery responses

IRREPARABLE HARM EVIDENCE COMPILATION

I. EXECUTIVE SUMMARY

II. LEGAL FRAMEWORK

III. EVIDENCE OF DIRECT COMPETITION

IV. EVIDENCE OF PRICE EROSION

V. EVIDENCE OF CUSTOMER DIVERSION

VI. EVIDENCE OF LOSS OF DESIGN-IN OPPORTUNITIES

VII. EVIDENCE OF REPUTATIONAL AND COMPETITIVE-POSITION HARM

VIII. EVIDENCE THAT MONETARY DAMAGES ARE INADEQUATE

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