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MEMORANDUM

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT

This memorandum is protected by the attorney-client privilege and constitutes attorney work product prepared in anticipation of litigation. It is intended solely for the use of the addressees and should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP.

TO: Alan Ngo, Responsible Partner, IP Litigation, Calderwood & Harkness LLP

FROM: Wendy Schultz, Lead Associate; Omar Siddiqui, Working Associate

DATE: May 15, 2024

RE: Inter Partes Review Risk Assessment — Asserted Patents in Optiwave Semiconductor Corp. v. Lumicore Technologies, Inc., Case No. 2:24-cv-00319-JRG (E.D. Tex.)

CC: Marcus Delgado, Billing Partner; James "Jim" Callahan, Local Counsel, Whitmore & Callahan LLP

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I. EXECUTIVE SUMMARY

The purpose of this memorandum is to assess the risk that Lumicore Technologies, Inc. ("Lumicore" or "LTC"), through its litigation counsel Hawthorne Vega & Cruz LLP ("HVC"), files inter partes review ("IPR") petitions at the United States Patent and Trademark Office ("USPTO") against one or more of the four United States utility patents asserted by our client, Optiwave Semiconductor Corp. ("OWS" or "Optiwave"), in the above-captioned action. Specifically, this memorandum analyzes the IPR exposure 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"). In addition, this memorandum assesses the likelihood and potential impact of a resulting stay of the district court litigation should IPR petitions be filed and evaluates recommended strategies to position OWS both to oppose a stay and to defend the Asserted Patents before the Patent Trial and Appeal Board ("PTAB").

OWS filed its Complaint for Patent Infringement on April 22, 2024, in the United States District Court for the Eastern District of Texas, where the case has been assigned to the Honorable James R. Gilstrap. Summons was served on Lumicore's registered agent, National Agent Services Corp., at 850 New Burton Road, Suite 201, Dover, Delaware 19904, on May 1, 2024. Under 35 U.S.C. § 315(b), Lumicore must file any IPR petition within one year of the date on which it was served with a complaint alleging infringement of the relevant patents. Accordingly, the statutory deadline for filing any IPR petition is May 1, 2025.

This assessment covers the following areas: (a) the likelihood that Lumicore will file IPR petitions against each of the four Asserted Patents; (b) the strength of the prior art available to Lumicore to support such petitions; (c) the probability that the PTAB would institute review if petitions are filed; (d) the likelihood that the district court would grant a stay of the litigation pending IPR proceedings; and (e) recommended strategies to position OWS against a stay and to defend the Asserted Patents before the PTAB.

Our overall risk assessment is as follows. There is a moderate risk that Lumicore files IPR petitions against the '847 Patent and the '562 Patent, which are the two patents most vulnerable to the prior art we have identified thus far. The risk is lower as to the '193 Patent and the '015 Patent. With respect to the possibility of a litigation stay, we assess the risk as low-to-moderate given the advanced posture this case will have achieved by the time any petition could reasonably be filed. The one-year statutory deadline under § 315(b) coincides with the close of fact discovery, and by that point the Court will have conducted a Markman hearing, the parties will have exchanged detailed infringement and invalidity contentions, and substantial discovery will have been completed.

We note that Lumicore has signaled its intention to pursue IPR as part of its defense strategy. In pre-filing defense communications exchanged through HVC, Lumicore has expressly reserved the right to petition for IPR. We anticipate that Lumicore's Answer and Counterclaims, which we project will be filed in mid-June 2024 (D.E. 12, filed June 17, 2024, as confirmed post-filing), will formally assert invalidity and reserve IPR rights. Additionally, we have learned through informal channels and public records that Lumicore has retained Marlowe Asset Management Patent Analytics, Inc., a prior-art search firm based in Atlanta, Georgia, to conduct comprehensive prior-art searches relating to the Asserted Patents. This engagement strongly suggests that Lumicore is actively preparing one or more IPR petitions.

This memorandum should be treated as a preliminary assessment. We recommend updating this analysis at several key junctures: (1) upon receipt of Lumicore's invalidity contentions under Patent Rule 3-3, which we anticipate will be served on or about October 14, 2024; (2) following the Markman hearing scheduled for March 14, 2025; and (3) in April 2025, immediately before the one-year filing deadline.

II. BACKGROUND

A. The Asserted Patents

OWS has asserted four United States utility patents in this action. The table below provides a summary of each patent, including its title, filing and issue dates, ownership history, and family relationships.

Several patent-family relationships are relevant to this analysis. The '562 Patent and the '847 Patent are in the same patent family and share a continuation relationship, which means that portions of their specifications overlap and their prosecution histories are interconnected. The '193 Patent and the '015 Patent share a common provisional application — Provisional Application No. 62/499,117, filed April 7, 2017 — which establishes an early effective filing date for prior-art purposes for both patents. This common priority date is particularly significant because it pushes the relevant prior-art date back to April 7, 2017, potentially excluding references published after that date from consideration under 35 U.S.C. § 102.

With respect to the '562 Patent, we note that this patent was not originally assigned to OWS. It was instead originally assigned to Solara Optics, Inc., a now-defunct photonics startup that developed thermal management technologies for integrated optical circuits. OWS acquired the '562 Patent, along with eleven other patents, from Solara pursuant to an Asset Purchase Agreement dated June 15, 2018. The total consideration for the twelve-patent portfolio was $34.5 million. The chain of title has been properly recorded at the USPTO, and there are no outstanding encumbrances or licensing obligations associated with the '562 Patent that would affect OWS's standing to assert it.

All four Asserted Patents have been maintained in force, and all required maintenance fees are current. None of the Asserted Patents is subject to any terminal disclaimer that would raise issues concerning the enforceability of the claims. All four patents were prosecuted by the same outside prosecution counsel — Cascade IP Advisors, LLC, of Arlington, Virginia — with Dr. Martin Chu serving as lead prosecution attorney. Dr. Chu's familiarity with the prosecution histories of all four patents will be an important resource in preparing PTAB defenses should IPR petitions be filed.

No IPR petitions have been filed against any of the four Asserted Patents to date. Similarly, no ex parte reexamination requests, supplemental examination requests, or post-grant review petitions have been filed. The Asserted Patents have not been the subject of any prior litigation other than the instant action. OWS holds a total portfolio of 142 issued U.S. patents and 58 pending U.S. patent applications, which provides additional context for the company's investment in and commitment to its intellectual property.

B. Asserted Claims and Accused Products

The Complaint alleges that three Lumicore products infringe certain claims of the Asserted Patents. The specific claim-to-product mapping is as follows:

'847 Patent — Claims 1, 3, 5, 9, and 14. These claims are asserted against the LumiLink 400G-ZR+ coherent transceiver module and the LumiLink 800G-DR8 short-reach transceiver module. The LumiLink 400G-ZR+ generated approximately $94.8 million in revenue for Lumicore in fiscal year 2023, and the LumiLink 800G-DR8 generated approximately $128.4 million in revenue for the same period. The '847 Patent claims are directed to the silicon photonic waveguide multiplexer architecture used in both products to combine multiple optical signals of different wavelengths onto a single output waveguide.

'193 Patent — Claims 1, 3, 7, 10, 15, and 18. These claims are asserted against all three accused products: the LumiLink 400G-ZR+, the LumiLink 800G-DR8, and the LumiEdge 1600G-LR long-reach transceiver module. The LumiEdge 1600G-LR generated approximately $41.7 million in revenue for Lumicore in fiscal year 2023. The '193 Patent claims are directed to the integrated coherent optical transceiver architecture implemented across all three product lines, including the integration of modulator, detector, and digital signal processing components on a single silicon substrate.

'562 Patent — Claims 1, 4, 6, and 11. These claims are asserted against the LumiLink 400G-ZR+ and the LumiLink 800G-DR8. The '562 Patent claims are directed to the thermal management method employing embedded micro-channel heat sinks used in both products to dissipate heat generated by the photonic integrated circuits.

'015 Patent — Claims 1, 5, 8, 12, and 16. These claims are asserted against the LumiLink 800G-DR8 and the LumiEdge 1600G-LR. The '015 Patent claims are directed to the polarization-diverse grating coupler design used to couple light into and out of the silicon photonic transceivers in both products.

The total accused-product revenue for Lumicore in fiscal year 2023 across all three product lines was approximately $264.9 million. Based on revenue projections through the anticipated trial date (covering the period from the third quarter of 2022 through the fourth quarter of 2025), total accused-product revenue is estimated at approximately $714.6 million. OWS's total damages demand in this action is approximately $210.0 million, which reflects a reasonable royalty analysis performed by our damages consultant, Dr. Patricia Reinhardt of Meridian Economics Group, LLC.

C. Procedural Posture and Key Dates

The following timeline reflects both actual and anticipated case milestones. Items marked with an asterisk (*) are anticipated dates based on the Eastern District of Texas standard scheduling practices and pre-filing discussions with the Court's clerk; these dates will be confirmed once the Scheduling Order is issued.

As the table illustrates, the one-year IPR filing deadline under 35 U.S.C. § 315(b) falls on exactly the same date as the close of fact discovery. By the time Lumicore could file any IPR petition at the outer boundary of the statutory window, the case will have progressed through claim construction, the Markman hearing will have been completed, and the parties will have engaged in months of intensive fact discovery. This advanced procedural posture is directly relevant to both the PTAB's discretionary-denial analysis under Camberwell & Co. v. Fintiv, Inc. and the district court's analysis of any motion to stay.

D. Lumicore's Invalidity Contentions (Anticipated)

Although Lumicore has not yet filed its Answer or served its invalidity contentions at the time of this memorandum, we have sufficient basis to anticipate the general contours of its invalidity theories. Lumicore's Answer and Counterclaims, which we anticipate will be filed in mid-June 2024, are expected to assert invalidity under 35 U.S.C. §§ 102 (anticipation) and 103 (obviousness), as well as unenforceability based on inequitable conduct. The inequitable conduct allegation, which we understand from pre-suit correspondence to be based on Dr. Jian-Wei Huang's alleged failure to disclose a prior publication during prosecution of the '193 Patent, would not be cognizable in IPR proceedings.

Our understanding of Lumicore's likely invalidity positions is informed by several sources. First, Lumicore's February 28, 2023 letter, sent through HVC in response to OWS's initial infringement notification, expressly disputed infringement and questioned the validity of the Asserted Patents, referencing several specific prior-art publications. Second, during an in-person licensing meeting held on April 20, 2023, in Austin, Texas, Lumicore's representatives (including Dr. Antoine Michaud, Lumicore's Vice President of Engineering, and Jessica Bautista, Lumicore's in-house patent counsel) identified certain prior-art references they believed to be material to the validity of the Asserted Patents. Third, Lumicore's retention of Marlowe Asset Management Patent Analytics, Inc. for prior-art searching indicates that its invalidity case is being developed with the assistance of a dedicated search firm.

Once Lumicore's formal invalidity contentions are served under Patent Rule 3-3, which we anticipate will occur on or about October 14, 2024, we will be able to conduct a more granular assessment of IPR risk based on the specific references and combinations Lumicore has identified. We understand that Lumicore ultimately cites twenty-three prior-art references across all four patents in its invalidity contentions. This memorandum will be updated at that time.

III. STATUTORY FRAMEWORK FOR INTER PARTES REVIEW

This section summarizes the statutory and procedural framework governing IPR proceedings, with particular attention to the aspects most relevant to our risk assessment.

A. Grounds for IPR

Inter partes review is a trial proceeding conducted by the PTAB to review the patentability of one or more claims of a patent. Under 35 U.S.C. § 311(b), an IPR petition may challenge a claim only on the basis of anticipation under 35 U.S.C. § 102 or obviousness under 35 U.S.C. § 103, and only on the basis of prior art consisting of patents or printed publications. This limitation is critical to our analysis because it means that certain categories of invalidity arguments available to Lumicore in district court litigation are not available in IPR.

Specifically, Lumicore cannot challenge the Asserted Patents in IPR based on: (i) issues arising under 35 U.S.C. § 112, such as indefiniteness, lack of written description, or lack of enablement; (ii) inequitable conduct or any other defense sounding in unenforceability; (iii) prior public use or on-sale bar arguments that are not based on patents or printed publications; or (iv) prior-conception defenses based on internal documents that do not qualify as patents or printed publications.

This limitation is particularly significant for the '015 Patent, as discussed in Section IV.D below, because Lumicore's strongest invalidity argument for that patent appears to rest on a prior-conception defense based on internal Lumicore design documents — an argument that is simply unavailable in IPR. Additionally, Lumicore's inequitable conduct counterclaim, which alleges that Dr. Jian-Wei Huang (the named inventor on the '193 Patent) failed to disclose a prior publication during prosecution, would not be cognizable in any IPR proceeding directed to the '193 Patent.

B. Time Bar — 35 U.S.C. § 315(b)

Section 315(b) of Title 35 imposes a strict time bar on the filing of IPR petitions. An IPR petition must be filed no later than one year after the date on which the petitioner, a real party in interest, or a privy of the petitioner is served with a complaint alleging infringement of the patent. This one-year clock began running on May 1, 2024 — the date on which summons and the Complaint were served on Lumicore's registered agent. Accordingly, the statutory deadline for Lumicore to file any IPR petition is May 1, 2025.

This deadline is jurisdictional in nature and cannot be waived by the PTAB or the parties. If Lumicore fails to file an IPR petition by May 1, 2025, it will be permanently barred from seeking IPR of the Asserted Patents (absent the filing of a new complaint by OWS on different patents, which is not anticipated).

We have investigated whether any real parties in interest or privies of Lumicore may have been served with a complaint alleging infringement of the Asserted Patents at an earlier date, which could trigger an earlier time bar. Based on our investigation, we have identified no such real parties in interest or privies. Lumicore is a publicly traded corporation (NASDAQ: LUMC), and its significant shareholders (as disclosed in its most recent proxy statement) are institutional investors with no apparent privity or real-party-in-interest relationship to this litigation. We are not aware of any indemnification agreements, joint-defense arrangements, or other relationships that would extend the time-bar analysis to third parties. Accordingly, we conclude that the one-year bar runs exclusively from May 1, 2024.

The coincidence of the IPR filing deadline with the close of fact discovery in the district court case is a significant factor in our analysis. By May 1, 2025, the litigation will be substantially advanced, which has important implications for both the PTAB's discretionary-denial analysis and the district court's analysis of any stay motion.

C. Estoppel — 35 U.S.C. § 315(e)

If an IPR proceeding is instituted and proceeds to a final written decision, the petitioner is subject to estoppel under 35 U.S.C. § 315(e). Specifically, the petitioner (and any real party in interest or privy) may not assert in a civil action arising in whole or in part under 28 U.S.C. § 1338, or in a proceeding before the International Trade Commission under 19 U.S.C. § 1337, that a claim is invalid on any ground that the petitioner "raised or reasonably could have raised" during the IPR.

This estoppel provision has a dual significance for OWS. On the one hand, if an IPR proceeds to a final written decision confirming the patentability of the challenged claims, Lumicore would be estopped from raising in district court any invalidity ground based on prior-art patents or printed publications that it raised or reasonably could have raised in the IPR. This would significantly narrow Lumicore's invalidity defenses at trial and could be a substantial strategic advantage for OWS. On the other hand, if the PTAB issues a final written decision holding one or more claims unpatentable, that determination would be binding and would effectively eliminate the invalidated claims from the litigation (subject to any appeal to the Federal Circuit).

The estoppel analysis also creates an important strategic consideration for Lumicore in deciding whether to file IPR petitions. By filing an IPR petition, Lumicore effectively narrows its ability to raise certain invalidity arguments at trial — particularly arguments based on prior-art references that it could have included in its petition but chose not to. This risk may discourage Lumicore from filing IPR petitions, particularly for patents where its strongest invalidity arguments are not based on patents or printed publications (e.g., the '015 Patent, where its strongest argument is a prior-conception defense).

D. Institution Standard

The PTAB will institute an IPR if the petition demonstrates a "reasonable likelihood" that the petitioner would prevail with respect to at least one challenged claim. 35 U.S.C. § 314(a). This standard is lower than the preponderance-of-the-evidence standard applied at trial but requires more than a mere possibility of success. The PTAB has considerable discretion in determining whether to institute review, and its institution decisions are non-appealable. See Cuozzo Speed Techs., LLC v. Lee, 579 U.S. 261 (2016).

In addition to the merits-based institution standard, the PTAB may exercise its discretion to deny institution based on factors unrelated to the merits of the petition. The most significant source of discretionary-denial authority for purposes of this assessment is the framework established in Camberwell & Co. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential), and the Interim Guidance on the Fintiv factors issued by USPTO Director Kathi Vidal on June 21, 2022 (the "June 2022 Interim Guidance").

Under Fintiv and the June 2022 Interim Guidance, the PTAB considers the following six factors in deciding whether to exercise its discretion to deny institution in cases involving parallel district court litigation:

(1) Whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted;

(2) Proximity of the court's trial date to the Board's projected statutory deadline for a final written decision;

(3) Investment in the parallel proceeding by the court and the parties;

(4) Overlap between issues raised in the petition and in the parallel proceeding;

(5) Whether the petitioner and the defendant in the parallel proceeding are the same party; and

(6) Other circumstances that impact the Board's exercise of discretion, including the merits.

The June 2022 Interim Guidance further specifies that the PTAB should not deny institution solely based on the Fintiv factors if the petition presents "compelling, meritorious challenges" — i.e., if there is a "compelling" showing that the challenged claims are unpatentable based on prior art that the district court has not yet evaluated. However, even under the June 2022 Interim Guidance, the timing and posture of parallel litigation remain significant considerations.

As discussed in detail in Section V below, the Fintiv factors are likely to weigh against institution if Lumicore files near the May 1, 2025 deadline, because the trial date of February 2, 2026 will be only approximately nine months away, the PTAB's final written decision would not issue until well after trial (approximately November 2026), and the parties and the Court will have made substantial investments in the litigation.

IV. PATENT-BY-PATENT IPR RISK ANALYSIS

This section provides a detailed patent-by-patent assessment of IPR risk, analyzing the strength of available prior art, the probability of PTAB institution, and the key vulnerabilities and defenses for each of the four Asserted Patents. The analysis is based on: (i) our own prior-art searches; (ii) references identified in Lumicore's pre-suit correspondence; (iii) information gathered during the April 20, 2023 licensing meeting; and (iv) publicly available information about Marlowe Asset Management Patent Analytics' search activities. This analysis will be refined following receipt of Lumicore's formal invalidity contentions.

A. U.S. Patent No. 10,234,847 ('847 Patent) — MODERATE-TO-HIGH IPR RISK

The '847 Patent, entitled "Multi-Channel Silicon Photonic Waveguide Multiplexer with Low Insertion Loss," presents the highest IPR risk among the four Asserted Patents. The prior art identified to date includes at least one strong reference that directly addresses the silicon photonic waveguide multiplexer technology claimed in the patent. We estimate the institution probability at 50–60% for at least one challenged claim.

1. Key Prior Art Identified

We have identified six prior-art references that are potentially relevant to the asserted claims of the '847 Patent, of which two are most significant:

Takahashi et al., "Dense WDM Silicon Photonic MUX," IEEE Photonics Technology Letters, Vol. 26, No. 6, pp. 614–617 (March 2014) ("Takahashi"). This is Lumicore's strongest reference for the '847 Patent. The Takahashi paper describes a silicon photonic wavelength-division multiplexer for dense WDM applications, employing arrayed waveguide grating architecture to combine multiple optical channels onto a single output waveguide. The paper reports insertion loss measurements for various channel configurations and discusses design techniques for minimizing crosstalk between adjacent channels. Takahashi was published more than two years before the '847 Patent's filing date of September 14, 2016, and clearly qualifies as a "printed publication" under 35 U.S.C. § 311(b). Lumicore identified Takahashi in its February 28, 2023 letter as a primary invalidity reference and discussed it at the April 20, 2023 licensing meeting in Austin.

PCT/EP2015/071234 (Simonsen), filed September 17, 2015 ("Simonsen"). The Simonsen PCT application describes arrayed waveguide grating designs for silicon photonic multiplexing applications, with particular emphasis on phase-shifted waveguide array configurations that improve channel uniformity and reduce insertion loss. Simonsen was filed approximately one year before the '847 Patent and published in the relevant timeframe to qualify as prior art. This reference is most relevant as a secondary reference in obviousness combinations with Takahashi.

The remaining four references identified to date include two U.S. patents and two additional conference papers addressing silicon photonic multiplexing technology. These references are generally less pertinent than Takahashi and Simonsen because they address the technology at a higher level of abstraction or focus on different aspects of the multiplexer design that are not directly implicated by the asserted claims.

2. Analysis of Anticipation Argument (Takahashi)

Takahashi is the most likely basis for an anticipation challenge under 35 U.S.C. § 102 against the '847 Patent. The reference describes a multi-channel silicon photonic multiplexer that combines multiple optical signals of different wavelengths onto a single waveguide — a concept that maps directly to the preamble and several elements of independent Claim 1 of the '847 Patent. However, our analysis reveals important limitations in the Takahashi anticipation argument.

Independent Claim 1 of the '847 Patent requires, among other things, a waveguide multiplexer that combines "multiple optical signals of different wavelengths onto a single waveguide" with a "low insertion loss" characteristic achieved through a specific waveguide geometry, including tapered mode converters at each input port and a particular coupling configuration that minimizes optical loss at the waveguide junctions. While Takahashi discloses a silicon photonic multiplexer at a general level, it does not expressly disclose the specific waveguide geometry that achieves the claimed low-insertion-loss performance.

Turning to the dependent claims, the analysis is more favorable to OWS. Dependent Claim 3 recites a specific tapered waveguide transition structure with defined taper ratios. Dependent Claim 5 further specifies a coupling ratio between the input ports and the multiplexed output waveguide. Dependent Claim 14 adds a requirement for a specific channel spacing and passband width. None of these specific structural limitations are expressly disclosed in Takahashi, which describes the multiplexer at a higher level of generality without specifying the detailed geometric parameters claimed in the '847 Patent's dependent claims.

Independent Claim 9 presents a distinct set of considerations. This claim includes a means-plus-function term — "means for combining the plurality of optical signals" — which, under 35 U.S.C. § 112(f), must be construed to cover only the corresponding structure disclosed in the specification and equivalents thereof. Our means-plus-function analysis (completed October 5, 2024, and circulated to the team) identifies the corresponding structure as the specific arrayed waveguide grating with tapered mode converters depicted in Figures 4A–4C of the '847 Patent specification. This narrow construction may distinguish Claim 9 over Takahashi, which employs a different waveguide coupling architecture.

Assessment: The Takahashi anticipation argument is colorable with respect to independent Claim 1 of the '847 Patent but is materially weaker for dependent Claims 3, 5, and 14, and for independent Claim 9. The PTAB could potentially institute review on Claim 1 alone based on the Takahashi anticipation theory, but we believe OWS has strong arguments against institution on the remaining claims. Even as to Claim 1, the argument has vulnerabilities because Takahashi does not expressly disclose the specific waveguide geometry that achieves the "low insertion loss" characteristic claimed in the patent.

3. Analysis of Obviousness Argument (Takahashi + Simonsen)

An obviousness challenge under 35 U.S.C. § 103 combining Takahashi with Simonsen presents a somewhat broader threat to the '847 Patent claims. The combination would pair Takahashi's general multiplexer architecture with Simonsen's phase-shifted waveguide array design, which addresses some of the structural limitations not found in Takahashi alone. Specifically, Simonsen describes tapered waveguide structures and coupling configurations that bear some similarity to the structures claimed in the '847 Patent's dependent claims.

A motivation-to-combine argument is readily available: both Takahashi and Simonsen address the same technical problem — silicon photonic WDM multiplexing for data-center interconnect applications — and a person of ordinary skill in the art working in this field would reasonably look to both references in developing a multiplexer design. The PTAB has consistently held that references addressing the same technical problem provide a sufficient motivation to combine, and the silicon photonics field is sufficiently cohesive that a POSITA would be aware of and look to the leading publications in the area.

However, the Takahashi-Simonsen combination has a significant gap: neither reference teaches the specific insertion-loss optimization technique claimed in Claims 5 and 14 of the '847 Patent. The '847 Patent's specification describes a novel approach to minimizing insertion loss through a combination of tapered mode converters, specific coupling ratios, and controlled waveguide curvature that together achieve a measured insertion loss of less than 0.5 dB per channel. Neither Takahashi nor Simonsen teaches this specific combination of design features, and the claimed insertion-loss performance represents a measurable improvement over the performance reported in either reference.

In addition to the limitations-based arguments, OWS has substantial evidence of secondary considerations of non-obviousness that would be available in responding to any IPR petition. The secondary-considerations evidence includes:

• Commercial success: OWS's products practicing the '847 Patent, including the OWS-400ZR transceiver module, generated approximately $310 million in revenue in fiscal year 2023. There is a demonstrable nexus between the patented technology and the commercial success of these products, as the waveguide multiplexer architecture claimed in the '847 Patent is a key differentiating feature.

• Long-felt need: The silicon photonics industry has long sought low-insertion-loss waveguide multiplexers for WDM applications, as insertion loss is a fundamental performance bottleneck in optical transceiver design. Industry publications dating back to at least 2010 identify insertion-loss reduction as a critical unmet need.

• Failure of others: At least three competitors — NovaPlex Photonics Corp., AetherWave Systems, Inc., and Solara Optics, Inc. (prior to its acquisition by OWS) — attempted to develop low-insertion-loss silicon photonic multiplexers using alternative approaches and were unable to achieve the performance levels claimed in the '847 Patent. Technical documentation and published papers from each competitor confirm these unsuccessful efforts.

• Copying by Lumicore: Evidence of copying by Lumicore is supported by the anticipated deposition testimony of Dr. Antoine Michaud (Lumicore's VP of Engineering), who admitted in a pre-deposition declaration that Lumicore's engineering team reviewed OWS's published patent applications during the design phase of the LumiLink product line. Additional evidence of copying is expected from the testimony of Melissa Chen, a former Lumicore engineer who has agreed to provide testimony.

Assessment: The Takahashi-Simonsen obviousness combination is a credible but not overwhelming threat. The combination does not fully account for the specific insertion-loss optimization technique claimed in the patent, and OWS has strong secondary-considerations evidence to rebut the obviousness challenge. Nonetheless, the PTAB may find the combination sufficient to meet the "reasonable likelihood" standard for institution on at least some claims.

4. Institution Probability

We estimate the probability of PTAB institution on at least one claim of the '847 Patent at 50–60%. This assessment reflects the strength of the Takahashi reference as applied to independent Claim 1, tempered by the structural specificity of the dependent claims, the means-plus-function limitation in Claim 9, and the availability of strong secondary-considerations evidence. The risk is further mitigated by the potential for discretionary denial under the Fintiv factors if the petition is filed near the May 1, 2025 deadline.

The '847 Patent represents the highest-risk target among the four Asserted Patents for IPR challenge, and we recommend prioritizing defensive preparations for this patent. Specific recommendations are set forth in Section VI.D below.

B. U.S. Patent No. 10,891,193 ('193 Patent) — LOW-TO-MODERATE IPR RISK

The '193 Patent, entitled "High-Bandwidth Coherent Optical Transceiver Integrated on Silicon Substrate," presents a lower IPR risk than the '847 and '562 Patents. The claims are directed to a complete integrated coherent optical transceiver architecture, comprising multiple complex elements that are difficult to map to any single prior-art reference. We estimate the institution probability at 30–40%.

1. Key Prior Art Identified

Lumicore's anticipated invalidity contentions identify eight prior-art references against the asserted claims of the '193 Patent. The primary reference is Takahashi (the same reference identified for the '847 Patent), which Lumicore argues discloses certain coherent transceiver integration concepts. However, no single reference identified to date discloses the full combination of coherent optical transceiver elements integrated on a single silicon substrate as claimed in the '193 Patent.

We note that Lumicore's inequitable conduct allegation — specifically, that Dr. Jian-Wei Huang, the named inventor on the '193 Patent, failed to disclose a prior publication during prosecution — is not a cognizable ground for IPR under 35 U.S.C. § 311(b). This allegation, if pursued, would be limited to the district court proceeding. The inability to raise this defense in IPR may reduce Lumicore's incentive to file an IPR petition against the '193 Patent, as its strongest non-prior-art defense (inequitable conduct) cannot be adjudicated at the PTAB.

2. Analysis. The asserted claims of the '193 Patent — Claims 1, 3, 7, 10, 15, and 18 — are directed to a coherent optical transceiver architecture with specific modulator, detector, and digital signal processing ("DSP") integration on a single silicon substrate. The claims are characterized by their complexity and multi-element nature, reciting a combination of: (i) a coherent modulator with specified modulation formats; (ii) a coherent detection module with polarization-diverse inputs; (iii) an integrated DSP engine with specific signal-processing capabilities; and (iv) an optical local oscillator coupled to the detection module. The integration of all these elements on a single silicon substrate distinguishes the claims from prior-art approaches that employed discrete components or partial integration.

A critical aspect of the prosecution history supports OWS's position. During prosecution, the examiner issued a rejection under 35 U.S.C. § 102 based on Takahashi, arguing that Takahashi anticipated the claimed coherent transceiver architecture. In response, OWS (through Dr. Martin Chu at Cascade IP Advisors) made a narrowing amendment to the "coherent detection module" limitation, adding a requirement that the detection module include "a pair of balanced photodetectors configured to receive orthogonal polarization components of a coherent optical signal, wherein the balanced photodetectors are monolithically integrated on the silicon substrate with the modulator and the DSP engine." This narrowing amendment was deliberate and is recorded in the prosecution file history. The amendment distinguishes the claims over Takahashi, which does not disclose monolithically integrated balanced photodetectors in a coherent detection module of the type described in the amended claims.

This prosecution-history narrowing has a direct impact on IPR risk. Because the claims were specifically amended to overcome Takahashi, Lumicore cannot credibly argue that Takahashi alone anticipates the claims in their current form. Any IPR petition directed to the '193 Patent would need to rely on an obviousness combination of multiple references to cover all of the claim limitations.

The '193 Patent's priority to Provisional Application No. 62/499,117, filed April 7, 2017, establishes an early effective filing date that limits the universe of available prior art. Any reference published after April 7, 2017 would not qualify as prior art under 35 U.S.C. § 102(a)(1), and any reference filed after that date would not qualify under § 102(a)(2). This early priority date excludes several potentially relevant references from consideration.

With respect to obviousness combinations, we assess that at least three references would be required to cover all the limitations of independent Claim 1 of the '193 Patent. The PTAB has historically been skeptical of obviousness arguments requiring the combination of three or more references, particularly when the references come from different technical subfields or when the motivation to combine is not immediately apparent. While the PTAB does not impose a per se rule against multi-reference combinations, the burden on the petitioner increases significantly as the number of required references grows.

3. Institution Probability

We estimate the probability of PTAB institution on the '193 Patent at 30–40%. This assessment reflects the complex, multi-element nature of the claims, the early priority date that limits available prior art, and the prosecution-history narrowing that forecloses the strongest anticipation argument. The '193 Patent is a significantly lower-risk target for IPR than either the '847 Patent or the '562 Patent.

The strongest defenses available to OWS for the '193 Patent include: (i) the prosecution-history amendment that distinguishes over Takahashi; (ii) the early priority date established by Provisional Application No. 62/499,117; (iii) the complexity and multi-element nature of the claims, which makes it difficult to assemble a credible obviousness combination from two or fewer references; and (iv) the potential for Fintiv discretionary denial based on the advanced posture of the parallel litigation.

C. U.S. Patent No. 9,678,562 ('562 Patent) — MODERATE IPR RISK

The '562 Patent, entitled "Method for Thermal Management of Photonic Integrated Circuits Using Embedded Micro-Channel Heat Sinks," presents a moderate IPR risk. We have identified one prior-art printed publication — the Li Wei conference paper — that directly addresses the thermal management of photonic integrated circuits using embedded cooling channels, though material differences in channel geometry may distinguish the claims. We estimate the institution probability at 40–50%.

1. Key Prior Art Identified

Two primary references have been identified as potential bases for an IPR challenge:

U.S. Patent No. 8,412,007 (Bergmann), issued April 2, 2013 ("Bergmann"). The Bergmann patent describes micro-channel heat-sink structures for semiconductor integrated circuits, including fabrication methods for embedding micro-channels within a semiconductor substrate. The reference is directed to thermal management of electronic (rather than photonic) integrated circuits, but the underlying heat-sink technology is analogous. Bergmann qualifies as a "patent" under 35 U.S.C. § 311(b) and was issued more than a year before the '562 Patent's filing date of November 22, 2014.

Dr. Li Wei, "Thermal Solutions for PICs," Proceedings of the Optical Fiber Communication Conference (OFC 2013), Paper No. Th3A.7, March 2013 ("Li Wei"). This conference paper discusses thermal management solutions for photonic integrated circuits, including the use of embedded cooling channels to dissipate heat generated by active photonic components. Li Wei describes a specific implementation of embedded cooling channels with rectangular cross-sections and reports thermal performance measurements for a prototype PIC. The paper was published at a major industry conference and clearly qualifies as a "printed publication" under § 311(b). Li Wei is the more dangerous of the two primary references because it specifically addresses PIC thermal management — the same technical field as the '562 Patent — rather than the more general semiconductor thermal management addressed by Bergmann.

Lumicore's anticipated invalidity contentions are expected to cite additional references beyond Takahashi, Bergmann, and Li Wei, but these two references form the core of the anticipated IPR challenge to the '562 Patent.

2. Analysis of Anticipation (Li Wei)

Li Wei presents a plausible basis for an anticipation challenge under 35 U.S.C. § 102, but the argument faces significant obstacles related to the specific channel geometry and dimensions claimed in the '562 Patent.

The Li Wei conference paper describes embedded cooling channels for PICs, but the channels described in Li Wei have a rectangular cross-section with dimensions that differ from the specific channel configuration claimed in the '562 Patent. The '562 Patent claims a "micro-channel heat sink" comprising cooling channels with a defined hydraulic-diameter range and a specific multi-layer channel configuration that enhances heat transfer efficiency. Li Wei does not disclose this specific channel configuration, and the rectangular channels described in Li Wei may not fall within the claimed hydraulic-diameter range.

Critically, the term "micro-channel heat sink" is a disputed claim-construction term in the district court litigation. OWS proposes a construction of "a heat-dissipating structure containing channels with a hydraulic diameter of less than 1 mm." Lumicore, by contrast, proposes a narrower construction: "a closed-loop liquid-cooling system with channels having a hydraulic diameter between 10 µm and 200 µm." The outcome of the claim-construction dispute will have significant implications for IPR risk, creating an unusual dynamic in this case.

If OWS's broader construction prevails at the Markman hearing on March 14, 2025, the prior art base potentially widens, as more references with various channel geometries could fall within the claimed scope. Conversely, if Lumicore's narrower construction prevails, the prior art must describe channels within the 10–200 µm hydraulic-diameter range to anticipate the claims. Notably, the channels described in Li Wei appear to fall outside Lumicore's own proposed 10–200 µm range, which means that under Lumicore's own construction, Li Wei may not anticipate the claims. This creates a paradox for Lumicore: arguing for a narrow construction in district court to avoid infringement while simultaneously needing a broad construction in IPR to establish anticipation.

This claim-construction overlap creates a strategic consideration that we will need to monitor carefully. If Lumicore files an IPR petition before the Markman hearing, the PTAB will apply the "broadest reasonable interpretation" standard (or, more precisely under the current rules, the same claim-construction standard used in civil actions, i.e., the Phillips v. AWH Corp. standard), which may not align with either party's proposed construction in district court. If the petition is filed after the Markman hearing, the PTAB would be expected to consider the district court's construction, though it is not bound by it.

Assessment: Li Wei anticipation is a credible but imperfect basis for challenge. The channel geometry differences and the claim-construction dependency introduce significant uncertainty that could cut either way.

3. Analysis of Obviousness (Bergmann + Li Wei)

An obviousness challenge combining Bergmann's micro-channel heat-sink technology with Li Wei's PIC-specific thermal management concepts could potentially cover more claim limitations than either reference alone. Bergmann provides detailed fabrication methods for embedding micro-channels in semiconductor substrates, while Li Wei provides the PIC-specific application and thermal performance data. The combination would argue that a person of ordinary skill in the art would have been motivated to apply Bergmann's well-developed micro-channel fabrication techniques to the PIC thermal management problem addressed by Li Wei.

A motivation-to-combine argument is available: both Bergmann and Li Wei address thermal management of semiconductor integrated circuits, and a POSITA working on PIC thermal management would naturally look to the broader semiconductor literature for heat-dissipation solutions. The silicon photonics and semiconductor fabrication communities share substantial overlap in terms of fabrication processes and thermal-management challenges.

However, the Bergmann-Li Wei combination does not account for the specific method steps claimed in the '562 Patent for embedding micro-channels during the PIC fabrication process. Claims 4, 6, and 11 of the '562 Patent recite specific fabrication-process steps — including a particular order of deposition, etching, and bonding operations — that are not taught by either Bergmann or Li Wei. Bergmann describes fabrication methods for electronic ICs, and Li Wei does not provide detailed fabrication-process information at all. A POSITA adapting Bergmann's methods to PIC fabrication would face non-trivial challenges that are addressed by the specific process steps claimed in the '562 Patent.

Additionally, the '562 Patent has an early filing date (November 22, 2014) and an early issue date (June 13, 2017), which limits the prior-art window. While both Bergmann and Li Wei predate the filing date, the '562 Patent's prosecution history may contain priority-date arguments or evidence of swearing behind that could affect the analysis. We are currently reviewing the complete prosecution history with Dr. Martin Chu to identify any such arguments.

Assessment: The Bergmann-Li Wei combination is a moderate threat, primarily to the independent claims and broader dependent claims of the '562 Patent. The method-specific claims (Claims 4, 6, and 11) are less vulnerable because the combination does not teach the specific fabrication steps recited therein.

4. Institution Probability

We estimate the probability of PTAB institution on at least one claim of the '562 Patent at 40–50%. The primary risk factor is the Li Wei conference paper, which is a strong printed publication directly addressing PIC thermal management using embedded cooling channels. The risk is tempered by the channel-geometry differences between Li Wei and the claimed invention, the claim-construction dependency, and the specific fabrication-method limitations in Claims 4, 6, and 11 that are not taught by the prior art.

The '562 Patent represents the second-highest-risk target among the four Asserted Patents (after the '847 Patent). Defensive preparations should focus on distinguishing the Li Wei reference on channel geometry and fabrication-method grounds and on leveraging the claim-construction dynamics that may work in OWS's favor depending on the outcome of the Markman hearing.

D. U.S. Patent No. 11,402,015 ('015 Patent) — LOW IPR RISK

The '015 Patent, entitled "Polarization-Diverse Grating Coupler for Silicon Photonic Transceivers," presents the lowest IPR risk of the four Asserted Patents. Lumicore's strongest invalidity argument for this patent is based on a prior-conception defense relying on internal Lumicore design documents — an argument that is simply unavailable in IPR proceedings. The printed-publication prior art identified to date is relatively weak. We estimate the institution probability at 15–25%.

1. Key Prior Art Identified

Lumicore's primary invalidity theory for the '015 Patent centers on a prior-conception defense, supported by internal Lumicore design documents dated 2016–2017 that purportedly show that Lumicore engineers independently conceived of the polarization-diverse grating coupler design prior to OWS's earliest priority date. This is potentially a strong defense in district court under 35 U.S.C. § 102(a)(2) and the pre-AIA first-to-invent framework (to the extent applicable), but it is not available in IPR. Under 35 U.S.C. § 311(b), IPR challenges must be based exclusively on patents or printed publications. Internal design documents, laboratory notebooks, and similar non-published materials do not qualify as "printed publications" and cannot form the basis of an IPR petition.

Among the printed-publication references that Lumicore has identified, the most prominent is a combination of Bergmann (U.S. Patent No. 8,412,007) with Simonsen (PCT/EP2015/071234). However, the '015 Patent includes a narrowing amendment made during prosecution to the "two-dimensional sub-wavelength grating" limitation that distinguishes the claimed invention over this combination. Specifically, the amendment added a requirement that the grating coupler include "a two-dimensional periodic array of sub-wavelength features arranged in a non-uniform pattern configured to split incoming light into orthogonal polarization components and to direct each polarization component to a separate waveguide." Neither Bergmann nor Simonsen discloses a two-dimensional sub-wavelength grating with the specific non-uniform pattern and polarization-splitting functionality recited in the amended claims.

No strong single-reference anticipation candidate has been identified for the '015 Patent. The polarization-diverse grating coupler technology as claimed represents a specific advance in the field that is not clearly taught by any available prior-art patent or printed publication.

2. Analysis. The '015 Patent's most significant validity challenge is the prior-conception defense based on Lumicore's internal documents. If Lumicore can establish that its engineers independently conceived of the claimed invention before OWS's priority date and exercised reasonable diligence in reducing the invention to practice, this defense could be devastating in district court. However, because this defense cannot be raised in IPR, it creates a natural disincentive for Lumicore to file an IPR petition against the '015 Patent. Filing such a petition would expose Lumicore to IPR estoppel under 35 U.S.C. § 315(e) without the ability to present its strongest invalidity argument, and a final written decision confirming patentability would further strengthen OWS's position at trial.

The printed-publication prior art for the '015 Patent is comparatively weak. The polarization-diverse grating coupler technology claimed in the patent represents a specialized design approach that combines two-dimensional sub-wavelength grating structures with polarization-splitting functionality in a way that was not previously taught in the prior art. The asserted claims — Claims 1, 5, 8, 12, and 16 — include specific structural limitations, particularly the two-dimensional grating coupler with polarization-splitting element and the non-uniform pattern requirement, that narrow the claims in a manner favorable to patentability.

The '015 Patent's priority to Provisional Application No. 62/499,117, filed April 7, 2017, provides an additional layer of protection by establishing an early effective filing date that limits the universe of available prior art.

3. Institution Probability

We estimate the probability of PTAB institution on the '015 Patent at 15–25%, the lowest of the four Asserted Patents. This assessment reflects the weakness of the available printed-publication prior art, the prosecution-history amendment that distinguishes over the strongest reference combination, and the fundamental structural limitation that Lumicore's most powerful invalidity argument (prior conception) is unavailable in IPR.

From a strategic standpoint, the '015 Patent gives OWS a significant procedural advantage. Lumicore's strongest invalidity argument is available only in district court, meaning that the '015 Patent is best defended in the forum where the case is already pending. Lumicore has little incentive to file an IPR petition against the '015 Patent, and doing so would risk estoppel on its weaker printed-publication arguments without any offsetting benefit.

V. LIKELIHOOD OF LITIGATION STAY IF IPR IS FILED

This section assesses the likelihood that the district court would grant a stay of the litigation pending IPR proceedings, assuming Lumicore files one or more IPR petitions. The analysis considers the legal standard for stays in the Eastern District of Texas, the Fintiv factors for PTAB discretionary denial (which indirectly affect stay analysis), and the specific circumstances of this case.

A. Legal Standard for Stay

District courts possess inherent authority to manage their dockets, including the discretion to stay proceedings pending the resolution of related administrative proceedings. See Landis v. North American Co., 299 U.S. 248, 254 (1936). There is no automatic right to a stay of litigation pending IPR, and the burden is on the party seeking the stay to demonstrate that a stay is warranted. Courts in the Eastern District of Texas, and throughout the Fifth Circuit, generally consider four factors in evaluating a motion to stay pending IPR:

(1) Whether a stay will simplify the issues in question and the trial of the case;

(2) Whether discovery is complete and whether a trial date has been set;

(3) Whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-movant; and

(4) Whether a stay will reduce the burden of litigation on the parties and the Court.

These factors are not applied mechanically; rather, they are weighed holistically in light of the totality of the circumstances. The non-movant's status as a practicing entity that competes directly with the accused infringer is a factor that courts frequently cite as weighing against a stay, because ongoing infringement causes competitive harm that compounds with delay. Conversely, courts may be more inclined to grant a stay when the litigation is in its early stages, discovery has not yet commenced, and the IPR proceedings have the potential to narrow or eliminate the issues for trial.

B. Fintiv Factors for PTAB Discretionary Denial

Although the Fintiv factors are applied by the PTAB in deciding whether to exercise discretion to deny institution of an IPR petition, they are relevant to the stay analysis because the PTAB's decision on institution directly affects whether a stay motion will be filed and the strength of the arguments in support of a stay. If the PTAB denies institution under Fintiv, there is no pending IPR proceeding, and no basis for a stay motion.

As discussed in Section III.D above, the six Fintiv factors consider the relationship between the IPR proceeding and the parallel district court litigation, with particular attention to the proximity of the trial date, the investment in the litigation, and the overlap of issues. The June 2022 Interim Guidance modifies the Fintiv framework to provide that the PTAB should not deny institution solely based on parallel-litigation considerations when the petition presents "compelling, meritorious challenges" to the claims at issue.

If Lumicore files an IPR petition near the May 1, 2025 deadline, the Fintiv factors strongly favor discretionary denial. At that point, the trial date of February 2, 2026 will be approximately nine months away, while the PTAB's projected final written decision date would be approximately eighteen months after institution — i.e., approximately November 2026, more than nine months after the trial is expected to conclude. This timing dramatically undermines the efficiency rationale for IPR and weighs heavily against institution under Fintiv Factor 2.

The remaining Fintiv factors also favor denial if Lumicore files near the deadline:

• Factor 1 (stay): No stay will have been granted, and for the reasons discussed below, a stay is unlikely given the advanced posture of the case.

• Factor 3 (investment): By May 2025, both parties and the Court will have made enormous investments in the litigation, including completion of the Markman hearing, extensive document discovery (an estimated 329,000+ documents produced), and multiple fact depositions.

• Factor 4 (overlap): There will be substantial overlap between the issues raised in any IPR petition and the issues in the district court case, but this factor cuts both ways and does not strongly favor either party.

• Factor 5 (same party): Lumicore is both the petitioner and the defendant in the parallel proceeding, which weighs in favor of denial.

• Factor 6 (other circumstances): The merits of the petition will be the primary consideration under this factor. Under the June 2022 Interim Guidance, a "compelling" showing on the merits could override the other factors, but the prior-art challenges identified to date are credible without being overwhelming.

Assessment: The Fintiv analysis favors discretionary denial if Lumicore files near the May 1, 2025 deadline. However, the June 2022 Interim Guidance's "compelling merits" exception creates uncertainty, particularly for the '847 Patent (where Takahashi is a strong reference) and the '562 Patent (where the Li Wei conference paper is directly on point). We estimate a meaningful probability that the PTAB would nonetheless institute review on at least the '847 Patent if the petition presents a strong showing on the merits.

C. Application to This Case

1. Stage of Litigation at Probable Filing (Near May 1, 2025)

By May 1, 2025, the date by which Lumicore must file any IPR petition, the litigation will be in an advanced posture. The following milestones will have been completed or substantially completed:

• Claim Construction: The Markman hearing will have been conducted on March 14, 2025. The parties will have submitted their Joint Claim Construction Statement (October 28, 2024), opening claim construction briefs, responsive briefs, and sur-reply briefs. The Court may or may not have issued its Claim Construction Order by May 1, 2025, but the hearing will have occurred and the Court will have invested substantial judicial resources in analyzing the disputed terms.

• Fact discovery: Fact discovery will have closed on May 1, 2025 (coinciding exactly with the IPR filing deadline). By this point, OWS will have produced approximately 182,000 documents (encompassing approximately 1.4 million pages), and Lumicore will have produced approximately 147,000 documents (encompassing approximately 980,000 pages). The total document production across both parties will exceed 329,000 documents and 2.38 million pages.

• Contentions: OWS's infringement contentions will have been served on September 16, 2024 (per P.R. 3-1), and Lumicore's invalidity contentions will have been served on October 14, 2024 (per P.R. 3-3). Both parties will have had months to analyze and refine their respective contentions.

• Depositions: At least five key fact depositions will have been taken, including: (a) Dr. Jian-Wei Huang, OWS's Chief Technology Officer and named inventor on the '193 and '015 Patents; (b) Dr. Antoine Michaud, Lumicore's Vice President of

MEMORANDUM
PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT
This memorandum is protected by the attorney-client privilege and constitutes attorney work product prepared in anticipation of litigation. It is intended solely for the use of the addressees and should not be disclosed to any third party without the prior written consent of Calderwood & Harkness LLP.
TO: Alan Ngo, Responsible Partner, IP Litigation, Calderwood & Harkness LLP
FROM: Wendy Schultz, Lead Associate; Omar Siddiqui, Working Associate
DATE: May 15, 2024
RE: Inter Partes Review Risk Assessment — Asserted Patents in Optiwave Semiconductor Corp. v. Lumicore Technologies, Inc., Case No. 2:24-cv-00319-JRG (E.D. Tex.)
CC: Marcus Delgado, Billing Partner; James "Jim" Callahan, Local Counsel, Whitmore & Callahan LLP
Right-click to update Table of Contents
I. EXECUTIVE SUMMARY
The purpose of this memorandum is to assess the risk that Lumicore Technologies, Inc. ("Lumicore" or "LTC"), through its litigation counsel Hawthorne Vega & Cruz LLP ("HVC"), files inter partes review ("IPR") petitions at the United States Patent and Trademark Office ("USPTO") against one or more of the four United States utility patents asserted by our client, Optiwave Semiconductor Corp. ("OWS" or "Optiwave"), in the above-captioned action. Specifically, this memorandum analyzes the IPR exposure 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"). In addition, this memorandum assesses the likelihood and potential impact of a resulting stay of the district court litigation should IPR petitions be filed and evaluates recommended strategies to position OWS both to oppose a stay and to defend the Asserted Patents before the Patent Trial and Appeal Board ("PTAB").
OWS filed its Complaint for Patent Infringement on April 22, 2024, in the United States District Court for the Eastern District of Texas, where the case has been assigned to the Honorable James R. Gilstrap. Summons was served on Lumicore's registered agent, National Agent Services Corp., at 850 New Burton Road, Suite 201, Dover, Delaware 19904, on May 1, 2024. Under 35 U.S.C. § 315(b), Lumicore must file any IPR petition within one year of the date on which it was served with a complaint alleging infringement of the relevant patents. Accordingly, the statutory deadline for filing any IPR petition is May 1, 2025.
This assessment covers the following areas: (a) the likelihood that Lumicore will file IPR petitions against each of the four Asserted Patents; (b) the strength of the prior art available to Lumicore to support such petitions; (c) the probability that the PTAB would institute review if petitions are filed; (d) the likelihood that the district court would grant a stay of the litigation pending IPR proceedings; and (e) recommended strategies to position OWS against a stay and to defend the Asserted Patents before the PTAB.
Our overall risk assessment is as follows. There is a moderate risk that Lumicore files IPR petitions against the '847 Patent and the '562 Patent, which are the two patents most vulnerable to the prior art we have identified thus far. The risk is lower as to the '193 Patent and the '015 Patent. With respect to the possibility of a litigation stay, we assess the risk as low-to-moderate given the advanced posture this case will have achieved by the time any petition could reasonably be filed. The one-year statutory deadline under § 315(b) coincides with the close of fact discovery, and by that point the Court will have conducted a Markman hearing, the parties will have exchanged detailed infringement and invalidity contentions, and substantial discovery will have been completed.
We note that Lumicore has signaled its intention to pursue IPR as part of its defense strategy. In pre-filing defense communications exchanged through HVC, Lumicore has expressly reserved the right to petition for IPR. We anticipate that Lumicore's Answer and Counterclaims, which we project will be filed in mid-June 2024 (D.E. 12, filed June 17, 2024, as confirmed post-filing), will formally assert invalidity and reserve IPR rights. Additionally, we have learned through informal channels and public records that Lumicore has retained Marlowe Asset Management Patent Analytics, Inc., a prior-art search firm based in Atlanta, Georgia, to conduct comprehensive prior-art searches relating to the Asserted Patents. This engagement strongly suggests that Lumicore is actively preparing one or more IPR petitions.
This memorandum should be treated as a preliminary assessment. We recommend updating this analysis at several key junctures: (1) upon receipt of Lumicore's invalidity contentions under Patent Rule 3-3, which we anticipate will be served on or about October 14, 2024; (2) following the Markman hearing scheduled for March 14, 2025; and (3) in April 2025, immediately before the one-year filing deadline.
II. BACKGROUND
A. The Asserted Patents
OWS has asserted four United States utility patents in this action. The table below provides a summary of each patent, including its title, filing and issue dates, ownership history, and family relationships.
Several patent-family relationships are relevant to this analysis. The '562 Patent and the '847 Patent are in the same patent family and share a continuation relationship, which means that portions of their specifications overlap and their prosecution histories are interconnected. The '193 Patent and the '015 Patent share a common provisional application — Provisional Application No. 62/499,117, filed April 7, 2017 — which establishes an early effective filing date for prior-art purposes for both patents. This common priority date is particularly significant because it pushes the relevant prior-art date back to April 7, 2017, potentially excluding references published after that date from consideration under 35 U.S.C. § 102.
With respect to the '562 Patent, we note that this patent was not originally assigned to OWS. It was instead originally assigned to Solara Optics, Inc., a now-defunct photonics startup that developed thermal management technologies for integrated optical circuits. OWS acquired the '562 Patent, along with eleven other patents, from Solara pursuant to an Asset Purchase Agreement dated June 15, 2018. The total consideration for the twelve-patent portfolio was $34.5 million. The chain of title has been properly recorded at the USPTO, and there are no outstanding encumbrances or licensing obligations associated with the '562 Patent that would affect OWS's standing to assert it.
All four Asserted Patents have been maintained in force, and all required maintenance fees are current. None of the Asserted Patents is subject to any terminal disclaimer that would raise issues concerning the enforceability of the claims. All four patents were prosecuted by the same outside prosecution counsel — Cascade IP Advisors, LLC, of Arlington, Virginia — with Dr. Martin Chu serving as lead prosecution attorney. Dr. Chu's familiarity with the prosecution histories of all four patents will be an important resource in preparing PTAB defenses should IPR petitions be filed.
No IPR petitions have been filed against any of the four Asserted Patents to date. Similarly, no ex parte reexamination requests, supplemental examination requests, or post-grant review petitions have been filed. The Asserted Patents have not been the subject of any prior litigation other than the instant action. OWS holds a total portfolio of 142 issued U.S. patents and 58 pending U.S. patent applications, which provides additional context for the company's investment in and commitment to its intellectual property.
B. Asserted Claims and Accused Products
The Complaint alleges that three Lumicore products infringe certain claims of the Asserted Patents. The specific claim-to-product mapping is as follows:
'847 Patent — Claims 1, 3, 5, 9, and 14. These claims are asserted against the LumiLink 400G-ZR+ coherent transceiver module and the LumiLink 800G-DR8 short-reach transceiver module. The LumiLink 400G-ZR+ generated approximately $94.8 million in revenue for Lumicore in fiscal year 2023, and the LumiLink 800G-DR8 generated approximately $128.4 million in revenue for the same period. The '847 Patent claims are directed to the silicon photonic waveguide multiplexer architecture used in both products to combine multiple optical signals of different wavelengths onto a single output waveguide.
'193 Patent — Claims 1, 3, 7, 10, 15, and 18. These claims are asserted against all three accused products: the LumiLink 400G-ZR+, the LumiLink 800G-DR8, and the LumiEdge 1600G-LR long-reach transceiver module. The LumiEdge 1600G-LR generated approximately $41.7 million in revenue for Lumicore in fiscal year 2023. The '193 Patent claims are directed to the integrated coherent optical transceiver architecture implemented across all three product lines, including the integration of modulator, detector, and digital signal processing components on a single silicon substrate.
'562 Patent — Claims 1, 4, 6, and 11. These claims are asserted against the LumiLink 400G-ZR+ and the LumiLink 800G-DR8. The '562 Patent claims are directed to the thermal management method employing embedded micro-channel heat sinks used in both products to dissipate heat generated by the photonic integrated circuits.
'015 Patent — Claims 1, 5, 8, 12, and 16. These claims are asserted against the LumiLink 800G-DR8 and the LumiEdge 1600G-LR. The '015 Patent claims are directed to the polarization-diverse grating coupler design used to couple light into and out of the silicon photonic transceivers in both products.
The total accused-product revenue for Lumicore in fiscal year 2023 across all three product lines was approximately $264.9 million. Based on revenue projections through the anticipated trial date (covering the period from the third quarter of 2022 through the fourth quarter of 2025), total accused-product revenue is estimated at approximately $714.6 million. OWS's total damages demand in this action is approximately $210.0 million, which reflects a reasonable royalty analysis performed by our damages consultant, Dr. Patricia Reinhardt of Meridian Economics Group, LLC.
C. Procedural Posture and Key Dates
The following timeline reflects both actual and anticipated case milestones. Items marked with an asterisk (*) are anticipated dates based on the Eastern District of Texas standard scheduling practices and pre-filing discussions with the Court's clerk; these dates will be confirmed once the Scheduling Order is issued.
As the table illustrates, the one-year IPR filing deadline under 35 U.S.C. § 315(b) falls on exactly the same date as the close of fact discovery. By the time Lumicore could file any IPR petition at the outer boundary of the statutory window, the case will have progressed through claim construction, the Markman hearing will have been completed, and the parties will have engaged in months of intensive fact discovery. This advanced procedural posture is directly relevant to both the PTAB's discretionary-denial analysis under Camberwell & Co. v. Fintiv, Inc. and the district court's analysis of any motion to stay.
D. Lumicore's Invalidity Contentions (Anticipated)
Although Lumicore has not yet filed its Answer or served its invalidity contentions at the time of this memorandum, we have sufficient basis to anticipate the general contours of its invalidity theories. Lumicore's Answer and Counterclaims, which we anticipate will be filed in mid-June 2024, are expected to assert invalidity under 35 U.S.C. §§ 102 (anticipation) and 103 (obviousness), as well as unenforceability based on inequitable conduct. The inequitable conduct allegation, which we understand from pre-suit correspondence to be based on Dr. Jian-Wei Huang's alleged failure to disclose a prior publication during prosecution of the '193 Patent, would not be cognizable in IPR proceedings.
Our understanding of Lumicore's likely invalidity positions is informed by several sources. First, Lumicore's February 28, 2023 letter, sent through HVC in response to OWS's initial infringement notification, expressly disputed infringement and questioned the validity of the Asserted Patents, referencing several specific prior-art publications. Second, during an in-person licensing meeting held on April 20, 2023, in Austin, Texas, Lumicore's representatives (including Dr. Antoine Michaud, Lumicore's Vice President of Engineering, and Jessica Bautista, Lumicore's in-house patent counsel) identified certain prior-art references they believed to be material to the validity of the Asserted Patents. Third, Lumicore's retention of Marlowe Asset Management Patent Analytics, Inc. for prior-art searching indicates that its invalidity case is being developed with the assistance of a dedicated search firm.
Once Lumicore's formal invalidity contentions are served under Patent Rule 3-3, which we anticipate will occur on or about October 14, 2024, we will be able to conduct a more granular assessment of IPR risk based on the specific references and combinations Lumicore has identified. We understand that Lumicore ultimately cites twenty-three prior-art references across all four patents in its invalidity contentions. This memorandum will be updated at that time.
III. STATUTORY FRAMEWORK FOR INTER PARTES REVIEW
This section summarizes the statutory and procedural framework governing IPR proceedings, with particular attention to the aspects most relevant to our risk assessment.
A. Grounds for IPR
Inter partes review is a trial proceeding conducted by the PTAB to review the patentability of one or more claims of a patent. Under 35 U.S.C. § 311(b), an IPR petition may challenge a claim only on the basis of anticipation under 35 U.S.C. § 102 or obviousness under 35 U.S.C. § 103, and only on the basis of prior art consisting of patents or printed publications. This limitation is critical to our analysis because it means that certain categories of invalidity arguments available to Lumicore in district court litigation are not available in IPR.
Specifically, Lumicore cannot challenge the Asserted Patents in IPR based on: (i) issues arising under 35 U.S.C. § 112, such as indefiniteness, lack of written description, or lack of enablement; (ii) inequitable conduct or any other defense sounding in unenforceability; (iii) prior public use or on-sale bar arguments that are not based on patents or printed publications; or (iv) prior-conception defenses based on internal documents that do not qualify as patents or printed publications.
This limitation is particularly significant for the '015 Patent, as discussed in Section IV.D below, because Lumicore's strongest invalidity argument for that patent appears to rest on a prior-conception defense based on internal Lumicore design documents — an argument that is simply unavailable in IPR. Additionally, Lumicore's inequitable conduct counterclaim, which alleges that Dr. Jian-Wei Huang (the named inventor on the '193 Patent) failed to disclose a prior publication during prosecution, would not be cognizable in any IPR proceeding directed to the '193 Patent.
B. Time Bar — 35 U.S.C. § 315(b)
Section 315(b) of Title 35 imposes a strict time bar on the filing of IPR petitions. An IPR petition must be filed no later than one year after the date on which the petitioner, a real party in interest, or a privy of the petitioner is served with a complaint alleging infringement of the patent. This one-year clock began running on May 1, 2024 — the date on which summons and the Complaint were served on Lumicore's registered agent. Accordingly, the statutory deadline for Lumicore to file any IPR petition is May 1, 2025.
This deadline is jurisdictional in nature and cannot be waived by the PTAB or the parties. If Lumicore fails to file an IPR petition by May 1, 2025, it will be permanently barred from seeking IPR of the Asserted Patents (absent the filing of a new complaint by OWS on different patents, which is not anticipated).
We have investigated whether any real parties in interest or privies of Lumicore may have been served with a complaint alleging infringement of the Asserted Patents at an earlier date, which could trigger an earlier time bar. Based on our investigation, we have identified no such real parties in interest or privies. Lumicore is a publicly traded corporation (NASDAQ: LUMC), and its significant shareholders (as disclosed in its most recent proxy statement) are institutional investors with no apparent privity or real-party-in-interest relationship to this litigation. We are not aware of any indemnification agreements, joint-defense arrangements, or other relationships that would extend the time-bar analysis to third parties. Accordingly, we conclude that the one-year bar runs exclusively from May 1, 2024.
The coincidence of the IPR filing deadline with the close of fact discovery in the district court case is a significant factor in our analysis. By May 1, 2025, the litigation will be substantially advanced, which has important implications for both the PTAB's discretionary-denial analysis and the district court's analysis of any stay motion.
C. Estoppel — 35 U.S.C. § 315(e)
If an IPR proceeding is instituted and proceeds to a final written decision, the petitioner is subject to estoppel under 35 U.S.C. § 315(e). Specifically, the petitioner (and any real party in interest or privy) may not assert in a civil action arising in whole or in part under 28 U.S.C. § 1338, or in a proceeding before the International Trade Commission under 19 U.S.C. § 1337, that a claim is invalid on any ground that the petitioner "raised or reasonably could have raised" during the IPR.
This estoppel provision has a dual significance for OWS. On the one hand, if an IPR proceeds to a final written decision confirming the patentability of the challenged claims, Lumicore would be estopped from raising in district court any invalidity ground based on prior-art patents or printed publications that it raised or reasonably could have raised in the IPR. This would significantly narrow Lumicore's invalidity defenses at trial and could be a substantial strategic advantage for OWS. On the other hand, if the PTAB issues a final written decision holding one or more claims unpatentable, that determination would be binding and would effectively eliminate the invalidated claims from the litigation (subject to any appeal to the Federal Circuit).
The estoppel analysis also creates an important strategic consideration for Lumicore in deciding whether to file IPR petitions. By filing an IPR petition, Lumicore effectively narrows its ability to raise certain invalidity arguments at trial — particularly arguments based on prior-art references that it could have included in its petition but chose not to. This risk may discourage Lumicore from filing IPR petitions, particularly for patents where its strongest invalidity arguments are not based on patents or printed publications (e.g., the '015 Patent, where its strongest argument is a prior-conception defense).
D. Institution Standard
The PTAB will institute an IPR if the petition demonstrates a "reasonable likelihood" that the petitioner would prevail with respect to at least one challenged claim. 35 U.S.C. § 314(a). This standard is lower than the preponderance-of-the-evidence standard applied at trial but requires more than a mere possibility of success. The PTAB has considerable discretion in determining whether to institute review, and its institution decisions are non-appealable. See Cuozzo Speed Techs., LLC v. Lee, 579 U.S. 261 (2016).
In addition to the merits-based institution standard, the PTAB may exercise its discretion to deny institution based on factors unrelated to the merits of the petition. The most significant source of discretionary-denial authority for purposes of this assessment is the framework established in Camberwell & Co. v. Fintiv, Inc., IPR2020-00019, Paper 11 (PTAB Mar. 20, 2020) (precedential), and the Interim Guidance on the Fintiv factors issued by USPTO Director Kathi Vidal on June 21, 2022 (the "June 2022 Interim Guidance").
Under Fintiv and the June 2022 Interim Guidance, the PTAB considers the following six factors in deciding whether to exercise its discretion to deny institution in cases involving parallel district court litigation:
(1) Whether the court granted a stay or evidence exists that one may be granted if a proceeding is instituted;
(2) Proximity of the court's trial date to the Board's projected statutory deadline for a final written decision;
(3) Investment in the parallel proceeding by the court and the parties;
(4) Overlap between issues raised in the petition and in the parallel proceeding;
(5) Whether the petitioner and the defendant in the parallel proceeding are the same party; and
(6) Other circumstances that impact the Board's exercise of discretion, including the merits.
The June 2022 Interim Guidance further specifies that the PTAB should not deny institution solely based on the Fintiv factors if the petition presents "compelling, meritorious challenges" — i.e., if there is a "compelling" showing that the challenged claims are unpatentable based on prior art that the district court has not yet evaluated. However, even under the June 2022 Interim Guidance, the timing and posture of parallel litigation remain significant considerations.
As discussed in detail in Section V below, the Fintiv factors are likely to weigh against institution if Lumicore files near the May 1, 2025 deadline, because the trial date of February 2, 2026 will be only approximately nine months away, the PTAB's final written decision would not issue until well after trial (approximately November 2026), and the parties and the Court will have made substantial investments in the litigation.
IV. PATENT-BY-PATENT IPR RISK ANALYSIS
This section provides a detailed patent-by-patent assessment of IPR risk, analyzing the strength of available prior art, the probability of PTAB institution, and the key vulnerabilities and defenses for each of the four Asserted Patents. The analysis is based on: (i) our own prior-art searches; (ii) references identified in Lumicore's pre-suit correspondence; (iii) information gathered during the April 20, 2023 licensing meeting; and (iv) publicly available information about Marlowe Asset Management Patent Analytics' search activities. This analysis will be refined following receipt of Lumicore's formal invalidity contentions.
A. U.S. Patent No. 10,234,847 ('847 Patent) — MODERATE-TO-HIGH IPR RISK
The '847 Patent, entitled "Multi-Channel Silicon Photonic Waveguide Multiplexer with Low Insertion Loss," presents the highest IPR risk among the four Asserted Patents. The prior art identified to date includes at least one strong reference that directly addresses the silicon photonic waveguide multiplexer technology claimed in the patent. We estimate the institution probability at 50–60% for at least one challenged claim.
1. Key Prior Art Identified
We have identified six prior-art references that are potentially relevant to the asserted claims of the '847 Patent, of which two are most significant:
Takahashi et al., "Dense WDM Silicon Photonic MUX," IEEE Photonics Technology Letters, Vol. 26, No. 6, pp. 614–617 (March 2014) ("Takahashi"). This is Lumicore's strongest reference for the '847 Patent. The Takahashi paper describes a silicon photonic wavelength-division multiplexer for dense WDM applications, employing arrayed waveguide grating architecture to combine multiple optical channels onto a single output waveguide. The paper reports insertion loss measurements for various channel configurations and discusses design techniques for minimizing crosstalk between adjacent channels. Takahashi was published more than two years before the '847 Patent's filing date of September 14, 2016, and clearly qualifies as a "printed publication" under 35 U.S.C. § 311(b). Lumicore identified Takahashi in its February 28, 2023 letter as a primary invalidity reference and discussed it at the April 20, 2023 licensing meeting in Austin.
PCT/EP2015/071234 (Simonsen), filed September 17, 2015 ("Simonsen"). The Simonsen PCT application describes arrayed waveguide grating designs for silicon photonic multiplexing applications, with particular emphasis on phase-shifted waveguide array configurations that improve channel uniformity and reduce insertion loss. Simonsen was filed approximately one year before the '847 Patent and published in the relevant timeframe to qualify as prior art. This reference is most relevant as a secondary reference in obviousness combinations with Takahashi.
The remaining four references identified to date include two U.S. patents and two additional conference papers addressing silicon photonic multiplexing technology. These references are generally less pertinent than Takahashi and Simonsen because they address the technology at a higher level of abstraction or focus on different aspects of the multiplexer design that are not directly implicated by the asserted claims.
2. Analysis of Anticipation Argument (Takahashi)
Takahashi is the most likely basis for an anticipation challenge under 35 U.S.C. § 102 against the '847 Patent. The reference describes a multi-channel silicon photonic multiplexer that combines multiple optical signals of different wavelengths onto a single waveguide — a concept that maps directly to the preamble and several elements of independent Claim 1 of the '847 Patent. However, our analysis reveals important limitations in the Takahashi anticipation argument.
Independent Claim 1 of the '847 Patent requires, among other things, a waveguide multiplexer that combines "multiple optical signals of different wavelengths onto a single waveguide" with a "low insertion loss" characteristic achieved through a specific waveguide geometry, including tapered mode converters at each input port and a particular coupling configuration that minimizes optical loss at the waveguide junctions. While Takahashi discloses a silicon photonic multiplexer at a general level, it does not expressly disclose the specific waveguide geometry that achieves the claimed low-insertion-loss performance.
Turning to the dependent claims, the analysis is more favorable to OWS. Dependent Claim 3 recites a specific tapered waveguide transition structure with defined taper ratios. Dependent Claim 5 further specifies a coupling ratio between the input ports and the multiplexed output waveguide. Dependent Claim 14 adds a requirement for a specific channel spacing and passband width. None of these specific structural limitations are expressly disclosed in Takahashi, which describes the multiplexer at a higher level of generality without specifying the detailed geometric parameters claimed in the '847 Patent's dependent claims.
Independent Claim 9 presents a distinct set of considerations. This claim includes a means-plus-function term — "means for combining the plurality of optical signals" — which, under 35 U.S.C. § 112(f), must be construed to cover only the corresponding structure disclosed in the specification and equivalents thereof. Our means-plus-function analysis (completed October 5, 2024, and circulated to the team) identifies the corresponding structure as the specific arrayed waveguide grating with tapered mode converters depicted in Figures 4A–4C of the '847 Patent specification. This narrow construction may distinguish Claim 9 over Takahashi, which employs a different waveguide coupling architecture.
Assessment: The Takahashi anticipation argument is colorable with respect to independent Claim 1 of the '847 Patent but is materially weaker for dependent Claims 3, 5, and 14, and for independent Claim 9. The PTAB could potentially institute review on Claim 1 alone based on the Takahashi anticipation theory, but we believe OWS has strong arguments against institution on the remaining claims. Even as to Claim 1, the argument has vulnerabilities because Takahashi does not expressly disclose the specific waveguide geometry that achieves the "low insertion loss" characteristic claimed in the patent.
3. Analysis of Obviousness Argument (Takahashi + Simonsen)
An obviousness challenge under 35 U.S.C. § 103 combining Takahashi with Simonsen presents a somewhat broader threat to the '847 Patent claims. The combination would pair Takahashi's general multiplexer architecture with Simonsen's phase-shifted waveguide array design, which addresses some of the structural limitations not found in Takahashi alone. Specifically, Simonsen describes tapered waveguide structures and coupling configurations that bear some similarity to the structures claimed in the '847 Patent's dependent claims.
A motivation-to-combine argument is readily available: both Takahashi and Simonsen address the same technical problem — silicon photonic WDM multiplexing for data-center interconnect applications — and a person of ordinary skill in the art working in this field would reasonably look to both references in developing a multiplexer design. The PTAB has consistently held that references addressing the same technical problem provide a sufficient motivation to combine, and the silicon photonics field is sufficiently cohesive that a POSITA would be aware of and look to the leading publications in the area.
However, the Takahashi-Simonsen combination has a significant gap: neither reference teaches the specific insertion-loss optimization technique claimed in Claims 5 and 14 of the '847 Patent. The '847 Patent's specification describes a novel approach to minimizing insertion loss through a combination of tapered mode converters, specific coupling ratios, and controlled waveguide curvature that together achieve a measured insertion loss of less than 0.5 dB per channel. Neither Takahashi nor Simonsen teaches this specific combination of design features, and the claimed insertion-loss performance represents a measurable improvement over the performance reported in either reference.
In addition to the limitations-based arguments, OWS has substantial evidence of secondary considerations of non-obviousness that would be available in responding to any IPR petition. The secondary-considerations evidence includes:
• Commercial success: OWS's products practicing the '847 Patent, including the OWS-400ZR transceiver module, generated approximately $310 million in revenue in fiscal year 2023. There is a demonstrable nexus between the patented technology and the commercial success of these products, as the waveguide multiplexer architecture claimed in the '847 Patent is a key differentiating feature.
• Long-felt need: The silicon photonics industry has long sought low-insertion-loss waveguide multiplexers for WDM applications, as insertion loss is a fundamental performance bottleneck in optical transceiver design. Industry publications dating back to at least 2010 identify insertion-loss reduction as a critical unmet need.
• Failure of others: At least three competitors — NovaPlex Photonics Corp., AetherWave Systems, Inc., and Solara Optics, Inc. (prior to its acquisition by OWS) — attempted to develop low-insertion-loss silicon photonic multiplexers using alternative approaches and were unable to achieve the performance levels claimed in the '847 Patent. Technical documentation and published papers from each competitor confirm these unsuccessful efforts.
• Copying by Lumicore: Evidence of copying by Lumicore is supported by the anticipated deposition testimony of Dr. Antoine Michaud (Lumicore's VP of Engineering), who admitted in a pre-deposition declaration that Lumicore's engineering team reviewed OWS's published patent applications during the design phase of the LumiLink product line. Additional evidence of copying is expected from the testimony of Melissa Chen, a former Lumicore engineer who has agreed to provide testimony.
Assessment: The Takahashi-Simonsen obviousness combination is a credible but not overwhelming threat. The combination does not fully account for the specific insertion-loss optimization technique claimed in the patent, and OWS has strong secondary-considerations evidence to rebut the obviousness challenge. Nonetheless, the PTAB may find the combination sufficient to meet the "reasonable likelihood" standard for institution on at least some claims.
4. Institution Probability
We estimate the probability of PTAB institution on at least one claim of the '847 Patent at 50–60%. This assessment reflects the strength of the Takahashi reference as applied to independent Claim 1, tempered by the structural specificity of the dependent claims, the means-plus-function limitation in Claim 9, and the availability of strong secondary-considerations evidence. The risk is further mitigated by the potential for discretionary denial under the Fintiv factors if the petition is filed near the May 1, 2025 deadline.
The '847 Patent represents the highest-risk target among the four Asserted Patents for IPR challenge, and we recommend prioritizing defensive preparations for this patent. Specific recommendations are set forth in Section VI.D below.
B. U.S. Patent No. 10,891,193 ('193 Patent) — LOW-TO-MODERATE IPR RISK
The '193 Patent, entitled "High-Bandwidth Coherent Optical Transceiver Integrated on Silicon Substrate," presents a lower IPR risk than the '847 and '562 Patents. The claims are directed to a complete integrated coherent optical transceiver architecture, comprising multiple complex elements that are difficult to map to any single prior-art reference. We estimate the institution probability at 30–40%.
1. Key Prior Art Identified
Lumicore's anticipated invalidity contentions identify eight prior-art references against the asserted claims of the '193 Patent. The primary reference is Takahashi (the same reference identified for the '847 Patent), which Lumicore argues discloses certain coherent transceiver integration concepts. However, no single reference identified to date discloses the full combination of coherent optical transceiver elements integrated on a single silicon substrate as claimed in the '193 Patent.
We note that Lumicore's inequitable conduct allegation — specifically, that Dr. Jian-Wei Huang, the named inventor on the '193 Patent, failed to disclose a prior publication during prosecution — is not a cognizable ground for IPR under 35 U.S.C. § 311(b). This allegation, if pursued, would be limited to the district court proceeding. The inability to raise this defense in IPR may reduce Lumicore's incentive to file an IPR petition against the '193 Patent, as its strongest non-prior-art defense (inequitable conduct) cannot be adjudicated at the PTAB.
2. Analysis. The asserted claims of the '193 Patent — Claims 1, 3, 7, 10, 15, and 18 — are directed to a coherent optical transceiver architecture with specific modulator, detector, and digital signal processing ("DSP") integration on a single silicon substrate. The claims are characterized by their complexity and multi-element nature, reciting a combination of: (i) a coherent modulator with specified modulation formats; (ii) a coherent detection module with polarization-diverse inputs; (iii) an integrated DSP engine with specific signal-processing capabilities; and (iv) an optical local oscillator coupled to the detection module. The integration of all these elements on a single silicon substrate distinguishes the claims from prior-art approaches that employed discrete components or partial integration.
A critical aspect of the prosecution history supports OWS's position. During prosecution, the examiner issued a rejection under 35 U.S.C. § 102 based on Takahashi, arguing that Takahashi anticipated the claimed coherent transceiver architecture. In response, OWS (through Dr. Martin Chu at Cascade IP Advisors) made a narrowing amendment to the "coherent detection module" limitation, adding a requirement that the detection module include "a pair of balanced photodetectors configured to receive orthogonal polarization components of a coherent optical signal, wherein the balanced photodetectors are monolithically integrated on the silicon substrate with the modulator and the DSP engine." This narrowing amendment was deliberate and is recorded in the prosecution file history. The amendment distinguishes the claims over Takahashi, which does not disclose monolithically integrated balanced photodetectors in a coherent detection module of the type described in the amended claims.
This prosecution-history narrowing has a direct impact on IPR risk. Because the claims were specifically amended to overcome Takahashi, Lumicore cannot credibly argue that Takahashi alone anticipates the claims in their current form. Any IPR petition directed to the '193 Patent would need to rely on an obviousness combination of multiple references to cover all of the claim limitations.
The '193 Patent's priority to Provisional Application No. 62/499,117, filed April 7, 2017, establishes an early effective filing date that limits the universe of available prior art. Any reference published after April 7, 2017 would not qualify as prior art under 35 U.S.C. § 102(a)(1), and any reference filed after that date would not qualify under § 102(a)(2). This early priority date excludes several potentially relevant references from consideration.
With respect to obviousness combinations, we assess that at least three references would be required to cover all the limitations of independent Claim 1 of the '193 Patent. The PTAB has historically been skeptical of obviousness arguments requiring the combination of three or more references, particularly when the references come from different technical subfields or when the motivation to combine is not immediately apparent. While the PTAB does not impose a per se rule against multi-reference combinations, the burden on the petitioner increases significantly as the number of required references grows.
3. Institution Probability
We estimate the probability of PTAB institution on the '193 Patent at 30–40%. This assessment reflects the complex, multi-element nature of the claims, the early priority date that limits available prior art, and the prosecution-history narrowing that forecloses the strongest anticipation argument. The '193 Patent is a significantly lower-risk target for IPR than either the '847 Patent or the '562 Patent.
The strongest defenses available to OWS for the '193 Patent include: (i) the prosecution-history amendment that distinguishes over Takahashi; (ii) the early priority date established by Provisional Application No. 62/499,117; (iii) the complexity and multi-element nature of the claims, which makes it difficult to assemble a credible obviousness combination from two or fewer references; and (iv) the potential for Fintiv discretionary denial based on the advanced posture of the parallel litigation.
C. U.S. Patent No. 9,678,562 ('562 Patent) — MODERATE IPR RISK
The '562 Patent, entitled "Method for Thermal Management of Photonic Integrated Circuits Using Embedded Micro-Channel Heat Sinks," presents a moderate IPR risk. We have identified one prior-art printed publication — the Li Wei conference paper — that directly addresses the thermal management of photonic integrated circuits using embedded cooling channels, though material differences in channel geometry may distinguish the claims. We estimate the institution probability at 40–50%.
1. Key Prior Art Identified
Two primary references have been identified as potential bases for an IPR challenge:
U.S. Patent No. 8,412,007 (Bergmann), issued April 2, 2013 ("Bergmann"). The Bergmann patent describes micro-channel heat-sink structures for semiconductor integrated circuits, including fabrication methods for embedding micro-channels within a semiconductor substrate. The reference is directed to thermal management of electronic (rather than photonic) integrated circuits, but the underlying heat-sink technology is analogous. Bergmann qualifies as a "patent" under 35 U.S.C. § 311(b) and was issued more than a year before the '562 Patent's filing date of November 22, 2014.
Dr. Li Wei, "Thermal Solutions for PICs," Proceedings of the Optical Fiber Communication Conference (OFC 2013), Paper No. Th3A.7, March 2013 ("Li Wei"). This conference paper discusses thermal management solutions for photonic integrated circuits, including the use of embedded cooling channels to dissipate heat generated by active photonic components. Li Wei describes a specific implementation of embedded cooling channels with rectangular cross-sections and reports thermal performance measurements for a prototype PIC. The paper was published at a major industry conference and clearly qualifies as a "printed publication" under § 311(b). Li Wei is the more dangerous of the two primary references because it specifically addresses PIC thermal management — the same technical field as the '562 Patent — rather than the more general semiconductor thermal management addressed by Bergmann.
Lumicore's anticipated invalidity contentions are expected to cite additional references beyond Takahashi, Bergmann, and Li Wei, but these two references form the core of the anticipated IPR challenge to the '562 Patent.
2. Analysis of Anticipation (Li Wei)
Li Wei presents a plausible basis for an anticipation challenge under 35 U.S.C. § 102, but the argument faces significant obstacles related to the specific channel geometry and dimensions claimed in the '562 Patent.
The Li Wei conference paper describes embedded cooling channels for PICs, but the channels described in Li Wei have a rectangular cross-section with dimensions that differ from the specific channel configuration claimed in the '562 Patent. The '562 Patent claims a "micro-channel heat sink" comprising cooling channels with a defined hydraulic-diameter range and a specific multi-layer channel configuration that enhances heat transfer efficiency. Li Wei does not disclose this specific channel configuration, and the rectangular channels described in Li Wei may not fall within the claimed hydraulic-diameter range.
Critically, the term "micro-channel heat sink" is a disputed claim-construction term in the district court litigation. OWS proposes a construction of "a heat-dissipating structure containing channels with a hydraulic diameter of less than 1 mm." Lumicore, by contrast, proposes a narrower construction: "a closed-loop liquid-cooling system with channels having a hydraulic diameter between 10 µm and 200 µm." The outcome of the claim-construction dispute will have significant implications for IPR risk, creating an unusual dynamic in this case.
If OWS's broader construction prevails at the Markman hearing on March 14, 2025, the prior art base potentially widens, as more references with various channel geometries could fall within the claimed scope. Conversely, if Lumicore's narrower construction prevails, the prior art must describe channels within the 10–200 µm hydraulic-diameter range to anticipate the claims. Notably, the channels described in Li Wei appear to fall outside Lumicore's own proposed 10–200 µm range, which means that under Lumicore's own construction, Li Wei may not anticipate the claims. This creates a paradox for Lumicore: arguing for a narrow construction in district court to avoid infringement while simultaneously needing a broad construction in IPR to establish anticipation.
This claim-construction overlap creates a strategic consideration that we will need to monitor carefully. If Lumicore files an IPR petition before the Markman hearing, the PTAB will apply the "broadest reasonable interpretation" standard (or, more precisely under the current rules, the same claim-construction standard used in civil actions, i.e., the Phillips v. AWH Corp. standard), which may not align with either party's proposed construction in district court. If the petition is filed after the Markman hearing, the PTAB would be expected to consider the district court's construction, though it is not bound by it.
Assessment: Li Wei anticipation is a credible but imperfect basis for challenge. The channel geometry differences and the claim-construction dependency introduce significant uncertainty that could cut either way.
3. Analysis of Obviousness (Bergmann + Li Wei)
An obviousness challenge combining Bergmann's micro-channel heat-sink technology with Li Wei's PIC-specific thermal management concepts could potentially cover more claim limitations than either reference alone. Bergmann provides detailed fabrication methods for embedding micro-channels in semiconductor substrates, while Li Wei provides the PIC-specific application and thermal performance data. The combination would argue that a person of ordinary skill in the art would have been motivated to apply Bergmann's well-developed micro-channel fabrication techniques to the PIC thermal management problem addressed by Li Wei.
A motivation-to-combine argument is available: both Bergmann and Li Wei address thermal management of semiconductor integrated circuits, and a POSITA working on PIC thermal management would naturally look to the broader semiconductor literature for heat-dissipation solutions. The silicon photonics and semiconductor fabrication communities share substantial overlap in terms of fabrication processes and thermal-management challenges.
However, the Bergmann-Li Wei combination does not account for the specific method steps claimed in the '562 Patent for embedding micro-channels during the PIC fabrication process. Claims 4, 6, and 11 of the '562 Patent recite specific fabrication-process steps — including a particular order of deposition, etching, and bonding operations — that are not taught by either Bergmann or Li Wei. Bergmann describes fabrication methods for electronic ICs, and Li Wei does not provide detailed fabrication-process information at all. A POSITA adapting Bergmann's methods to PIC fabrication would face non-trivial challenges that are addressed by the specific process steps claimed in the '562 Patent.
Additionally, the '562 Patent has an early filing date (November 22, 2014) and an early issue date (June 13, 2017), which limits the prior-art window. While both Bergmann and Li Wei predate the filing date, the '562 Patent's prosecution history may contain priority-date arguments or evidence of swearing behind that could affect the analysis. We are currently reviewing the complete prosecution history with Dr. Martin Chu to identify any such arguments.
Assessment: The Bergmann-Li Wei combination is a moderate threat, primarily to the independent claims and broader dependent claims of the '562 Patent. The method-specific claims (Claims 4, 6, and 11) are less vulnerable because the combination does not teach the specific fabrication steps recited therein.
4. Institution Probability
We estimate the probability of PTAB institution on at least one claim of the '562 Patent at 40–50%. The primary risk factor is the Li Wei conference paper, which is a strong printed publication directly addressing PIC thermal management using embedded cooling channels. The risk is tempered by the channel-geometry differences between Li Wei and the claimed invention, the claim-construction dependency, and the specific fabrication-method limitations in Claims 4, 6, and 11 that are not taught by the prior art.
The '562 Patent represents the second-highest-risk target among the four Asserted Patents (after the '847 Patent). Defensive preparations should focus on distinguishing the Li Wei reference on channel geometry and fabrication-method grounds and on leveraging the claim-construction dynamics that may work in OWS's favor depending on the outcome of the Markman hearing.
D. U.S. Patent No. 11,402,015 ('015 Patent) — LOW IPR RISK
The '015 Patent, entitled "Polarization-Diverse Grating Coupler for Silicon Photonic Transceivers," presents the lowest IPR risk of the four Asserted Patents. Lumicore's strongest invalidity argument for this patent is based on a prior-conception defense relying on internal Lumicore design documents — an argument that is simply unavailable in IPR proceedings. The printed-publication prior art identified to date is relatively weak. We estimate the institution probability at 15–25%.
1. Key Prior Art Identified
Lumicore's primary invalidity theory for the '015 Patent centers on a prior-conception defense, supported by internal Lumicore design documents dated 2016–2017 that purportedly show that Lumicore engineers independently conceived of the polarization-diverse grating coupler design prior to OWS's earliest priority date. This is potentially a strong defense in district court under 35 U.S.C. § 102(a)(2) and the pre-AIA first-to-invent framework (to the extent applicable), but it is not available in IPR. Under 35 U.S.C. § 311(b), IPR challenges must be based exclusively on patents or printed publications. Internal design documents, laboratory notebooks, and similar non-published materials do not qualify as "printed publications" and cannot form the basis of an IPR petition.
Among the printed-publication references that Lumicore has identified, the most prominent is a combination of Bergmann (U.S. Patent No. 8,412,007) with Simonsen (PCT/EP2015/071234). However, the '015 Patent includes a narrowing amendment made during prosecution to the "two-dimensional sub-wavelength grating" limitation that distinguishes the claimed invention over this combination. Specifically, the amendment added a requirement that the grating coupler include "a two-dimensional periodic array of sub-wavelength features arranged in a non-uniform pattern configured to split incoming light into orthogonal polarization components and to direct each polarization component to a separate waveguide." Neither Bergmann nor Simonsen discloses a two-dimensional sub-wavelength grating with the specific non-uniform pattern and polarization-splitting functionality recited in the amended claims.
No strong single-reference anticipation candidate has been identified for the '015 Patent. The polarization-diverse grating coupler technology as claimed represents a specific advance in the field that is not clearly taught by any available prior-art patent or printed publication.
2. Analysis. The '015 Patent's most significant validity challenge is the prior-conception defense based on Lumicore's internal documents. If Lumicore can establish that its engineers independently conceived of the claimed invention before OWS's priority date and exercised reasonable diligence in reducing the invention to practice, this defense could be devastating in district court. However, because this defense cannot be raised in IPR, it creates a natural disincentive for Lumicore to file an IPR petition against the '015 Patent. Filing such a petition would expose Lumicore to IPR estoppel under 35 U.S.C. § 315(e) without the ability to present its strongest invalidity argument, and a final written decision confirming patentability would further strengthen OWS's position at trial.
The printed-publication prior art for the '015 Patent is comparatively weak. The polarization-diverse grating coupler technology claimed in the patent represents a specialized design approach that combines two-dimensional sub-wavelength grating structures with polarization-splitting functionality in a way that was not previously taught in the prior art. The asserted claims — Claims 1, 5, 8, 12, and 16 — include specific structural limitations, particularly the two-dimensional grating coupler with polarization-splitting element and the non-uniform pattern requirement, that narrow the claims in a manner favorable to patentability.
The '015 Patent's priority to Provisional Application No. 62/499,117, filed April 7, 2017, provides an additional layer of protection by establishing an early effective filing date that limits the universe of available prior art.
3. Institution Probability
We estimate the probability of PTAB institution on the '015 Patent at 15–25%, the lowest of the four Asserted Patents. This assessment reflects the weakness of the available printed-publication prior art, the prosecution-history amendment that distinguishes over the strongest reference combination, and the fundamental structural limitation that Lumicore's most powerful invalidity argument (prior conception) is unavailable in IPR.
From a strategic standpoint, the '015 Patent gives OWS a significant procedural advantage. Lumicore's strongest invalidity argument is available only in district court, meaning that the '015 Patent is best defended in the forum where the case is already pending. Lumicore has little incentive to file an IPR petition against the '015 Patent, and doing so would risk estoppel on its weaker printed-publication arguments without any offsetting benefit.
V. LIKELIHOOD OF LITIGATION STAY IF IPR IS FILED
This section assesses the likelihood that the district court would grant a stay of the litigation pending IPR proceedings, assuming Lumicore files one or more IPR petitions. The analysis considers the legal standard for stays in the Eastern District of Texas, the Fintiv factors for PTAB discretionary denial (which indirectly affect stay analysis), and the specific circumstances of this case.
A. Legal Standard for Stay
District courts possess inherent authority to manage their dockets, including the discretion to stay proceedings pending the resolution of related administrative proceedings. See Landis v. North American Co., 299 U.S. 248, 254 (1936). There is no automatic right to a stay of litigation pending IPR, and the burden is on the party seeking the stay to demonstrate that a stay is warranted. Courts in the Eastern District of Texas, and throughout the Fifth Circuit, generally consider four factors in evaluating a motion to stay pending IPR:
(1) Whether a stay will simplify the issues in question and the trial of the case;
(2) Whether discovery is complete and whether a trial date has been set;
(3) Whether a stay would unduly prejudice or present a clear tactical disadvantage to the non-movant; and
(4) Whether a stay will reduce the burden of litigation on the parties and the Court.
These factors are not applied mechanically; rather, they are weighed holistically in light of the totality of the circumstances. The non-movant's status as a practicing entity that competes directly with the accused infringer is a factor that courts frequently cite as weighing against a stay, because ongoing infringement causes competitive harm that compounds with delay. Conversely, courts may be more inclined to grant a stay when the litigation is in its early stages, discovery has not yet commenced, and the IPR proceedings have the potential to narrow or eliminate the issues for trial.
B. Fintiv Factors for PTAB Discretionary Denial
Although the Fintiv factors are applied by the PTAB in deciding whether to exercise discretion to deny institution of an IPR petition, they are relevant to the stay analysis because the PTAB's decision on institution directly affects whether a stay motion will be filed and the strength of the arguments in support of a stay. If the PTAB denies institution under Fintiv, there is no pending IPR proceeding, and no basis for a stay motion.
As discussed in Section III.D above, the six Fintiv factors consider the relationship between the IPR proceeding and the parallel district court litigation, with particular attention to the proximity of the trial date, the investment in the litigation, and the overlap of issues. The June 2022 Interim Guidance modifies the Fintiv framework to provide that the PTAB should not deny institution solely based on parallel-litigation considerations when the petition presents "compelling, meritorious challenges" to the claims at issue.
If Lumicore files an IPR petition near the May 1, 2025 deadline, the Fintiv factors strongly favor discretionary denial. At that point, the trial date of February 2, 2026 will be approximately nine months away, while the PTAB's projected final written decision date would be approximately eighteen months after institution — i.e., approximately November 2026, more than nine months after the trial is expected to conclude. This timing dramatically undermines the efficiency rationale for IPR and weighs heavily against institution under Fintiv Factor 2.
The remaining Fintiv factors also favor denial if Lumicore files near the deadline:
• Factor 1 (stay): No stay will have been granted, and for the reasons discussed below, a stay is unlikely given the advanced posture of the case.
• Factor 3 (investment): By May 2025, both parties and the Court will have made enormous investments in the litigation, including completion of the Markman hearing, extensive document discovery (an estimated 329,000+ documents produced), and multiple fact depositions.
• Factor 4 (overlap): There will be substantial overlap between the issues raised in any IPR petition and the issues in the district court case, but this factor cuts both ways and does not strongly favor either party.
• Factor 5 (same party): Lumicore is both the petitioner and the defendant in the parallel proceeding, which weighs in favor of denial.
• Factor 6 (other circumstances): The merits of the petition will be the primary consideration under this factor. Under the June 2022 Interim Guidance, a "compelling" showing on the merits could override the other factors, but the prior-art challenges identified to date are credible without being overwhelming.
Assessment: The Fintiv analysis favors discretionary denial if Lumicore files near the May 1, 2025 deadline. However, the June 2022 Interim Guidance's "compelling merits" exception creates uncertainty, particularly for the '847 Patent (where Takahashi is a strong reference) and the '562 Patent (where the Li Wei conference paper is directly on point). We estimate a meaningful probability that the PTAB would nonetheless institute review on at least the '847 Patent if the petition presents a strong showing on the merits.
C. Application to This Case
1. Stage of Litigation at Probable Filing (Near May 1, 2025)
By May 1, 2025, the date by which Lumicore must file any IPR petition, the litigation will be in an advanced posture. The following milestones will have been completed or substantially completed:
• Claim Construction: The Markman hearing will have been conducted on March 14, 2025. The parties will have submitted their Joint Claim Construction Statement (October 28, 2024), opening claim construction briefs, responsive briefs, and sur-reply briefs. The Court may or may not have issued its Claim Construction Order by May 1, 2025, but the hearing will have occurred and the Court will have invested substantial judicial resources in analyzing the disputed terms.
• Fact discovery: Fact discovery will have closed on May 1, 2025 (coinciding exactly with the IPR filing deadline). By this point, OWS will have produced approximately 182,000 documents (encompassing approximately 1.4 million pages), and Lumicore will have produced approximately 147,000 documents (encompassing approximately 980,000 pages). The total document production across both parties will exceed 329,000 documents and 2.38 million pages.
• Contentions: OWS's infringement contentions will have been served on September 16, 2024 (per P.R. 3-1), and Lumicore's invalidity contentions will have been served on October 14, 2024 (per P.R. 3-3). Both parties will have had months to analyze and refine their respective contentions.
• Depositions: At least five key fact depositions will have been taken, including: (a) Dr. Jian-Wei Huang, OWS's Chief Technology Officer and named inventor on the '193 and '015 Patents; (b) Dr. Antoine Michaud, Lumicore's Vice President of

MEMORANDUM

I. EXECUTIVE SUMMARY

II. BACKGROUND

III. STATUTORY FRAMEWORK FOR INTER PARTES REVIEW

IV. PATENT-BY-PATENT IPR RISK ANALYSIS

V. LIKELIHOOD OF LITIGATION STAY IF IPR IS FILED

Record

Parties

Dates

Amounts