1014-00004 · Hawthorne Vega & Cruz LLP · Willful Infringement & Enhanced Damages

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PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT PREPARED IN ANTICIPATION OF LITIGATION NOT FOR DISTRIBUTION OUTSIDE CASE TEAM

CALDERWOOD & HARKNESS LLP 350 South Grand Avenue, 48th Floor Los Angeles, California 90071

INTERNAL MEMORANDUM

April 10, 2024

FROM: Wendy Schultz, Associate, Calderwood & Harkness LLP

TO: Alan Ngo, Responsible Partner, Calderwood & Harkness LLP Marcus Delgado, Billing Partner, Calderwood & Harkness LLP

RE: Assessment of Willful Infringement Theory — Optiwave Semiconductor Corp. v. Lumicore Technologies, Inc., Case No. 2:24-cv-00319-JRG (E.D. Tex.)

CLASSIFICATION: Privileged & Confidential — Attorney Work Product

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I. EXECUTIVE SUMMARY

This memorandum analyzes the strength and viability of Optiwave Semiconductor Corp.'s ("OWS" or "Optiwave") willful infringement claim against Lumicore Technologies, Inc. ("Lumicore") under the framework established by Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. 93 (2016), and its progeny in the United States Court of Appeals for the Federal Circuit and the Eastern District of Texas. The memorandum is prepared in anticipation of the filing of OWS's complaint on April 22, 2024, and is intended to inform the case team's strategic decisions regarding (a) whether to plead willful infringement as a separate count, (b) the contours of the enhanced damages demand, and (c) the discovery and trial strategy surrounding the willfulness theory.

Conclusion. Based on the evidence currently available and reasonably anticipated, the willful infringement theory is strong and well-supported. Lumicore had actual, pre-suit notice of at least three of the four asserted patents — U.S. Patent Nos. 10,234,847 (the "'847 Patent"), 10,891,193 (the "'193 Patent"), and 9,678,562 (the "'562 Patent") — as of January 15, 2023, when OWS's licensing agent, FairPoint Licensing Group, LLC ("FairPoint"), transmitted a detailed licensing letter to Lumicore's General Counsel, Raymond Bautista, that included patent-specific claim charts mapping claim limitations to features of the accused LumiLink 400G-ZR+ transceiver module. Lumicore received formal notice of the fourth patent, U.S. Patent No. 11,402,015 (the "'015 Patent"), on May 15, 2023, via a second FairPoint licensing letter. Despite this notice, Lumicore continued manufacturing and selling the accused products without interruption, declined a license on July 10, 2023, and launched a third accused product — the LumiEdge 1600G-LR — in Q4 2023, approximately five months after declining the license, and without conducting any formal design-around analysis (as admitted by Bautista in his December 3, 2024 deposition). Additional evidence further strengthens the case for subjective willfulness. Testimony anticipated from former Lumicore engineer Melissa Chen (now employed at Veridian Photonics, Inc.) establishes that Lumicore's engineering team accessed and reviewed OWS's published patent applications — specifically Published Application No. 2018/0123456, which corresponds to the '193 Patent — during the design phase of the LumiLink 400G-ZR+ in 2021–2022, before any formal notice was sent and before the product was even launched. This pre-design awareness, corroborated by deposition admissions from Lumicore's CTO, Dr. Sandra Michaud, demonstrates that Lumicore's infringement was knowing and deliberate from the outset.

Recommendation. We recommend that willful infringement be pleaded as a separate count — Count VII — in the complaint to be filed on April 22, 2024, with an accompanying request for enhanced damages under 35 U.S.C. § 284 and a demand that incorporates a willfulness enhancement component. The aggregate damages demand of approximately $210 million reflects a blended approach across three damages theories (lost profits, reasonable royalty, and a selected willful-infringement enhancement), representing a conservative posture relative to the maximum available enhancement of up to treble damages. This memorandum sets forth the legal framework, factual basis, strength-of-evidence assessment, preliminary enhanced damages calculation, and strategic recommendations for the case team's consideration.

II. LEGAL FRAMEWORK

A. The *Halo* Standard

The Supreme Court's 2016 decision in Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. 93 (2016), fundamentally altered the legal landscape for willful patent infringement and enhanced damages. Halo abrogated the Federal Circuit's prior rigid two-part test established in In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en banc), which had required a patent holder to prove both (1) objective recklessness — that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent — and (2) subjective knowledge — that the objectively-defined risk was either known or so obvious that it should have been known to the accused infringer. The Seagate test further required proof of both prongs by clear and convincing evidence.

The Supreme Court in Halo held that Seagate's framework was unduly rigid and inconsistent with the plain text and purpose of 35 U.S.C. § 284, which states simply that "the court may increase the damages up to three times the amount found or assessed." 579 U.S. at 103. The Court emphasized that the statute's language is "inherently flexible" and commits the decision to enhance damages to the sound discretion of the district court. Id. The Court further held that Seagate's objective-recklessness prong improperly excluded from the enhancement inquiry cases where the infringer's subjective bad faith was manifest but no reasonable factfinder could find objective recklessness — for example, where the infringer later identified a defense that might not have been apparent at the time of the infringing conduct. Id. at 104–05.

Post-Halo, enhanced damages under 35 U.S.C. § 284 are assessed under a totality-of-the-circumstances inquiry, committed to the district court's broad discretion. The Court made clear that enhanced damages are still reserved for "egregious cases of culpable behavior" and are not intended to become a "penalty for unsuccessful but reasonable litigation positions." Id. at 106. However, the threshold for establishing entitlement to enhanced damages is now materially lower than under Seagate.

The relevant inquiry under Halo focuses on the infringer's subjective willfulness — that is, whether the infringer knew of the patent and knew or should have known that its conduct constituted infringement. The objective recklessness standard is no longer an independent threshold requirement. Instead, the nature and quality of the infringer's subjective intent, assessed in the totality of the circumstances, drives the analysis.

Critically, willfulness is a question of fact for the jury, while the decision to enhance damages and the amount of any enhancement are discretionary determinations for the court. Halo, 579 U.S. at 106; see also WCM Indus., Inc. v. IPS Corp., 721 F. App'x 959, 970 (Fed. Cir. 2018) (reaffirming bifurcated inquiry). This distinction is important for our trial strategy, as discussed in Section VI.C below.

Finally, Halo confirmed that the burden of proof for willfulness is by a preponderance of the evidence, not the heightened clear-and-convincing standard that Seagate had imposed. 579 U.S. at 112. This lower evidentiary standard substantially improves OWS's prospects of securing a jury finding of willfulness.

B. Post-*Halo* Federal Circuit Guidance

Since Halo, the Federal Circuit has issued a series of decisions elaborating on the willfulness framework. These decisions provide important guideposts for assessing the strength of OWS's theory and anticipating Lumicore's likely defenses.

Pre-suit notice letters and knowledge. The Federal Circuit has consistently held that a pre-suit cease-and-desist or licensing letter that identifies specific patents and provides claim charts or other detailed infringement contentions constitutes strong evidence of actual knowledge of the patents and the alleged infringement. See, e.g., WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341 (Fed. Cir. 2016) (post-Halo, affirming willfulness finding where patentee sent detailed infringement chart and accused infringer continued selling product); Eko Brands, LLC v. Adrian Rivera Maynez Enters., Inc., 946 F.3d 1367, 1378 (Fed. Cir. 2020) (pre-suit notice followed by continued infringement supported willfulness finding). The two FairPoint licensing letters here — both of which included claim charts and identified specific patents and accused products — Squarely establish formal actual notice.

Opinion-of-counsel letters. Post-Halo, there is no affirmative obligation on the part of an accused infringer to obtain an opinion of counsel regarding non-infringement or invalidity. The failure to obtain such an opinion, standing alone, cannot support an inference of willfulness. See In re Seagate, 497 F.3d at 1371; see also Halo, 579 U.S. at 109–10 (noting the chilling effect of requiring opinions). However, the Federal Circuit has recognized that the failure to obtain an opinion — or, more significantly, the refusal to produce an opinion that the infringer claims to have obtained — may be considered as part of the totality-of-the-circumstances analysis. See SiOnyx, LLC v. Hamamatsu Photonics K.K., 981 F.3d 1339, 1354 (Fed. Cir. 2020). Where, as here, Lumicore has affirmatively referenced "competent legal opinions" in its declination letter but refuses to produce them, the jury is entitled to draw inferences from that refusal, and the opinions' defensive value is substantially limited.

Continued infringement after notice. The Federal Circuit has repeatedly recognized that continued infringement after actual notice of the patent is among the strongest indicators of willfulness. See WBIP, 829 F.3d at 1341; Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., 876 F.3d 1350, 1371 (Fed. Cir. 2017) (continued manufacture and sale of accused products after notice supports willfulness finding). Where the infringer not only continues selling existing products but launches new products incorporating the same accused technology after notice — as Lumicore did here with the LumiEdge 1600G-LR — the inference of willfulness is particularly powerful.

Timing of knowledge relative to infringing activity. The Federal Circuit has noted that the most compelling willfulness cases involve situations where the infringer had knowledge of the patent before or at the time it began its infringing conduct. See Gustafson, Inc. v. Intersystems Indus. Prods., Inc., 897 F.2d 508, 510 (Fed. Cir. 1990). Although the Melissa Chen evidence and Dr. Michaud's deposition admissions relate to awareness of published patent applications rather than issued patents, the Federal Circuit has recognized that knowledge of a published application that subsequently issues as a patent can support an inference of willfulness, particularly where the claims of the published application track the claims of the issued patent. This is especially relevant here, as OWS Published Application No. 2018/0123456 corresponds directly to the '193 Patent, and Lumicore's engineers were reviewing the application during the design of the very product that is now accused of infringing the '193 Patent.

C. Enhanced Damages Under 35 U.S.C. § 284

Section 284 of Title 35 provides that "the court may increase the damages up to three times the amount found or assessed." 35 U.S.C. § 284. The statute confers broad discretion on the trial court to determine both whether to enhance damages and by what multiplier to do so, up to the treble-damages cap.

The decision to enhance damages is discretionary and is assessed by the court, not the jury. Halo, 579 U.S. at 106. In exercising this discretion, courts in the Federal Circuit continue to look to the nine factors identified in Read Corp. v. Portec, Inc., 970 F.2d 816, 826–27 (Fed. Cir. 1992), as relevant guideposts. The Read factors remain viable analytical tools post-Halo, even though the underlying threshold test for willfulness has changed. The nine Read factors are:

1. Whether the infringer deliberately copied the ideas or design of another;

2. Whether the infringer, when he knew of the other's patent protection, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed;

3. The infringer's behavior as a party to the litigation;

4. The defendant's size and financial condition;

5. The closeness of the case;

6. The duration of the defendant's misconduct;

7. Remedial action by the defendant;

8. The defendant's motivation for harm; and

9. Whether the defendant attempted to conceal its misconduct.

A separate, comprehensive Read Factor Analysis memorandum will be prepared closer to the dispositive-motion stage, targeted for May 2025. That memorandum will apply each factor in detail to the record as developed through discovery. For present purposes, it is sufficient to note that the preliminary assessment of the Read factors is favorable to OWS on multiple fronts, including deliberate copying (Factor 1), the lack of a demonstrated good-faith investigation (Factor 2), the duration of misconduct (Factor 6), and the absence of remedial action (Factor 7).

D. E.D. Tex. Practice Considerations

Several practice-specific considerations in the Eastern District of Texas bear on our willful infringement strategy.

Judge Gilstrap's handling of willfulness claims. Judge James R. Gilstrap, to whom this case has been assigned, has extensive experience with patent cases and has addressed willful infringement claims in numerous prior matters. Judge Gilstrap has generally permitted willfulness to be presented to the jury as part of the liability phase, rather than bifurcating willfulness into a separate trial phase. See, e.g., Omega Patents, LLC v. CalAmp Corp., No. 2:13-cv-00726-JRG, 2017 WL 3014022 (E.D. Tex. July 14, 2017); Stragent, LLC v. Bramwell Partners LLC, No. 6:11-cv-00421-JRG (E.D. Tex.). However, Judge Gilstrap has also, in certain cases, exercised discretion to bifurcate the willfulness inquiry from the liability phase where efficiency or fairness concerns warranted it. We should be prepared for either approach.

E.D. Tex. pattern jury instructions. The Eastern District of Texas pattern jury instructions on willful infringement, updated to reflect Halo, instruct the jury that to find willful infringement, the plaintiff must prove by a preponderance of the evidence that the defendant acted despite an objectively high likelihood of infringement and that this likelihood was known or so obvious that it should have been known to the defendant. The instructions further provide that the jury should consider, among other things, whether the defendant was aware of the patent, the nature and quality of any investigation the defendant undertook, and whether the defendant had a good-faith basis for believing it did not infringe. Our proposed jury instructions should track the pattern closely while emphasizing the specific facts that support willfulness here.

Specificity in pleading. Eastern District of Texas practice, consistent with Federal Circuit guidance, favors specificity in pleading willful infringement at the complaint stage. General, conclusory allegations of willfulness are insufficient. The complaint should set forth the factual basis for the willfulness claim with reasonable particularity, including identification of the pre-suit notice, the accused products, and the specific basis for the allegation that the defendant's infringement was knowing and deliberate. Our draft complaint, discussed further in Section VI.A, incorporates detailed factual allegations supporting the willfulness count.

III. FACTUAL BASIS FOR WILLFUL INFRINGEMENT

A. The Asserted Patents

OWS asserts four United States utility patents against Lumicore in this action:

U.S. Patent No. 10,234,847 (the "'847 Patent"): Entitled "Multi-Channel Silicon Photonic Waveguide Multiplexer with Low Insertion Loss." The '847 Patent was filed on September 14, 2016, and issued on March 19, 2019. Optiwave Semiconductor Corp. is both the original and current assignee of record. The '847 Patent claims a multi-channel waveguide multiplexer architecture designed for silicon photonic platforms that achieves low insertion loss through a specific combination of adiabatic tapering structures and mode-matching elements. The '847 Patent is in the same patent family as the '562 Patent, sharing a continuation relationship.

U.S. Patent No. 10,891,193 (the "'193 Patent"): Entitled "High-Bandwidth Coherent Optical Transceiver Integrated on Silicon Substrate." The '193 Patent was filed on April 7, 2017, and issued on January 12, 2021. Optiwave Semiconductor Corp. is both the original and current assignee. The '193 Patent claims a coherent optical transceiver architecture that integrates modulator, detector, and signal-processing components on a common silicon substrate. The '193 Patent shares Provisional Application No. 62/499,117 with the '015 Patent.

U.S. Patent No. 9,678,562 (the "'562 Patent"): Entitled "Method for Thermal Management of Photonic Integrated Circuits Using Embedded Micro-Channel Heat Sinks." The '562 Patent was filed on November 22, 2014, and issued on June 13, 2017. The '562 Patent was originally assigned to Solara Optics, Inc. and was acquired by OWS pursuant to an Asset Purchase Agreement dated June 15, 2018, for $34.5 million, which covered a portfolio of twelve patents including the '562 Patent. The assignment was duly recorded with the United States Patent and Trademark Office. The '562 Patent claims a method of thermal management for photonic integrated circuits employing embedded micro-channel heat sinks fabricated using specific etching and bonding techniques. As noted, the '562 Patent is in the same patent family as the '847 Patent through a continuation relationship.

U.S. Patent No. 11,402,015 (the "'015 Patent"): Entitled "Polarization-Diverse Grating Coupler for Silicon Photonic Transceivers." The '015 Patent was filed on August 30, 2019, and issued on August 2, 2022. Optiwave Semiconductor Corp. is both the original and current assignee. The '015 Patent claims a polarization-diverse grating coupler architecture for silicon photonic transceivers that achieves improved coupling efficiency across a broad wavelength range through the use of dual-layer gratings with asymmetric scattering elements. As noted, the '015 Patent shares Provisional Application No. 62/499,117 with the '193 Patent.

All maintenance fees on the four asserted patents are current, and OWS has maintained all annuities due to date. No inter partes review ("IPR") petitions have been filed against any of the four asserted patents to date, although Lumicore has reserved the right to petition the Patent Trial and Appeal Board. We are monitoring the one-year window under 35 U.S.C. § 315(b) and will prepare an analysis of IPR risk as a separate memorandum.

B. The Accused Products

OWS accuses three Lumicore product lines of infringement:

LumiLink 400G-ZR+ Transceiver Module. Lumicore launched the LumiLink 400G-ZR+ in Q3 2022. This product is a 400-gigabit coherent optical transceiver module designed for data center interconnect ("DCI") applications. The LumiLink 400G-ZR+ achieved full-year 2023 revenue of $94.8 million and has been a commercially successful product for Lumicore. OWS accuses the LumiLink 400G-ZR+ of infringing the '847, '193, and '562 Patents.

LumiLink 800G-DR8 Transceiver Module. Lumicore launched the LumiLink 800G-DR8 in Q1 2023, during the pendency of the initial licensing negotiations between FairPoint and Lumicore. This product is an 800-gigabit optical transceiver module designed for short-reach data center applications. The LumiLink 800G-DR8 achieved full-year 2023 revenue of $128.4 million, making it Lumicore's highest-revenue accused product. OWS accuses the LumiLink 800G-DR8 of infringing all four asserted patents — the '847, '193, '562, and '015 Patents.

LumiEdge 1600G-LR Transceiver Module. Lumicore launched the LumiEdge 1600G-LR in Q4 2023, approximately five months after Lumicore's formal declination of OWS's licensing offer and more than nine months after receiving the first FairPoint notice letter. This product is a next-generation 1600-gigabit optical transceiver module designed for long-reach applications. Due to its Q4 launch, the LumiEdge 1600G-LR achieved partial-year 2023 revenue of $41.7 million, with substantially higher revenue projected for subsequent years. OWS accuses the LumiEdge 1600G-LR of infringing the '193 and '015 Patents.

Total accused-product revenue. Total accused-product revenue for fiscal year 2023 was $264.9 million across the three product lines. Dr. Lawrence Keating of Meridian Economic Consulting Group, LLC, retained as OWS's damages expert, has prepared a preliminary estimate projecting total accused-product revenue from the inception of infringement in Q3 2022 through the anticipated trial date in Q4 2025 at approximately $714.6 million. This projection is based on Lumicore's publicly available financial disclosures, analyst reports, and reasonable market growth assumptions.

C. Chronological Timeline of Notice and Lumicore's Conduct

1. Pre-Notice Period (Q3 2022 – January 14, 2023)

Q3 2022 — Lumicore launches the LumiLink 400G-ZR+. Lumicore commercially launched its LumiLink 400G-ZR+ transceiver module in Q3 2022. The product was marketed at OFC 2022 and subsequently through Lumicore's direct sales channels and distributor network. At the time of launch, OWS did not have notice that the LumiLink 400G-ZR+ incorporated technology covered by OWS's patent portfolio.

October 2022 — OWS identifies potential infringement. In October 2022, members of OWS's internal engineering team, led by Dr. Jian-Wei Huang (Vice President, Photonic IC Design), identified features of the LumiLink 400G-ZR+ that appeared to be potentially covered by OWS's patent claims. The engineers' observations were based on publicly available product datasheets, white papers presented by Lumicore engineers at academic and industry conferences, and a preliminary physical inspection of a commercially purchased LumiLink 400G-ZR+ sample unit. The engineering team escalated the matter to Rebecca Tanaka, OWS's General Counsel, for further evaluation.

November 2022 — OWS retains Benchmark for teardown analysis. At Ms. Tanaka's direction, OWS retained Benchmark Semiconductor Analysis, LLC ("Benchmark"), located at 2244 Mission College Boulevard, Santa Clara, California 95054, to perform a comprehensive teardown and reverse-engineering analysis of the LumiLink 400G-ZR+. The analysis was supervised by Kevin Ng, Benchmark's lead engineer for photonic integrated circuit ("PIC") teardowns. The engagement letter directed Benchmark to evaluate the LumiLink 400G-ZR+'s waveguide multiplexer structures, coherent transceiver integration architecture, and thermal management subsystems for potential overlap with specific claims of the '847, '193, and '562 Patents.

December 12, 2022 — Benchmark teardown report. Benchmark delivered its final teardown report on December 12, 2022. The report confirmed the presence of waveguide multiplexer structures and thermal management micro-channels in the LumiLink 400G-ZR+ that are consistent with the claimed architectures of the '847, '193, and '562 Patents. Specifically, Benchmark's analysis identified: (a) adiabatic tapering structures in the waveguide multiplexer consistent with independent claims 1 and 14 of the '847 Patent; (b) a coherent transceiver integration architecture on a silicon substrate consistent with independent claims 1, 8, and 22 of the '193 Patent; and (c) embedded micro-channel heat sink structures consistent with independent claims 1 and 9 of the '562 Patent. The Benchmark report formed the basis for the claim charts subsequently transmitted to Lumicore with the first FairPoint licensing letter.

Pre-notice awareness — Melissa Chen evidence. Critical to the willfulness analysis, evidence obtained during discovery indicates that Lumicore's infringement was not inadvertent but rather was informed by awareness of OWS's patent portfolio even before any formal notice was sent. Melissa Chen, a former Lumicore engineer who worked on the LumiLink 400G-ZR+ design team from approximately 2020 to 2024 and is now employed at Veridian Photonics, Inc., is expected to testify that Lumicore's engineering team accessed and reviewed OWS's published patent applications — specifically Published Application No. 2018/0123456 (published approximately July 12, 2018), which corresponds to the '193 Patent — during the LumiLink 400G-ZR+ product design phase in 2021–2022. This evidence is discussed in greater detail in Section III.D below.

2. First Licensing Notice (January 15, 2023)

On January 15, 2023, FairPoint Licensing Group, LLC ("FairPoint"), acting as OWS's exclusive licensing agent, transmitted the first formal licensing and notice letter to Lumicore's General Counsel, Raymond Bautista. FairPoint's Managing Director, Angela Reeves, signed the letter. FairPoint's offices are located at 500 Sansome Street, Suite 1400, San Francisco, California 94111.

The January 15, 2023 letter was a detailed, twelve-page communication that accomplished the following:

• Patent identification. The letter identified three OWS patents: the '847 Patent, the '193 Patent, and the '562 Patent. Each patent was identified by number, title, and issuance date.

• Accused product identification. The letter identified the LumiLink 400G-ZR+ as the accused product.

• Claim charts. The letter included three claim charts — one per patent — mapping specific claim limitations from representative independent claims to corresponding features of the LumiLink 400G-ZR+ as identified through the Benchmark teardown analysis. The claim charts were detailed and technically specific, providing element-by-element comparisons supported by annotated teardown photographs, product datasheet excerpts, and Lumicore's own published technical specifications.

• Licensing invitation. The letter invited Lumicore to enter into licensing discussions and proposed a meeting to discuss terms.

This letter constitutes actual, formal notice of the patents and the infringement allegations. Receipt of the letter was confirmed by Raymond Bautista in his December 3, 2024 deposition, discussed in Section III.F below. The date of this letter — January 15, 2023 — marks the commencement of the post-notice willfulness period for the '847, '193, and '562 Patents.

3. Lumicore's Initial Response (February 28, 2023)

Lumicore responded to the FairPoint letter on February 28, 2023, through its retained outside counsel, Hawthorne Vega & Cruz LLP ("HVC"). The response was authored by Catherine "Kate" Rourke, a partner at HVC's Austin, Texas office, located at 600 Congress Avenue, Suite 2400, Austin, Texas 78701.

The HVC response letter was four pages in length and adopted a posture of general denial. The letter stated that Lumicore disputed infringement of the identified patents and questioned the validity of the asserted claims. However, the response provided no specific technical or legal basis for Lumicore's non-infringement position. It did not identify any specific claim limitation that was allegedly absent from the accused product, nor did it cite any prior art that allegedly anticipated or rendered obvious the claimed inventions. The letter was, in substance, a boilerplate denial without analytical support.

Notably, the response contained no indication that Lumicore had undertaken or planned to undertake any design-around effort to avoid the identified patent claims. Nor did it indicate that Lumicore planned to cease sales of the LumiLink 400G-ZR+ pending resolution of the dispute.

4. LumiLink 800G-DR8 Launch (Q1 2023)

During the pendency of the licensing negotiations — and within approximately six weeks of receiving the first FairPoint notice letter — Lumicore commercially launched its second accused product, the LumiLink 800G-DR8, in Q1 2023. The LumiLink 800G-DR8 is an 800-gigabit transceiver module that incorporates the same or substantially similar accused waveguide multiplexer structures, coherent transceiver integration architecture, and thermal management micro-channels as the LumiLink 400G-ZR+. Additionally, the LumiLink 800G-DR8 incorporates a polarization-diverse grating coupler architecture that implicates the '015 Patent, which had issued on August 2, 2022.

The significance of this launch cannot be overstated. Lumicore introduced a new product line that incorporated the same patented technology identified in the FairPoint licensing letter — and, indeed, added features implicating a fourth OWS patent — while licensing negotiations were actively underway and while Lumicore was on actual notice of infringement of three OWS patents. The launch of a new product incorporating the same patented technology while on notice is strong evidence of willfulness under Halo and its progeny. See Arctic Cat, 876 F.3d at 1371; WBIP, 829 F.3d at 1341.

5. In-Person Licensing Meeting (April 20, 2023)

On April 20, 2023, an in-person licensing meeting was held in Austin, Texas, attended by the following individuals:

• For OWS: Angela Reeves (FairPoint, Managing Director); Rebecca Tanaka (OWS, General Counsel).

• For Lumicore: Raymond Bautista (Lumicore, General Counsel); Catherine "Kate" Rourke (HVC, outside counsel).

During the meeting, OWS (through FairPoint) presented its infringement position in detail, walking through the claim charts for each of the three patents identified in the January 15, 2023 letter. OWS also offered specific licensing terms, including proposed royalty rates and a lump-sum option. The licensing proposal was structured as a portfolio license covering all four asserted patents (including the '015 Patent, which was being added to the licensing discussion) and any future continuations or related patents.

According to Angela Reeves's account, provided during her December 10, 2024 deposition (taken in connection with the pending litigation), Lumicore's representatives showed "no interest in negotiating" during the meeting. Lumicore did not engage substantively with the claim charts or the infringement analysis. Lumicore did not present any counter-analysis or identify any specific basis for disputing infringement. Lumicore did not make a counter-proposal. Lumicore did not indicate any willingness to take a license on any terms. The meeting concluded without agreement and without any indication from Lumicore that it would engage in further substantive discussions.

The failure to engage at the in-person meeting is significant because it undermines any argument that Lumicore was acting in good faith to evaluate OWS's patent positions and consider its options. A party that receives detailed notice of infringement, attends an in-person meeting to discuss the issue, and then refuses to engage substantively — without offering any alternative or even articulating a specific basis for its non-infringement position — is not behaving in a manner consistent with good faith.

6. Second Licensing Notice (May 15, 2023)

On May 15, 2023, FairPoint transmitted a second formal licensing letter to Raymond Bautista. This letter accomplished two important objectives:

• Addition of the '015 Patent. The letter added U.S. Patent No. 11,402,015 (the '015 Patent) to the list of asserted patents, expanding the total to four. The '015 Patent had issued on August 2, 2022, and its claims had been evaluated against the LumiLink product line in the intervening months.

• Expansion of accused products. The letter expanded the list of accused products to include the LumiLink 800G-DR8, which had been launched in Q1 2023.

The letter included additional claim charts for the '015 Patent, mapping claim limitations to features of both the LumiLink 400G-ZR+ and the LumiLink 800G-DR8. As of the date of this second letter, Lumicore had actual, documented notice of all four asserted patents and all then-existing accused products.

7. Lumicore Declines License (July 10, 2023)

On July 10, 2023, Lumicore — through HVC — formally declined to take a license to the asserted OWS patents. The declination letter, addressed to FairPoint, stated that Lumicore had obtained "competent legal opinions" concluding that its products did not infringe the asserted patents. However, the letter did not disclose the substance of these opinions, identify the counsel who prepared them, or provide any technical or legal analysis supporting the non-infringement conclusion.

Lumicore has subsequently asserted attorney-client privilege over the referenced opinion letters and has refused to produce them in discovery. OWS filed a Motion to Compel production of these opinion letters on October 21, 2024 (Docket Entry 38), which is currently pending before the Court. OWS's position, as briefed in the motion, is that Lumicore's affirmative reference to "competent legal opinions" in its declination letter — which was communicated to a third party (FairPoint) and thus arguably outside the scope of privilege — combined with any reliance on advice-of-counsel as a defense in this litigation, constitutes a waiver of attorney-client privilege as to those opinions. The law in this Circuit supports this position. See Seagate, 497 F.3d at 1372–74 (discussing scope of waiver when advice-of-counsel defense is raised); In re EchoStar Commc'ns Corp., 448 F.3d 1294, 1302 (Fed. Cir. 2006).

Regardless of the outcome of the motion, Lumicore's invocation of "competent legal opinions" without disclosure creates a significant adverse inference risk. Under Halo and the totality-of-the-circumstances standard, an infringer's reliance on undisclosed opinions — where the infringer affirmatively references those opinions in correspondence but then refuses to produce them — is of limited defensive value. The jury is entitled to consider that Lumicore obtained opinions it has chosen not to disclose, and to infer that the opinions may not support the non-infringement position Lumicore claims they do.

8. LumiEdge 1600G-LR Launch (Q4 2023)

In Q4 2023, Lumicore launched its third accused product, the LumiEdge 1600G-LR. At the time of this launch, the following circumstances obtained:

• Lumicore had been on actual notice of the '847, '193, and '562 Patents for approximately nine months (since January 15, 2023).

• Lumicore had been on actual notice of the '015 Patent for approximately five months (since May 15, 2023).

• Lumicore had formally declined to take a license approximately three months earlier (July 10, 2023).

• The in-person licensing meeting had failed approximately six months earlier (April 20, 2023).

Despite these circumstances, Lumicore proceeded to launch the LumiEdge 1600G-LR — a new product line accused of infringing the '193 and '015 Patents — without conducting any formal design-around analysis. This fact is established by the deposition testimony of Lumicore's General Counsel, Raymond Bautista, who admitted on December 3, 2024 that no formal design-around analysis was commissioned before the LumiEdge 1600G-LR launch. This admission is particularly damaging to Lumicore's position: it establishes that Lumicore launched an entirely new product line incorporating patented technology without even evaluating whether it could avoid the identified patent claims.

The LumiEdge 1600G-LR achieved partial-year revenue of $41.7 million in FY 2023 (reflecting approximately one quarter of sales). Revenue from this product is projected to increase substantially in FY 2024 and FY 2025 as production ramps and the product gains market adoption.

9. Litigation Filed (April 22, 2024)

OWS filed its complaint in the Eastern District of Texas on April 22, 2024, initiating Optiwave Semiconductor Corp. v. Lumicore Technologies, Inc., Case No. 2:24-cv-00319-JRG, before Judge James R. Gilstrap. The complaint includes seven counts: Counts I through IV assert infringement of the '847, '193, '562, and '015 Patents, respectively; Counts V and VI assert induced and contributory infringement; and Count VII asserts willful infringement and seeks enhanced damages under 35 U.S.C. § 284.

D. Evidence from Melissa Chen

Melissa Chen is a critical witness for the willfulness theory. Chen is a former Lumicore engineer who was a member of the LumiLink 400G-ZR+ design team from approximately 2020 to 2024. She left Lumicore and is now employed at Veridian Photonics, Inc., a company that is not a party to this litigation and is not otherwise involved in the dispute.

Chen is expected to testify — via declaration, deposition, or both — that Lumicore's engineering team accessed and reviewed OWS's published patent applications during the LumiLink 400G-ZR+ design phase in 2021–2022. Specifically, Chen is expected to testify that the team reviewed Published Application No. 2018/0123456, which corresponds to the '193 Patent ("High-Bandwidth Coherent Optical Transceiver Integrated on Silicon Substrate"). The published application, which was available on the USPTO's PAIR system and Severin Industries Patents, disclosed the core architectural concepts subsequently claimed in the '193 Patent, including the integration of modulator, detector, and signal-processing components on a common silicon substrate.

The significance of Chen's anticipated testimony is twofold:

First, it establishes that Lumicore's engineers were aware of OWS's patented technology — at least in published-application form — even before the first FairPoint licensing letter was sent in January 2023 and before the LumiLink 400G-ZR+ was commercially launched in Q3 2022. This transforms the willfulness narrative from one of post-notice continuation to one of pre-design, knowing adoption of patented technology.

Second, the fact that Lumicore's engineers reviewed OWS's published application during the design phase and then designed a product whose features align with the claims of the subsequently-issued patent supports a strong inference that the design choices were informed by — and potentially derived from — OWS's disclosed inventions. While independent development is theoretically possible, the inference of copying or at minimum awareness-driven design is substantially strengthened by this evidence.

A third-party subpoena duces tecum and deposition notice has been issued to Melissa Chen, dated January 22, 2025, pursuant to Federal Rule of Civil Procedure 45. The subpoena requests production of any documents Chen retained or can identify from her tenure at Lumicore that relate to the LumiLink 400G-ZR+ design process, the review of OWS patent applications, or any internal Lumicore discussions regarding OWS's intellectual property. We anticipate Chen's deposition will be scheduled within 45 days of subpoena service, and we are coordinating with Omar Siddiqui on logistics and deposition preparation.

E. Dr. Sandra Michaud Deposition Admissions (November 19, 2024)

Dr. Sandra Michaud, Lumicore's Chief Technology Officer, was deposed on November 19, 2024, in connection with this litigation. Dr. Michaud has been Lumicore's CTO since 2019 and was responsible for overseeing the technical direction of Lumicore's product development, including the LumiLink and LumiEdge product lines.

The following key admissions were obtained during Dr. Michaud's deposition:

Review of OWS published application. Dr. Michaud admitted that she personally reviewed OWS Published Application No. 2018/0123456 during the LumiLink design phase. When asked whether she had reviewed the application, Michaud testified: "I believe I may have looked at it at some point during the early design discussions. It's not unusual to review published applications in the same technology space." This admission corroborates the anticipated testimony of Melissa Chen and establishes that awareness of OWS's published application reached the highest levels of Lumicore's technical leadership.

Denial of knowledge of issued patents. Dr. Michaud denied having knowledge of the issued '193 Patent until receipt of the FairPoint letter in January 2023. However, this denial is arguably inconsistent with her admitted review of the published application that matured into the '193 Patent. A published patent application contains substantially the same disclosure as the issued patent, and the transition from published application to issued patent is a matter of public record that can be tracked through the USPTO's PAIR system. The jury may reasonably conclude that an individual who reviewed a published application in the same technology space — and who, as CTO, would have reason to monitor competitive intellectual property developments — knew or should have known that the application had issued as a patent.

Inability to identify non-infringing alternatives. When asked to identify specific non-infringing design alternatives for the accused products, Dr. Michaud could not do so. She testified that she was "not the right person to answer that question in detail" and suggested that the company's design engineers would be better positioned to address it. This inability to identify alternatives is significant for two reasons: (a) it undercuts Lumicore's position that it had a good-faith basis for believing its products did not infringe, because if the products were truly non-infringing, one would expect the CTO to be able to articulate the technical distinctions; and (b) it suggests that Lumicore may not have undertaken a serious evaluation of design-around options, consistent with Bautista's admission that no formal design-around analysis was commissioned before the LumiEdge 1600G-LR launch.

F. Raymond Bautista Deposition Admissions (December 3, 2024)

Raymond Bautista, Lumicore's General Counsel, was deposed on December 3, 2024. The deposition was of limited scope due to privilege issues and ongoing disputes regarding the discoverability of the opinion letters referenced in Lumicore's July 10, 2023 declination letter.

The following key admissions were obtained:

Confirmed receipt of FairPoint's January 15, 2023 letter. Bautista confirmed that he personally received the FairPoint licensing letter dated January 15, 2023. He testified that the letter was received by Lumicore's legal department "around January 18 or 19, 2023" — within three to four days of the letter date. This establishes the precise date range of actual receipt and removes any doubt that Lumicore had formal notice of the '847, '193, and '562 Patents by mid-to-late January 2023.

Forwarded to outside counsel within 3 business days. Bautista confirmed that the FairPoint letter was forwarded to Lumicore's outside counsel, Hawthorne Vega & Cruz LLP, within three business days of receipt. This demonstrates that Lumicore treated the letter as a serious legal communication requiring outside counsel's attention, further supporting the inference that Lumicore was aware of the significance of the patents and the infringement allegations.

Refused to disclose substance of opinions. Bautista refused to answer questions about the substance of the "competent legal opinions" referenced in Lumicore's July 10, 2023 declination letter, asserting attorney-client privilege. Lumicore's counsel, Kate Rourke, instructed the witness not to answer on multiple occasions. As noted above, OWS has filed a Motion to Compel (D.E. 38) seeking production of these opinions, which is pending before the Court.

No formal design-around analysis before LumiEdge 1600G-LR launch. In what may be the single most damaging admission in his deposition, Bautista confirmed that no formal design-around analysis was commissioned before the commercial launch of the LumiEdge 1600G-LR in Q4 2023. When asked whether "Lumicore, before launching the LumiEdge 1600G-LR, commissioned or received a formal analysis evaluating whether the product could be designed to avoid the claims of the patents identified in FairPoint's licensing letters," Bautista responded: "Not a formal analysis, no." This admission is highly probative of willfulness because it establishes that Lumicore launched a brand-new product — one that was not yet on the market when Lumicore received notice of the asserted patents — without even evaluating whether it could avoid the patented claims. The launch was not an instance of inertia (i.e., continuing to sell an existing product while the dispute was being evaluated); it was an affirmative, forward-looking business decision to introduce a new infringing product while on actual notice.

IV. STRENGTH-OF-EVIDENCE ASSESSMENT

A. Evidence Strongly Supporting Willfulness

Based on the factual record as developed to date, the following evidence strongly supports a willful infringement finding:

1. Pre-design awareness of OWS's patent portfolio. Melissa Chen's anticipated testimony and Dr. Sandra Michaud's deposition admission establish that Lumicore engineers — including Lumicore's CTO — reviewed OWS Published Application No. 2018/0123456 (corresponding to the '193 Patent) during the LumiLink 400G-ZR+ design phase in 2021–2022. This evidence demonstrates that Lumicore was aware of OWS's patented technology before the first formal notice letter and before the LumiLink 400G-ZR+ was even launched. The inference of knowing, awareness-driven design is strong.

2. Formal actual notice via two FairPoint licensing letters. The two FairPoint licensing letters — dated January 15, 2023 and May 15, 2023 — provided detailed, patent-by-patent, claim-by-claim notice of all four asserted patents, accompanied by claim charts and annotated teardown photographs. Receipt was confirmed by Bautista. These letters are paradigmatic examples of the type of formal, substantive notice that courts have held supports a willfulness finding. See WBIP, 829 F.3d at 1341.

3. Continued infringement after notice. After receiving the first FairPoint letter on January 15, 2023, Lumicore continued manufacturing and selling the LumiLink 400G-ZR+ and (beginning Q1 2023) the LumiLink 800G-DR8 without interruption. There is no evidence that Lumicore paused sales, suspended shipments, or took any other remedial action in response to the notice. The continued sale of accused products after actual notice is classic willfulness evidence.

4. Launch of new infringing products after notice. Lumicore launched the LumiEdge 1600G-LR in Q4 2023 — more than nine months after receiving the first FairPoint letter, approximately five months after formally declining a license, and six months after the failed in-person licensing meeting. The LumiEdge 1600G-LR was a new product that did not exist at the time the licensing letters were sent; its launch was an affirmative business decision to introduce a new product incorporating patented technology while on actual notice of infringement. Moreover, Bautista admitted that no formal design-around analysis was conducted before the launch. This is among the most compelling evidence of willfulness in this case.

5. Refusal to negotiate in good faith. At the April 20, 2023 in-person meeting in Austin, Texas, Lumicore showed "no interest in negotiating" (per Angela Reeves's deposition testimony). Lumicore did not engage with the claim charts, did not present any technical counter-analysis, and did not make a counter-proposal. The refusal to engage in good-faith licensing negotiations after receiving detailed infringement contentions is consistent with a strategy of deliberate infringement.

6. Refusal to produce opinion-of-counsel letters. Lumicore affirmatively referenced "competent legal opinions" in its July 10, 2023 declination letter but has asserted attorney-client privilege and refused to disclose the opinions. Under Halo and the totality-of-the-circumstances framework, while there is no duty to obtain counsel's opinion, asserting reliance on undisclosed opinions invites judicial scrutiny and potentially supports an adverse inference. The jury is entitled to consider what inferences, if any, should be drawn from Lumicore's decision to reference opinions it refuses to produce.

7. Absence of design-around efforts. Bautista's deposition admission that no formal design-around analysis was conducted before launching the LumiEdge 1600G-LR directly undercuts any argument that Lumicore acted in good faith to avoid infringement. A company that is on actual notice of patents covering specific technical features and that launches a new product incorporating those same features — without even evaluating whether alternative designs are available — is acting with the kind of subjective willfulness that Halo targets.

8. Scale and duration of infringement. The projected accused-product revenue of approximately $714.6 million through trial demonstrates that Lumicore's infringement was commercially significant, sustained over a multi-year period, and integral to Lumicore's business. This is not a case of inadvertent, marginal infringement; the accused products represent a substantial portion of Lumicore's total revenue and market position. The commercial significance of the infringing activity is a relevant consideration in the totality-of-the-circumstances analysis.

B. Potential Weaknesses and Defendant's Likely Counter-Arguments

Lumicore can be expected to advance several defenses and counter-arguments. We assess each below, along with our anticipated responses.

1. Pre-notice period argument. Lumicore will argue that the period before January 15, 2023 (i.e., Q3 2022 through January 14, 2023) should not support a willfulness finding because Lumicore had no formal notice of the issued patents during that period. Lumicore will characterize its review of OWS's published application as routine competitive intelligence activity that does not establish knowledge of issued patents or intent to infringe.

Counter: While the pre-notice period presents a somewhat less compelling case for willfulness than the post-notice period, it is far from irrelevant. Melissa Chen's testimony and Dr. Michaud's deposition admissions establish that Lumicore engineers affirmatively reviewed OWS's published patent application during the design of the very product now accused of infringement. The published application disclosed the same inventive concepts subsequently claimed in the '193 Patent. The transition from published application to issued patent is a matter of public record, and an infringer's pre-notice awareness of the underlying technology — particularly where the infringer is in the same technical field and has the sophistication to monitor patent portfolios — is properly considered as part of the totality-of-the-circumstances analysis. Moreover, the pre-notice awareness evidence strengthens the post-notice willfulness case by establishing that Lumicore's infringement was not the product of ignorance but of a knowing decision to use patented technology.

2. Advice-of-counsel defense. Lumicore may eventually waive privilege and produce the opinion letters referenced in its July 10, 2023 declination letter. If the opinions are competently prepared and contain non-frivolous non-infringement positions, they could provide some defensive value on the willfulness question.

Counter: Even competent opinions of non-infringement do not preclude a willfulness finding under Halo if the totality of circumstances demonstrates egregious conduct. The Supreme Court in Halo emphasized that enhanced damages are assessed holistically, and a single factor — even a favorable opinion of counsel — does not necessarily insulate an infringer from a willfulness finding. 579 U.S. at 105–06. Moreover, Lumicore has thus far refused to produce the opinions, and its assertion of privilege limits their defensive value. If the opinions are eventually produced and found to be competent, they will bear on the enhancement analysis but will not defeat a willfulness finding in light of the other evidence — including pre-design awareness, continued infringement, new product launches without design-arounds, and refusal to negotiate.

3. Good-faith invalidity challenge. Lumicore has asserted invalidity of the asserted patents under 35 U.S.C. §§ 102 and 103, citing twenty-three prior-art references in its preliminary invalidity contentions. Lumicore may argue that a good-faith belief in invalidity negates willfulness — i.e., that it continued manufacturing the accused products because it believed the patents were invalid, not because it chose to infringe.

Counter: A reasonable invalidity defense may bear on the court's exercise of discretion regarding the amount of enhancement, but it does not necessarily defeat a jury finding of willful infringement. The Federal Circuit has recognized that "an accused infringer's belief regarding patent validity is only one factor for the jury to consider." Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275, 1295 (Fed. Cir. 2017). This is particularly true where, as here, the infringer was on actual notice of the patents, continued infringing without interruption, launched new products without design-around efforts, and refused to engage in good-faith licensing negotiations. A self-serving assertion of invalidity, unsupported by contemporaneous evidence of reliance on a specific invalidity analysis, is of limited defensive value.

4. Inequitable conduct defense. Lumicore has counterclaimed for unenforceability of the '193 Patent based on alleged inequitable conduct during prosecution. Specifically, Lumicore alleges that Dr. Jian-Wei Huang, a named inventor on the '193 Patent, failed to disclose a prior publication (a conference paper by Yamamoto et al., presented at ECOC 2015) to the USPTO during prosecution. If this defense were credited, it could undermine the enforceability of the '193 Patent and, derivatively, weaken the willfulness theory as it relates to that patent.

Counter: Our preliminary analysis — to be set forth in a separate Inequitable Conduct Defense Analysis memorandum anticipated for August 2024 — indicates that the Yamamoto reference was cumulative of other prior art already of record during prosecution. Moreover, the inequitable conduct standard under Brightmoor & Co., Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc), requires proof of specific intent to deceive the USPTO by clear and convincing evidence, a high bar that Lumicore is unlikely to meet. The reference at issue is a general conference paper that does not disclose the specific claim limitations of the '193 Patent, and we have no evidence of deliberate withholding by Dr. Huang. Accordingly, we do not view the inequitable conduct defense as a significant threat to the willfulness theory.

5. Independent development. Lumicore's invalidity contentions include an assertion of prior conception based on internal design documents dated 2016–2017, which Lumicore contends predate the effective filing date of the '015 Patent. Lumicore may argue that it independently developed its technology and therefore did not copy or willfully infringe OWS's patents.

Counter: These documents are uncorroborated by independent evidence and likely post-date the '015 Patent's priority date, which traces through Provisional Application No. 62/499,117 to August 30, 2019 (but the provisional was filed in 2017, and the '015 Patent's effective filing date depends on the continuation chain; this requires further investigation). Moreover, and critically, independent development does not negate willful infringement where the infringer had actual notice of the patents and continued infringing. See Hollowell Industries v. Zimmer, Inc., 782 F.3d 649, 661 (Fed. Cir. 2015), aff'd sub nom. Halo, 579 U.S. 93. Even if Lumicore independently conceived certain aspects of its technology, its decision to continue manufacturing and selling accused products — and to launch new accused products — after actual notice of OWS's patents constitutes willful infringement.

C. Overall Assessment

The willful infringement case against Lumicore is strong. The combination of pre-design awareness (Chen/Michaud), formal written notice (two FairPoint letters with claim charts), a failed in-person licensing meeting, continued sales without interruption, new product launches after notice without design-around analysis, Lumicore's refusal to engage in good-faith negotiations or to produce its opinion letters, and the commercial scale of the infringement provides a compelling, multi-layered narrative for the jury. The evidence tells a clear story: OWS innovated, Lumicore's engineers studied OWS's technology, Lumicore built products incorporating that technology, OWS identified the infringement and put Lumicore on notice, and Lumicore chose to continue and expand its infringing product line rather than take a license, design around, or even seriously evaluate its options.

Based on the current record and our experience with willfulness cases in the Eastern District of Texas and before juries generally, we assess the probabilities as follows:

• Probability of jury finding willful infringement (assuming liability is established on at least one patent): Approximately 70–80%. The evidence of actual notice, continued infringement, and new product launches after notice is compelling, and Lumicore's defenses (advice-of-counsel, good-faith invalidity) are weakened by its refusal to produce opinions and the absence of design-around efforts.

• Probability of court awarding enhanced damages (assuming willfulness is found by the jury): Approximately 60–70%. Enhancement is discretionary, and the court will apply the Read factors in determining the appropriate multiplier. The strength of Lumicore's invalidity defenses, which remain to be fully assessed, will bear on the court's analysis. However, the multiple indicators of egregious conduct — particularly the launch of a new product without a design-around — favor enhancement.

These probability estimates are preliminary and will be refined as discovery progresses, expert reports are exchanged, and the Read Factor Analysis memorandum is prepared in May 2025.

V. ENHANCED DAMAGES CALCULATION — PRELIMINARY FRAMEWORK

A. Statutory Framework

Under 35 U.S.C. § 284, the court "may increase the damages up to three times the amount found or assessed." The statute confers unfettered discretion on the trial court to determine both whether to enhance damages and by what multiplier to enhance them, subject only to the treble-damages cap and the requirement that the enhancement be justified by the circumstances of the case. Halo, 579 U.S. at 103.

Enhancement is informed by the Read factors, which guide the court's exercise of discretion in determining the appropriate multiplier. A comprehensive Read Factor Analysis memorandum will be prepared closer to the dispositive-motion stage, targeted for May 2025, when the discovery record will be substantially complete and the parties' expert reports will have been exchanged. That memorandum will present a detailed, factor-by-factor analysis of Lumicore's conduct and recommend a specific enhancement multiplier.

The multiplier is applied to the underlying damages award as found by the jury or assessed by the court. Courts have applied the multiplier to the entirety of the damages award or, in some cases, to a subset thereof — for example, limiting enhancement to damages accruing during the post-notice period or to damages attributable to specific patents for which willfulness was found. We recommend seeking enhancement of the full post-notice damages award.

B. Damages Base for Enhancement

Dr. Lawrence Keating of Meridian Economic Consulting Group, LLC, has prepared a preliminary damages analysis that provides the foundation for the enhancement calculation. The key figures are as fol

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT PREPARED IN ANTICIPATION OF LITIGATION NOT FOR DISTRIBUTION OUTSIDE CASE TEAM
CALDERWOOD & HARKNESS LLP 350 South Grand Avenue, 48th Floor Los Angeles, California 90071
INTERNAL MEMORANDUM
April 10, 2024
FROM: Wendy Schultz, Associate, Calderwood & Harkness LLP
TO: Alan Ngo, Responsible Partner, Calderwood & Harkness LLP Marcus Delgado, Billing Partner, Calderwood & Harkness LLP
RE: Assessment of Willful Infringement Theory — Optiwave Semiconductor Corp. v. Lumicore Technologies, Inc., Case No. 2:24-cv-00319-JRG (E.D. Tex.)
CLASSIFICATION: Privileged & Confidential — Attorney Work Product
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I. EXECUTIVE SUMMARY
This memorandum analyzes the strength and viability of Optiwave Semiconductor Corp.'s ("OWS" or "Optiwave") willful infringement claim against Lumicore Technologies, Inc. ("Lumicore") under the framework established by Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. 93 (2016), and its progeny in the United States Court of Appeals for the Federal Circuit and the Eastern District of Texas. The memorandum is prepared in anticipation of the filing of OWS's complaint on April 22, 2024, and is intended to inform the case team's strategic decisions regarding (a) whether to plead willful infringement as a separate count, (b) the contours of the enhanced damages demand, and (c) the discovery and trial strategy surrounding the willfulness theory.
Conclusion. Based on the evidence currently available and reasonably anticipated, the willful infringement theory is strong and well-supported. Lumicore had actual, pre-suit notice of at least three of the four asserted patents — U.S. Patent Nos. 10,234,847 (the "'847 Patent"), 10,891,193 (the "'193 Patent"), and 9,678,562 (the "'562 Patent") — as of January 15, 2023, when OWS's licensing agent, FairPoint Licensing Group, LLC ("FairPoint"), transmitted a detailed licensing letter to Lumicore's General Counsel, Raymond Bautista, that included patent-specific claim charts mapping claim limitations to features of the accused LumiLink 400G-ZR+ transceiver module. Lumicore received formal notice of the fourth patent, U.S. Patent No. 11,402,015 (the "'015 Patent"), on May 15, 2023, via a second FairPoint licensing letter. Despite this notice, Lumicore continued manufacturing and selling the accused products without interruption, declined a license on July 10, 2023, and launched a third accused product — the LumiEdge 1600G-LR — in Q4 2023, approximately five months after declining the license, and without conducting any formal design-around analysis (as admitted by Bautista in his December 3, 2024 deposition). Additional evidence further strengthens the case for subjective willfulness. Testimony anticipated from former Lumicore engineer Melissa Chen (now employed at Veridian Photonics, Inc.) establishes that Lumicore's engineering team accessed and reviewed OWS's published patent applications — specifically Published Application No. 2018/0123456, which corresponds to the '193 Patent — during the design phase of the LumiLink 400G-ZR+ in 2021–2022, before any formal notice was sent and before the product was even launched. This pre-design awareness, corroborated by deposition admissions from Lumicore's CTO, Dr. Sandra Michaud, demonstrates that Lumicore's infringement was knowing and deliberate from the outset.
Recommendation. We recommend that willful infringement be pleaded as a separate count — Count VII — in the complaint to be filed on April 22, 2024, with an accompanying request for enhanced damages under 35 U.S.C. § 284 and a demand that incorporates a willfulness enhancement component. The aggregate damages demand of approximately $210 million reflects a blended approach across three damages theories (lost profits, reasonable royalty, and a selected willful-infringement enhancement), representing a conservative posture relative to the maximum available enhancement of up to treble damages. This memorandum sets forth the legal framework, factual basis, strength-of-evidence assessment, preliminary enhanced damages calculation, and strategic recommendations for the case team's consideration.
II. LEGAL FRAMEWORK
A. The *Halo* Standard
The Supreme Court's 2016 decision in Halo Electronics, Inc. v. Pulse Electronics, Inc., 579 U.S. 93 (2016), fundamentally altered the legal landscape for willful patent infringement and enhanced damages. Halo abrogated the Federal Circuit's prior rigid two-part test established in In re Seagate Technology, LLC, 497 F.3d 1360 (Fed. Cir. 2007) (en banc), which had required a patent holder to prove both (1) objective recklessness — that the infringer acted despite an objectively high likelihood that its actions constituted infringement of a valid patent — and (2) subjective knowledge — that the objectively-defined risk was either known or so obvious that it should have been known to the accused infringer. The Seagate test further required proof of both prongs by clear and convincing evidence.
The Supreme Court in Halo held that Seagate's framework was unduly rigid and inconsistent with the plain text and purpose of 35 U.S.C. § 284, which states simply that "the court may increase the damages up to three times the amount found or assessed." 579 U.S. at 103. The Court emphasized that the statute's language is "inherently flexible" and commits the decision to enhance damages to the sound discretion of the district court. Id. The Court further held that Seagate's objective-recklessness prong improperly excluded from the enhancement inquiry cases where the infringer's subjective bad faith was manifest but no reasonable factfinder could find objective recklessness — for example, where the infringer later identified a defense that might not have been apparent at the time of the infringing conduct. Id. at 104–05.
Post-Halo, enhanced damages under 35 U.S.C. § 284 are assessed under a totality-of-the-circumstances inquiry, committed to the district court's broad discretion. The Court made clear that enhanced damages are still reserved for "egregious cases of culpable behavior" and are not intended to become a "penalty for unsuccessful but reasonable litigation positions." Id. at 106. However, the threshold for establishing entitlement to enhanced damages is now materially lower than under Seagate.
The relevant inquiry under Halo focuses on the infringer's subjective willfulness — that is, whether the infringer knew of the patent and knew or should have known that its conduct constituted infringement. The objective recklessness standard is no longer an independent threshold requirement. Instead, the nature and quality of the infringer's subjective intent, assessed in the totality of the circumstances, drives the analysis.
Critically, willfulness is a question of fact for the jury, while the decision to enhance damages and the amount of any enhancement are discretionary determinations for the court. Halo, 579 U.S. at 106; see also WCM Indus., Inc. v. IPS Corp., 721 F. App'x 959, 970 (Fed. Cir. 2018) (reaffirming bifurcated inquiry). This distinction is important for our trial strategy, as discussed in Section VI.C below.
Finally, Halo confirmed that the burden of proof for willfulness is by a preponderance of the evidence, not the heightened clear-and-convincing standard that Seagate had imposed. 579 U.S. at 112. This lower evidentiary standard substantially improves OWS's prospects of securing a jury finding of willfulness.
B. Post-*Halo* Federal Circuit Guidance
Since Halo, the Federal Circuit has issued a series of decisions elaborating on the willfulness framework. These decisions provide important guideposts for assessing the strength of OWS's theory and anticipating Lumicore's likely defenses.
Pre-suit notice letters and knowledge. The Federal Circuit has consistently held that a pre-suit cease-and-desist or licensing letter that identifies specific patents and provides claim charts or other detailed infringement contentions constitutes strong evidence of actual knowledge of the patents and the alleged infringement. See, e.g., WBIP, LLC v. Kohler Co., 829 F.3d 1317, 1341 (Fed. Cir. 2016) (post-Halo, affirming willfulness finding where patentee sent detailed infringement chart and accused infringer continued selling product); Eko Brands, LLC v. Adrian Rivera Maynez Enters., Inc., 946 F.3d 1367, 1378 (Fed. Cir. 2020) (pre-suit notice followed by continued infringement supported willfulness finding). The two FairPoint licensing letters here — both of which included claim charts and identified specific patents and accused products — Squarely establish formal actual notice.
Opinion-of-counsel letters. Post-Halo, there is no affirmative obligation on the part of an accused infringer to obtain an opinion of counsel regarding non-infringement or invalidity. The failure to obtain such an opinion, standing alone, cannot support an inference of willfulness. See In re Seagate, 497 F.3d at 1371; see also Halo, 579 U.S. at 109–10 (noting the chilling effect of requiring opinions). However, the Federal Circuit has recognized that the failure to obtain an opinion — or, more significantly, the refusal to produce an opinion that the infringer claims to have obtained — may be considered as part of the totality-of-the-circumstances analysis. See SiOnyx, LLC v. Hamamatsu Photonics K.K., 981 F.3d 1339, 1354 (Fed. Cir. 2020). Where, as here, Lumicore has affirmatively referenced "competent legal opinions" in its declination letter but refuses to produce them, the jury is entitled to draw inferences from that refusal, and the opinions' defensive value is substantially limited.
Continued infringement after notice. The Federal Circuit has repeatedly recognized that continued infringement after actual notice of the patent is among the strongest indicators of willfulness. See WBIP, 829 F.3d at 1341; Arctic Cat Inc. v. Bombardier Recreational Prods. Inc., 876 F.3d 1350, 1371 (Fed. Cir. 2017) (continued manufacture and sale of accused products after notice supports willfulness finding). Where the infringer not only continues selling existing products but launches new products incorporating the same accused technology after notice — as Lumicore did here with the LumiEdge 1600G-LR — the inference of willfulness is particularly powerful.
Timing of knowledge relative to infringing activity. The Federal Circuit has noted that the most compelling willfulness cases involve situations where the infringer had knowledge of the patent before or at the time it began its infringing conduct. See Gustafson, Inc. v. Intersystems Indus. Prods., Inc., 897 F.2d 508, 510 (Fed. Cir. 1990). Although the Melissa Chen evidence and Dr. Michaud's deposition admissions relate to awareness of published patent applications rather than issued patents, the Federal Circuit has recognized that knowledge of a published application that subsequently issues as a patent can support an inference of willfulness, particularly where the claims of the published application track the claims of the issued patent. This is especially relevant here, as OWS Published Application No. 2018/0123456 corresponds directly to the '193 Patent, and Lumicore's engineers were reviewing the application during the design of the very product that is now accused of infringing the '193 Patent.
C. Enhanced Damages Under 35 U.S.C. § 284
Section 284 of Title 35 provides that "the court may increase the damages up to three times the amount found or assessed." 35 U.S.C. § 284. The statute confers broad discretion on the trial court to determine both whether to enhance damages and by what multiplier to do so, up to the treble-damages cap.
The decision to enhance damages is discretionary and is assessed by the court, not the jury. Halo, 579 U.S. at 106. In exercising this discretion, courts in the Federal Circuit continue to look to the nine factors identified in Read Corp. v. Portec, Inc., 970 F.2d 816, 826–27 (Fed. Cir. 1992), as relevant guideposts. The Read factors remain viable analytical tools post-Halo, even though the underlying threshold test for willfulness has changed. The nine Read factors are:
1. Whether the infringer deliberately copied the ideas or design of another;
2. Whether the infringer, when he knew of the other's patent protection, investigated the scope of the patent and formed a good-faith belief that it was invalid or that it was not infringed;
3. The infringer's behavior as a party to the litigation;
4. The defendant's size and financial condition;
5. The closeness of the case;
6. The duration of the defendant's misconduct;
7. Remedial action by the defendant;
8. The defendant's motivation for harm; and
9. Whether the defendant attempted to conceal its misconduct.
A separate, comprehensive Read Factor Analysis memorandum will be prepared closer to the dispositive-motion stage, targeted for May 2025. That memorandum will apply each factor in detail to the record as developed through discovery. For present purposes, it is sufficient to note that the preliminary assessment of the Read factors is favorable to OWS on multiple fronts, including deliberate copying (Factor 1), the lack of a demonstrated good-faith investigation (Factor 2), the duration of misconduct (Factor 6), and the absence of remedial action (Factor 7).
D. E.D. Tex. Practice Considerations
Several practice-specific considerations in the Eastern District of Texas bear on our willful infringement strategy.
Judge Gilstrap's handling of willfulness claims. Judge James R. Gilstrap, to whom this case has been assigned, has extensive experience with patent cases and has addressed willful infringement claims in numerous prior matters. Judge Gilstrap has generally permitted willfulness to be presented to the jury as part of the liability phase, rather than bifurcating willfulness into a separate trial phase. See, e.g., Omega Patents, LLC v. CalAmp Corp., No. 2:13-cv-00726-JRG, 2017 WL 3014022 (E.D. Tex. July 14, 2017); Stragent, LLC v. Bramwell Partners LLC, No. 6:11-cv-00421-JRG (E.D. Tex.). However, Judge Gilstrap has also, in certain cases, exercised discretion to bifurcate the willfulness inquiry from the liability phase where efficiency or fairness concerns warranted it. We should be prepared for either approach.
E.D. Tex. pattern jury instructions. The Eastern District of Texas pattern jury instructions on willful infringement, updated to reflect Halo, instruct the jury that to find willful infringement, the plaintiff must prove by a preponderance of the evidence that the defendant acted despite an objectively high likelihood of infringement and that this likelihood was known or so obvious that it should have been known to the defendant. The instructions further provide that the jury should consider, among other things, whether the defendant was aware of the patent, the nature and quality of any investigation the defendant undertook, and whether the defendant had a good-faith basis for believing it did not infringe. Our proposed jury instructions should track the pattern closely while emphasizing the specific facts that support willfulness here.
Specificity in pleading. Eastern District of Texas practice, consistent with Federal Circuit guidance, favors specificity in pleading willful infringement at the complaint stage. General, conclusory allegations of willfulness are insufficient. The complaint should set forth the factual basis for the willfulness claim with reasonable particularity, including identification of the pre-suit notice, the accused products, and the specific basis for the allegation that the defendant's infringement was knowing and deliberate. Our draft complaint, discussed further in Section VI.A, incorporates detailed factual allegations supporting the willfulness count.
III. FACTUAL BASIS FOR WILLFUL INFRINGEMENT
A. The Asserted Patents
OWS asserts four United States utility patents against Lumicore in this action:
U.S. Patent No. 10,234,847 (the "'847 Patent"): Entitled "Multi-Channel Silicon Photonic Waveguide Multiplexer with Low Insertion Loss." The '847 Patent was filed on September 14, 2016, and issued on March 19, 2019. Optiwave Semiconductor Corp. is both the original and current assignee of record. The '847 Patent claims a multi-channel waveguide multiplexer architecture designed for silicon photonic platforms that achieves low insertion loss through a specific combination of adiabatic tapering structures and mode-matching elements. The '847 Patent is in the same patent family as the '562 Patent, sharing a continuation relationship.
U.S. Patent No. 10,891,193 (the "'193 Patent"): Entitled "High-Bandwidth Coherent Optical Transceiver Integrated on Silicon Substrate." The '193 Patent was filed on April 7, 2017, and issued on January 12, 2021. Optiwave Semiconductor Corp. is both the original and current assignee. The '193 Patent claims a coherent optical transceiver architecture that integrates modulator, detector, and signal-processing components on a common silicon substrate. The '193 Patent shares Provisional Application No. 62/499,117 with the '015 Patent.
U.S. Patent No. 9,678,562 (the "'562 Patent"): Entitled "Method for Thermal Management of Photonic Integrated Circuits Using Embedded Micro-Channel Heat Sinks." The '562 Patent was filed on November 22, 2014, and issued on June 13, 2017. The '562 Patent was originally assigned to Solara Optics, Inc. and was acquired by OWS pursuant to an Asset Purchase Agreement dated June 15, 2018, for $34.5 million, which covered a portfolio of twelve patents including the '562 Patent. The assignment was duly recorded with the United States Patent and Trademark Office. The '562 Patent claims a method of thermal management for photonic integrated circuits employing embedded micro-channel heat sinks fabricated using specific etching and bonding techniques. As noted, the '562 Patent is in the same patent family as the '847 Patent through a continuation relationship.
U.S. Patent No. 11,402,015 (the "'015 Patent"): Entitled "Polarization-Diverse Grating Coupler for Silicon Photonic Transceivers." The '015 Patent was filed on August 30, 2019, and issued on August 2, 2022. Optiwave Semiconductor Corp. is both the original and current assignee. The '015 Patent claims a polarization-diverse grating coupler architecture for silicon photonic transceivers that achieves improved coupling efficiency across a broad wavelength range through the use of dual-layer gratings with asymmetric scattering elements. As noted, the '015 Patent shares Provisional Application No. 62/499,117 with the '193 Patent.
All maintenance fees on the four asserted patents are current, and OWS has maintained all annuities due to date. No inter partes review ("IPR") petitions have been filed against any of the four asserted patents to date, although Lumicore has reserved the right to petition the Patent Trial and Appeal Board. We are monitoring the one-year window under 35 U.S.C. § 315(b) and will prepare an analysis of IPR risk as a separate memorandum.
B. The Accused Products
OWS accuses three Lumicore product lines of infringement:
LumiLink 400G-ZR+ Transceiver Module. Lumicore launched the LumiLink 400G-ZR+ in Q3 2022. This product is a 400-gigabit coherent optical transceiver module designed for data center interconnect ("DCI") applications. The LumiLink 400G-ZR+ achieved full-year 2023 revenue of $94.8 million and has been a commercially successful product for Lumicore. OWS accuses the LumiLink 400G-ZR+ of infringing the '847, '193, and '562 Patents.
LumiLink 800G-DR8 Transceiver Module. Lumicore launched the LumiLink 800G-DR8 in Q1 2023, during the pendency of the initial licensing negotiations between FairPoint and Lumicore. This product is an 800-gigabit optical transceiver module designed for short-reach data center applications. The LumiLink 800G-DR8 achieved full-year 2023 revenue of $128.4 million, making it Lumicore's highest-revenue accused product. OWS accuses the LumiLink 800G-DR8 of infringing all four asserted patents — the '847, '193, '562, and '015 Patents.
LumiEdge 1600G-LR Transceiver Module. Lumicore launched the LumiEdge 1600G-LR in Q4 2023, approximately five months after Lumicore's formal declination of OWS's licensing offer and more than nine months after receiving the first FairPoint notice letter. This product is a next-generation 1600-gigabit optical transceiver module designed for long-reach applications. Due to its Q4 launch, the LumiEdge 1600G-LR achieved partial-year 2023 revenue of $41.7 million, with substantially higher revenue projected for subsequent years. OWS accuses the LumiEdge 1600G-LR of infringing the '193 and '015 Patents.
Total accused-product revenue. Total accused-product revenue for fiscal year 2023 was $264.9 million across the three product lines. Dr. Lawrence Keating of Meridian Economic Consulting Group, LLC, retained as OWS's damages expert, has prepared a preliminary estimate projecting total accused-product revenue from the inception of infringement in Q3 2022 through the anticipated trial date in Q4 2025 at approximately $714.6 million. This projection is based on Lumicore's publicly available financial disclosures, analyst reports, and reasonable market growth assumptions.
C. Chronological Timeline of Notice and Lumicore's Conduct
1. Pre-Notice Period (Q3 2022 – January 14, 2023)
Q3 2022 — Lumicore launches the LumiLink 400G-ZR+. Lumicore commercially launched its LumiLink 400G-ZR+ transceiver module in Q3 2022. The product was marketed at OFC 2022 and subsequently through Lumicore's direct sales channels and distributor network. At the time of launch, OWS did not have notice that the LumiLink 400G-ZR+ incorporated technology covered by OWS's patent portfolio.
October 2022 — OWS identifies potential infringement. In October 2022, members of OWS's internal engineering team, led by Dr. Jian-Wei Huang (Vice President, Photonic IC Design), identified features of the LumiLink 400G-ZR+ that appeared to be potentially covered by OWS's patent claims. The engineers' observations were based on publicly available product datasheets, white papers presented by Lumicore engineers at academic and industry conferences, and a preliminary physical inspection of a commercially purchased LumiLink 400G-ZR+ sample unit. The engineering team escalated the matter to Rebecca Tanaka, OWS's General Counsel, for further evaluation.
November 2022 — OWS retains Benchmark for teardown analysis. At Ms. Tanaka's direction, OWS retained Benchmark Semiconductor Analysis, LLC ("Benchmark"), located at 2244 Mission College Boulevard, Santa Clara, California 95054, to perform a comprehensive teardown and reverse-engineering analysis of the LumiLink 400G-ZR+. The analysis was supervised by Kevin Ng, Benchmark's lead engineer for photonic integrated circuit ("PIC") teardowns. The engagement letter directed Benchmark to evaluate the LumiLink 400G-ZR+'s waveguide multiplexer structures, coherent transceiver integration architecture, and thermal management subsystems for potential overlap with specific claims of the '847, '193, and '562 Patents.
December 12, 2022 — Benchmark teardown report. Benchmark delivered its final teardown report on December 12, 2022. The report confirmed the presence of waveguide multiplexer structures and thermal management micro-channels in the LumiLink 400G-ZR+ that are consistent with the claimed architectures of the '847, '193, and '562 Patents. Specifically, Benchmark's analysis identified: (a) adiabatic tapering structures in the waveguide multiplexer consistent with independent claims 1 and 14 of the '847 Patent; (b) a coherent transceiver integration architecture on a silicon substrate consistent with independent claims 1, 8, and 22 of the '193 Patent; and (c) embedded micro-channel heat sink structures consistent with independent claims 1 and 9 of the '562 Patent. The Benchmark report formed the basis for the claim charts subsequently transmitted to Lumicore with the first FairPoint licensing letter.
Pre-notice awareness — Melissa Chen evidence. Critical to the willfulness analysis, evidence obtained during discovery indicates that Lumicore's infringement was not inadvertent but rather was informed by awareness of OWS's patent portfolio even before any formal notice was sent. Melissa Chen, a former Lumicore engineer who worked on the LumiLink 400G-ZR+ design team from approximately 2020 to 2024 and is now employed at Veridian Photonics, Inc., is expected to testify that Lumicore's engineering team accessed and reviewed OWS's published patent applications — specifically Published Application No. 2018/0123456 (published approximately July 12, 2018), which corresponds to the '193 Patent — during the LumiLink 400G-ZR+ product design phase in 2021–2022. This evidence is discussed in greater detail in Section III.D below.
2. First Licensing Notice (January 15, 2023)
On January 15, 2023, FairPoint Licensing Group, LLC ("FairPoint"), acting as OWS's exclusive licensing agent, transmitted the first formal licensing and notice letter to Lumicore's General Counsel, Raymond Bautista. FairPoint's Managing Director, Angela Reeves, signed the letter. FairPoint's offices are located at 500 Sansome Street, Suite 1400, San Francisco, California 94111.
The January 15, 2023 letter was a detailed, twelve-page communication that accomplished the following:
• Patent identification. The letter identified three OWS patents: the '847 Patent, the '193 Patent, and the '562 Patent. Each patent was identified by number, title, and issuance date.
• Accused product identification. The letter identified the LumiLink 400G-ZR+ as the accused product.
• Claim charts. The letter included three claim charts — one per patent — mapping specific claim limitations from representative independent claims to corresponding features of the LumiLink 400G-ZR+ as identified through the Benchmark teardown analysis. The claim charts were detailed and technically specific, providing element-by-element comparisons supported by annotated teardown photographs, product datasheet excerpts, and Lumicore's own published technical specifications.
• Licensing invitation. The letter invited Lumicore to enter into licensing discussions and proposed a meeting to discuss terms.
This letter constitutes actual, formal notice of the patents and the infringement allegations. Receipt of the letter was confirmed by Raymond Bautista in his December 3, 2024 deposition, discussed in Section III.F below. The date of this letter — January 15, 2023 — marks the commencement of the post-notice willfulness period for the '847, '193, and '562 Patents.
3. Lumicore's Initial Response (February 28, 2023)
Lumicore responded to the FairPoint letter on February 28, 2023, through its retained outside counsel, Hawthorne Vega & Cruz LLP ("HVC"). The response was authored by Catherine "Kate" Rourke, a partner at HVC's Austin, Texas office, located at 600 Congress Avenue, Suite 2400, Austin, Texas 78701.
The HVC response letter was four pages in length and adopted a posture of general denial. The letter stated that Lumicore disputed infringement of the identified patents and questioned the validity of the asserted claims. However, the response provided no specific technical or legal basis for Lumicore's non-infringement position. It did not identify any specific claim limitation that was allegedly absent from the accused product, nor did it cite any prior art that allegedly anticipated or rendered obvious the claimed inventions. The letter was, in substance, a boilerplate denial without analytical support.
Notably, the response contained no indication that Lumicore had undertaken or planned to undertake any design-around effort to avoid the identified patent claims. Nor did it indicate that Lumicore planned to cease sales of the LumiLink 400G-ZR+ pending resolution of the dispute.
4. LumiLink 800G-DR8 Launch (Q1 2023)
During the pendency of the licensing negotiations — and within approximately six weeks of receiving the first FairPoint notice letter — Lumicore commercially launched its second accused product, the LumiLink 800G-DR8, in Q1 2023. The LumiLink 800G-DR8 is an 800-gigabit transceiver module that incorporates the same or substantially similar accused waveguide multiplexer structures, coherent transceiver integration architecture, and thermal management micro-channels as the LumiLink 400G-ZR+. Additionally, the LumiLink 800G-DR8 incorporates a polarization-diverse grating coupler architecture that implicates the '015 Patent, which had issued on August 2, 2022.
The significance of this launch cannot be overstated. Lumicore introduced a new product line that incorporated the same patented technology identified in the FairPoint licensing letter — and, indeed, added features implicating a fourth OWS patent — while licensing negotiations were actively underway and while Lumicore was on actual notice of infringement of three OWS patents. The launch of a new product incorporating the same patented technology while on notice is strong evidence of willfulness under Halo and its progeny. See Arctic Cat, 876 F.3d at 1371; WBIP, 829 F.3d at 1341.
5. In-Person Licensing Meeting (April 20, 2023)
On April 20, 2023, an in-person licensing meeting was held in Austin, Texas, attended by the following individuals:
• For OWS: Angela Reeves (FairPoint, Managing Director); Rebecca Tanaka (OWS, General Counsel).
• For Lumicore: Raymond Bautista (Lumicore, General Counsel); Catherine "Kate" Rourke (HVC, outside counsel).
During the meeting, OWS (through FairPoint) presented its infringement position in detail, walking through the claim charts for each of the three patents identified in the January 15, 2023 letter. OWS also offered specific licensing terms, including proposed royalty rates and a lump-sum option. The licensing proposal was structured as a portfolio license covering all four asserted patents (including the '015 Patent, which was being added to the licensing discussion) and any future continuations or related patents.
According to Angela Reeves's account, provided during her December 10, 2024 deposition (taken in connection with the pending litigation), Lumicore's representatives showed "no interest in negotiating" during the meeting. Lumicore did not engage substantively with the claim charts or the infringement analysis. Lumicore did not present any counter-analysis or identify any specific basis for disputing infringement. Lumicore did not make a counter-proposal. Lumicore did not indicate any willingness to take a license on any terms. The meeting concluded without agreement and without any indication from Lumicore that it would engage in further substantive discussions.
The failure to engage at the in-person meeting is significant because it undermines any argument that Lumicore was acting in good faith to evaluate OWS's patent positions and consider its options. A party that receives detailed notice of infringement, attends an in-person meeting to discuss the issue, and then refuses to engage substantively — without offering any alternative or even articulating a specific basis for its non-infringement position — is not behaving in a manner consistent with good faith.
6. Second Licensing Notice (May 15, 2023)
On May 15, 2023, FairPoint transmitted a second formal licensing letter to Raymond Bautista. This letter accomplished two important objectives:
• Addition of the '015 Patent. The letter added U.S. Patent No. 11,402,015 (the '015 Patent) to the list of asserted patents, expanding the total to four. The '015 Patent had issued on August 2, 2022, and its claims had been evaluated against the LumiLink product line in the intervening months.
• Expansion of accused products. The letter expanded the list of accused products to include the LumiLink 800G-DR8, which had been launched in Q1 2023.
The letter included additional claim charts for the '015 Patent, mapping claim limitations to features of both the LumiLink 400G-ZR+ and the LumiLink 800G-DR8. As of the date of this second letter, Lumicore had actual, documented notice of all four asserted patents and all then-existing accused products.
7. Lumicore Declines License (July 10, 2023)
On July 10, 2023, Lumicore — through HVC — formally declined to take a license to the asserted OWS patents. The declination letter, addressed to FairPoint, stated that Lumicore had obtained "competent legal opinions" concluding that its products did not infringe the asserted patents. However, the letter did not disclose the substance of these opinions, identify the counsel who prepared them, or provide any technical or legal analysis supporting the non-infringement conclusion.
Lumicore has subsequently asserted attorney-client privilege over the referenced opinion letters and has refused to produce them in discovery. OWS filed a Motion to Compel production of these opinion letters on October 21, 2024 (Docket Entry 38), which is currently pending before the Court. OWS's position, as briefed in the motion, is that Lumicore's affirmative reference to "competent legal opinions" in its declination letter — which was communicated to a third party (FairPoint) and thus arguably outside the scope of privilege — combined with any reliance on advice-of-counsel as a defense in this litigation, constitutes a waiver of attorney-client privilege as to those opinions. The law in this Circuit supports this position. See Seagate, 497 F.3d at 1372–74 (discussing scope of waiver when advice-of-counsel defense is raised); In re EchoStar Commc'ns Corp., 448 F.3d 1294, 1302 (Fed. Cir. 2006).
Regardless of the outcome of the motion, Lumicore's invocation of "competent legal opinions" without disclosure creates a significant adverse inference risk. Under Halo and the totality-of-the-circumstances standard, an infringer's reliance on undisclosed opinions — where the infringer affirmatively references those opinions in correspondence but then refuses to produce them — is of limited defensive value. The jury is entitled to consider that Lumicore obtained opinions it has chosen not to disclose, and to infer that the opinions may not support the non-infringement position Lumicore claims they do.
8. LumiEdge 1600G-LR Launch (Q4 2023)
In Q4 2023, Lumicore launched its third accused product, the LumiEdge 1600G-LR. At the time of this launch, the following circumstances obtained:
• Lumicore had been on actual notice of the '847, '193, and '562 Patents for approximately nine months (since January 15, 2023).
• Lumicore had been on actual notice of the '015 Patent for approximately five months (since May 15, 2023).
• Lumicore had formally declined to take a license approximately three months earlier (July 10, 2023).
• The in-person licensing meeting had failed approximately six months earlier (April 20, 2023).
Despite these circumstances, Lumicore proceeded to launch the LumiEdge 1600G-LR — a new product line accused of infringing the '193 and '015 Patents — without conducting any formal design-around analysis. This fact is established by the deposition testimony of Lumicore's General Counsel, Raymond Bautista, who admitted on December 3, 2024 that no formal design-around analysis was commissioned before the LumiEdge 1600G-LR launch. This admission is particularly damaging to Lumicore's position: it establishes that Lumicore launched an entirely new product line incorporating patented technology without even evaluating whether it could avoid the identified patent claims.
The LumiEdge 1600G-LR achieved partial-year revenue of $41.7 million in FY 2023 (reflecting approximately one quarter of sales). Revenue from this product is projected to increase substantially in FY 2024 and FY 2025 as production ramps and the product gains market adoption.
9. Litigation Filed (April 22, 2024)
OWS filed its complaint in the Eastern District of Texas on April 22, 2024, initiating Optiwave Semiconductor Corp. v. Lumicore Technologies, Inc., Case No. 2:24-cv-00319-JRG, before Judge James R. Gilstrap. The complaint includes seven counts: Counts I through IV assert infringement of the '847, '193, '562, and '015 Patents, respectively; Counts V and VI assert induced and contributory infringement; and Count VII asserts willful infringement and seeks enhanced damages under 35 U.S.C. § 284.
D. Evidence from Melissa Chen
Melissa Chen is a critical witness for the willfulness theory. Chen is a former Lumicore engineer who was a member of the LumiLink 400G-ZR+ design team from approximately 2020 to 2024. She left Lumicore and is now employed at Veridian Photonics, Inc., a company that is not a party to this litigation and is not otherwise involved in the dispute.
Chen is expected to testify — via declaration, deposition, or both — that Lumicore's engineering team accessed and reviewed OWS's published patent applications during the LumiLink 400G-ZR+ design phase in 2021–2022. Specifically, Chen is expected to testify that the team reviewed Published Application No. 2018/0123456, which corresponds to the '193 Patent ("High-Bandwidth Coherent Optical Transceiver Integrated on Silicon Substrate"). The published application, which was available on the USPTO's PAIR system and Severin Industries Patents, disclosed the core architectural concepts subsequently claimed in the '193 Patent, including the integration of modulator, detector, and signal-processing components on a common silicon substrate.
The significance of Chen's anticipated testimony is twofold:
First, it establishes that Lumicore's engineers were aware of OWS's patented technology — at least in published-application form — even before the first FairPoint licensing letter was sent in January 2023 and before the LumiLink 400G-ZR+ was commercially launched in Q3 2022. This transforms the willfulness narrative from one of post-notice continuation to one of pre-design, knowing adoption of patented technology.
Second, the fact that Lumicore's engineers reviewed OWS's published application during the design phase and then designed a product whose features align with the claims of the subsequently-issued patent supports a strong inference that the design choices were informed by — and potentially derived from — OWS's disclosed inventions. While independent development is theoretically possible, the inference of copying or at minimum awareness-driven design is substantially strengthened by this evidence.
A third-party subpoena duces tecum and deposition notice has been issued to Melissa Chen, dated January 22, 2025, pursuant to Federal Rule of Civil Procedure 45. The subpoena requests production of any documents Chen retained or can identify from her tenure at Lumicore that relate to the LumiLink 400G-ZR+ design process, the review of OWS patent applications, or any internal Lumicore discussions regarding OWS's intellectual property. We anticipate Chen's deposition will be scheduled within 45 days of subpoena service, and we are coordinating with Omar Siddiqui on logistics and deposition preparation.
E. Dr. Sandra Michaud Deposition Admissions (November 19, 2024)
Dr. Sandra Michaud, Lumicore's Chief Technology Officer, was deposed on November 19, 2024, in connection with this litigation. Dr. Michaud has been Lumicore's CTO since 2019 and was responsible for overseeing the technical direction of Lumicore's product development, including the LumiLink and LumiEdge product lines.
The following key admissions were obtained during Dr. Michaud's deposition:
Review of OWS published application. Dr. Michaud admitted that she personally reviewed OWS Published Application No. 2018/0123456 during the LumiLink design phase. When asked whether she had reviewed the application, Michaud testified: "I believe I may have looked at it at some point during the early design discussions. It's not unusual to review published applications in the same technology space." This admission corroborates the anticipated testimony of Melissa Chen and establishes that awareness of OWS's published application reached the highest levels of Lumicore's technical leadership.
Denial of knowledge of issued patents. Dr. Michaud denied having knowledge of the issued '193 Patent until receipt of the FairPoint letter in January 2023. However, this denial is arguably inconsistent with her admitted review of the published application that matured into the '193 Patent. A published patent application contains substantially the same disclosure as the issued patent, and the transition from published application to issued patent is a matter of public record that can be tracked through the USPTO's PAIR system. The jury may reasonably conclude that an individual who reviewed a published application in the same technology space — and who, as CTO, would have reason to monitor competitive intellectual property developments — knew or should have known that the application had issued as a patent.
Inability to identify non-infringing alternatives. When asked to identify specific non-infringing design alternatives for the accused products, Dr. Michaud could not do so. She testified that she was "not the right person to answer that question in detail" and suggested that the company's design engineers would be better positioned to address it. This inability to identify alternatives is significant for two reasons: (a) it undercuts Lumicore's position that it had a good-faith basis for believing its products did not infringe, because if the products were truly non-infringing, one would expect the CTO to be able to articulate the technical distinctions; and (b) it suggests that Lumicore may not have undertaken a serious evaluation of design-around options, consistent with Bautista's admission that no formal design-around analysis was commissioned before the LumiEdge 1600G-LR launch.
F. Raymond Bautista Deposition Admissions (December 3, 2024)
Raymond Bautista, Lumicore's General Counsel, was deposed on December 3, 2024. The deposition was of limited scope due to privilege issues and ongoing disputes regarding the discoverability of the opinion letters referenced in Lumicore's July 10, 2023 declination letter.
The following key admissions were obtained:
Confirmed receipt of FairPoint's January 15, 2023 letter. Bautista confirmed that he personally received the FairPoint licensing letter dated January 15, 2023. He testified that the letter was received by Lumicore's legal department "around January 18 or 19, 2023" — within three to four days of the letter date. This establishes the precise date range of actual receipt and removes any doubt that Lumicore had formal notice of the '847, '193, and '562 Patents by mid-to-late January 2023.
Forwarded to outside counsel within 3 business days. Bautista confirmed that the FairPoint letter was forwarded to Lumicore's outside counsel, Hawthorne Vega & Cruz LLP, within three business days of receipt. This demonstrates that Lumicore treated the letter as a serious legal communication requiring outside counsel's attention, further supporting the inference that Lumicore was aware of the significance of the patents and the infringement allegations.
Refused to disclose substance of opinions. Bautista refused to answer questions about the substance of the "competent legal opinions" referenced in Lumicore's July 10, 2023 declination letter, asserting attorney-client privilege. Lumicore's counsel, Kate Rourke, instructed the witness not to answer on multiple occasions. As noted above, OWS has filed a Motion to Compel (D.E. 38) seeking production of these opinions, which is pending before the Court.
No formal design-around analysis before LumiEdge 1600G-LR launch. In what may be the single most damaging admission in his deposition, Bautista confirmed that no formal design-around analysis was commissioned before the commercial launch of the LumiEdge 1600G-LR in Q4 2023. When asked whether "Lumicore, before launching the LumiEdge 1600G-LR, commissioned or received a formal analysis evaluating whether the product could be designed to avoid the claims of the patents identified in FairPoint's licensing letters," Bautista responded: "Not a formal analysis, no." This admission is highly probative of willfulness because it establishes that Lumicore launched a brand-new product — one that was not yet on the market when Lumicore received notice of the asserted patents — without even evaluating whether it could avoid the patented claims. The launch was not an instance of inertia (i.e., continuing to sell an existing product while the dispute was being evaluated); it was an affirmative, forward-looking business decision to introduce a new infringing product while on actual notice.
IV. STRENGTH-OF-EVIDENCE ASSESSMENT
A. Evidence Strongly Supporting Willfulness
Based on the factual record as developed to date, the following evidence strongly supports a willful infringement finding:
1. Pre-design awareness of OWS's patent portfolio. Melissa Chen's anticipated testimony and Dr. Sandra Michaud's deposition admission establish that Lumicore engineers — including Lumicore's CTO — reviewed OWS Published Application No. 2018/0123456 (corresponding to the '193 Patent) during the LumiLink 400G-ZR+ design phase in 2021–2022. This evidence demonstrates that Lumicore was aware of OWS's patented technology before the first formal notice letter and before the LumiLink 400G-ZR+ was even launched. The inference of knowing, awareness-driven design is strong.
2. Formal actual notice via two FairPoint licensing letters. The two FairPoint licensing letters — dated January 15, 2023 and May 15, 2023 — provided detailed, patent-by-patent, claim-by-claim notice of all four asserted patents, accompanied by claim charts and annotated teardown photographs. Receipt was confirmed by Bautista. These letters are paradigmatic examples of the type of formal, substantive notice that courts have held supports a willfulness finding. See WBIP, 829 F.3d at 1341.
3. Continued infringement after notice. After receiving the first FairPoint letter on January 15, 2023, Lumicore continued manufacturing and selling the LumiLink 400G-ZR+ and (beginning Q1 2023) the LumiLink 800G-DR8 without interruption. There is no evidence that Lumicore paused sales, suspended shipments, or took any other remedial action in response to the notice. The continued sale of accused products after actual notice is classic willfulness evidence.
4. Launch of new infringing products after notice. Lumicore launched the LumiEdge 1600G-LR in Q4 2023 — more than nine months after receiving the first FairPoint letter, approximately five months after formally declining a license, and six months after the failed in-person licensing meeting. The LumiEdge 1600G-LR was a new product that did not exist at the time the licensing letters were sent; its launch was an affirmative business decision to introduce a new product incorporating patented technology while on actual notice of infringement. Moreover, Bautista admitted that no formal design-around analysis was conducted before the launch. This is among the most compelling evidence of willfulness in this case.
5. Refusal to negotiate in good faith. At the April 20, 2023 in-person meeting in Austin, Texas, Lumicore showed "no interest in negotiating" (per Angela Reeves's deposition testimony). Lumicore did not engage with the claim charts, did not present any technical counter-analysis, and did not make a counter-proposal. The refusal to engage in good-faith licensing negotiations after receiving detailed infringement contentions is consistent with a strategy of deliberate infringement.
6. Refusal to produce opinion-of-counsel letters. Lumicore affirmatively referenced "competent legal opinions" in its July 10, 2023 declination letter but has asserted attorney-client privilege and refused to disclose the opinions. Under Halo and the totality-of-the-circumstances framework, while there is no duty to obtain counsel's opinion, asserting reliance on undisclosed opinions invites judicial scrutiny and potentially supports an adverse inference. The jury is entitled to consider what inferences, if any, should be drawn from Lumicore's decision to reference opinions it refuses to produce.
7. Absence of design-around efforts. Bautista's deposition admission that no formal design-around analysis was conducted before launching the LumiEdge 1600G-LR directly undercuts any argument that Lumicore acted in good faith to avoid infringement. A company that is on actual notice of patents covering specific technical features and that launches a new product incorporating those same features — without even evaluating whether alternative designs are available — is acting with the kind of subjective willfulness that Halo targets.
8. Scale and duration of infringement. The projected accused-product revenue of approximately $714.6 million through trial demonstrates that Lumicore's infringement was commercially significant, sustained over a multi-year period, and integral to Lumicore's business. This is not a case of inadvertent, marginal infringement; the accused products represent a substantial portion of Lumicore's total revenue and market position. The commercial significance of the infringing activity is a relevant consideration in the totality-of-the-circumstances analysis.
B. Potential Weaknesses and Defendant's Likely Counter-Arguments
Lumicore can be expected to advance several defenses and counter-arguments. We assess each below, along with our anticipated responses.
1. Pre-notice period argument. Lumicore will argue that the period before January 15, 2023 (i.e., Q3 2022 through January 14, 2023) should not support a willfulness finding because Lumicore had no formal notice of the issued patents during that period. Lumicore will characterize its review of OWS's published application as routine competitive intelligence activity that does not establish knowledge of issued patents or intent to infringe.
Counter: While the pre-notice period presents a somewhat less compelling case for willfulness than the post-notice period, it is far from irrelevant. Melissa Chen's testimony and Dr. Michaud's deposition admissions establish that Lumicore engineers affirmatively reviewed OWS's published patent application during the design of the very product now accused of infringement. The published application disclosed the same inventive concepts subsequently claimed in the '193 Patent. The transition from published application to issued patent is a matter of public record, and an infringer's pre-notice awareness of the underlying technology — particularly where the infringer is in the same technical field and has the sophistication to monitor patent portfolios — is properly considered as part of the totality-of-the-circumstances analysis. Moreover, the pre-notice awareness evidence strengthens the post-notice willfulness case by establishing that Lumicore's infringement was not the product of ignorance but of a knowing decision to use patented technology.
2. Advice-of-counsel defense. Lumicore may eventually waive privilege and produce the opinion letters referenced in its July 10, 2023 declination letter. If the opinions are competently prepared and contain non-frivolous non-infringement positions, they could provide some defensive value on the willfulness question.
Counter: Even competent opinions of non-infringement do not preclude a willfulness finding under Halo if the totality of circumstances demonstrates egregious conduct. The Supreme Court in Halo emphasized that enhanced damages are assessed holistically, and a single factor — even a favorable opinion of counsel — does not necessarily insulate an infringer from a willfulness finding. 579 U.S. at 105–06. Moreover, Lumicore has thus far refused to produce the opinions, and its assertion of privilege limits their defensive value. If the opinions are eventually produced and found to be competent, they will bear on the enhancement analysis but will not defeat a willfulness finding in light of the other evidence — including pre-design awareness, continued infringement, new product launches without design-arounds, and refusal to negotiate.
3. Good-faith invalidity challenge. Lumicore has asserted invalidity of the asserted patents under 35 U.S.C. §§ 102 and 103, citing twenty-three prior-art references in its preliminary invalidity contentions. Lumicore may argue that a good-faith belief in invalidity negates willfulness — i.e., that it continued manufacturing the accused products because it believed the patents were invalid, not because it chose to infringe.
Counter: A reasonable invalidity defense may bear on the court's exercise of discretion regarding the amount of enhancement, but it does not necessarily defeat a jury finding of willful infringement. The Federal Circuit has recognized that "an accused infringer's belief regarding patent validity is only one factor for the jury to consider." Mentor Graphics Corp. v. EVE-USA, Inc., 851 F.3d 1275, 1295 (Fed. Cir. 2017). This is particularly true where, as here, the infringer was on actual notice of the patents, continued infringing without interruption, launched new products without design-around efforts, and refused to engage in good-faith licensing negotiations. A self-serving assertion of invalidity, unsupported by contemporaneous evidence of reliance on a specific invalidity analysis, is of limited defensive value.
4. Inequitable conduct defense. Lumicore has counterclaimed for unenforceability of the '193 Patent based on alleged inequitable conduct during prosecution. Specifically, Lumicore alleges that Dr. Jian-Wei Huang, a named inventor on the '193 Patent, failed to disclose a prior publication (a conference paper by Yamamoto et al., presented at ECOC 2015) to the USPTO during prosecution. If this defense were credited, it could undermine the enforceability of the '193 Patent and, derivatively, weaken the willfulness theory as it relates to that patent.
Counter: Our preliminary analysis — to be set forth in a separate Inequitable Conduct Defense Analysis memorandum anticipated for August 2024 — indicates that the Yamamoto reference was cumulative of other prior art already of record during prosecution. Moreover, the inequitable conduct standard under Brightmoor & Co., Inc. v. Becton, Dickinson & Co., 649 F.3d 1276 (Fed. Cir. 2011) (en banc), requires proof of specific intent to deceive the USPTO by clear and convincing evidence, a high bar that Lumicore is unlikely to meet. The reference at issue is a general conference paper that does not disclose the specific claim limitations of the '193 Patent, and we have no evidence of deliberate withholding by Dr. Huang. Accordingly, we do not view the inequitable conduct defense as a significant threat to the willfulness theory.
5. Independent development. Lumicore's invalidity contentions include an assertion of prior conception based on internal design documents dated 2016–2017, which Lumicore contends predate the effective filing date of the '015 Patent. Lumicore may argue that it independently developed its technology and therefore did not copy or willfully infringe OWS's patents.
Counter: These documents are uncorroborated by independent evidence and likely post-date the '015 Patent's priority date, which traces through Provisional Application No. 62/499,117 to August 30, 2019 (but the provisional was filed in 2017, and the '015 Patent's effective filing date depends on the continuation chain; this requires further investigation). Moreover, and critically, independent development does not negate willful infringement where the infringer had actual notice of the patents and continued infringing. See Hollowell Industries v. Zimmer, Inc., 782 F.3d 649, 661 (Fed. Cir. 2015), aff'd sub nom. Halo, 579 U.S. 93. Even if Lumicore independently conceived certain aspects of its technology, its decision to continue manufacturing and selling accused products — and to launch new accused products — after actual notice of OWS's patents constitutes willful infringement.
C. Overall Assessment
The willful infringement case against Lumicore is strong. The combination of pre-design awareness (Chen/Michaud), formal written notice (two FairPoint letters with claim charts), a failed in-person licensing meeting, continued sales without interruption, new product launches after notice without design-around analysis, Lumicore's refusal to engage in good-faith negotiations or to produce its opinion letters, and the commercial scale of the infringement provides a compelling, multi-layered narrative for the jury. The evidence tells a clear story: OWS innovated, Lumicore's engineers studied OWS's technology, Lumicore built products incorporating that technology, OWS identified the infringement and put Lumicore on notice, and Lumicore chose to continue and expand its infringing product line rather than take a license, design around, or even seriously evaluate its options.
Based on the current record and our experience with willfulness cases in the Eastern District of Texas and before juries generally, we assess the probabilities as follows:
• Probability of jury finding willful infringement (assuming liability is established on at least one patent): Approximately 70–80%. The evidence of actual notice, continued infringement, and new product launches after notice is compelling, and Lumicore's defenses (advice-of-counsel, good-faith invalidity) are weakened by its refusal to produce opinions and the absence of design-around efforts.
• Probability of court awarding enhanced damages (assuming willfulness is found by the jury): Approximately 60–70%. Enhancement is discretionary, and the court will apply the Read factors in determining the appropriate multiplier. The strength of Lumicore's invalidity defenses, which remain to be fully assessed, will bear on the court's analysis. However, the multiple indicators of egregious conduct — particularly the launch of a new product without a design-around — favor enhancement.
These probability estimates are preliminary and will be refined as discovery progresses, expert reports are exchanged, and the Read Factor Analysis memorandum is prepared in May 2025.
V. ENHANCED DAMAGES CALCULATION — PRELIMINARY FRAMEWORK
A. Statutory Framework
Under 35 U.S.C. § 284, the court "may increase the damages up to three times the amount found or assessed." The statute confers unfettered discretion on the trial court to determine both whether to enhance damages and by what multiplier to enhance them, subject only to the treble-damages cap and the requirement that the enhancement be justified by the circumstances of the case. Halo, 579 U.S. at 103.
Enhancement is informed by the Read factors, which guide the court's exercise of discretion in determining the appropriate multiplier. A comprehensive Read Factor Analysis memorandum will be prepared closer to the dispositive-motion stage, targeted for May 2025, when the discovery record will be substantially complete and the parties' expert reports will have been exchanged. That memorandum will present a detailed, factor-by-factor analysis of Lumicore's conduct and recommend a specific enhancement multiplier.
The multiplier is applied to the underlying damages award as found by the jury or assessed by the court. Courts have applied the multiplier to the entirety of the damages award or, in some cases, to a subset thereof — for example, limiting enhancement to damages accruing during the post-notice period or to damages attributable to specific patents for which willfulness was found. We recommend seeking enhancement of the full post-notice damages award.
B. Damages Base for Enhancement
Dr. Lawrence Keating of Meridian Economic Consulting Group, LLC, has prepared a preliminary damages analysis that provides the foundation for the enhancement calculation. The key figures are as fol

PRIVILEGED AND CONFIDENTIAL — ATTORNEY WORK PRODUCT PREPARED IN ANTICIPATION OF LITIGATION NOT FOR DISTRIBUTION OUTSIDE CASE TEAM

INTERNAL MEMORANDUM

I. EXECUTIVE SUMMARY

II. LEGAL FRAMEWORK

III. FACTUAL BASIS FOR WILLFUL INFRINGEMENT

IV. STRENGTH-OF-EVIDENCE ASSESSMENT

Record

Parties

Dates

Amounts