CONFIDENTIAL — INTERNAL MEMORANDUM
This memorandum contains privileged and confidential attorney work product prepared in connection with the firm's internal conflict-of-interest clearance procedures. It is not intended for distribution outside Calderwood & Harkness LLP conflict-clearance personnel and the attorneys identified herein. Any unauthorized reproduction or distribution of this memorandum is strictly prohibited.
CALDERWOOD & HARKNESS LLP 555 California Street, 42nd Floor San Francisco, California 94104 Telephone: (415) 782-6000
Date: February 7, 2022
TO: File — New Matter Intake / Conflicts Committee
FROM: Catherine Bloom, Partner, intellectual Property Group (USPTO Reg. No. 58,412)
REVIEWED BY: Alan Ngo, Partner, intellectual Property Group (USPTO Reg. No. 61,877)
RE: Conflict Check — Proposed Patent Prosecution Engagement for Optiwave Semiconductor Corp.
PROPOSED MATTER NUMBER: 1014-00005 (pending clearance)
Right-click to update Table of Contents
1. Purpose and Summary
The purpose of this memorandum is to document the results of the firm-wide conflict-of-interest check conducted in connection with the proposed engagement of Calderwood & Harkness LLP ("C&H" or the "Firm") by Optiwave Semiconductor Corp. ("OWS" or the "Proposed Client") for patent prosecution services. The proposed engagement would encompass the preparation, filing, and prosecution of a family of related U.S. and international patent applications in the silicon-photonics semiconductor field, as more particularly described in Section 3 below. This memorandum is submitted to the Conflicts Committee in accordance with the Firm's New Business Intake Policy (revised January 2021) and applicable provisions of the California Rules of Professional Conduct and the USPTO Rules of Professional Conduct.
Summary Conclusion: Based on the comprehensive search and analysis described in this memorandum, no disqualifying conflicts of interest have been identified. The proposed engagement may proceed, subject to the informational disclosures and ongoing monitoring protocols described in Sections 5 and 8 below. While the search identified certain relationships and entities warranting discussion — most notably the competitive relationship between OWS and Pinnacle Optics, Inc. ("Pinnacle"), a non-client third party — none of these relationships gives rise to a current-client conflict, a former-client conflict, or any other basis for disqualification under the applicable ethical rules.
The conflict search was initiated on February 4, 2022, by the Firm's Conflicts & New Business Intake Department upon submission of the New Matter Request Form by Catherine Bloom. A supplemental run was conducted on February 7, 2022, to capture additional search terms identified during the course of diligence. The search was completed and the results finalized as of February 7, 2022.
2. Proposed Client Information
2.1 Client Identification
The following information has been gathered from OWS's corporate records, publicly available filings, and representations made by OWS's General Counsel, Marcus Whitfield, during preliminary discussions regarding the proposed engagement. All information has been entered into the Firm's conflicts database for purposes of the search described herein.
OWS is a fabless semiconductor company that designs silicon-photonics integrated circuits used in high-bandwidth optical transceivers for data-center interconnect applications. The company does not own or operate fabrication facilities; rather, it contracts with third-party foundries for the manufacture of its designs. OWS's products are primarily sold to hyperscale cloud-computing operators and optical networking equipment manufacturers. OWS's fiscal year 2022 is currently in progress, and no revenue figures for the current year have been provided.
2.2 Key Principals and Contact Persons
The following individuals have been identified as key principals and contact persons for the proposed engagement. Each individual's name was included as a separate search term in the conflict check:
• Chief Executive Officer: Dr. Rajan Menon — Co-founder of OWS; holds a Ph.D. in Electrical Engineering from Stanford University; named inventor on several OWS patent applications.
• Vice President of Engineering: Dr. Lena Strickland — Leads OWS's silicon-photonics design team; holds a Ph.D. in Applied Physics from MIT; named inventor on the pending applications that are the subject of this engagement.
• General Counsel: Marcus Whitfield — Primary engagement contact for the Firm; will countersign the engagement letter on behalf of OWS. Mr. Whitfield joined OWS in 2020 from an in-house role at a telecommunications equipment manufacturer. He is a member of the California State Bar.
• IP Manager / In-House Patent Counsel: Sandra Koh — Day-to-day prosecution contact for the engagement team; registered patent practitioner (USPTO Reg. No. 72,861); manages OWS's patent portfolio, including docketing, annuity management, and coordination with foreign associates.
• Chief Financial Officer: Daniel Everhart — Responsible for financial oversight of outside counsel expenditures; may be involved in engagement-letter negotiations regarding billing arrangements and budgets.
• Named Inventors on Pending Applications: The following individuals are named as inventors on the provisional application and related disclosures that form the basis of the proposed engagement:
(a) Dr. Rajan Menon (CEO);
(b) Dr. Lena Strickland (VP Engineering);
(c) Dr. Feng-Yi Chen, Principal Engineer — leads the electrode design sub-team within OWS's engineering group; holds a Ph.D. in Electrical Engineering from UC Berkeley; and
(d) Dr. Arjun Dasgupta, Senior Design Engineer — responsible for packaging and thermal management design; holds a Ph.D. in Materials Science from Georgia Institute of Technology.
All named inventors have executed invention-assignment agreements in favor of OWS, as confirmed by Sandra Koh.
2.3 Ownership / Affiliates
OWS is a majority-owned portfolio company of Harborview Partners ("Veltrano" or "RCP"), a private equity firm focused on middle-market technology and industrial investments. The relevant ownership details are as follows:
• Majority Equity Sponsor: Harborview Partners, a Delaware limited partnership with principal offices at 200 Lexington Avenue, 38th Floor, New York, NY 10016.
• Ownership Structure: Veltrano acquired a 72% equity stake in OWS in 2019 through a leveraged recapitalization transaction valued at approximately $310 million in enterprise value. The remaining 28% equity is held by OWS's founders (principally Dr. Rajan Menon), management team members, and certain angel investors. A detailed capitalization table was not provided for purposes of this conflict check, but the Firm may request one in connection with engagement-letter diligence if deemed necessary.
• Key Veltrano Personnel: The following individuals at Veltrano are known to be actively involved in the oversight and governance of OWS:
(a) Theodore "Ted" Hargrove, Managing Partner of Veltrano — serves on OWS's Board of Directors; and
(b) Christine Paulsen, Operating Partner (Technology Sector) at Veltrano — serves as a Board observer and is involved in strategic and operational decision-making at OWS.
• Portfolio Companies: Veltrano manages a diversified portfolio of technology and industrial investments. The specific identities of all Veltrano portfolio companies are not currently known to C&H. As discussed in Section 5.2 below, a standard affiliate-disclosure request will be included as part of the engagement-letter process to obtain a complete list of Veltrano portfolio companies, which will then be cross-checked against the Firm's conflicts database.
Harborview Partners, Theodore Hargrove, Christine Paulsen, and the term "Veltrano portfolio companies" (as a general category search) were all included in the conflict search.
2.4 Lender / Secured Creditor
OWS's capital structure includes a senior secured revolving credit facility provided by Meridian National Bank, N.A. ("Meridian"), the details of which are as follows:
• Lender / Administrative Agent: Meridian National Bank, N.A., 600 Travis Street, Houston, TX 77002.
• Facility: $55 million senior secured revolving credit facility, dated September 30, 2020. The facility is secured by substantially all of OWS's assets, including an intellectual property collateral pledge covering OWS's patent portfolio. This IP-collateral pledge is relevant to the proposed engagement because patent prosecution activities — including the filing of new applications and the maintenance of existing patents — directly affect the scope and value of the collateral pool.
• Relationship Manager: Brian Hartwell, Vice President, Technology Banking Division, Meridian National Bank.
Meridian National Bank, N.A. and Brian Hartwell were included in the conflict search. The relevance of this search is discussed in Section 5.3 below.
2.5 Prior Counsel
OWS's prior outside patent counsel, from whom the Firm would be assuming prosecution responsibilities, is identified as follows:
• Prior Counsel: Kessler & Morin LLP ("K&M"), 1750 Tysons Boulevard, Suite 800, McLean, VA 22102.
• Scope of Prior Representation: K&M served as OWS's outside patent prosecution counsel from 2017 through 2021, during which time K&M drafted, filed, and prosecuted OWS's initial patent portfolio, comprising thirty-one (31) issued U.S. utility patents and associated pending applications. K&M's lead partner on the OWS account was Dr. Helen Kessler, a named partner of the firm.
• Reason for Transition: OWS has elected to transition its patent prosecution responsibilities from K&M to C&H. According to Marcus Whitfield, the transition is motivated by OWS's desire to consolidate its outside IP counsel relationships with a West Coast-based firm having deep expertise in the silicon-photonics technology area, as well as concerns regarding responsiveness and docketing errors that arose during the latter period of K&M's engagement. The transition is expected to be amicable.
• Provisional Application: The immediate priority application, U.S. Provisional Application No. 63/297,841, was filed by K&M on January 10, 2022, prior to the engagement transition. The non-provisional filing deadline based on this provisional is January 10, 2023, which provides adequate time for the engagement to be established and the prosecution strategy to be developed.
Kessler & Morin LLP and Dr. Helen Kessler were included in the conflict search as related parties. The results are discussed in Section 5.4 below.
2.6 Third-Party Service Providers
The following third-party service providers were identified by OWS as entities that are involved in the administration and prosecution of OWS's patent portfolio. Each has been included in the conflict search as a related party:
• Trident intellectual Property Services, LLC ("Trident IPS"), 9800 Northwest Freeway, Suite 420, Houston, TX 77092 — Patent annuity management and docketing agent retained by OWS. OWS's account manager at Trident IPS is Lisa Cheng. Trident IPS manages the payment of maintenance fees for OWS's issued U.S. patents and coordinates with foreign associates for the payment of annuities on international filings.
• Nakashima & Togawa Patent Professional Corporation ("N&T"), 2-4-16 Toranomon, Minato-ku, Tokyo 105-0001, Japan — Japanese foreign associate for OWS patent filings before the Japan Patent Office (JPO). The lead attorney is Kenji Nakashima. N&T has prosecuted OWS's Japanese national-phase applications under K&M's coordination and is expected to continue in that role under C&H's supervision.
• Breitenfeld & Vogt Patentanwälte PartGmbB ("B&V"), Leopoldstrasse 44, 80802 Munich, Germany — European patent attorney firm retained by OWS for prosecution of patent applications before the European Patent Office (EPO). The lead attorney is Dr. Matthias Vogt. B&V has handled OWS's European patent applications since 2019.
These entities are service providers to OWS and are not anticipated to be adverse parties in connection with the proposed engagement. They are included in the conflict search to ensure that C&H has no pre-existing relationship that might create an awkward dual-role situation or informational conflict.
3. Proposed Scope of Engagement
The proposed engagement encompasses patent prosecution representation for a family of twelve (12) related U.S. and international patent applications covering OWS's next-generation silicon-photonics modulator architecture. The applications are organized into three sub-families based on the underlying technology:
Sub-Family A — Core Modulator Architecture: This sub-family covers the fundamental design of OWS's next-generation Mach-Zehnder modulator, including the optical waveguide geometry, PN-junction doping profiles, and signal-integrity optimization features. Approximately four (4) applications are anticipated in this sub-family.
Sub-Family B — Electrode Fabrication Process: This sub-family covers the novel fabrication processes for the tapered impedance-matching electrode structures that are central to OWS's design-around strategy relative to competitor patents. Approximately four (4) applications are anticipated in this sub-family. This sub-family is of particular competitive significance, as discussed in Section 5.1 below.
Sub-Family C — Packaging & Thermal Management: This sub-family covers innovations in chip-level packaging and thermal dissipation architecture that enable OWS's modulator to operate reliably in high-density data-center environments. Approximately four (4) applications are anticipated in this sub-family.
All twelve applications ultimately claim priority to U.S. Provisional Application No. 63/297,841, filed January 10, 2022, by K&M prior to the engagement transition. The provisional application was filed as a comprehensive disclosure covering all three sub-families.
The proposed scope of the engagement includes the following activities:
(a) Drafting and filing non-provisional U.S. utility patent applications based on the provisional application;
(b) Drafting and filing continuation, continuation-in-part, and divisional applications as warranted by the prosecution strategy;
(c) Preparing and filing PCT (Patent Cooperation Treaty) international applications to preserve OWS's ability to seek patent protection in foreign jurisdictions;
(d) Responding to office actions issued by the U.S. Patent and Trademark Office, including examiner interviews and appeals to the Patent Trial and Appeal Board as necessary;
(e) Developing and advising on overall prosecution strategy, including claim-drafting strategy designed to maximize claim scope while avoiding prior art, particularly the Pinnacle Optics patent family discussed in Section 5.1 below;
(f) Conducting a freedom-to-operate analysis regarding Pinnacle Optics' patent portfolio and other identified third-party patents in the silicon-photonics modulator space;
(g) Coordinating with N&T (Japan) and B&V (Germany/EPO) for national-phase and regional-phase filings and prosecution; and
(h) General patent prosecution counseling, including patentability opinions, prior-art monitoring, and portfolio-management advice.
The proposed engagement team is as follows:
All members of the engagement team are registered patent practitioners before the USPTO and are licensed to practice in California. None of the team members has been identified as having any personal conflict of interest with respect to the proposed engagement.
4. Conflict Search Methodology
4.1 Databases and Systems Searched
The conflict search was conducted by the Firm's Conflicts & New Business Intake Department (the "Conflicts Department") using the following databases and systems:
• C&H Firm-Wide Conflicts Database (Ridgeway Health IT / Open): The Firm's primary conflicts-management system, which contains records of all active, dormant, and closed client matters for the preceding ten (10) years, including client names, matter descriptions, adverse parties, related parties, key personnel, and industry classifications. The database is updated continuously as new matters are opened, matters are closed, and party information is modified.
• C&H Client/Matter Index: A comprehensive index of all clients and matters maintained by the Firm, cross-referenced by client name, matter number, engagement partner, and practice group. This index was searched to identify any representations of the Proposed Client or related parties that may not have been captured in the primary conflicts database.
• C&H Party-Name Index: An index of all parties associated with Firm matters, including adverse parties, co-parties, witnesses, and other interested persons. This index was searched to ensure comprehensive coverage of all named individuals and entities.
• C&H Industry-Classification Index: An index that classifies all Firm matters by industry sector, technology area, and subject-matter category. This index was used to conduct the industry-level search described in Section 4.2 below.
The search was initiated on February 4, 2022, and a supplemental run was conducted on February 7, 2022, to incorporate additional search terms identified during the partner-level inquiry described in Section 4.3 below.
4.2 Search Terms
The following search terms were entered into the conflicts database. Each term was searched using both exact-match and fuzzy-match algorithms to capture potential variations in spelling, abbreviation, and formatting:
Entity Names:
1. Optiwave Semiconductor Corp.
2. Optiwave Semi
3. OWS (with appropriate disambiguation filters)
4. Harborview Partners
5. Veltrano Capital Partners (and variants)
6. Meridian National Bank, N.A.
7. Meridian National Bank (and variants)
8. Kessler & Morin LLP
9. Trident intellectual Property Services, LLC
10. Trident IPS
11. Nakashima & Togawa Patent Professional Corporation
12. Breitenfeld & Vogt Patentanwälte PartGmbB
13. Pinnacle Optics, Inc.
14. Cavanaugh Holt & Sayer LLP
Individual Names:
15. Dr. Rajan Menon
16. Dr. Lena Strickland
17. Marcus Whitfield
18. Sandra Koh
19. Daniel Everhart
20. Dr. Feng-Yi Chen
21. Dr. Arjun Dasgupta
22. Theodore "Ted" Hargrove
23. Christine Paulsen
24. Brian Hartwell
25. Dr. Helen Kessler
26. Howard Raines
Industry-Level Search Terms:
27. "Silicon photonics" / "photonic integrated circuit" / "optical transceiver" / "data-center interconnect" / "semiconductor — fabless" (combined as a single industry-classification search with Boolean OR operators)
In total, twenty-seven (27) discrete search terms were entered into the system. The industry-level search was designed to identify any Firm representations that, while not involving OWS or named parties directly, might involve competing companies or overlapping technology areas in the silicon-photonics or data-center optical interconnect space.
The inclusion of Pinnacle Optics, Inc. as a search term reflects the Firm's awareness — based on preliminary discussions with OWS's General Counsel — that Pinnacle is OWS's primary competitor and that the proposed engagement will involve prosecution strategy and freedom-to-operate analysis directed at Pinnacle's patent portfolio.
4.3 Additional Diligence
In addition to the database searches described above, the following supplementary diligence measures were undertaken:
• Partner-Level Inquiry — IP Group: Catherine Bloom and Alan Ngo circulated a written inquiry to all partners and senior associates in the Firm's intellectual Property Group (eighteen attorneys in total), requesting disclosure of any current, prior, or informal relationships with OWS, Veltrano Capital Partners, Pinnacle Optics, or any of the other entities and individuals identified in Section 2 above. All responses were received by February 7, 2022. No previously undisclosed relationships were reported.
• Inquiry to Technology Transactions and Corporate Groups: A parallel inquiry was circulated to the partners in the Firm's Technology Transactions and Corporate practice groups, requesting disclosure of any current or prior representations of OWS, Veltrano, or any Veltrano portfolio company, as well as any representations that may involve competitors in the silicon-photonics or data-center interconnect space. All responses were received by February 7, 2022. No conflicts or potential conflicts were identified.
• Semiconductor Industry Practice Group Review: The Firm maintains a Semiconductor Industry Practice Group that coordinates cross-practice representations in the semiconductor sector. Catherine Bloom conferred with Michael Dern, the Practice Group Leader, to review the group's current and recent engagement roster for any representations involving OWS, Veltrano, or identified competitors. This review confirmed the three existing semiconductor-industry client representations discussed in Section 5.5 below, none of which presents a conflict.
5. Conflict Search Results
The conflict search returned a total of five (5) hits, each of which is analyzed in detail below. As set forth in this Section 5, all five hits have been reviewed and cleared. No disqualifying conflict of interest has been identified.
5.1 Pinnacle Optics, Inc. — Potential Adverse Interest (Primary Focus)
The relationship between OWS and Pinnacle Optics, Inc. represents the most significant area of inquiry in this conflict check. Although Pinnacle is not a current or former client of the Firm, the competitive and potentially adversarial relationship between OWS and Pinnacle warrants careful analysis and the implementation of ongoing monitoring protocols.
5.1.1 Identification.
Pinnacle is a well-established competitor to OWS in the silicon-photonics modulator market. Like OWS, Pinnacle designs silicon-photonics integrated circuits for data-center optical interconnect applications. Pinnacle is understood to be a publicly traded company with significantly larger revenue than OWS, though precise financial data has not been gathered for purposes of this conflict check.
5.1.2 Nature of Concern. The relationship between OWS and Pinnacle gives rise to a heightened need for conflict analysis for the following reasons:
First, Pinnacle is OWS's primary competitor in the silicon-photonics modulator space. The two companies compete directly for customers among hyperscale data-center operators and optical networking OEMs. Their respective product roadmaps target the same 800G and 1.6T transceiver applications.
Second, Pinnacle holds a blocking patent family that is of central relevance to the proposed engagement. Specifically, Pinnacle is the assignee of the following U.S. patents:
(a) U.S. Patent No. 10,823,417, issued November 3, 2020, entitled "Segmented Traveling-Wave Electrode for Silicon-Photonic Mach-Zehnder Modulator" (the "'417 Patent"); and
(b) U.S. Patent No. 11,105,662, issued August 31, 2021, entitled "Method of Fabricating Segmented Electrode Architecture for High-Speed Photonic Modulation" (the "'662 Patent").
Both patents claim silicon-photonic Mach-Zehnder modulator designs featuring segmented traveling-wave electrode architecture. This technology is directly adjacent to the technology covered by OWS's proposed patent applications, and a key objective of the proposed OWS engagement is to draft and prosecute claims that design around Pinnacle's electrode-segmentation geometry. Specifically, OWS's Sub-Family B applications (Electrode Fabrication Process) will specify distinct "tapered impedance-matching" features that OWS believes differentiate its electrode design from Pinnacle's segmented architecture.
Third, freedom-to-operate analysis regarding Pinnacle's patent family — including the '417 Patent and the '662 Patent — is expressly within the proposed engagement scope. The Firm will be asked to evaluate the risk that OWS's products and processes may infringe Pinnacle's patent claims and to advise on design-around strategies and claim-drafting approaches that minimize that risk.
Fourth, there is a foreseeable potential for future adversarial proceedings between OWS and Pinnacle, including but not limited to inter partes review proceedings before the Patent Trial and Appeal Board, patent infringement litigation in federal court, and licensing negotiations or disputes. While no such proceedings are currently pending or threatened, the competitive dynamic between the two companies and the overlapping nature of their respective patent portfolios make such proceedings a realistic possibility during the course of the engagement.
5.1.3 C&H Representation History — Pinnacle Optics. The conflict database search returned no current or prior C&H representation of Pinnacle Optics, Inc. in any capacity. No C&H attorney — whether currently employed or formerly employed during the ten-year look-back period covered by the conflicts database — has represented Pinnacle in any legal matter, whether patent prosecution, litigation, transactional, regulatory, or otherwise.
Furthermore, Pinnacle's outside patent counsel, Cavanaugh Holt & Sayer LLP, is not affiliated with C&H in any manner. There is no lateral-hire overlap, no referral arrangement, no office-sharing relationship, and no other connection between the two firms.
No financial, business, or personal relationship between C&H and Pinnacle or any of its identified personnel (including Howard Raines) has been identified through the conflict search or the supplemental partner-level inquiry.
5.1.4 Analysis. No disqualifying conflict of interest exists with respect to Pinnacle Optics. Because C&H has never represented Pinnacle, no current-client conflict arises under California Rule of Professional Conduct 1.7 or USPTO Rule 37 C.F.R. § 11.107, and no former-client conflict arises under California Rule 1.9 or USPTO Rule 37 C.F.R. § 11.109. The Firm owes no duty of loyalty, confidentiality, or non-adversity to Pinnacle.
However, given the direct competitive and potentially adversarial relationship between OWS and Pinnacle, the following monitoring protocols and disclosures are recommended:
(a) Intake Monitoring: The Conflicts Department should flag any future C&H intake inquiry or new matter request involving Pinnacle Optics, Inc., Howard Raines, Grant Sayer, or Cavanaugh Holt & Sayer LLP for immediate review by Catherine Bloom prior to clearance. If Pinnacle approaches C&H for representation during the pendency of the OWS engagement, the Firm must evaluate whether acceptance of the Pinnacle representation would create a concurrent conflict under Rule 1.7 by being materially adverse to OWS.
(b) Client Disclosure: The engagement letter to be delivered to OWS should inform OWS that C&H has no current or prior relationship with Pinnacle, but that C&H recognizes the competitive dynamic between the two companies and will implement appropriate monitoring protocols. OWS should also be informed of C&H's ethical obligation to decline any future representation of Pinnacle that would be directly and materially adverse to OWS in a matter substantially related to the OWS engagement.
(c) Supplemental Conflict Check: If the OWS engagement evolves to encompass inter partes proceedings, patent litigation, or formal licensing negotiations involving Pinnacle, a supplemental full conflict check must be conducted at that time to ensure that no new conflicts have arisen in the interim.
5.2 Harborview Partners — Affiliate Check
5.2.1 Search Results. The conflict database search returned no current representations of Harborview Partners, any identified Veltrano fund entity, or any identified Veltrano portfolio company. Similarly, no current matters were identified involving Theodore "Ted" Hargrove or Christine Paulsen in any capacity — whether as clients, adverse parties, or witnesses.
The search also returned no former or closed representations of Veltrano or its personnel within the ten-year look-back period. Veltrano has not previously engaged C&H for any legal services, and no C&H attorney has reported any prior professional or personal relationship with Veltrano or its identified personnel.
It should be noted that the scope of this search is inherently limited by the Firm's knowledge of Veltrano's portfolio. Veltrano is a middle-market private equity fund with a diversified portfolio of technology and industrial investments. The specific identities of all Veltrano portfolio companies are not currently known to C&H. Accordingly, the search was necessarily limited to the Veltrano fund entities themselves, the identified personnel, and such portfolio companies as may appear in the Firm's records under industry or other cross-references.
5.2.2 Analysis. No conflict has been identified with respect to Harborview Partners. No current or former client relationship exists, and no adverse representations have been identified.
Standard monitoring is recommended, given the breadth of Veltrano's portfolio and the possibility that one or more Veltrano portfolio companies may be C&H clients or adverse parties in matters unrelated to the OWS engagement. To address this possibility, the engagement team will include an affiliate-disclosure request in the engagement-letter package, asking OWS and/or Veltrano to provide a current list of Veltrano portfolio companies. Upon receipt, the Conflicts Department will run a supplemental conflict check against the identified entities and add them to the ongoing monitoring profile for the OWS matter.
5.3 Meridian National Bank, N.A. — Lender Check
5.3.1 Search Results. The conflict database search returned two (2) prior matters in which C&H represented borrower clients in financing transactions where Meridian National Bank, N.A. served as lender or administrative agent:
(a) Matter No. 1014-00005 — Representation of a commercial real-estate development company (borrower) in a $120 million construction financing arranged by a syndicate of lenders, with Meridian serving as co-lead arranger and administrative agent. This matter was opened in 2018 and closed in 2019 upon closing of the financing and completion of the post-closing deliverables. The matter was handled by the Firm's Real Estate Finance practice group. No confidential information regarding Meridian's lending policies, credit underwriting procedures, or internal business operations was obtained by C&H in connection with this representation.
(b) Matter No. 1014-00005 — Representation of a technology company (borrower) in the negotiation of a $35 million senior secured revolving credit facility with Meridian as sole lender. This matter was opened in 2020 and closed in 2021 upon completion of the credit facility documentation and the first-year compliance review. The matter was handled by the Firm's Corporate Finance practice group. As with the prior matter, C&H represented the borrower, not Meridian, and did not obtain any confidential information regarding Meridian's internal operations that could be relevant to the OWS engagement.
No current active matters involving Meridian National Bank in any capacity — whether as client, adverse party, lender, or other interested party — were identified. C&H has never represented Meridian directly, and no C&H attorney has served as counsel to Meridian in any transaction.
5.3.2 Analysis. No conflict of interest exists with respect to Meridian National Bank. The two prior matters were borrower-side representations in which Meridian occupied the position of lender or administrative agent on the opposite side of the transaction. Both matters are now closed. No confidential information belonging to Meridian was obtained by C&H in connection with either matter, and in any event, neither matter involved subject matter that bears any relationship to the OWS patent prosecution engagement.
The proposed OWS engagement is a patent prosecution matter, not a lending or financing transaction. C&H will not be negotiating with Meridian, advising OWS on its credit facility, or taking any position adverse to Meridian in connection with the engagement. The existence of an IP-collateral pledge in OWS's credit facility with Meridian does not create a conflict because C&H's prosecution of patent applications on OWS's behalf would enhance rather than diminish the value of the collateral pool, and C&H is not being asked to provide advice regarding the credit facility itself.
No further action is required with respect to Meridian.
5.4 Kessler & Morin LLP — Prior Counsel Check
5.4.1 Search Results. The conflict database search returned no current or prior C&H representation of Kessler & Morin LLP in any capacity. No current or prior adverse representation against K&M was identified. A search for Dr. Helen Kessler, K&M's lead partner on the OWS account, also returned no hits in the conflicts database.
No C&H attorney has reported any professional or personal relationship with K&M or Dr. Kessler through the partner-level inquiry process.
5.4.2 Analysis. No conflict of interest exists with respect to Kessler & Morin LLP. K&M is OWS's departing outside patent counsel, and C&H will be succeeding K&M in that role. This succession does not create a conflict because K&M is not an adverse party — rather, K&M is a prior service provider whose engagement is being concluded in the ordinary course of OWS's business.
As a practical matter, the engagement team should take the following steps to ensure an orderly transition of prosecution responsibilities from K&M to C&H:
(a) Confirm with OWS's General Counsel that K&M has been formally notified of the transition and that K&M's engagement has been terminated in writing;
(b) Request that K&M transfer all patent prosecution files, including application files, prior-art search results, prosecution histories, invention disclosures, correspondence, and docketing records;
(c) Confirm that K&M has no outstanding liens, fee disputes, or retainer claims against the OWS prosecution files that could impede the file transfer; and
(d) Coordinate with Trident IPS, N&T, and B&V to update their records to reflect C&H as the new responsible counsel and primary point of contact for OWS's patent prosecution matters.
5.5 Other Semiconductor-Industry Clients — Industry-Level Review
5.5.1 Search Results. The industry-level search identified three (3) current C&H client representations in the semiconductor industry. These clients are identified below by anonymized designation, consistent with the Firm's policy of not disclosing the identities of existing clients in conflict memoranda except to the extent necessary for the conflict analysis:
Client A: C&H currently provides corporate and M&A advisory services to a semiconductor company that designs and manufactures analog power semiconductors for automotive and industrial applications. The engagement involves general corporate counseling and potential acquisition target evaluation. The engagement has no intellectual property component and involves a markedly different market segment than OWS's silicon-photonics technology. Client A does not compete with OWS in any product market, and there is no known commercial or intellectual property dispute between Client A and OWS.
Client B: C&H currently represents a semiconductor company in the defense of an employment-related lawsuit filed by a former employee. The matter involves claims of wrongful termination and discrimination and has no intellectual property or competitive dimension. Client B operates in a different semiconductor technology area than OWS and does not compete with OWS. There is no known relationship, dispute, or competitive overlap between Client B and OWS.
Client C: C&H currently represents a semiconductor company in the negotiation of a patent licensing agreement in the radio-frequency (RF) semiconductor space. While this engagement involves intellectual property, the technology area — RF semiconductors — is entirely distinct from OWS's silicon-photonics modulator technology. Client C does not design, manufacture, or sell products that compete with OWS's products, and there is no overlap between Client C's patent portfolio and OWS's technology area. There is no known commercial or IP dispute between Client C and OWS.
5.5.2 Analysis. No conflict of interest exists with respect to any of the three existing semiconductor-industry client representations. None of the three clients competes with OWS in the silicon-photonics or data-center optical interconnect markets. None of the three engagements involves technology, products, or intellectual property that overlaps with the subject matter of the proposed OWS engagement. None of the three clients has any known commercial or intellectual property dispute with OWS.
Notwithstanding the absence of a current conflict, industry-level conflict monitoring is recommended on an ongoing basis. The semiconductor industry is dynamic, with frequent shifts in competitive relationships, market entry by new players, and convergence of previously distinct technology areas. The Conflicts Department should conduct a quarterly review of new C&H semiconductor-industry engagements against OWS's competitive landscape to ensure that no new conflicts emerge during the course of the engagement.
5.6 Foreign Associates and Service Providers
5.6.1 Search Results. The conflict database search returned no hits for any of the following entities:
• Trident intellectual Property Services, LLC — no current, prior, or adverse representations identified;
• Nakashima & Togawa Patent Professional Corporation — no hits of any kind;
• Breitenfeld & Vogt Patentanwälte PartGmbB — no hits of any kind; and
• Cavanaugh Holt & Sayer LLP (Pinnacle's outside patent counsel) — no current, prior, or adverse representations identified; no relationship with C&H of any kind.
5.6.2 Analysis. No conflicts exist with respect to any of the identified service providers or foreign associates. These entities were included in the conflict search out of an abundance of caution to confirm that no pre-existing relationship with C&H could complicate the engagement. The search confirmed that no such relationships exist.
Trident IPS, N&T, and B&V are third-party service providers that will work cooperatively with the C&H engagement team during the course of the OWS engagement. Cavanaugh Holt & Sayer LLP is identified as Pinnacle's outside patent counsel and may become opposing counsel in the event of future adversarial proceedings between OWS and Pinnacle. The Firm's lack of any relationship with Cavanaugh Holt & Sayer eliminates any concern regarding professional courtesy conflicts or imputed disqualification through lateral movement.
No further action is required with respect to any of these entities, subject to the ongoing Pinnacle monitoring protocol described in Section 5.1.4 above.
6. Ethical Rules Considered
The following ethical rules and standards were considered in the analysis of the conflict search results:
California Rules of Professional Conduct, Rule 1.7 (Conflict of Interest: Current Clients). Rule 1.7 prohibits a lawyer from representing a client if the representation involves a concurrent conflict of interest — that is, if the representation of one client will be directly adverse to another client, or if there is a significant risk that the representation of one or more clients will be materially limited by the lawyer's responsibilities to another client, a former client, or a third person, or by a personal interest of the lawyer. The analysis in Sections 5.1 through 5.6 above confirms that no current-client conflict exists. OWS is not adverse to any current C&H client, and no current C&H representation would materially limit the Firm's ability to represent OWS in the proposed patent prosecution engagement. The three existing semiconductor-industry clients (Clients A, B, and C) operate in different technology areas and do not compete with OWS.
California Rules of Professional Conduct, Rule 1.9 (Duties to Former Clients). Rule 1.9 prohibits a lawyer who has formerly represented a client in a matter from thereafter representing another person in the same or a substantially related matter in which that person's interests are materially adverse to the interests of the former client, unless the former client gives informed written consent. The conflict search did not identify any former C&H client whose interests would be materially adverse to OWS in a matter substantially related to the proposed engagement. No former-client conflict exists.
California Rules of Professional Conduct, Rule 1.10 (Imputation of Conflicts of Interest Among Current and Former Associated Lawyers). Rule 1.10 provides that, while lawyers are associated in a firm, none of them shall knowingly represent a client when any one of them practicing alone would be prohibited from doing so by Rules 1.7 or 1.9. Because no individual attorney at C&H has been identified as having a conflict with respect to the proposed OWS engagement, there is no conflict to impute to the Firm or to any other C&H attorney.
USPTO Rules of Professional Conduct, 37 C.F.R. § 11.107 (Conflict of Interest: Current Clients) and § 11.109 (Duties to Former Clients). Because the proposed engagement involves patent prosecution before the USPTO, the Firm's obligations under the USPTO's own rules of professional conduct must also be considered. The substance of these rules closely parallels the California rules discussed above. The analysis confirms that no conflict exists under the USPTO rules: C&H has no current or former client whose interests would be adversely affected by the proposed representation of OWS.
Note Regarding Future Adversity. The analysis in this memorandum is based on the current posture of the proposed engagement, which is limited to patent prosecution. Should OWS's prosecution activities lead to inter partes proceedings before the Patent Trial and Appeal Board (e.g., inter partes review, post-grant review, derivation proceedings, or interference proceedings) or to patent infringement litigation involving Pinnacle Optics or any other third party, a supplemental conflict check would be required at that time. Such proceedings would involve direct adversity to identified parties and would necessitate a fresh review of C&H's client relationships, including any relationships that may have developed after the date of this memorandum.
7. Conclusion and Clearance Recommendation
CLEARANCE STATUS: APPROVED — NO DISQUALIFYING CONFLICTS IDENTIFIED
Based on the comprehensive conflict search and analysis described in this memorandum, no disqualifying conflict of interest has been identified in connection with the proposed engagement of Optiwave Semiconductor Corp. for patent prosecution services. All five hits returned by the conflict database have been reviewed, analyzed, and cleared. The engagement may proceed, subject to the informational disclosures and ongoing monitoring protocols recommended in Sections 5 and 8 of this memorandum.
The engagement of Optiwave Semiconductor Corp. under proposed Matter No. 1014-00005 is hereby cleared for opening. Responsible Partner Catherine Bloom and Billing Partner Alan Ngo are authorized to finalize and execute the engagement letter, which is anticipated to be countersigned by Marcus Whitfield, General Counsel of OWS, on or about February 10, 2022. Upon receipt of the countersigned engagement letter and completion of the Firm's standard client onboarding procedures (including anti-money-laundering verification and engagement-letter billing-terms confirmation), the matter may be formally opened. Engagement opening is anticipated for February 14, 2022.
The engagement team is reminded that conflict clearance is not a one-time event. The ongoing monitoring recommendations set forth in Section 8 below should be observed throughout the duration of the engagement, and supplemental conflict checks should be initiated whenever there is a material change in the scope of the engagement, the identity of adverse parties, or the Firm's client roster in the semiconductor industry.
8. Ongoing Monitoring Recommendations
The following ongoing monitoring protocols are recommended in connection with the OWS engagement and should be implemented by the Conflicts Department in coordination with the engagement team:
1. Pinnacle Optics Monitoring. The Conflicts Department shall flag any C&H new matter intake inquiry, lateral-hire clearance, or business-development contact involving Pinnacle Optics, Inc., Howard Raines, Grant Sayer, or Cavanaugh Holt & Sayer LLP for immediate review by Catherine Bloom prior to clearance or further action. No representation of Pinnacle shall be accepted without a supplemental conflict analysis and, if warranted, consultation with the Conflicts Committee. This monitoring protocol shall remain in effect for the duration of the OWS engagement and for a period of two (2) years following its conclusion.
2. Veltrano Portfolio Monitoring. The engagement team shall request, as part of the engagement-letter process, a current and complete list of Veltrano Capital Partners' portfolio companies from OWS's General Counsel or directly from Veltrano's Operating Partner, Christine Paulsen. Upon receipt, the Conflicts Department shall run a supplemental conflict check against all identified portfolio companies and add them to the ongoing monitoring profile for Matter No. 1014-00005. OWS or Veltrano should be asked to provide updated portfolio-company lists on a semi-annual basis or promptly upon any material change.