DCT

2:20-cv-00211

Oyster Optics LLC v. Cisco Systems Inc

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Key Events
Amended Complaint

I. Executive Summary and Procedural Information

  • Parties & Counsel:
  • Case Identification: 2:20-cv-00211, E.D. Tex., 09/24/2020
  • Venue Allegations: Venue is alleged to be proper in the Eastern District of Texas because Cisco is subject to personal jurisdiction, has transacted business in the district, and has allegedly committed acts of patent infringement there.
  • Core Dispute: Plaintiff alleges that Defendant’s optical networking products, including line cards and pluggable modules, infringe three patents related to dual-mode optical signal modulation and energy level monitoring for security.
  • Technical Context: The lawsuit concerns the underlying technology of high-speed fiber optic networks, focusing on how data is encoded onto light signals and how the integrity of those signals is monitored to detect potential security breaches or line faults.
  • Key Procedural History: The complaint references a prior litigation between the parties (2:16-cv-01301-JRG), where Plaintiff asserted the ’898 Patent before dismissing those claims without prejudice. The current complaint highlights statements made by Cisco in that prior case regarding the technical nature of certain products. Additionally, the complaint notes that the Patent Trial and Appeal Board (PTAB) issued a final written decision in case IPR2017-01881, confirming the patentability of claims of the ’898 Patent that Cisco had challenged, a fact which may be relevant to allegations of willful infringement.

Case Timeline

Date Event
2001-01-29 U.S. Patent No. 6,665,500 Priority Date
2001-07-09 U.S. Patent Nos. 8,913,898 & 10,205,516 Priority Date
2003-12-16 U.S. Patent No. 6,665,500 Issue Date
2014-12-16 U.S. Patent No. 8,913,898 Issue Date
2016-11-24 Prior litigation against Cisco filed by Oyster
2019-02-12 U.S. Patent No. 10,205,516 Issue Date
2019-02-26 PTAB issues final written decision affirming claims of the ’898 Patent
2020-09-24 Complaint Filing Date

II. Technology and Patent(s)-in-Suit Analysis

U.S. Patent No. 6,665,500 - “Dual-Mode Fiber Optic Telecommunications System and Method,” issued December 16, 2003

The Invention Explained

  • Problem Addressed: The patent’s background describes a dilemma in fiber optics: traditional amplitude-modulated signals are not secure and can be easily tapped, while more secure phase-modulation techniques based on Sagnac interferometers are complex, expensive, and incompatible with the large installed base of existing receivers (’500 Patent, col. 1:11-2:24).
  • The Patented Solution: The invention proposes a "dual-mode" optical transmitter that can switch between two operational modes. In a "first mode," it generates secure, phase-modulated optical signals. In a "second alternate mode," it generates conventional amplitude-modulated signals. This allows a single piece of equipment to communicate securely with new, compatible receivers while retaining backward compatibility with legacy hardware, facilitating a gradual network upgrade (’500 Patent, Abstract; col. 2:33-47). A controller within the transmitter selects the mode, potentially based on instructions within a data packet, allowing for dynamic switching (’500 Patent, col. 3:21-34).
  • Technical Importance: By enabling backward compatibility, this dual-mode approach could lower the barrier to adoption for more secure phase-modulation transmission technologies in established telecommunication networks (’500 Patent, col. 2:41-47).

Key Claims at a Glance

  • The complaint asserts independent claim 1 and reserves the right to assert others (Compl. ¶39).
  • The essential elements of independent claim 1 include:
    • An optical data transmitter comprising a laser, a phase modulator, and a controller that receives an electronic data stream.
    • The controller operates in a "first mode" to control the phase modulator, creating phase-modulated optical signals.
    • The controller operates in a "second alternate mode" to amplitude-modulate the light from the laser.
    • The first and second modes must occur at "different times."

U.S. Patent No. 8,913,898 - “Fiber Optic Telecommunications Card with Energy Level Monitoring,” issued December 16, 2014

The Invention Explained

  • Problem Addressed: The patent identifies a need for effective, integrated security to detect physical taps or breaches on fiber optic lines. It notes that while secure modulation methods exist, external monitoring equipment like Optical Time Domain Reflectometers (OTDRs) is often expensive and separate from the primary data-transmitting hardware (’898 Patent, col. 5:48-55, col. 6:20-27).
  • The Patented Solution: The invention integrates an "energy level detector" directly onto the same transceiver card that transmits and receives data. This detector continuously monitors the power level of the incoming optical signal. If the power drops significantly, which could signify an illicit tap or a fiber fault, the detector is configured to trigger an alarm (’898 Patent, Abstract; col. 6:51-54). The patent’s detailed description illustrates a circuit for this purpose using a photodiode and comparators set against programmable thresholds (’898 Patent, Fig. 3).
  • Technical Importance: Placing this monitoring function on the transceiver card itself represents a more cost-effective and architecturally simple way to deploy security monitoring across a network compared to using separate, dedicated monitoring devices (’898 Patent, col. 7:19-28).

Key Claims at a Glance

  • The complaint asserts independent claim 14 and reserves the right to assert others (Compl. ¶60).
  • The essential elements of independent claim 14 include:
    • A transceiver card for a telecommunications box with both a transmitter and a receiver.
    • The card includes a transmitter (laser, modulator, controller) and a receiver for processing optical signals over separate first and second optical fibers.
    • The card includes an "energy level detector" configured to measure the energy level of the incoming (second) optical signal.
    • The energy level detector includes a "threshold indicating a drop in amplitude" of that signal.

U.S. Patent No. 10,205,516 - “Fiber Optic Telecommunications Card with Energy Level Monitoring,” issued February 12, 2019

  • Technology Synopsis: This patent is in the same family as the ’898 Patent and addresses the same technical problem of detecting unauthorized taps or faults on a fiber optic line (’516 Patent, col. 6:28-31). The invention is a telecommunications apparatus containing an optical receiver affixed to a printed circuit board, which includes an "energy level detector circuit" optically coupled to the incoming fiber. This integrated circuit is configured to monitor the optical signal's energy level and generate an alarm if it deviates from one or more defined thresholds (’516 Patent, Abstract; col. 7:6-14).
  • Asserted Claims: The complaint asserts independent claim 1 (Compl. ¶75).
  • Accused Features: The complaint alleges that the accused products' functionality for monitoring optical signal energy and generating alarms, such as "Loss of Signal (LOS)" and "Threshold Crossing Alerts (TCAS)," infringes this patent (Compl. ¶72).

III. The Accused Instrumentality

Product Identification

  • The complaint names a wide range of Cisco optical networking equipment, including the NCS and ASR series chassis, various line cards (e.g., Cisco NCS 1004 1.2Tbps Line Card), modular port adapters, and pluggable optical modules (e.g., CFP2-DCO modules) (Compl. ¶¶24, 45, 66). These are collectively referred to as the "Accused Instrumentalities."

Functionality and Market Context

  • The accused products are high-capacity transceivers and related hardware for optical networks (Compl. ¶25). The complaint alleges their key functionalities include:
    • Transmitting and receiving optical data at high speeds using various user-selectable modulation formats, such as Phase-Shift Keying (e.g., QPSK) and Quadrature Amplitude Modulation (e.g., 16-QAM) (Compl. ¶¶29-30, 33-36).
    • Monitoring the status of the received optical signal and generating alarms based on its energy level, such as "Loss of Signal (LOS)" alarms (Compl. ¶¶58, 72).
  • The complaint alleges the market for this "compact modular" optical equipment is substantial, citing analyst reports and press releases to suggest pervasive infringement and high revenues (Compl. ¶10). A marketing diagram provided in the complaint illustrates the general architecture of a coherent optical transceiver, showing a laser feeding into modulators on the transmit side and a receiver that processes the incoming optical signal (Compl. ¶28, p. 9).

IV. Analysis of Infringement Allegations

U.S. Patent No. 6,665,500 Infringement Allegations

Claim Element (from Independent Claim 1) Alleged Infringing Functionality Complaint Citation Patent Citation
an optical data transmitter comprising: a laser; a phase modulator... The accused products are optical data transmitters that contain tunable lasers and phase modulators, as shown in product datasheets and a "Coherent optics" diagram. ¶¶27-30 col. 5:60-65
a controller...for receiving an electronic data stream The accused line cards and modules are alleged to have controllers that receive electronic data at rates from 100G to 600G. ¶¶31-32 col. 5:65-6:2
the controller in a first mode controlling the phase modulator so as to create phase-modulated optical signals... The controller is alleged to operate in a first mode where it creates phase-modulated signals, such as BPSK or QPSK, which are supported formats in the accused products. ¶¶33-34 col. 4:51-58
and the controller in a second alternate mode amplitude-modulating the light... The controller is alleged to operate in a second mode where it creates signals such as 8-QAM and 16-QAM, which the complaint alleges meets the "amplitude-modulating" limitation. ¶¶35-36 col. 4:59-5:4
the first mode and the second mode occurring at different times. The modulation formats are described as "software settable" and can be "controlled," indicating the modes are selected and occur at different times. ¶¶37-38 col. 3:21-28
  • Identified Points of Contention:
    • Scope Question: A central issue may be whether generating a Quadrature Amplitude Modulation (QAM) signal, which by definition modulates both amplitude and phase, meets the claim limitation of "amplitude-modulating the light." The defense could argue the claim requires a mode where only amplitude is modulated, while the plaintiff may argue that any mode using amplitude variation to encode data infringes.
    • Technical Question: The complaint relies on high-level marketing documents, such as a "Coherent optics for 100G and beyond" presentation slide, to show the presence of a laser and modulators (Compl. ¶28, p. 9). A key factual question will be whether the accused products' internal "controller" architecture performs the specific mode-switching and modulation control as required by the claim.

U.S. Patent No. 8,913,898 Infringement Allegations

Claim Element (from Independent Claim 14) Alleged Infringing Functionality Complaint Citation Patent Citation
A transceiver card for a telecommunications box... The accused Cisco NCS 1004 1.2Tbps Line Card, shown in a photograph, and CFP2-DCO modules are alleged to be transceiver cards. ¶¶47-48 col. 7:31-33
a transmitter having a laser, a modulator, and a controller...to generate a first optical signal... The accused products contain coherent optics with a transmitter block comprising a laser and modulators controlled to generate an output signal. ¶¶49-50 col. 8:16-19
a fiber output optically connected to the transmitter... The accused line cards and modules have trunk ports or connectors that serve as fiber outputs for the transmitted signal. A photograph of a CFP2 module shows its optical connector. ¶¶51-52 col. 8:20-23
a receiver configured to receive a second optical signal...and to convert the second optical signal to output data. The accused products' receiver block, shown in a diagram, is configured to receive an optical signal and process it. ¶¶53-54 col. 8:24-27
a fiber input optically connected to the receiver... The accused line cards and modules have ports that serve as fiber inputs for the receiver. ¶¶56-57 col. 8:28-31
an energy level detector configured to measure an energy level...including a threshold indicating a drop in amplitude... The accused products' alleged ability to detect and report a "Loss of Signal (LOS)" or assert an "RX_LOS" pin when received optical power drops below a threshold is alleged to meet this limitation. ¶¶58-59 col. 8:32-36
  • Identified Points of Contention:
    • Scope Question: Does a standard "Loss of Signal" (LOS) alarm function, a ubiquitous feature in optical transceivers, constitute the "energy level detector" as claimed? The defense may argue that the patent requires a specific, more complex circuit than a generic LOS detector.
    • Technical Question: The complaint cites product datasheets listing "Alarm reporting for Loss of Signal (LOS)" (Compl. ¶58). A factual dispute may arise over whether this standard feature operates in the manner described by the patent's specification, which details a particular analog circuit design (’898 Patent, Fig. 3).

V. Key Claim Terms for Construction

For the ’500 Patent:

  • The Term: "amplitude-modulating"
  • Context and Importance: Infringement of the "second alternate mode" of claim 1 hinges on the construction of this term. The accused products allegedly implement this mode by generating QAM signals, which modulate both amplitude and phase. The court's definition will determine if this functionality falls within the claim's scope.
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: Practitioners may argue the patent contrasts the "second alternate mode" with the purely phase-modulated "first mode" (’500 Patent, col. 2:33-40). This suggests any modulation scheme that uses amplitude to encode data, even if phase is also varied, could be considered "amplitude-modulating" in the context of the invention's dual-mode concept.
    • Evidence for a Narrower Interpretation: The patent’s background discusses conventional "amplitude-modulated optical signal[s]" which, at the time of invention, often referred to simpler on-off keying schemes (’500 Patent, col. 1:15-18). The specification also notes this mode is readable by "common receivers," which could be interpreted to mean receivers designed for amplitude-only signals (’500 Patent, col. 3:5-6).

For the ’898 Patent:

  • The Term: "energy level detector"
  • Context and Importance: This term is central to the infringement allegations for the ’898 and ’516 patents. The dispute will likely focus on whether a standard, off-the-shelf Loss of Signal (LOS) circuit, as alleged in the complaint, is equivalent to the claimed "energy level detector."
  • Intrinsic Evidence for Interpretation:
    • Evidence for a Broader Interpretation: The plain language of the claim requires a detector that measures an energy level and has a threshold for a drop in amplitude (’898 Patent, cl. 14). A plaintiff may argue that any circuit performing this function, including a standard LOS detector, meets the claim's requirements.
    • Evidence for a Narrower Interpretation: Figure 3 and the accompanying description detail a specific analog circuit implementation with a photodetector, an amplifier, and one or more comparators connected to programmable digital-to-analog converters to set thresholds for both increases and decreases in energy (’898 Patent, col. 8:43-col. 9:35). A defendant may argue this detailed embodiment limits the term to a more complex and programmable circuit than a simple, binary LOS alarm.

VI. Other Allegations

  • Indirect Infringement: For all three patents, the complaint alleges induced infringement under 35 U.S.C. § 271(b). The allegations state that Cisco provides customers with technical guides, datasheets, and software that instruct them on how to configure and use the accused products in an infringing manner (e.g., selecting different modulation modes or utilizing alarm features) (Compl. ¶¶41, 62, 77).
  • Willful Infringement: The complaint alleges willful infringement for all three patents.
    • For the ’500 and ’516 Patents, the allegation is based on knowledge of the patents at least as of the filing of the complaint (Compl. ¶¶41, 77).
    • For the ’898 Patent, the allegation is more specific, asserting pre-suit knowledge from at least December 2, 2016, when Cisco was served in a prior litigation involving the patent. The complaint further alleges that infringement became "willful and egregious" after February 26, 2019, when the PTAB confirmed the patentability of the ’898 Patent's claims in an IPR proceeding initiated by Cisco (Compl. ¶¶62-63).

VII. Analyst’s Conclusion: Key Questions for the Case

  • A core issue will be one of definitional scope: can the term "amplitude-modulating" in the ’500 patent be construed to cover Quadrature Amplitude Modulation (QAM), a technique that modulates both amplitude and phase, or is it limited to modulation of amplitude alone? The outcome of this claim construction will be critical to the infringement analysis for that patent.
  • A second central question involves technical differentiation: does the "energy level detector" claimed in the ’898 and ’516 patents read on a standard Loss of Signal (LOS) alarm, a common feature in the industry, or does the patent specification limit the claims to a more specific and complex implementation, raising questions of both infringement and validity over prior art?
  • Finally, a key question for damages will be the impact of prior legal proceedings on willfulness. Specifically for the ’898 patent, the court will need to evaluate whether Cisco's alleged infringement after being sued on the patent previously, and after its own invalidity challenge was rejected by the PTAB, rises to the level of objective recklessness required for an enhancement of damages.