DCT
6:19-cv-00279
Xtera Inc v. NEC Corp
I. Executive Summary and Procedural Information
- Parties & Counsel:
- Plaintiff: Xtera, Inc. (Delaware), Xtera Topco Ltd. (UK), and Neptune Subsea IP Ltd. (UK)
- Defendant: NEC Corporation (Japan) and NEC Networks & System Integration Corporation (Japan)
- Plaintiff’s Counsel: Naman Howell Smith & Lee, PLLC; Paul Hastings LLP
- Case Identification: 6:19-cv-00279, W.D. Tex., 10/03/2019
- Venue Allegations: Plaintiff alleges venue is proper because Defendants conduct regular business in Texas, including through a wholly-owned subsidiary headquartered in the state, and place the accused products into the stream of commerce with the knowledge that they will be sold in Texas.
- Core Dispute: Plaintiff alleges that Defendant’s terrestrial and submarine telecommunication systems infringe patents related to optical amplifier control, dispersion shifting for mixed-signal transmission, and high bit-rate data formatting.
- Technical Context: The dispute centers on core technologies for long-haul and transoceanic optical fiber networks, which form the backbone of global internet and data traffic.
- Key Procedural History: The complaint alleges that Defendant was put on notice of its infringement of U.S. Patent No. 7,860,403 as of December 22, 2017, and of U.S. Patent No. 8,380,069 as of May 11, 2018, due to prior proceedings between the parties at the U.S. International Trade Commission (ITC). These prior proceedings may be relevant to the allegations of willful infringement.
Case Timeline
| Date | Event |
|---|---|
| 2003-04-17 | Earliest Priority Date (’403 Patent) |
| 2003-07-15 | Issue Date (’071 Patent) |
| 2004-01-01 | Xtera deploys first commercial all-Raman network in Europe (approx.) |
| 2007-01-01 | Xtera introduces Nu-Wave NXT platform (approx.) |
| 2009-10-27 | Earliest Priority Date (’069 Patent) |
| 2010-10-01 | Xtera introduces Nu-Wave Optima product (approx.) |
| 2010-12-28 | Issue Date ('403 Patent) |
| 2011-01-01 | First deployment of Xtera's Nu-Wave Optima (approx.) |
| 2013-02-19 | Issue Date ('069 Patent) |
| 2017-12-22 | Alleged notice of '403 Patent infringement via ITC Complaint filing |
| 2018-05-11 | Alleged notice of '069 Patent infringement via ITC Markman Brief |
| 2019-10-03 | Complaint Filing Date |
II. Technology and Patent(s)-in-Suit Analysis
U.S. Patent No. 6,594,071 - Method and Apparatus for Amplifier Control
Issued July 15, 2003 (Compl. ¶18).
The Invention Explained
- Problem Addressed: The patent describes that conventional methods for controlling optical amplifier gain, such as logarithmic amplifiers or electronic range switching, can suffer from low linearity and accuracy, and present a difficult trade-off between the amplifier's bandwidth and its precision (Compl. ¶19; ’071 Patent, col. 1:11-29).
- The Patented Solution: The invention proposes a control system architecture that splits a tapped portion of an optical signal into multiple "control legs," with each leg receiving a different percentage of the signal. The system uses a plurality of registers to measure the power in each leg. By selecting the measurement from a leg that is neither under-flowing nor over-flowing its capacity, and then scaling that measurement by the known percentage, the system can accurately determine the signal's power over a very wide dynamic range using simple, cost-effective components (’071 Patent, Abstract; col. 4:54-64; Fig. 2).
- Technical Importance: This architecture offered a method to achieve highly reliable and wide-dynamic-range gain control, essential for maintaining signal stability in long-haul optical networks, without requiring complex and expensive high-precision components (’071 Patent, col. 1:30-34).
Key Claims at a Glance
- The complaint asserts independent claims 1 and 14 (Compl. ¶40).
- The essential elements of independent claim 1 are:
- A plurality of control legs, each receiving a portion of an optical signal, where each portion is a different percentage of the signal.
- A plurality of registers, each associated with a control leg, to store a value proportional to the signal portion in that leg.
- A controller that selects a value from one of the registers and scales it by a factor determined by the percentage of the optical signal associated with that value.
- The controller then generates a control signal based on the scaled value to affect the amplifier's gain.
- The complaint reserves the right to assert one or more dependent claims (Compl. ¶40).
U.S. Patent No. 8,380,069 - Introduction-Side Dispersion Shifting of Channels
Issued February 19, 2013 (Compl. ¶21).
The Invention Explained
- Problem Addressed: When upgrading optical networks, new, higher-capacity channels using coherent modulation are often added alongside older, existing channels that use non-coherent modulation. These two signal types have different sensitivities to chromatic dispersion, and mixing them on a network with a single, shared dispersion compensation plan can degrade the quality of one or both signal types (Compl. ¶22; ’069 Patent, col. 1:15-2:4).
- The Patented Solution: The patent describes a system and method where, at an "introduction node," a dispersive element intentionally introduces different dispersion levels to the coherent and non-coherent channel sets before they are combined. This creates a "shifted dispersion map" for the coherent channels, allowing both signal types to be transmitted optimally over the same partially dispersion-compensated fiber link (Compl. ¶23; ’069 Patent, Abstract).
- Technical Importance: The invention enables the efficient and cost-effective upgrade of legacy optical networks by allowing new coherent-modulated traffic to coexist with older non-coherent traffic on the same physical infrastructure without requiring a complete overhaul of the link's dispersion management (Compl. ¶22).
Key Claims at a Glance
- The complaint asserts independent claims 1, 11, and 13 (Compl. ¶54).
- The essential elements of independent claim 1 are:
- A non-coherent source providing one or more non-coherent channels.
- A coherent source providing one or more coherent channels.
- An introduction node that receives and combines both sets of channels for transmission onto a dispersion-compensated fiber link.
- The introduction node includes a dispersive element that introduces different dispersion levels to one or both channel sets, creating a "shifted dispersion map" for the coherent channel set compared to the non-coherent set.
- The complaint reserves the right to assert one or more dependent claims (Compl. ¶54).
U.S. Patent No. 7,860,403 - Data Format for High Bit Rate WDM Transmission
Issued December 28, 2010 (Compl. ¶24).
Technology Synopsis
The patent addresses the challenge in high bit rate Wavelength Division Multiplexed (WDM) systems where efforts to avoid inter-channel crosstalk can lead to pulse broadening and overlap, destroying data (Compl. ¶25). The patented solution is a transmitter that uses a specific filter to shape optical data pulses so they extend over more than one time slot but have a temporal profile with a minimum in adjacent time slots, which mitigates the negative effects of overlap and allows for higher spectral efficiency (Compl. ¶26; ’403 Patent, Abstract).
Asserted Claims & Accused Features
- Asserted Claims: Independent claim 8 (Compl. ¶68).
- Accused Features: The complaint accuses NEC's T740SW line terminal equipment, alleging it is a transmitter with a filter (e.g., a Nyquist filter) that produces optical pulses with the claimed temporal profile (Compl. ¶72).
III. The Accused Instrumentality
Product Identification
The complaint names NEC's terrestrial and submarine telecommunication systems and components. Specifically identified products include the NS Series telecommunications systems, Variable Gain Erbium Doped Fiber ("EDFA") amplifier modules, the NS Series Submarine Repeatered System, R640SW repeaters, Line Terminal Equipment SLR320SW, 100G DWDM and 10G DWDM transponders, and the T740SW line terminal equipment (Compl. ¶37, ¶42, ¶57, ¶72).
Functionality and Market Context
The accused products are components and systems used to build and upgrade long-haul and transoceanic optical communication networks (Compl. ¶36). The complaint alleges that the EDFA modules provide gain-controlled optical amplification, the transponders are used to add both coherent and non-coherent channels to new or existing networks, and the T740SW is terminal equipment for transmitting high-capacity signals over transoceanic distances (Compl. ¶43, ¶57; Ex. 6, p. 25). The complaint positions NEC as a direct and familiar competitor to Xtera in a market with a limited number of participants (Compl. ¶50, ¶64). The complaint provides a chart from a technical presentation showing the industry trend of migrating from non-coherent to coherent technologies, providing context for mixing signal types on a network (Compl. p. 18).
IV. Analysis of Infringement Allegations
'071 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a plurality of control legs, each operable to receive one of plurality of portions of an optical signal, wherein each of the plurality of portions comprises a different percentage of the optical signal; | NEC's EDFA products allegedly contain a control system with a plurality of control legs that receive different percentages of the optical signal. This is supported by a diagram of an "Automatic Level Controller" showing a multi-stage amplifier with multiple photodiode/controller feedback loops. | ¶43, p. 13 | col. 4:54-64 |
| a plurality of registers, each associated with one of the control legs and each operable to store a value proportional to the portion of the optical signal...; | The accused control systems allegedly include "storage registers associated with the optical signal communicated to each control leg." | ¶43 | col. 4:46-53 |
| a controller operable to select one of the values stored in one of the plurality of registers and to scale that value by a scaling factor... | The accused control systems allegedly have a controller that "selects one of the stored values" and "scales the values." This is supported by reference to general Automatic Gain Control (AGC) and Automatic Level Control (ALC) models where a controller adjusts pump power or attenuation based on monitored power. | ¶43, p. 13 | col. 5:30-42 |
| wherein the controller is operable to generate... a control signal operable to affect the gain of the amplifier. | The controller in the accused products allegedly "generates a control signal operable to affect the gain of the amplifier" by adjusting pump power or attenuation. The provided diagram of an "Automatic Gain Controller" shows a controller adjusting pump power to maintain a target gain. | ¶43, p. 13 | col. 5:17-24 |
- Identified Points of Contention ('071 Patent):
- Scope Questions: A central question for the court will be whether the general feedback loops in the accused products, as depicted in the complaint's generic technical diagrams (Compl. p. 13), constitute the specific "plurality of control legs" architecture described in the patent. The defense may argue that the patent requires a specific parallel structure for processing different percentages of a single tapped signal, which may not be present in a conventional multi-stage amplifier's control system.
- Technical Questions: The complaint alleges the presence of "registers" from which a controller "selects" a value, which is the core of the patent's method for expanding dynamic range. A key evidentiary question will be whether the accused products actually implement this "select and scale" logic across multiple measurement ranges or if they use a different control method that does not map to the claim limitations.
'069 Patent Infringement Allegations
| Claim Element (from Independent Claim 1) | Alleged Infringing Functionality | Complaint Citation | Patent Citation |
|---|---|---|---|
| a non-coherent source that provides a set of one or more non-coherent optical wavelength channels; a coherent source that provides a set of one or more coherent optical wavelength channels; | NEC's accused systems allegedly include components such as 10G DWDM (non-coherent) and 100G DWDM (coherent) transponders, which provide the respective channel sets for upgrading subsea networks. A provided visual shows the evolution of submarine cable technology from analog non-coherent to digital coherent. | ¶57, p. 18 | col. 10:45-50 |
| an introduction node that receives the... channel set[s]... and combines the coherent and non-coherent optical wavelength sets to form a mixed optical wavelength channel set... | The accused systems allegedly include an "introduction node" that combines the coherent and non-coherent channels for transmission. | ¶57 | col. 10:50-58 |
| a dispersive element that introduces different dispersion levels into either or both of the... channel set[s] such that the coherent optical wavelength channel set has a shifted dispersion map... | The introduction node allegedly includes a "dispersive element that introduces different dispersion levels" to create a shifted dispersion map for the coherent channels as compared to the non-coherent channels. | ¶57-58 | col. 10:58-67 |
- Identified Points of Contention ('069 Patent):
- Technical Questions: The infringement theory hinges on the existence and function of a "dispersive element" at an "introduction node." A primary question will be what specific hardware or software component in NEC's systems performs this function to intentionally create a "shifted dispersion map," as the complaint does not identify a specific component.
- Scope Questions: Does the act of upgrading a network by adding new coherent transponders alongside existing non-coherent ones inherently create the "introduction node" and "shifted dispersion map" recited in the claim? The court will need to determine if the claim covers a specific, deliberately implemented architecture or if it can be read to cover the natural consequence of mixing different technologies on certain legacy networks.
V. Key Claim Terms for Construction
Term ('071 Patent): "a plurality of control legs"
- Context and Importance: This term defines the core architecture of the invention in the '071 patent. Its construction will be critical to determining if the accused amplifier control systems, which may use multiple feedback loops in series or for different functions, fall within the scope of the claims. Practitioners may focus on this term because the patent's novelty appears to reside in this specific partitioned signal processing structure.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The specification describes the invention generally, stating "a control system having a plurality of control legs each operable to process a portion of the optical signal" (’071 Patent, col. 4:6-8), which could be argued to cover any system with multiple signal-monitoring pathways for control purposes.
- Evidence for a Narrower Interpretation: The specific embodiment illustrated in Figure 2 and its description detail an optical tap (140) that splits a single signal into distinct portions (142, 144), which are then routed to separate, parallel processing legs (150, 160). This could support a narrower construction requiring a parallel architecture designed to process different percentages of the same tapped signal simultaneously (’071 Patent, col. 4:54-64).
Term ('069 Patent): "shifted dispersion map"
- Context and Importance: This term describes the key outcome of the invention in the '069 patent. The dispute will likely center on whether this requires an affirmative, engineered shift or merely a resulting difference. Practitioners may focus on this term because its definition determines whether the invention is practiced by simply mixing channel types or if it requires a specific, active component.
- Intrinsic Evidence for Interpretation:
- Evidence for a Broader Interpretation: The claim states the dispersive element acts "such that" the coherent channel set "has a shifted dispersion map" (’069 Patent, cl. 1), which is functional language. This may support a broad reading where any resulting difference between the maps, regardless of cause, meets the limitation.
- Evidence for a Narrower Interpretation: The patent's abstract and summary explain that the system introduces dispersion to move the map "further from the zero dispersion point, which can degrade coherent detection" (’069 Patent, Abstract). This suggests an intentional, engineered modification to solve a specific problem, supporting a narrower construction requiring an active, purposeful shift.
VI. Other Allegations
- Indirect Infringement: For all three asserted patents, the complaint alleges that NEC induces infringement by providing "manuals, white papers, training, and/or other technical support with specific intent to induce purchasers and end users" to use the accused products in an infringing manner (Compl. ¶47, ¶61, ¶76).
- Willful Infringement: The complaint alleges willful infringement for all three patents. For the '069 patent, it alleges NEC has had knowledge since at least May 11, 2018, from an ITC proceeding (Compl. ¶58). For the '403 patent, it alleges knowledge since at least December 22, 2017, from a separate ITC complaint filing (Compl. ¶38, ¶73). For the '071 patent, knowledge is alleged from the filing of the present complaint and from NEC's general familiarity with Xtera as a competitor and pioneer in the field (Compl. ¶44, ¶50).
VII. Analyst’s Conclusion: Key Questions for the Case
- A core issue will be one of architectural equivalence: For the '071 patent, can the plaintiff demonstrate that the accused amplifier control systems embody the specific parallel "control leg" and "select-and-scale" architecture of the claims, or will the evidence show a conventional feedback design that is functionally and structurally distinct? The complaint's reliance on generic diagrams from a third-party paper suggests this will be a key evidentiary battleground.
- A second central issue will be one of inventive action: For the '069 patent, does merely upgrading a network with both coherent and non-coherent transponders inherently practice the invention, or must the plaintiff prove that the accused systems contain a specific "dispersive element" that actively creates the claimed "shifted dispersion map"? The resolution will depend on whether the claims are construed to cover a specific, deliberate implementation or a natural consequence of mixing technologies.
- Finally, a key legal question will concern willfulness and damages: Given the specific allegations of pre-suit notice for the '069 and '403 patents stemming from prior ITC litigation, should infringement be found, the court will need to closely examine whether NEC's continued alleged infringement constitutes the type of "egregious and wanton" conduct that warrants an award of enhanced damages.