CIG USA Has Filed Petitions for IPR Against AOI Patents in Legal Dispute

Rhea-AI Summary

Cambridge Industries USA (CIG USA) has filed Petitions with the Patent Trial and Appeal Board (PTAB) challenging Applied Optoelectronics (AAOI) patents. The Inter Partes Review (IPR) petitions aim to invalidate all claims in AAOI's patents, arguing they are unpatentable due to anticipation or obviousness.

The petitions are related to AAOI's ongoing patent infringement lawsuit against CIG USA in the Northern District of California. PTAB decisions on whether to proceed with the IPRs are expected by mid-2025, ahead of the scheduled District Court trial in June 2026.

Positive

• None.

Negative

• Faces patent validity challenges that could invalidate company's intellectual property
• Ongoing legal dispute potentially affecting business operations and resources
• Risk of losing patent protection if IPR petitions are successful

Insights

Patent Litigation Expert

This patent dispute represents a significant challenge to Applied Optoelectronics' (AAOI) intellectual property portfolio. CIG USA's IPR petitions are a strategic countermove that could substantially impact AAOI's market position in the optical components sector. The timing is particularly important - with PTAB decisions expected by mid-2025 and the district court trial scheduled for June 2026, this creates a complex legal timeline that could influence settlement negotiations.

The key technical point here is that CIG USA is claiming AAOI's patents are invalid due to anticipation or obviousness - fundamental challenges in patent law that, if successful, would completely invalidate AAOI's claims. For investors, this presents significant risk as patent invalidation could erode AAOI's competitive moat and potentially impact future revenue streams from their optical technology portfolio.

Most concerning is the broad scope of the challenge - seeking cancellation of all claims in the patents. This comprehensive attack suggests CIG USA has identified substantial vulnerabilities in AAOI's patent portfolio. Historical PTAB statistics show that when IPRs are instituted, patent claims are often invalidated at rates exceeding 60%, making this a material threat to AAOI's intellectual property assets.

Financial Risk Analyst

The IPR filing introduces substantial operational and financial uncertainty for AAOI. Patent litigation is notoriously expensive, with typical costs for defending IPRs ranging from $300,000 to $500,000 per patent, plus additional district court litigation expenses. Given AAOI's market cap of $1.5B, these legal expenses could materially impact their cash flow and R&D investment capacity.

Beyond direct legal costs, the market implications are concerning. The optical components industry relies heavily on IP protection to maintain pricing power and market share. If CIG USA succeeds in invalidating these patents, it could open the door for increased competition and margin pressure. This is particularly relevant given AAOI's position in the high-margin optical transceiver market, where patent protection has historically been a key competitive advantage.

The extended timeline until resolution (potentially mid-2026) creates a prolonged period of uncertainty that could impact customer relationships and strategic partnerships. Companies may hesitate to enter long-term supply agreements or technology licensing deals while AAOI's IP rights remain under challenge.

SANTA CLARA, Calif.--(BUSINESS WIRE)-- Cambridge Industries USA, Inc. (CIG USA), a Delaware corporation headquartered in Santa Clara, California, today announced that it has filed Petitions with the Patent Trial and Appeal Board (PTAB) of the U.S. Patent and Trademark Office for Inter Partes Review (IPR) of U.S. patents asserted by Applied Optoelectronics, Inc. (AOI, NASDAQ:AAOI) in AOI’s infringement action, which is pending in the United States District Court for the Northern District of California.

The Petitions seek the cancellation of all claims in the patents as unpatentable, which, as demonstrated in CIG USA’s Inter Partes Review Petitions, are invalid due to anticipation or obviousness. Decisions on whether to institute the IPRs are expected by mid-2025, well in advance of the scheduled District Court trial date in June 2026.

CIG USA remains firmly committed to upholding fairness, integrity, and the true purpose of intellectual property rights—to foster innovation and protect legitimate contributions, not to obstruct healthy competition.

About CIG USA
CIG USA is a wholly owned subsidiary of CIG, a global company with affiliates in the USA, Germany, Japan, China, Malaysia, and other locations. CIG enables data center interconnect through its advanced high-speed optical module products and multi-gigabit broadband connectivity by providing industry-leading wired and wireless solutions. Combining R&D technology leadership with state-of-the-art manufacturing, CIG supports its customers and partners worldwide with millions of devices every year. Products covered by CIG include PON CPEs, home and enterprise Wi-Fi equipment, routers, LTE/5G small cells, and high-speed optical transceivers. Learn more at: https://www.cigtech.com/.

View source version on businesswire.com: https://www.businesswire.com/news/home/20250117961188/en/

For Media Contact: press@cigtech.com

Source: Cambridge Industries USA, Inc.

FAQ

What is the status of the patent dispute between CIG USA and AAOI?

CIG USA has filed Inter Partes Review petitions with the PTAB challenging AAOI's patents, claiming they are invalid due to anticipation or obviousness. The case is pending in the Northern District of California.

When will the PTAB decide on AAOI's patent review petitions?

Decisions on whether to institute the Inter Partes Reviews are expected by mid-2025.

When is AAOI's patent infringement trial scheduled?

The District Court trial is scheduled for June 2026.

What is CIG USA seeking in their IPR petitions against AAOI?

CIG USA is seeking the cancellation of all claims in AAOI's patents, arguing they are unpatentable due to anticipation or obviousness.