Chapter 1544 Patent Hunting

The excitement in the conference room had not yet dissipated when Mahachi knocked on the oak door of the office of President and CEO Dr. Dan Raymond Kania, holding a thick folder.

"Please come in."

The voice coming from inside the door was as steady as usual.

"Mr. Kania, I'm sorry to bother you so suddenly, but the matter is very urgent." Mahachi didn't bother to say hello and directly placed two paper printouts and three Chinese patent announcement documents on Kania's large mahogany desk.

Kania pushed his reading glasses onto his shiny forehead and scanned the paper titles and patent abstracts in front of him.

Although he has left the front-line R&D position for many years, he has not lost his sensitivity to cutting-edge technologies.

Just by glancing at the title, I realized the business opportunities behind it.

Or, it could be a crisis.

Of course, as a CEO, he certainly wouldn't show his inner reactions like those engineers did.

"Does your technical department have a response plan?"

Mahachi opened the laptop tucked under his arm and showed the email of cooperation intention from China to the other party.

"They took the initiative to approach us and invited us... Of course, it is possible that we are not the only ones to work together to develop and promote this system."

He pointed to the attachment at the end of the email and said:

"The Frontier Technology Department just held a meeting for an afternoon, and the conclusion is that the project is highly feasible. Although their patents have locked the core path, they also point out the direction. With our existing R&D capabilities, combined with their patent authorization and core algorithms, we can achieve commercialization in... probably no more than 18 months."

Perhaps worried that this conclusion might seem too frivolous, Mahachi paused and opened an old PDF document from deep within the folder: "Although we haven't had time to verify the validity of China's patent content, many of the key technical points mentioned in it can match our internal research results that have not been made public..."

"No need to be so detailed." Dr. Kania did not look at the old report, but interrupted Mahachi directly: "Even if there is only a slight chance of success for such a key technology that can change the times, we must do our best to stay ahead of our competitors. Your idea is correct."

"But the problem is." He crossed his hands on the table and leaned forward slightly: "Establishing a joint venture with the Chinese...Have you considered the risks?"

When Mahachi heard the word "risk", he almost immediately thought of Jimenez's warning in the conference room.

"Are you referring to possible restrictive bills in the future?" He quickly found the minutes of the previous meeting. "We have discussed this with Ms. Jimenez from the Compliance Department. Even if the bill is passed, it will most likely target the semiconductor field. The risk of a complete ban on basic scientific research equipment is very low... Moreover, even if there is an impact, it should not be a complete shutdown."

Dr. Kania was stunned for a moment, then waved his hands, with a look of confusion on his face: "Policy risk has never been the biggest problem... FEI has survived in the global market today not by focusing on research and development, we have plenty of ways to circumvent those political barriers."

He leaned back in the large leather seat and spoke with the cunning of a veteran multinational corporation: "If it doesn't work, we can use the name of 'Philips Electron Microscope Department' to transfer the FEI partner from the United States to the Netherlands, which will save a lot of trouble."

Mahachi was stunned.

As the technical director, he had never thought deeply about this kind of "identity conversion" operation.

Dr. Kania's thinking is obviously more in line with business rules.

"So...what risks did you mention just now?" Mahachi asked cautiously.

"Technology diffusion." Kania's expression became serious. "The joint venture has many loopholes and may not be able to block all competitors... After all, the owners of those key patents belong to the other party's parent company, not the joint venture subsidiary itself..."

Obviously, what he was worried about was that the Chinese were greedy. They did this in the past when the other side only had the market. Now that they have core technology, it is even more unstoppable.

Mahachi responded immediately: "We have also considered this. The premise of the cooperation is to require the other party to sign the most stringent exclusive terms in the world, strictly restricting Candlelight Technology and its affiliates from using the relevant patents and technologies in any form for any product development or authorization outside the joint venture..."

"Too naive..." Dr. Kania sneered, "Have you heard of the Italian CB Ferrari company?"

Mahachi nodded, but he didn't know why the other party suddenly mentioned a completely unrelated company.

"More than a decade ago, this company also signed an exclusive cooperation agreement with Huaxia, but in the end it still failed to prevent the key linear stepper motor technology and machine tool operating system from being applied to the product lines of other companies in the same industry, especially local Chinese companies."

Kania stood up and walked to the huge French window:

"It can be said that the reason why Huaxia Machine Tool has become one of the four major mainstream systems in the world today is because of its cooperation with CB Ferrari."

In fact, Kania himself did not have a deep understanding of the situation in the machine tool industry. He only heard about it from his peers such as Haas or Koch Group.

But it is enough to arouse vigilance.

"Of course, CB Ferrari was already in danger when it cooperated with China, and was even about to be squeezed out of the ranks of first-tier brands. Therefore, even if China later took over, it still made a profit overall. But it's different for us FEI..."

Mahachi was also shocked when he heard this.

As a technical person, he is more focused on cutting-edge breakthroughs and has little understanding of these "hidden injuries" in the business battlefield.

"This... is indeed a painful lesson. Then we..."

"So..." Dr. Kania turned around and leaned against the window with his hands in his pockets. "It would be best if we could find a way to cut off the application of these Chinese patents and force them to sell the patents to us, or... at least accept a secondary position in the cooperation."

Mahachi's expression suddenly turned awkward.

"I'm afraid this... is almost impossible technically." He sighed helplessly, "They have registered a complete patent family around this TEM-APT integrated system, with a total of more than 70 patents... The three on the table are just the most core ones."

As he spoke, he opened a list of patents on his computer: "These patents cover everything from special alloy sample substrate processing, magnetic field-assisted assembly, laser in-situ induction methods, FIB etching parameter combinations, to needle tip design, manipulation platform structure, and even specific optimization steps for data fusion algorithms..."

"..."

Kania returned to the computer and quickly flipped through the thirty-page introduction document on the screen.

With every turn of the page, his brows furrowed a little more.

"A method for preparing functionally gradient metal matrix composites for in situ TEM-APT analysis"

"Real-time calibration system of three-dimensional spatial coordinates of nano-tip based on laser interferometry positioning"

"Design of a multi-layer shielding structure for suppressing crosstalk between high-voltage electron beam and field evaporation electric field"

……

Each item is precisely stuck at the key node, like a high wall, blocking any possibility of cutting off the source of the problem.

"Indeed...it's very strict." There was even a hint of admiration in Kania's tone.

It is hard to imagine that a company that has never been heard of in the industry in the past can act so flawlessly.

But he still didn't give up.

After thinking for a few minutes, Kania picked up the internal phone on the table: "Ask Alkad to come to my office immediately."

Soon, FEI's legal director, Geniel Alcade, walked in.

This tough, thoughtful executive, a lawyer by training, almost immediately picked up on the subtle mood in the room.

"What happened?"

Dr. Kania briefly introduced the situation, emphasizing Candlelight Technology's strict patent layout and the other party's joint venture intention, as well as his extreme concern about the spread of technology:

"Is it possible for us to use some... um, legal operations to force the Chinese to sell these patents... or at least make them invalid, so that they will accept a cooperation condition that is more favorable to us?"

This request seemed a bit unreasonable at first, but Alkad only thought for a moment and gave a reply:

"Similar operations are rare in our field..." Alkad opened the laptop he carried with him, "but we can learn from the strategies of giants in the consumer electronics field to deal with emerging challengers, or... closer to the point, some successful cases of large construction machinery manufacturers 'clearing' local patent barriers in the Chinese market."

Kania's eyes lit up: "How to do it specifically?"

Alkad opened a document: "The core idea is to take advantage of the desire of various parts of China to attract investment, especially large foreign investment projects, and some... flexibility that may exist in their practice. The operation can be carried out in several steps."

It was a sample of a legal document. It was not complicated and an outsider could understand about 70% of it.

"The first step is to create judicial noise, that is, to activate several white glove companies controlled by us - preferably registered in different provinces with foreign capital backgrounds, and let them file a large number of patent invalidation requests in batches and regions for these dozens of core patents, or directly counter-sue them for infringing other basic patents."

Perhaps he saw the doubts of the other two, he paused and explained:

"The content and evidence of these lawsuits are not important. What matters is the number and persistence of these lawsuits. Dragging the targets into endless judicial procedures will not only greatly consume their manpower and time costs, but more importantly, will label them as 'those with major intellectual property disputes' at the official level."

Then, he clicked on a template for a letter of intent:

"The second step is to immediately submit an attractive 'investment expansion plan in China' to the target company's location after creating enough 'noise' and 'risk'. It should clearly state that we are optimistic about the Chinese market and are ready to invest heavily in establishing an Asia-Pacific R&D center and even high-end production lines, and mention the relevant patents."

"Finally, when the other party was attracted by the huge investment blueprint we drew, the preliminary work was in full swing, and the negotiations on various preferential policies entered a critical stage, we then told the local leaders that the target patents had huge legal risks and instability, and said that this seriously shook our investment confidence and the security of the project landing."

He leaned forward slightly, his tone full of temptation and coercion:

"At this point, the pressure is completely transferred to the other party. In order to keep this investment that can bring huge political achievements and GDP, the local government will spare no effort to put pressure on the company and ask them to remove obstacles to cooperation. The most direct and effective way to remove obstacles is to sell the troublesome patents to the entity designated by us at a reasonable price, or to sign an agreement to exclusively, permanently and irrevocably authorize the patents to the joint venture company."

In just a few words, Mahachi's worldview was shaken.

Arkad closed the document, sat on the sofa and concluded:

"Of course, the specific results depend on the actual situation, but based on past operational experience in the fields of machinery and chemicals, the success rate of this combination of punches is about... 60%. Even if it is unsuccessful, it can usually greatly weaken the other party's negotiating position and force it to make huge concessions on the terms of the joint venture."

"The most important thing is," he pushed his glasses, "the entire process is superficially in full compliance with laws and regulations. The lawsuit is a legitimate civil dispute, the investment is a sincere business behavior, and the expression of concerns is a reasonable risk warning... Even if we fail in the end, there will be no legal handle... At least that's the case for us."