Hearing Zhao Zhaoxin's words, Ogier and Lassiter looked at each other. Ogier was silent for a second, then nodded and said: "In this case, we can exclude Chinese companies. However, when paying,
Patent fees should also be reduced."
As Zhao Zhaoxin guessed, Ogle and Lassiter came to China this time for the two-step fermentation method of the Institute of Microbiology.
The two-step fermentation process was invented by Chinese scientists. It has been applied in several pharmaceutical factories in China as early as ten years ago and has achieved certain results. Related papers have also been published in several international academic journals.
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In this era, China's scientific research level ranks relatively low in the world. After the publication of papers by Chinese scholars, it attracted some attention in the international academic community, but the industry did not pay too much attention to it.
The Wright's fermentation method is the main process for the production of vitamin C nowadays. After nearly 50 years of development, this process has become very mature. In the international market, the production of vitamin C is mainly monopolized by several companies such as Lowe's, including several companies in China.
Although a number of small companies, including several pharmaceutical manufacturers, can produce small amounts of vitamin C, they do not pose any threat to international giants such as Lowe's.
Lowe's regards vitamin C production as a "cash cow" that can continue to provide profits, and does not intend to invest more efforts in process development. When he first saw the paper on the two-step fermentation method published by Chinese scientists, Lowe's
The company's technical department just laughed at it and did not think it was a new technology worthy of attention. After all, Chinese scientists also mentioned in the paper that there are still many flaws in this process.
This went on for several years, until last year, Chinese scientists applied for a patent for the two-step fermentation method at the International Patent Organization and published a new paper introducing some process improvements in the application of the two-step fermentation method.
The company's management was concerned and ordered the technical department to evaluate the application prospects of this process.
Lowe's technical department carefully studied the papers and patent documents of Chinese scientists and submitted a report, believing that the two-step fermentation method "has a certain possibility" to become a competitive new process. If Lowe's competitors take the lead
The use of this process will pose a threat to Lowe's position in the vitamin C market.
With this conclusion, Lowe's could no longer ignore the two-step fermentation method. After discussion, the management came up with a plan, which was to buy out the patent and then shelve it.
Using the two-step fermentation method to replace the Leyster fermentation method requires replacing a large number of equipment, which is uneconomical for Lowe's. All Lowe's has to do is to prevent other companies from adopting this process.
The management has also discussed the cost of buying out the patent. The market size of vitamin C is US$1 billion a year. For a new process that can effectively reduce production costs and improve production efficiency, the patent value is estimated to be tens of millions of US dollars.
reasonable.
However, considering that China is a developing country and China has a reputation in the international industry for not paying attention to the value of patents, Lowe's management set a broad price for this patent procurement case and instructed the chief representative of Asia
Ogier went to negotiate with the Chinese side and acted accordingly.
The purpose of Lowe's acquiring the two-step fermentation patent is to prevent competitors from using this patent. In Lowe's mind, the only competitors that can be called competitors are several pharmaceutical giants from the United States, Europe, Japan, and China.
Enterprises are not within their scope of consideration.
As the chief representative of Asia, Ogle is based in Japan, but he has also studied the situation in China. Before departure, he discussed with Lassiter and believed that they should buy out the patents from the Chinese and ban several companies.
It is possible for international pharmaceutical giants to use this patent, but it is somewhat difficult to prevent Chinese companies from using this patent.
The reason is also very simple. China is a country dominated by state-owned enterprises. The Institute of Microbiology and several pharmaceutical factories in China are state-owned institutions, which is equivalent to a family. How can it be possible to target one's own family when a patent prohibits such a thing?
Regarding this point, the headquarters also explained when assigning tasks to them, that is, it does not care about authorizing Chinese companies, because... several pharmaceutical companies in China are just ants in front of Lowe's. Who cares whether the ants can do it?
What about calculus?
Of course, as a negotiation strategy, Ogle still needs to prohibit Chinese companies from using this patent as a condition at the beginning. This is also a negotiating weight, isn't it?
Hearing that Zhao Zhaoxin was really concerned about the licensing issue of Chinese companies, Oger pretended to be reluctant, and while agreeing to Zhao Zhaoxin's request, he pushed down the already severely underestimated licensing price.
"To what extent should we reduce it?" Zhao Zhaoxin asked.
"$80,000," Ogle said.
Zhao Zhaoxin smiled: "Mr. Ogle, I'm afraid Lowe's is lacking in sincerity in proposing such a quotation. We have calculated that the two-step fermentation process can reduce the production cost of vitamin C by more than 15%. This is based on the current lack of
Immature technology and small batch production.
"Lloyd's is a large enterprise with a large production scale and strong process optimization capabilities. I believe that after adopting the two-step fermentation method, Lowe's can reduce production costs by at least 20%.
"Low's currently produces 50,000 tons of vitamin C per year. Based on a production cost of US$7,000 per ton, reducing production costs by 20% means saving US$70 million per year. The exclusive licensing fee is only US$80,000, right?
Too low?"
Ogle frowned. Zhao Zhaoxin’s algorithm is not much different from Lowe’s internal algorithm. If this process was proposed by scientists from the United States or Japan, Lowe’s would indeed have to come up with a few dollars to obtain the exclusive authorization.
Only tens of millions of dollars would be enough. With an asking price of 100,000 or 80,000 U.S. dollars, not to mention whether the other party would be annoyed or not, Lowe himself would blush.
The key reason why Ogle proposed such a low price before was that he felt that the Chinese people were not knowledgeable about the business. He might have happily agreed to such a price of US$100,000. Lowe's is a large company with annual sales of more than US$30 billion.
Enterprises, but why not save money when you can? Why not bully honest people who can be bullied?
But who would have thought that the Chinese man in front of him, whose total attire does not exceed 30 US dollars, is actually a knowledgeable person who can calculate the accounts clearly with just one mouth. How can he deceive others?
"So, according to Mr. Zhao's wishes, how much do you want?" Oger changed his strategy and wanted to listen to the other party's bid.