Shockingly, a counterfeit factory has produced a 3-nanometer chip.

Chapter 151 Charging Qualcomm a Transmission Tax

Qualcomm's lawyers immediately refuted this!

"But the patents you registered have nothing to do with MediaTek."

Shen Fei nodded, indicating that it was indeed alright.

"Those patents were developed by ourselves," Shen Fei said, picking up his teacup and glancing at Paul Jacob. "Mr. Jacob, Qualcomm has been doing communications technology for 30 years."

The time spent on Chuanyin was indeed relatively short, but some things are not simply a matter of who does them the longest.

"Using one's age to act superior is not suitable for the business world, but for children playing house."

He wrote on the whiteboard next to him: The Patent Examination Board is not stupid.

"Since 08, Transsion has been researching multi-carrier aggregation technology."

Some of the technologies were indeed based on Qualcomm's solutions, but all of them were significantly improved.

For example, our engineers found that Qualcomm's standards were not good enough in some scenarios, especially in unstable network environments like those in Africa.

We spent several months developing a new solution that is better suited for Africa.

"And so we successfully applied for a patent."

He turned around and said, "These patents are less about us registering them first and more about us developing them independently."

Qualcomm's lawyer wanted to say something more, but Paul Jacobs stopped him.

I'm not here to argue!

He looked at Shen Fei, his eyes becoming serious.

"Mr. Shen, you just said that you developed it yourself, but as far as I know, you don't have a related R&D department?"

Shen Fei pointed to his forehead: "Mr. Jacob, have you ever heard of the old Chinese saying, 'Make a fortune quietly'...?"

Without a breakthrough, we should naturally prioritize secrecy.

However, last year, your country's engineers were indeed very capable, enabling us to achieve a technological breakthrough, and the next breakthrough is just around the corner.

Jacob's expression changed.

"You poached our engineers, used our technology, and you still say it's not infringement."

Shen Fei smiled and then waved his hand.

"Mr. Jacob, reverse engineering is an industry practice. MediaTek does reverse engineering, SanSang does reverse engineering, we just do it more thoroughly."

Moreover, we're not just dismantling; we're also making improvements.

"As for the engineers, those were 'abandoned' by you, and they joined Transmission voluntarily; we didn't use any underhanded tactics..."

……

When this topic came up, Paul Jacobs didn't know what to say.

Ultimately, he chose to avoid the topic.

After all, this is something that is being done across the entire United States, not just by Qualcomm.

In an economic crisis, the most important thing is to save your own life.

"Mr. Shen, do you know why Qualcomm is coming here?"

Shen Fei looked at him: "It's not a patent. What happened just now was at most an opening, a small show of force from your company."

"Time is tight, let's get down to business."

Jacob nodded.

"Yes, it's not just because of patents."

He looked at Huang Tianya sitting to the side: "It's mainly because of Huaxin Investment."

The office was quiet for a long while, and Shen Fei did not deny it.

After all, this is a fact.

"Huaxin Investment bought Qualcomm shares, last time it was 4.9%. I wanted to talk to Mr. Shen then, but the meeting was postponed because of the MSM8255."

Last month we did another investigation, and the shareholding has changed slightly again, reaching an astonishing 7.5%.

Even for investment banks, this is a very large share.

Although the investments were spread across more than a dozen investment companies, which took us a lot of time, the result was so astonishing that we couldn't have proceeded properly without knowing your perspective.

The reality is far more alarming than Paul Jacobs described; some of these stocks originated from the secondary market, while others came from shareholder acquisitions…

They've revealed their hand directly!

"Mr. Shen, what exactly do you want?"

Shen Fei picked up Qualcomm's investigation documents, shook his head at the end, and then smiled:

"Mr. Jacob, what do you think I want to do?"

Jacob said, "You want to control Qualcomm? Just like you acquired Nvidia, take all the related patents and steal America's fortune."

Shen Fei shook his head: "It's only 7.5%, it's not that serious."

Shen Fei paused for a moment, then revealed his true purpose: "But there's one thing I can do."

"What is it?" Paul Jacob asked anxiously.

"I want you to sit down and talk to me. You should take the initiative to talk to me."

Paul Jacobs calmed himself down; this was indeed the other party's intention.

Although Transsion has many 4G patents, Qualcomm was still the dominant player in the 3G era, which allowed it to maintain a leading position.

That afternoon, the two sides talked for four hours, but Qualcomm did not gain the upper hand and at one point was even led by the nose by Transsion.

The final agreement was that Transsion would acknowledge Qualcomm's fundamental patents and pay reasonable licensing fees.

Qualcomm acknowledges Transsion's patent...

Cross-licensing.

Transsion is prohibited from further increasing its stake in Qualcomm. In return, Qualcomm can cancel the Qualcomm tax levied on Huaxin.

Qualcomm tax is a common term in the industry; it is essentially a licensing fee for Qualcomm's 3G standard essential patents.

The shady part about this patent collection model is that it doesn't sign patent licenses or sell chips; instead, it charges 5% of the wholesale price of the entire machine.

Including the complete CDMA/WCDMMA package, the commission is indeed very high.

Based on the price of the fruit, each machine would cost approximately $25, which is equivalent to more than 100 Chinese yuan.

Even if MediaTek chips are used, the delivery will still be made without fail.

Without paying this Qualcomm tax, there will be no chips available.

Now that they have Motorola's patents and Transsion's self-developed 4G and 3G related patents, after settling accounts, Huang Tianya walked over and whispered a few words in Shen Fei's ear.

Shen Fei smiled after hearing this.

"Mr. Jacob, according to the current agreement, Transsion needs to pay Qualcomm a patent fee of $18 per Transsion phone, but..."

Qualcomm needs to pay Huaxin $21.5 for each chip.

In other words, Qualcomm has to pay Transsion $3.5 for each chip it produces.

Jacob's expression changed, and he looked at his lawyer, whose team immediately did the math.

This problem is a bit complicated, and about an hour later, his expression changed.

"That's impossible."

Huang Tianya pushed over more detailed documents.

"This is the global licensing status of Huaxin's patents; Nokia, Ericsson, and MediaTek are all using them."

He looked at Jacob: "The chips your company sells also use these technologies."

Jacob quickly picked up the documents and began flipping through them page by page.

Ultimately, it was proven that what Huang Tianya said was true.

Qualcomm needs to pay an additional $3.5 to Huaxin Investment, which is about 15% of the chip cost.

Not fatal, but it hurts to see you suffer.

After all, they're the ones who always collect patent fees from other companies; no other company ever collects from Qualcomm...

Besides that, there's this blunt knife... Qualcomm pays Transsion $350 million for every 100 million chips it sells.

Moreover, they can receive shareholder dividends and charge reverse fees, making a double profit and putting the lion's share of the profits in their own hands!

So he's become a wage earner.