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Now that the release of the Lemon 4 has been finalized, Suning called Robert, the legal director, and Lisa, the strategic investment director, to its office.

"There's something more important than selling computers," Su Ning said bluntly, pushing a stack of documents onto the table.

Robert picked up the document and looked at it; it was a list of various technology patents.

"This is……"

“We need to buy patents, the more the better,” Suning said bluntly. “While our competitors are still reeling from the blows, we need to hurry up and stock up.”

Lisa frowned: "Boss, we do have money in the account, but buying patents... is it worth the money? We might as well expand production or invest in research and development."

“You’re wrong,” Su Ning shook his head. “If we don’t stockpile patents now, we’ll be held hostage in the future. Let me ask you, whose patent is the 6502 chip we’re using right now?”

"From MOS Technology".

“What about graphical interface technology? Floppy disk drives? Even keyboard layouts, motherboard designs… these all have patents.” Suning stood up and paced around the office. “The market is chaotic right now, small companies are going bankrupt, and large companies are shrinking. It’s the perfect time to acquire patents at low prices.”

Robert understood: "Are you afraid that someone will sue us using the patent in the future?"

“It’s not just about being afraid of being sued.” Suning sat down. “What I want is to take the initiative. If Lemon wants to grow bigger in the future, it will definitely encounter patent barriers. Rather than spending a fortune to buy licenses later, it’s better to stock up now while they’re cheap.”

"understand!"

"Go! This is our Lemon's strategic mission this year."

"Yes! Boss."

……

The following day, the Strategic Investment Department established a "Patent Acquisition Team," personally led by Lisa.

Our first stop was a recently bankrupt computer company in Silicon Valley called "StarCraft".

After their bankruptcy, their assets were taken over and auctioned off by the bank.

At the auction, Lisa raised her paddle.

"All of Star Technology's technology patents are bundled together, including three motherboard design patents and one power management patent..." the auctioneer read from the list, "Starting bid: $50,000."

There were very few people holding up signs in the audience.

Most buyers only want physical assets—machinery, factories, and inventory.

"Fifty-five thousand." Lisa raised her sign for the first time.

"Sixty thousand," someone echoed.

"Seventy thousand," Lisa raised the price.

"Eighty thousand."

"One hundred thousand." Lisa immediately pushed the price to the maximum.

The audience fell silent.

Many people think it's not worth spending 100,000 yuan on a pile of "paper".

"Ten thousand for the first time, ten thousand for the second time... Sold!"

Lisa closed her first deal.

On the way back, the assistant asked, puzzled, "Lisa, are these patents really worth 100,000? Star Technology hasn't even made it big yet..."

“The boss said it’s worth it.” Lisa flipped through the list. “Look at this power management patent, it can reduce power consumption by 30%. If we use it on the Lemon 5, the laptop concept can be realized.”

"notebook?"

"The boss said that future computers should be portable, like laptops. Power saving is key."

The assistant still didn't understand, but didn't ask again.

Over the next month, the patent acquisition team attended seventeen auctions and acquired all the patents from eight bankrupt companies.

They obtained more than 200 patents for less than one million US dollars.

Some patents seem useless now, but Suning insists: "Buy them regardless of their usefulness. Who knows if we'll need them in the future?"

Robert was in charge of another line, directly poaching people.

His target is not ordinary engineers, but individual inventors who possess core patents.

The first target was Carl Miller, a retired engineer in his sixties.

He holds a key patent: high-speed data transmission technology.

Robert paid a visit and they talked in Carl's living room.

“Mr. Miller, we at Lemon Technology are very interested in your data transmission patent.”

Carl was wary: "You want to buy a license?"

“No, I want a buyout,” Robert said clearly. “A one-time buyout, and the patents will belong to us from now on.”

“Buying it out is very expensive,” Carl said. “My technology could be worth millions in the next ten years.”

“It might be worthless,” Robert said realistically. “Your patent has been registered for five years, and no one has used it commercially yet. Why? Because computers are slow now, and high-speed transmission isn’t needed. But it might be needed in the future—or it might never be needed.”

Karl remained silent.

“We’ll offer $200,000, in cash,” Robert quoted the price. “Think about it, you’re already seventy years old. $200,000 is enough for you to live comfortably in your old age. If you wait for the future, you might die before anyone buys it.”

This price impressed Carl.

He hesitated for two days before agreeing.

Suning was present in person on the day of the signing.

“Mr. Miller, thank you.” Suning shook hands. “By the way, do you know any other engineers who hold patents? We are acquiring them.”

Carl thought for a moment: "I have an old friend named Hans, who used to work at Texas Instruments. Before he retired, he registered several patents related to memory management..."

"Can you introduce me? If the deal goes through, I'll give you a referral fee of 5% of the patent price."

"Okay! I'll contact them."

In this way, by "finding people through people", Robert's team recruited twelve retired engineers and bought out more than thirty core patents in two months.

It cost more than four million US dollars, but Suning felt it was worth it.

“These patents are cutting-edge technologies now, but they may be standard equipment in five years,” he said at an internal meeting. “If you don’t buy them now, you may have to pay ten times the price in five years.”

……

The most difficult negotiations are with giants like IBM and HP about patent transfers.

Lisa led a team to IBM headquarters in New York to meet with the head of the patent licensing department, a middle-aged man named Johnson.

“Ms. Lisa, let me be frank,” Johnson said arrogantly. “IBM has tens of thousands of patents, but they are not for sale. We can license them and charge a usage fee each year.”

“We want to buy out patents in specific areas,” Lisa said, “such as graphics display technology, data storage architecture…”

“Impossible,” Johnson refused outright. “These are IBM’s core technologies, not for sale.”

The first negotiation broke down.

HP is slightly better, but not by much.

HP's patent director, Davis, was quite pragmatic: "Ms. Lisa, HP can sell some of the patents, but the price... won't be cheap."

"Name your price."

Davis pulled out a list: "These twenty patents, a package deal, are worth eight million dollars."

When Lisa looked at the list, it was indeed full of good patents, but eight million was too expensive.

"Five million," she bargained.

"Seven million is the lowest I can get."

The final price was 6.5 million.

This is Lemon Technology's largest patent acquisition to date.

After signing the contract, Davis asked curiously, "Why are you buying so many patents? A lot of the technology is no longer needed."

Lisa answered according to Suning's instructions: "Our boss likes to collect technology. He said that the future belongs to those who are prepared."

"Okay! I hope you guys keep having good luck."

All the acquired patent documents filled Lemon Technology's newly established "Patent Archives Room".

Suning personally led his team to organize the documents. "Classify these patents," he said, pointing to the mountain of files. "Hardware patents in one category, software patents in another, basic algorithms in another, human-computer interaction in another..."

After the classification was completed, the patent map became clear.

Lemon Technology currently possesses:

Hardware-related patents: 428

Software algorithm patents: 215

Storage technology patents: 89

Display technology patents: 76

Human-computer interaction patents: 53

Other miscellaneous items: 112 items

A total of 973 patents.

Robert stared at the numbers in disbelief: "Boss, we're almost a patent tycoon with a thousand patents. Just maintaining these patents costs hundreds of thousands in government fees every year."

“It’s worth it.” Su Ning pointed to the blank space on the map, “but it’s not enough. Look here, in network communication technology, we only have three patents, which is too weak. Here, in wireless transmission, we don’t have a single one.”

"Those technologies are too advanced, aren't they? Computers are still standalone these days..."

“The era of standalone computers won’t last forever,” Suning said. “Computers will eventually be connected. If we don’t plan ahead now, we’ll have to pay patent fees to others when the internet age arrives.”

He instructed Lisa: "Next, focus on acquiring patents related to networks and communications. Also, go to university labs; many professors have forward-looking research results, but they haven't been commercialized. We'll buy them."

"Yes! Boss."

Lisa visited MIT, Stanford, and Berkeley, meeting with professors in the computer science departments.

Most professors are not interested in money; they care more about their academic reputation.

But there are always exceptions.

Mark, a young professor at Stanford, was researching "packet-switched networks," a forward-thinking concept that later became the foundation of the Internet.

"Professor Mark, have you applied for a patent for your research findings?"

“I applied, but…” Mark smiled wryly, “nobody was interested. The phone company thought it was too complicated, and the computer company thought it was unnecessary.”

“We are interested,” Lisa said. “Lemon Technology wants to buy this patent.”

"Do you really think it's useful?"

“It may not be useful now, but it will definitely be useful in the future.” Lisa relayed Suning’s words: “Our boss said that the internet will make the world smaller.”

The price was negotiated smoothly. Mark needed research funding, so he sold the patent for $100,000.

As it turned out, this was Lemon Technology's most worthwhile investment.

This patent became the foundation for future Lemon Networks devices, increasing their value several thousand times over.

Professor Marian of Berkeley is even more special; she studies "multitasking in graphical user interfaces".

“My research allows a single computer to run multiple programs simultaneously,” Marian demonstrated. “For example, you can write a document, listen to music, and print a file all at the same time…”

“We desperately need this!” Lisa’s eyes lit up.

Although the Lemon 4 is advanced, it is still a single-tasking system, meaning it can only run one program at a time.

They eventually bought out the patent for $250,000.

The later Lemon OS 4.0 implemented multitasking based on this technology.

……

Meanwhile, news of Lemon Technology's aggressive acquisition of patents had already begun to spread.

At an internal meeting, HP's Davis warned: "Lemons are hoarding patents, and they specifically target cutting-edge technologies that are not currently needed. What are they trying to do?"

no one knows.

IBM's Johnson was even more dismissive: "Let them buy! Buying more patents is useless if they can't make good products. IBM has the best engineers who can develop new patents at any time."

But DEC (Digital Equipment Corporation) became alarmed.

They sent in commercial spies to investigate and discovered that lemons have a very broad patent portfolio.

“They’re playing Go,” DEC’s CEO said at a board meeting. “They’ve taken positions and laid out the entire board in advance. When we’re about to make our move, we find that everything around us is their territory, and we can’t move.”

"Then what do we do?"

"We'll buy it too! We can't let lemons monopolize all the technological routes!"

It's a pity it's too late.

By the time DEC took action, most of the high-quality patents on the market had already been swept up by Lemon.

The remaining patents are either worthless or exorbitantly priced.

DEC ultimately only acquired a few dozen peripheral patents, while its core areas were blocked by Lemon.

……

At the end of 1973, Lemon Technology held its annual strategy meeting.

This was the first formal presentation by the patent department.

"To date, we have 1274 valid patents and 356 pending applications," the patent officer said, displaying a chart. "In the field of personal computer-related technologies, our patent coverage exceeds 40%."

"Be more specific," Su Ning said.

"For example, in motherboard architecture, we have 21 core patents, covering 70% of mainstream designs. In graphics display, we have 18 patents, covering the main technological paths from character display to color graphics. And then there's storage technology..."

The executives were shocked upon hearing the report.

Jack whispered to David, "We've quietly become patent giants."

David nodded: "The boss is visionary. Now anyone who wants to make a personal computer has to go around our patent wall."

After listening to the report, Suning asked the key question: "If a company wants to make a product similar to lemons, can they circumvent our patents?"

The patent officer thought for a moment and said, "It's difficult. Unless they develop a completely different technology system from scratch, but that would be too costly and take too long. By the time they finish it, our new product will have already been released."

"Good." Su Ning said with satisfaction, "This is the effect I wanted."

He looked at all the executives: “Remember, technological leadership is temporary. Today, Lemon 4 is ahead, but it may be surpassed next year. But patent barriers are long-term. As long as our patent wall is high and thick enough, latecomers will not be able to climb it.”

"That's why we're going on a patent acquisition spree—not to sue others, but to protect ourselves. To discourage newcomers, or force them to take the path we allow."

"Yes! Boss."

After the meeting, Suning kept Lisa behind alone.

“Patent acquisitions cannot stop,” he said. “The next two directions are: first, basic science patents—materials, energy, and biotechnology. They may seem unrelated to computers, but they may intersect in the future.”

"Second, international patents. We want those registered in the US, and we also want those registered in Europe and Japan. A global presence."

Lisa asked, puzzled, "Boss, aren't we temporarily not going into the international market?"

"We'll have to do it sooner or later," Suning said. "Besides, it's cheap to buy international patents now. If we wait until we expand into Europe and Japan, the price will be sky-high."

"Do you have enough money? We've already spent nearly 20 million on patents this year."

“That’s enough.” Suning was certain. “The monthly profit of the Lemon 4 model is eight million. It’s worthwhile to use one-third of it to buy patents. This is an investment in the future.”

Lisa nodded and went to carry it out.

As she walked out of the office, she looked back at Su Ning...

He was standing in front of the patent map, looking at it like a general examining a battle map.

At that moment, she understood.

The boss doesn't want the success of just one generation of products.

What he wanted was to build an empire, an empire built with patents and technology that was difficult for others to shake.

And this empire-building process has only just begun.

The only advantage I have over those industry giants is my God-like perspective; if I still can't seize the initiative, I'm probably pretty useless.

...(End of chapter)