American History 1988
Chapter 180 - 174: The Last Negotiation

Chapter 180: Chapter 174: The Last Negotiation

In August, just when the outside world thought the lawsuit between Byte Company and Bell would turn into a protracted battle.

The two sides suddenly began settlement talks under the auspices of the California Northern District Court, and to everyone’s surprise, they reached a settlement agreement at their initial contact.

According to the statements released by both parties, Byte Company would pay Southern Bell half a million US dollars to obtain the authorization for the upcoming ADPCM technology and its derivative patents.

Also, effective immediately, Southern Bell formally withdrew all its lawsuits against Byte Company, including claims for damages, injunctions against the use of patents, and motions to change the venue, among others.

As soon as the joint statements of the settlement were released, the entire tech industry was in an uproar.

This was totally unexpected, especially since just two days earlier, a spokesperson for Southern Bell had solemnly promised to continue the appeal.

Byte Company, on their part, also said they would never yield and were prepared to respond vigorously to the lawsuit.

But less than a week had passed since the back-and-forth began, and now they had suddenly turned around to shake hands and make peace?

Because the change happened so fast, nobody could react in time.

However, overall, the tech industry still believed that Byte Company had won this legal dispute.

After all, an authorization fee of half a million dollars was nothing compared to the huge compensation of 7.96 million dollars previously demanded by Southern Bell; it wasn’t even close to the same ballpark.

Moreover, the half a million was an authorization fee for Byte Company to use the patents in the future, not compensation.

Literally, Byte Company’s previous actions were not deemed as infringement.

This was crucial, as it relieved most companies in the tech industry, no longer worrying about facing unexpected lawsuits in the future.

Some even thought that the half a million dollars was just Byte Company not wanting the hassle and wishing to end the lawsuit early.

This was how the tech industry understood the lawsuit between Byte and Bell, while newspapers and other media focused on the behind-the-scenes deal between the two.

They had more insider information, with Los Angeles Times even stating outright that Byte Company’s founder, Dean Price, had several private communications with the CEO of Southern Bell, Duane.

What exactly the two discussed was unknown to the public, but it was clear that it was key to the settlement.

After all, half a million dollars was far from enough to sway Southern Bell, this massive entity.

Byte Company’s growth rate was also clear for all to see, as they had established branches or offices in more than half the states across America.

Although they haven’t published a detailed financial report, rumors in Silicon Valley suggested that Byte Company’s sales for the year had already exceeded 65 million US dollars.

This was an incredible number for a company that had been established for less than a year, and the year was just over half over.

One was a local telephone company with tremendous influence in the Southern states, and the other was a rising star in Silicon Valley.

The behind-the-scenes dealings between the two had not only the media curious, but the tech industry was also discreetly inquiring.

Of course, everyone’s reactions paled in comparison to two other companies.

"Duane! You owe me an explanation!" William Kennard, furious like an old lion, nearly crushed the phone in his hand.

"William, it happened just like the newspapers said, we reached a settlement with Byte Company.

It was all under the guidance of the California Northern District Court, as you know, they’ve always been encouraging us to do this."

At this moment, Duane acted as if he were a law-abiding good citizen, merely heeding the call of the federal court.

"Duane, did you make a private agreement with Byte Company? Half a million dollars, ah?!

AT&T offered you 5 million! That’s ten times the pathetic compensation you ended up with! Why?!," Kennard’s rage didn’t subside, it only accumulated more. He could feel Duane was brushing him off.

"William!" After being yelled at several times, Duane also felt his blood boil. "You’ve been using us all along!

This lawsuit has been fronted by Southern Bell from the start to finish, and AT&T hasn’t even made one public statement!"

"Ah, ha~" Kennard scoffed in frustration, "The lawsuit materials were prepared by AT&T, and the lawyers and legal fees were also AT&T’s responsibility.

But guess what, now my dear ally is accusing us of inaction? Duane, is this how you treat an ally?"

"Wow, it sounds like we’ve been terribly wronged." Duane gave a cold laugh, "William, why don’t you check the newspapers!

Who are all the scoffs and mockery aimed at?! Bell octopus, Bell mama, Bell robber, ah?

Because of this case, all the other Bell companies have been protesting against us! And what did we get in return?

Nothing! Maybe Bell should never have been involved in this matter from the beginning; pulling out now is the best choice."

"But Southern Bell could have sold the ADPCM technology to us! 5 million dollars was your take!"

That was also baffling to Kennard. What conditions did Byte Company offer that made it worth Duane’s while to forgo this 5 million dollars?

"William, our collaboration ends here!" Without addressing the question, Duane hung up the phone.

"F*ck!" William Kennard threw the phone down violently.

"Boss?" Hearing the commotion, Ruth walked in and stood at the door peering in.

"Get out! Bitch! Don’t come in without my permission!" William Kennard directed all his anger at Ruth.

Ruth, who had worn a beguiling expression moments before, suddenly froze in place, dumbfounded. Bitch? Was he calling her a bitch?

Thinking back on the deliberate ingratiation and insincere flattery of the past, Ruth’s complexion changed repeatedly like a geometric figure, and she felt waves of nausea.

"Sorry, Boss..." Ruth lowered her head and quietly slipped out.

William Kennard, who was in a rage, didn’t notice any of this; at the moment, he was furiously cursing Duane.

After several months, AT&T had been busy for so long, yet ended up with nothing.

Bell South and Byte Company reconciled? That meant not only had AT&T failed to bring Byte Company into its fold, but it had also wasted a hefty sum on attorney fees.

As for the so-called compensation, William Kennard could already foresee the board of directors’ inquiry.

...

"Dean, are we still allies?" The moment Dave received the news, he had his assistant purchase a plane ticket to the West Coast.

"Of course, we’ve always been," Dean gestured for Dave and Durell to make themselves comfortable, as the housekeeper Lucy had gone to prepare coffee.

This time, the three of them met at Dean’s place in Silicon Valley, which, after all, was a bit closer to Byte Company.

"But you reconciled with Bell, and we didn’t know anything about it!" Dave frantically threw the newspaper on the coffee table.

"Take it easy, buddy," Dean continued after Lucy had brought in the coffee and left, "Our reconciliation with Bell shouldn’t pose a conflict of interest for MCI."

"But..." In his haste, Dave almost said "it does."

Fortunately, he caught himself in time, otherwise wouldn’t it appear that MCI was hoping for Byte and Bell to keep suing each other?

But the reality was indeed related; if Byte and Bell reconciled, then what about MCI? What would happen to the IP telephony business?

It was now obvious that Byte Company no longer needed MCI’s voice encoding technology, as they had acquired the rights to the more broadly applicable ADPCM technology.

Unable to voice his troubles, Dave’s complexion kept changing.

When he came back to his senses, he noticed that Dean was thoughtfully looking at him.

Using the act of sipping coffee as a pretext, Dave hastily regained his composure.

"Dean, there’s just one thing I want to confirm right now; is there still a chance for cooperation on the IP telephony business between MCI and Byte Company?"

The thing Dave was most worried about now was that Byte and Bell had not only reached a reconciliation.

If they even reached a consensus on the IP telephony business, MCI could very well come away empty-handed.

Wow, that question was quite direct; it seemed MCI was truly anxious.

"Dean, this place is really nice. I love the pool and lawn outside."

Seeing the atmosphere turning a bit heavy, Durell had to step in and lighten the mood.

It’s a basic skill of a broker to prevent the negotiation room from becoming too tense.

"Durell, if you like it, feel free to visit anytime. Of course, Dave, you too."

The atmosphere in the living room relaxed considerably thanks to Durell’s interjection.

"I’m curious, Dean. Byte Company has been pouring money into expansion, and yet you’ve managed to buy such a large property.

Mother F*cker, if I didn’t check Byte Company’s financial reports every month, I’d even start to doubt you."

Not just Durell; Dave was curious too. Although property prices in Silicon Valley weren’t as high as in San Francisco, such a large villa wouldn’t likely be secured for less than a million dollars.

According to Durell, Dean hadn’t taken a cent from Byte Company, so where did this property come from?

Faced with their puzzled expressions, Dean shrugged. "I have some business in Ohio that just about helps with the household expenses."

"Just about?" Durrell looked around at the luxurious decor, "Aha, indeed, it barely surpasses all the houses in Pacific Heights."

"Alright, no more jokes," Dean sipped his coffee before returning to the subject at hand.

"Dave, how much sincerity can MCI offer in equity distribution?"

Upon hearing this question, Dave felt a surge of relief; it seemed the worst-case scenario had not occurred.

"30%! MCI will take care of all hardware facilities and customer channel resources; Byte Company will only be responsible for the software technology.

Dean, this is the most sincere offer we have; Byte Company doesn’t even have to pay a penny!"

MCI’s initial terms were 20%, but now that Byte Company no longer needed MCI’s voice encoding technology, Dave had made some concessions.

Moreover, when it came to investments, MCI was indeed bearing the brunt. Even though the hardware facilities were temporarily funded by the National Science Foundation office, what about after that?

And the most precious customer channel resources were almost the core condition for a company’s survival.

After listening to Dave’s terms, Dean pondered briefly before making his final determination.

"35%, and MCI’s voice encoding technology must also be licensed to us for free; this is Byte Company’s final offer," Dean stated.

Without waiting for Dave’s response, Dean emphasized once more.

"This is in consideration of our alliance; it’s our final negotiation, and MCI isn’t the only option for Byte Company!"

After changing expressions a few times, Dave finally nodded determinedly, "Deal!"

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