The New Taste (3)
After the tasting session concluded, we gathered in a conference room on the second floor of the school building. Surrounded by a large pizza, we focused on filling our stomachs first.
“Mmm... this is actually pretty good.”
Armando, munching on a slice, flipped the pizza box over and spread out the stack of evaluation sheets with his clean left hand. In the past, looking through these sheets felt like watching a horror movie—my heart would pound with anxiety—but today, Armando’s movements were swift and confident.
And the expressions of our friends watching him held no tension at all.
“It’s definitely different from yesterday. Everyone’s reaction is positive. They’re even asking when this is going to be sold.”
Jacob, who was eating pizza with me, asked, “You said earlier that we should handle the patents before the official launch, right? Which patents were you talking about?”
“There are a few. Things like the stabilization process for the light fruit soju, or the hybrid distillation process that links the pot and column stills.”
“I have no idea what you’re talking about.”
“It sounds complicated, but it’s not that difficult once you understand the content. Well, it’s certainly not something you can think of easily. We’ll file a Provisional application first, and then the Non-provisional within 12 months.”
If we had better equipment, we could have filed for patents with even higher technical standards, but this alone would make it difficult for major liquor conglomerates to easily muscle in.
“So, is patent registration the first thing we need to do?”
“Yes. And while we’re at it, we need to expand our facilities.”
As Jacob nodded, Chloe chimed in.
“Then, whose name will the patent be under?”
At Jacob’s startled look, Chloe spoke calmly and firmly.
“I know Brian owns 30% of Golden Grain Soju House, but I think patents are a bit different. To be clear, I think Brian should file the patent, and Golden Grain Soju House should pay the patent fees and hold the exclusive rights.”
“No...”
Personally, I didn’t think it was necessary to go that far. Since the royalty fees paid to me would reduce the company’s profits, my dividends would decrease. While it’s obviously more advantageous to receive separate royalties, I wondered if it was really worth all this trouble...
“Yeah, I think you’re right. My dad said something similar before, and my mom always told me that when friends do business together, everything should be clearly laid out in a contract. So that no one’s feelings get hurt. Like Chloe said, you filing the patent and me using it to make the liquor seems like the perfect arrangement.”
It was clear that this was where the cultural differences between the U.S. and Korea manifested.
“Well, if that’s the case... I have no complaints. I’ll take care of the patent application. You just go ahead with the facility expansion I told you about.”
“Alright. I’ll do that.”
I started writing on the whiteboard with a black marker to explain.
“First, we need a Mixing Tank. At least 200 liters or more. We also need an RO Unit (Reverse Osmosis) that can purify 500 to 1,000 liters a day, a Chiller, and a Microfilter Housing... you already have a semi-automatic bottler, right?”
“Yeah. We have that.”
“This should all be resolved in about two weeks. Since most of the equipment suppliers are gathered in Napa or Sacramento, it won’t be hard to find them.”
“I can just ask the place that handled our winery equipment, and it’ll be solved immediately. But wait, aren’t the recipes included in the patent?”
“It’s better not to include the recipes. We should just keep those a secret. Secrets are more reliable than the law.”
I drew a line on the whiteboard.
“This side is the ‘Process,’ meaning how it’s made. We lock this with a patent. And this side is the ‘Ratio’ or ‘Blend,’ meaning what and how much goes into it. We intentionally leave this out of the patent. The moment you patent something, the raw materials, ratios, process order, temperature, and time are all made public. Once a certain period passes, anyone can use them.”
“Oh... I see. Then what if someone copies our process later?”
“We sue them immediately.”
At my words, Jacob began to polish off his pizza with a satisfied smile.
After finishing our work at school, I returned home and began preparing for the patent registration. There was a lot to do, especially since I had to manage the bottling and shipping of Ceracia simultaneously, but I didn’t feel tired at all.
Even with the high workload, because everything was proceeding by my own will, it didn’t feel like a burden.
A few days later, I spoke with a patent attorney. The attorney’s voice over the speaker was fast and clear.
“Hello, Brian. You’re planning to file the Provisional Filing today, right?”
“Yes, if possible, today. Hybrid distillation, stabilization process, filtration method, device structure, and aroma protection. Five items, right?”
“Excellent. You just need to include the values and sequences in the specification. For example, ‘alcohol concentration 38~43%’... you know what I mean, right? Those numbers are crucial.”
“Yes, I’m aware. Please take good care of it.”
After submitting the patent application, I headed to Jacob’s distillery. The vast rice fields of Sacramento, nearing December, were filled with a desolate feeling, but in my heart, it felt as if spring had already arrived.
“Welcome! I’ve been waiting.”
As soon as Jacob saw me, he showed off the steak he had prepared in advance. He had been bragging about buying a new barbecue grill just a few days ago, and he was already putting it to good use.
“Eat up, Brian.”
“This is the Ceracia we’re launching soon. I’ll leave a case for you when I head back.”
When I presented the first Ceracia of the year, Mrs. Maggie’s eyes widened.
“Oh my, I heard this is all the rage these days?”
“Haha, it’s great for gifting to people around you, and it pairs well with seafood or meat.”
“Why don’t you two have some now?”
“I have to drive back, so it’s hard to drink more than half a glass.”
Mrs. Maggie’s cooking wasn’t bad at all; after finishing the steak she made, along with corn and potatoes, I went up to Jacob’s room and pulled a file folder out onto his desk.
On the cover of the folder, the words Redwood Lab Holdings LLC were written in bold letters.
“What’s this?”
“It’s a new company. A research corporation that I own 100%.”
I opened my notebook and said, “The fruit soju made at Golden Grain will be produced by borrowing the technology from this research corporation.”
“Oh, I see. You created a corporation, not just an individual entity.”
If you file a patent under an individual’s name, royalty income is all treated as personal income, leading to higher tax rates. However, by registering as a corporation, intellectual property income can be treated as corporate income, allowing for the deduction of research expenses, equipment purchases, and consulting fees. In other words, it’s essential to establish a corporation because it reduces actual taxes and facilitates capital circulation.
“You’ve already understood the structure, so I don’t need to explain further, right?”
“I’m not an idiot. I know it well.”
“Hehe, right. It’s a contract I prepared, so take a look.”
I took out the contract I had prepared from the folder.
“First, we have the exclusive right to produce soju and soju-based fruit soju products ‘only in North America.’
Second, in return, we pay 4% of net sales to Redwood Lab as a royalty.
Third, we set a minimum guarantee of $80,000 for the first year, $140,000 for the second, and $200,000 from the third year onwards. This is a bit intense, isn’t it?”
“Read further down. It says if the sales are insufficient, you don’t have to pay it.”
“Ah... so it does.”
Jacob, who had been holding his breath, looked over the contract again. Calculations were running rapidly in his head. 4% wasn’t large. In fact, the conditions were better than those of other distributors.
“This is fine.”
He believed that if they could generate additional sales with fruit soju on top of the current sales from The One, they could sufficiently handle these conditions. In any case, the 4% royalty for the patent wasn’t that burdensome.
“Are you really okay with it?”
“Yeah, I think I can handle it. And to be honest, from the beginning until now, you’ve planned out all the business strategies. You even came up with the idea for the fruit soju. This much isn’t a waste.”
“I’m grateful you think that way.”
“I’m the one who’s grateful, what are you talking about? I just sign here, right?”
With that, Jacob confidently finished signing.
In mid-December, Ceracia, the third product from Redwood, was launched, once again increasing the numbers in my bank account. By the end of the year, Ceracia was placed on every shelf in department stores, and the golden ribbon hanging over the glass bottle sparkled under the lights.
Chloe, Armando, Jacob, and I enjoyed some shopping at the department store before gathering at the Redwood Winery.
Now that the year’s farming was finished, everyone had some free time to enjoy a relaxed evening, but Jacob and I had one more schedule.
“Brian! A guest is here.”
My dad’s voice echoed, and soon after, a familiar voice drifted into the aging room.
“To see your friends again, it is a joy beyond words. I think this is another gift for the end of the year. Hahaha!”
It was Malcolm Lee of Unity Spirits, who distributes the vodka The One from Golden Grain Soju House.
“It’s been a while. Please, have a seat.”
He sat down with a curious yet expectant look, wondering why these four friends had called him.
Seeing his gaze, we looked at each other and shared a mysterious smile before pulling a transparent glass bottle from a bag.
“We’ve created a new liquor.”
“Vodka?”
As he tilted his head at the clear bottle, I took out a soju glass, opened the cap, and poured the drink.
“Rather than an explanation, just drink it first.”
In the U.S., people generally don’t accept unknown drinks from others. Because drugs are common enough in the U.S. that people are warned to keep an eye on their drinks, but given the situation and the fact that we were at a winery, he drank it without hesitation.
“Umm~”
As soon as he drank it, his eyes widened. He downed the rest of the liquor in the glass in one go and then savored the rich peach aroma lingering in his mouth.
“What is this? It’s not a soft drink... but it’s really delicious?”
As he enjoyed it, my friends laughed as if they had expected it. I poured more into his glass and said, “The drink you just had is fruit soju. We made it.”
“Fruit soju?”
“Yes. It’s a drink made lightly for people who don’t like liquor with a strong alcohol scent. But don’t think it’s weak just because it tastes like fruit. It’s a whopping 13 percent.”
“13 percent... you’d get drunk quickly if you sipped on this, wouldn’t you?”
“Exactly. I bet there won’t be a better ‘hook-up’ drink than this on college campuses.”
Having tasted it again, he wore a deep smile on his lips and said, “Haha, this is insane. It’s a drink that feels like a joke, but I can’t say it lacks marketability. Young people are going to go crazy for this, aren’t they?”
“Exactly.”
I even pulled out the label I had prepared in advance. The label that read ‘The One – Peach Light Soju’ looked as refreshing as real peach juice.
“Peach-flavored soju... this isn’t wine, and it isn’t vodka.”
“To be precise, it’s in between. The alcohol is 13 percent, the aroma is as light as fruit wine, and the finish is smooth.”
Malcolm opened the lid to smell it and wrinkled his nose.
“This is basically a soft drink.”
“That’s the point. A drink that’s like a soft drink.”
He rubbed his palms together and even smacked his lips. I could immediately feel how excited he was.
“If you were to grant the rights, how would you plan to distribute it?”
He didn’t ask for contract terms first, but rather about the distribution strategy. Malcolm, not wanting to miss this opportunity, didn’t answer immediately; he thought for a moment before opening his mouth.
“This fruit soju is definitely a product that will sell, but it’s hard to know the feeling before tasting it. I think we need to hold promotional events to form the market first.”
His opinion was an idea I had already considered. So, I didn’t think handing over the distribution rights to his company was a bad choice.
“Good. Then I’ll give you three days. Please come up with contract terms and make a proposal.”
Malcolm realized then that he couldn’t sign the contract right away. Hearing that another round of competition remained, he nodded instead.
It was because he thought that if it were such a good item, there was no way there wouldn’t be competition.
“Alright, I’ll do that. I’ll be back in three days.”
He stood up immediately, tapped the transparent fruit soju as if it were his own, and left.
“Are you going to make them compete?”
When Chloe asked, I smirked.
“No... I just thought I had to say that to get better conditions. Since they distribute The One, it’s better if they distribute the fruit soju as well.”
“Ah...”
I became incredibly curious about how the people who tasted the fruit soju would react.