How much could SawStop get in royalty payments? The answer here.

[Handplanesandmore]

(98)  IEc, 2016b at 14. Staff also spoke with Dr. Gass on November 26, 2015, who indicated that SawStop would accept royalty payments of 8 percent of a saw's wholesale value if a rule is mandated requiring AIM technology on all table saws.

https://www.regulations.gov/document?D=C...-0074-1154

The parent co. of Festool would be the recipient of the payments, of course, if those payments are made.

Simon

[Robert Adams]

Interesting. So Gass is basically a mafia kingpin getting the govt to force companys to use his product and pay him for it.  Is not legal for him to force them so he has the courts do the dirty work for him to make it legal. Its unfortunate that oir courts get used for mafia tactics.

[Handplanesandmore]

Dr. Gass and TPI are twin brothers as TPI now is mobilizing people to submit comments against the proposed safety improvement. Do we really (or naively) think TPI (and its members) are trying to save money for the consumers? It's just business -- for both sides.

Interestingly, before this payment info. was made public, many people against the SawStop owner were saying Gass was asking for the sky and that was why his technology offer was refused. 8% or even 10% wasn't much. The refusal by TPI to adopt the finger saving technology resulted in the creation of their own biggest enemy: SawStop has become the most selling cabinet saws in North America.

Had Dr. Gass given up and not set up his own company, CPSC today would not have been considering a law to make AMI technology mandatory for all new saws, just like the introduction of airbags and seatbelts in our cars.

The new owner of SawStop has had foresight.

Simon

[fixtureman]

Even at only 8% that would be way to much for a saw after they have to redesign it and add the features.  A $ 500 saw would end up being more like $800

[EricU]

yeah, 8 percent is a huge ask, even on wholesale price.  If they were supplying parts, it would be a different matter

[Handplanesandmore]

My bro-in-law is in the LED business (he got rich because he entered the market before everyone else). His mark-up in early days (7 years ago?) -- for illustrations, not the exact figures:

Imported $2 a bulb, wholesale $3 to retailers who sold them for $8

Later, everybody joined the bandwagon:

Imported $1 a bulb, wholesale $1.5 to retailers who sell them at $4 - $5. Some sell them now at $2 a bulb during promotion events.

He says when you see a LED bulb selling $2 a pc at Lowe's or Home Depot, the LED business for people like him is dead. He is sourcing a different "first-wave" product for imports (can't tell you what it is here, of course). He got rich like Dr. Gass for being insightful about the market.

8% royalty payments are a lot?!!!


No wonder most woodworkers are not entrepreneurs, like Dr. Gass, or my bil.

Simon

[Handplanesandmore]

Even at only 8% that would be way to much for a saw after they have to redesign it and add the features.  A $ 500 saw would end up being more like $800

Competition will work its wonder. I am sure if the AMI became the standard, saw manufacturers would find a way, including outsourcing if it has not been done yet, to offer saws at different entry prices. Look at today's mitre saw market where saws can be had from $200 to $1500.

I can only imagine if AMI became the gold standard, more tools would follow suit, like the bandsaws and mitre saws or even the circular saws...etc. The net benefits would be much bigger than what is put forward int he CPSC paper.

Fight the safety revolution or be part of it...your free choice, of course. I am 100% for it.

Simon

[Cecil]

Even at only 8% that would be way to much for a saw after they have to redesign it and add the features.  A $ 500 saw would end up being more like $800

The way I read it, he is not asking for 8% of his technology, but 8% of the whole saw.  This is exorbitantly high.  This means Gass makes more money for his technology I I want a saw with cast iron wings rather than stamped wings.  The more features I add to the saw, the more Gass extracts.  Yet his technology has nothing to do with the wings, the fence, etc.  Hmmm.  Am I missing something?

[Handplanesandmore]

The new owner of SawStop could be wondering if 15% should be the right %, if and when AMI became the new standard. Festool is known to be increasing prices year after year and if that was a valid guide, the 8% floated by Gass in 2015 should go higher by the time the new safety law kicked in (2022?)!

If no saw makers could afford it and decide to leave saw market (just joking, of course, as the patent thing might have expired...or might not have), SawStop would possibly run a second production line in Europe, perhaps, if not in the US, other than the one in Taiwan to meet unmatched demand.

Simon

[Admiral]

The way I read it, he is not asking for 8% of his technology, but 8% of the whole saw.  This is exorbitantly high.  This means Gass makes more money for his technology I I want a saw with cast iron wings rather than stamped wings.  The more features I add to the saw, the more Gass extracts.  Yet his technology has nothing to do with the wings, the fence, etc.  Hmmm.  Am I missing something?

Well, 8% is not an exorbitant patent royalty, in the telecom tech world, standards-based patents licensed on a FRAND (fair, reasonable and non discriminatory) basis are in that general range, 5% to 8% dependent upon the particular technology involved and the value add to the ultimate product, and this patent is certainly not "standards-based" at this point, but if it ever becomes mandated technology Festool would be right in the ballpark at 8%, considering it is a core feature of any saw.  And yes, such royalties are based on the overall cost of the "device", here a saw. 

Cecil:  not directed to you, just last in line here:   

Interesting that some keep blaming Gass going forward after he sold to Festool.  Where are the demands to boycott Festool???  Hard to figure out who the evil genius is now......

Either manufacturers want to license the technology or they don't, the right to patent inventions and profit from them is in the constitution, for heaven's sake.

And I agree that the market to be protected are likely weekend warriors who buy a benchtop saw and they maim themselves, as well as production workers; interesting that workers comp insurance carriers are big fans of SS technology in production environments, and CGL insurance carriers in school environments, it makes sense from a liability perspective.