SMTA International Conference Proceedings

SMT Wars Lesson Learned from an Electronic Contract Manufacturer and the Customer Who Sued Them

Author: Michael Konrad
Company: Aqueous Technologies
Date Published: 9/17/2017   Conference: SMTA International

Abstract: The day began not unlike others. Leave home, get a bagel and a large cup of caffeine, and drive to the office. I am the President and CTO of an equipment manufacturing company located in Southern California. Most days begin with a walk through the factory floor, and a short conversation with my management team. This day however, began with an unusual phone call. The man on the other end of the phone call stated, “I am a lawyer and I need your help”. This was to be an interesting day.

There are several unique words and phrases associated with my business, words not commonly used at cocktail parties or chance encounters with strangers. During my phone call with the lawyer, words and phrases such as “dendritic growth”, “CAF”, and “ECM” were thrown about. While these words and phrases would certainly be the most uninteresting cocktail party conversation starters, they were music to my ears. You see, my company manufacturers equipment that removes process residues from circuit assemblies as well as machines that test assemblies to quantify the level of cleanliness. Dendritic growth”, CAF, and ECM are all reasons we are in business.

Here’s the scoop… There were two companies engaged in a lawsuit. The plaintiff was a start-up company fueled by venture capitalist money. They had a product idea associated with transportation technology. This is the point in my story where I should inform the reader that my descriptions of the primary players shall remain intentionally vague as I am bound by a non-disclosure agreement. The plaintiff created a new technology that consisted of a sensor and a receiver. The sensor would be installed in the ground and send signals to a receiver mounted on a nearby pole above ground. Because the ground-based sensor would not be connected to a power source, it would require a long-life (ten year plus) battery. While the plaintiff had the skillset required to design a functioning circuit and related product, they lacked the ability to produce it. Enter the contract manufacturer, soon to be the defendant.

This part of the story is most likely typical. The Intellectual Property (IP) owner provided a Statement of Work (SOW) to the Contract Manufacturer (CM). The SOW provided the minimum amount of technical detail. The IP owner cited a couple of IPC standards, specified a bill-of-material including a bare board material described as “Down and dirty cheap FR4” (a description that would not serve them well during litigation). The CM ordered bare boards from a Chinese board supplier. Components were ordered and the CM began to produce product for their customer.

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