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Rubbik represented part of the total wholesale price charged by
Gamesa to petitioner for Gamesa’s products, that the funds could
have been paid directly to Gamesa as part of the price of the
products, and that the funds were transferred instead to Cremin
and Rubbik to bolster the appearance that Gamesa and petitioner
were not controlled by the same owners so that petitioner would
qualify for gray market protection with regard to Gamesa's
products distributed in the United States.
With regard specifically to the $2,293,626 in funds
transferred to Cremin, petitioner argues that it received rights
to the “g” trademark through Cremin and Rubbik and that Rubbik
had received its rights to the “g” trademark from Gamesa, that
the funds transferred to Cremin constituted royalties paid
pursuant to the alleged licensing agreement between petitioner
and Cremin, and that the funds transferred to Cremin, therefore,
constituted ordinary and necessary business expenses.
With regard specifically to the $3,047,635 in funds
transferred to Rubbik, petitioner argues that Rubbik, through de
la Garza, served as a broker of the services performed by Gamesa
to customize its products for U.S. markets and that the funds
transferred to Rubbik, therefore, constituted ordinary and
necessary business expenses.
Respondent argues that petitioner was not obligated to pay
Cremin royalties because Cremin never owned any rights to the “g”
trademark, that neither Rubbik nor de la Garza acted as a broker
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