Utah Jojoba I Research, William G. Kellen, Tax Matters Partner - Page 24

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          a common farming practice.  Chen concluded that the activities               
          conducted by U.S. Agri on the land allocated to Utah I did not               
          constitute research and development and were merely farming                  
          activities.  The field tests were not designed or carried out for            
          the purpose of acquiring information about jojoba that was                   
          unknown at the time.  Chen found no substantial evidence that any            
          research was conducted.                                                      
               Chen found that few, if any, scientific procedures were                 
          established for the conduct of the proposed research.  In Chen's             
          view, for the conclusion of a research project to be valid, the              
          experiment must be able to produce repeatable results, and Utah              
          I's research project produced no repeatable results.  Chen's                 
          report elaborated:                                                           
               Experiments are planned to minimize the effects of                      
               uncontrollable factors such as weather.  In botany this                 
               means that an experiment would have to be carried out                   
               on the same age plants over several years to average                    
               out the influence of the weather.  Otherwise it would                   
               not be possible to determine if results were due to the                 
               experiment.                                                             
               The Partnership's Project was planted without any                       
               provision for the repetition of the experiments.  The                   
               land was planted at once.                                               
          Staggered planting of the land is necessary so that the same age             
          plants from different years could be compared and conclusions                
          could be formed about the effectiveness of the various                       
          procedures.  There is no evidence that staggered planting                    
          occurred on Utah I.                                                          





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