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5.25-inch diskettes, and 3.5-inch diskettes.
The software masters remained petitioner’s property and were
unavailable for distribution to third parties. After petitioner
provided the foreign OEM or CFC with a software master, the licensee
stored the information on a network computer and archived the master
for security or production purposes. Upon transfer to the network,
the licensee’s duplication equipment accessed the digital
information to initiate duplication runs.
E. Petitioner’s Export Transactions
Petitioner distributed its computer software products
worldwide. In connection with its sales abroad, petitioner used two
types of channels: (1) The foreign OEM channel, and (2) the
international retail channel. The products distributed through
these channels were duplicated both in the United States and abroad.
Petitioner’s international revenues (from both the foreign OEM and
retail channels) constituted 54.9 percent of petitioner’s total
revenues for 1990 and 57.3 percent for 1991.
F. Foreign OEM Channel
Petitioner’s foreign OEM channel consisted of computer
manufacturers that installed petitioner’s software directly into the
hard drive of a computer and/or “bundled” software-encoded media
along with the computer. The foreign OEM’s distributed petitioner’s
computer software as a component of their own computer systems.
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