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that were produced from recycled plastic. He claims that during
his visit he was told that the recycler was unique and that it
was the only machine of its type. In fact, the Sentinel EPE
recycler was not unique; instead, several machines capable of
densifying low density materials already were on the market.
Other plastics recycling machines available during 1981 ranged in
price from $20,000 to $200,000, including the Foremost
Densilator, Nelmor/Weiss Densification System (Regenolux), Buss-
Condux Plastcompactor, and Cumberland Granulator. See Provizer
v. Commissioner, T.C. Memo. 1992-177.
Becker was also told that PI had put an enormous amount of
research and development--10 to 12 years' worth--into the
creation and production of the Sentinel EPE recycler. When he
asked to see the cost records for some kind of independent
verification, however, his request was denied. Becker was
informed that such information was proprietary and secret, and
that he would just have to take PI's representations as true.
Although PI claimed that all of its information was a trade
secret, and that it never obtained patents on any of its
machines, PI had in fact obtained numerous patents prior to the
recycling transactions and had also applied for a trademark for
the Sentinel recyclers. Becker decided to accept PI's
representations after speaking with Miller (the corporate counsel
to PI), Canno (who had never been to PI's plant or seen a
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