- 25 -
Trademarks and trade names 52,396 57,636 62,823
Customer list 106,433 86,098 69,117
Right to financing -0- -0- -0-
Covenant noncompete -0- -0- -0-
Total 184,229 169,776 1158,643
1 The expert report contained a mathematical error of $1
that we have corrected.
AVG used three methods of valuation to determine reasonable
royalty payments pursuant to the license agreement: (1) A
replacement cost method, (2) a market comparison method, and (3)
an income method. The method that AVG used depended on the
particular asset being valued.
First, AVG used the replacement cost method to value
petitioner's right to use and commercially market SMMT and the
computer software. AVG valued SMMT based on the $1,500 cost of a
4-week class at the Nyingma Institute for petitioner's eight
Nyingma managers for a total cost of $10,050 in 1990. AVG added
$10,400 for consultations provided by DM, mostly with Tulku,
regarding the application of SMMT. It assumed a 1-hour
consultation each week and a consulting fee of $200 per hour.
AVG discounted the value of SMMT licensed by petitioner as
compared with the courses now offered by the Nyingma Institute
because SMMT was being developed and revised during the years in
issue.
Respondent argues that the license agreement, as amended,
did not give petitioner the right to offer SMMT instruction to
nonmanagerial employees. The license agreement did not expressly
mention SMMT and conveyed the right to DM's expertise and
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