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skillful means and SMMT to justify substantial transfers of its
profits to DM, a closely related entity.
Moreover, we do not agree with petitioner's contention that
SMMT is a proprietary trade secret that justifies the exorbitant
royalties that petitioner paid to DM. "Mastering Successful
Work", which DM published in 1994, relates to SMMT and sells for
$14.95. The preface of the book states that it is based on
materials that petitioner received pursuant to the license
agreement. Petitioner denies that "Mastering Successful Work"
reveals any of the allegedly proprietary SMMT materials.
However, the testimony of petitioner's witness with regard to
this issue is not credible. Moreover, the Nyingma Institute
offers skillful means classes, and DM published a book relating
to skillful means in 1978. Nevertheless, we find that
petitioner's license of SMMT does support the payment of some
royalties to DM.
We accept the general methodology of respondent's expert in
valuing SMMT. Respondent's expert, Dr. Spiro, valued SMMT based
on the tuition for classes at the Nyingma Institute. Respondent
argues that SMMT had little value because Nyingma workers valued
work as a spiritual practice before working for petitioner. SMMT
has value to petitioner and to its Nyingma employees apart from
the spiritual value that Nyingma employees place on work. SMMT
enabled the Nyingma employees to develop and expand their
practice of Dharma. SMMT provided a benefit to the Nyingma
employees similar to an employer's offering to pay for college
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