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by the Nyingma Institute diminish the value of petitioner's right
to market SMMT. Petitioner's expert did not specifically value
petitioner's right to market SMMT. As we have no other
appropriate basis to evaluate this licensed asset, we accept
Spiro's valuation of the SMMT marketing right.
AVG also valued the computer software using the replacement
cost method and determined that the value of customized software
was $20,000, based on the cost of similar software, for an annual
value over a 5-year useful life of $4,000. Maitland believed
that comparable off-the-shelf software would have cost between
$60,000 and $70,000. However, petitioner did not consider
purchasing software from another company. DM did not provide
technical support for the software. This decreases the value of
the software because petitioner had to update the software
itself. We believe that AVG's valuation of the software is more
reliable than Maitland's uncorroborated testimony and accept
AVG's valuation.
Second, AVG relied on a market comparison to determine fair
market royalty payments for the licensed trade names and
trademarks. For the comparison, AVG considered royalties paid
for instant-print or quick-print franchises. It identified the
various assets received under these franchise agreements and
compared the quick-print franchises with the license agreement
only to the extent of the licensed trade names and trademarks.
Royalty rates associated with trade names and trademarks
represent the costs incurred by the franchisors to maintain the
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