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Petitioners' experts emphasize that under Technology-1980's
development license, Technology-1980 was obligated to pay $20,000
as an advance process royalty for each oil recovery installation
that was actually constructed. Petitioners' experts, however,
neglect the provision that would allow Technology-1980 to apply
any such advance process royalty paid to reduce or offset the
production royalty that would become due.
Petitioners emphasize that Cromwell agreed to pay a fourth
for its license of EOR technology of what Technology-1980 agreed
to pay. The only reason, however, that Cromwell was obligated to
pay less for its license of EOR technology was that Cromwell sold
fewer partnership units to investors. As stated, total license
fees due from the partnerships were based on the number of
partnership units sold.
Because the evidence establishes that the fixed license fees
that were agreed to were not justified at all, that they did not
bear any relationship to what was acquired, and that they were
not normal in the oil and gas industry, nominal differences
between Cromwell’s stated license fees and Technology-1980's
stated license fees do not constitute a material distinguishing
fact.
Petitioners' expert, Bursell, testified that Cromwell's
license fees for EOR technology were not particularly excessive
in amount. Bursell, however, did not even know what Cromwell had
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