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petitioner's clean room labels. Although electronics companies
could use normal labels to identify and package sensitive
electronic components they manufactured in their clean rooms, the
normal labels themselves would contain contaminants.
The materials used in and the processing for petitioner's
clean room labels are quite different from that of normal labels.
Clean room label production requires a special cleaning machine
that petitioner devised to clean labels after their manufacture
and before their packaging. In addition, the labels employ a
special adhesive that petitioner developed with the assistance of
outside adhesive consultants and chemists.
Mr. Martin was instrumental in developing the Micro Clean
100 process. In 1989, it was he who envisioned a process to
produce labels to clean room standards, initiated the engineering
program for its development, and saw the program through to a
successful conclusion in early 1990. He and petitioner's staff
engineer worked on the label-cleaning machine petitioner devised.
He and certain other of petitioner's employees refined the
process for producing clean room labels and worked with outside
consultants and chemists to develop the special adhesive the
labels required.
Petitioner sold its first clean room labels during the first
half of 1990. For its fiscal year ended June 30, 1990, its sales
of clean room labels totaled $32,639. In June 1990, petitioner's
directors anticipated that clean room labels would produce
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