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if the taxpayer has a right to the research results. Qualified
research can be performed on behalf of the taxpayer notwithstanding
the fact that the taxpayer does not have exclusive rights to the
results."
Under the Participant License Agreement between Norwest and
EDS executed on December 16, 1986, the SBS system and each release
of that system were the property of EDS, except that Norwest was
entitled to a "perpetual, nontransferable, nonexclusive, and * * *
royalty-free license to use the [SBS system]". The license to use
the SBS system was subject to several conditions, and the failure
of Norwest to adhere to those conditions gave EDS the right to
revoke the license if the noncompliance was not cured within 10
days. The license was later extended to permit Norwest to use SBS
in providing banking services to nonaffiliated financial
institutions.
Respondent contends that this limited license to use the
software is not sufficient as a "right to the research results" to
warrant the treatment of EDS as a contractor of qualified research.
Respondent differentiates between research results and the final
product and argues that had EDS failed to deliver a product,
Norwest would have been entitled to nothing. Respondent asserts
that if research results and the final product are synonymous, then
the term "research results" would be rendered meaningless and
every time a person purchased a product, the purchaser might be
entitled to a qualifying research credit under section 41.
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