Norwest Corporation and Subsidiaries - Page 35

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          accounts as Norwest.  Indeed, some providers processed as many as           
          five times more.  Mr. Teixeira found that Norwest's development of          
          the Trust Payment system did not result in any new or unique                
          functions or technology to the industry, and that commercially              
          available software offered comparable functionality.  He concluded          
          that the technologies used in developing the system were well               
          established in the banking industry and were familiar to Norwest            
          personnel.                                                                  
               We agree with respondent that the development of the Trust             
          Payment system does not constitute qualified research.  Although            
          technical risks arose in the development process, those risks were          
          limited and did not involve substantial uncertainty that Norwest's          
          investment could be recovered within a reasonable period of time.           
          The technical risks were clearly solvable: the only issue to                
          Norwest was whether they could be solved in time so as to maintain          
          or advance Norwest's competitive standing in the trust service              
          provider industry.  Indeed, Dr. McDermott admitted this when he             
          reported:                                                                   
               The key point to repeat here is that the risk to Norwest               
               was that a project would be delayed because of technical               
               uncertainties.  Even if a project could clearly be done                
               eventually, the results might be useless if they came too              
               late.  The cost to Norwest would be wasted development                 
               effort, inefficiency in using old solutions, and                       
               backwardness with respect to their competitors.  It seems              
               clear that in the case of * * * [the Trust Payment                     
               system] these risks were real, and actually materialized,              
               although not to the extent that the project failed                     
               altogether.                                                            





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