Norwest Corporation and Subsidiaries - Page 37

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          routine and consistent with standard practice in the computer               
          science field.                                                              
               Mr. Teixeira reported that debit cards were common by 1989,            
          and several banks had transaction volumes significantly larger than         
          Norwest's.  Further, by 1990, 673 banks were issuing Visa logo              
          debit cards.  He also found that Norwest's experience with ATM's,           
          which Norwest used to operate the debit card system, provided a             
          solid understanding of the technical issues involved, including             
          interfacing, card issuance, and capacity planning.  Additionally,           
          Mr. Teixeira stated that Norwest's activities in interfacing the            
          new debit card system with its other systems were consistent with           
          the deployment of the products by other institutions.  Finally, Mr.         
          Teixeira rejected any claim by Norwest that technical alternatives          
          were considered in the process of developing the debit card system          
          and insisted that the alternatives related only to business issues.         
               We agree with respondent that the development of the Debit             
          Card system does not constitute  qualified  research.    Dr.                
          McDermott's own findings that the project's only risk was its               
          ability to be completed and deployed before those of Norwest's              
          competitors undermines any claim to the R&E credit.  None of the            
          experts reveal any technical risks, and it is apparent that the             
          debit card was a fairly common product (nearly 40 percent of the            
          top 75 banks had the debit card by late 1989) by the time Norwest           
          entered the market.  No new principles of computer science were             
          discovered by this project, and although alternative approaches             



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