- 80 -
97-1 USTC par. 50,457 (N.D. Ill. 1997) (report and recommendation
of magistrate judge), although the court did not accept all of the
magistrate judge's findings. The Government therein, as in this
case, conceded that the taxpayer satisfied the section 174 test.
In analyzing section 41, the District Court disallowed the
credit on several grounds. First, the court concluded that the
taxpayer did not discover information that was technological in
nature. Applying a dictionary definition for technological
("resulting from improvement in technical processes that increases
the productivity of machines and eliminates manual operations or
the operations done by older machines") and discovery ("to make
known" or "to obtain for the first time sight or knowledge of"),
the court found that the taxpayer did no more than use the software
package as a building block and that it failed to discover
information that was technological in nature. In that regard, the
court found that the taxpayer did not expand or refine existing
principles of computer science, stating: "Rather, Stationers
merely applied, modified, and at most, built upon, pre-existing,
technological information already supplied to it. This is a far-
cry from what Congress contemplated when it spoke of research
directed at the `principles of computer science'." 982 F. Supp. at
1284.
The court next considered the process-of-experimentation test.
The court defined experimentation as "the act, process, or practice
of making experiments" and defined an experiment as "a test or
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