Norwest Corporation and Subsidiaries - Page 110

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          his understanding of the seven tax law tests.  However, in his              
          rebuttal report and at trial, he expressed reservations as to               
          whether the Cyborg Payroll project so qualified.  When asked to             
          rank the eight activities from most to least characteristic of              
          research, Dr. McDermott provided the following list:  Success and           
          SBS; Trust TU; MoneyNet, Trust Payment, and General Ledger; Debit           
          Card; and finally Cyborg Payroll.                                           
               Dr. McDermott summarized his general findings as follows:              
               There is usually little room for debate about whether a                
               project passes tests T4 and T7, having to do with                      
               "improved    business component" and commercial                        
               availability.  The main goal of most projects was a piece              
               of software that automated a process that was previously               
               done by hand, or that did essentially the same job as an               
               earlier piece of software, but had more features and                   
               better performance.  Even when the project failed, a goal              
               of this kind was usually clearly present and explicitly                
               stated.  As far as commercial availability is concerned,               
               I was impressed by how thoroughly Norwest searched for                 
               commercial products, proceeding to develop software                    
               internally only when it had to, and usually by beginning               
               with a commercial product and adding functions to it that              
               were crucial to the banking business. * * *                            
               Another criterion that is usually met fairly easily is                 
               T3, the use of a process of experimentation, involving                 
               the development and testing of hypotheses.  There was                  
               always some process of experimentation involved in the                 
               eight sample projects.  The process was generally not as               
               systematic as one would find in a physics or chemistry                 
               lab.  I think that reflects the state of practice in                   
               computer science, where effects are usually less subtle                
               than in physics, and require less rigorous experimental                
               methodology.                                                           
          *       *       *       *       *       *       *                           
               For these eight projects, it is clear that there was a                 
               process of experimentation to reduce significant                       
               computer-science uncertainties in every case.  There are               
               some areas of uncertainty that were not involved in any                



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