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We are not completely satisfied with the methodology employed
or the results reached by either party. We conclude that petitioner
has shown that the royalty rate advanced by respondent is
unreasonably low and therefore is arbitrary, capricious, and
unreasonable. Seagate Tech., Inc. & Consol. Subs. v. Commissioner,
supra; Sundstrand Corp. v. Commissioner, supra. On the other hand,
we believe that the royalty rate advocated by petitioner is
unreasonably high for the property involved in this case. We have
evaluated all of the arguments raised by the parties. In reaching
our conclusion, we draw on the record as a whole to determine the
royalty rate at which we believe unrelated parties, under the facts
and circumstances of the instant case, would have arrived for the
intangibles in issue, see Sundstrand Corp. v. Commissioner, 96 T.C.
at 383; Bausch & Lomb, Inc. v. Commissioner, supra at 597, and we
concentrate only on those factors that we believe are necessary to a
complete understanding of our holding as to what would be a
reasonable arm's-length consideration for the license of the patent.
We have carefully scrutinized the experts' reports and the
clarifying testimony given at trial by each expert as to his
respective report. We are not constrained to follow the opinion of
any expert when the opinion is contrary to our own judgment. We may
adopt or reject expert testimony, whichever in our judgment is most
appropriate. Helvering v. National Grocery Co., 304 U.S. 282, 295
(1938); Silverman v. Commissioner, 538 F.2d 927, 933 (2d Cir. 1976),
affg. T.C. Memo. 1974-285. We are not limited to choosing the
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