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agreement was later amended to provide for royalties at a 13-percent
rate, effective January 1, 1989.
Accordingly, by 1989, the Sea Bulk patents were being licensed
at royalty rates of 5 percent and 13 percent. We believe that this
range of royalties circumscribes the appropriate royalty rate to be
paid for use of the Amoco patents as well.
Petitioners describe the Amoco patents as being superior to the
Sea Bulk patents, and therefore capable of commanding higher royalty
rates. We believe, however, that the Amoco patents can best be
described as more specialized and designed for a particular use,
whereas the Sea Bulk patents were intended for more general usage.
Petitioners also point to the substantial increase in profits
of Powertex that resulted from sales of the Amoco liners as a factor
to justify a high royalty rate. Although we agree that the Amoco
patents were an important factor in generating those profits, we
believe that they were not the only catalyst. During 1987, Amoco
chose Powertex as its sole source of intermodal container liners, in
part because they had developed a good working relationship and
Powertex had agreed to build a facility near Amoco's Cooper River
plant. The skill and expertise which the Podds had accumulated in
designing and manufacturing liners also influenced the profitability
of Powertex. Consequently, we do not agree with petitioners that
the substantial increase in profits of Powertex is attributable
exclusively to use of the Amoco patents.
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