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Commissioner, supra; Stankevich v. Commissioner, supra. U.S.
Agri attempted to develop a jojoba plantation that would be
farmed for the oil seed. The limited partners of Utah I would
have realized income only through the sale of the jojoba oil if
the plantation had been successful. The correspondence of Pace
to Kellen, introduced at trial as progress reports from U.S.
Agri, did not reflect any proprietary technology but contained
only a general description of the growth of the jojoba plants and
was replete with optimistic comments regarding future jojoba
production. Before 1983, Pace had only limited knowledge of and
minimal background in jojoba. Despite Pace's inexperience with
the jojoba plant, 16 pages of Pace's handwritten notes reflecting
his personal observations on the growth of the jojoba plants from
April 1983 through December 1985 were the only reports on the
purported jojoba field research introduced by petitioner at
trial. U.S. Agri's laboratory and greenhouse were located in
Riverside, California, and not at the site of Utah I's plantation
in Desert Center, California. Additionally, petitioner failed to
provide documentation of U.S. Agri's purported research and
development costs.
We agree with respondent's expert witness that U.S. Agri's
actions were no more than what any farmer would do in the
ordinary course of preparing to grow a crop for commercial
harvesting. The amended research plan of Utah I primarily
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