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In my opinion, the marketing strategy worked out
by FMEC, licensee to [partnership name], is ingenious
and bound to succeed. [Partnership name]'s license
with FMEC requires additional royalty payments over and
above the minimum annual royalty, to be computed as a
share of profits on the sale (or fair market value if
used by sublicensees) of the resin pellets resulting
from further processing the recycled material produced
by the Recycler.
Petitioner made similar observations in his marketing report
regarding the Sentinel EPS recycler, concluding that investment
in transactions involving the Sentinel EPS recycler would be
profitable. At the time that this report was written, petitioner
was aware of difficulties faced by PI in placing the EPE
recyclers with end-users and that only a few such recyclers were
operational at that time.
Finally, in both marketing opinion reports, petitioner
relied heavily on the assumption that the price of oil would rise
dramatically in the future and that, as a result, the price of
oil resin would also rise.
Petitioner visited the PI plant in Hyannis, Massachusetts,
on two occasions and spent several hours meeting with PI's
personnel. At the plant, petitioner observed many types of
machines and consumer energy-saving products manufactured by PI.
Petitioner also visited a plastic manufacturing plant that used a
Sentinel recycler to see it in operation. He observed a Sentinel
recycler compress a truck load of plastic scrap into a 4-foot
square cube. He conducted limited research regarding plastics
recycling by visiting the local library for an hour. Petitioner
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