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application S.N. 800,288, which was assigned by Lea to Cascade in
1979. See Differential Steel Car Co. v. Commissioner, T.C. Memo.
1966-65 (resale of patents by shareholder to corporation provided
no new consideration). However, although the 750 patent
application did not result in a new patent, it did provide new
consideration. See 3 Williston, supra at 393-394 (anything of
present or potential intrinsic value, including a new and
original idea, can serve as consideration for a promise to pay).
Moreover, we find that Lea's waiver of Cascade's breach of the
1979 sales agreement and any claim that he may have had for
interest on the unpaid amounts provided legally sufficient
consideration for the contract modification. See State v. Brown,
965 P.2d 1102, 1106 (Wash. Ct. App. 1998).
Accordingly, we find that the 1982 agreement was a valid and
enforceable modification of the 1979 sales agreement.
Reasonable Payments
Ordinarily, the amounts that a corporation must pay under an
agreement for the use of a patent would be deductible in their
entirety as ordinary and necessary business expenses, and neither
the Commissioner nor the Court would have any authority to
rewrite the agreement of the parties. See Thomas Flexible
Coupling Co. v. Commissioner, 14 T.C. 802, 818 (1950), affd. 198
F.2d 350 (3d Cir. 1952). But where the party contracting with
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