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Expert Witness Reports
Cascade submitted an expert witness report that analyzed the
contract terms and amounts paid Lea and concluded that the 1982
agreement was reasonable. Respondent submitted an expert witness
report to rebut the conclusions of Cascade's expert witness.
Expert witness testimony is appropriate to help the Court
understand an area requiring specialized training, knowledge, or
judgment. See Fed. R. Evid. 702; Snyder v. Commissioner, 93 T.C.
529, 534 (1989). The Court, however, is not bound by an expert's
opinion. We weigh an expert's testimony in light of his or her
qualifications and with respect to all credible evidence in the
record. Depending on what we believe is appropriate under the
facts and circumstances of the case, we may either reject an
expert's opinion in its entirety, accept it in its entirety, or
accept selective portions of it. See Helvering v. National
Grocery Co., 304 U.S. 282, 294-295 (1938); Seagate Tech., Inc. &
Consol. Subs. v. Commissioner, 102 T.C. 149, 186 (1994).
Cascade's expert witness identified guideline transactions
comparable to the one between Cascade and Lea. Comparability of
the transactions was determined by either similarity of product,
similarity of manufacturing process, similarity of markets, or
similarity of components and/or technology. In these guideline
transactions, the amounts paid for the patent or process range
from 1 to 7 percent of sales, and the mode is 5 percent.
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