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It is clear from the facts that much more than the passage
of time entered into the parties' considerations in negotiating
the 1982 agreement. For the years 1973 through 1978, before the
parties entered into the 1979 sales agreement, Cascade reported
total gross income of $940,116 and total taxable income of
$114,176. For the years 1979 through 1982, the years after the
1979 sales agreement and before the 1982 agreement, Cascade
reported total gross income of $7,638,233 and total taxable
income of $979,043. Furthermore, the parties expected the growth
rate of the sales, and Cascade's earnings, would continue to
increase.
We have found that the 1982 agreement modified the 1979
sales agreement. Therefore, in deciding whether the 1982
agreement was reasonable, we consider the value of all the
transferred patents, not only the 776 patent and the 750
technology.
The market value of the patents and the manufacturing
technologies was greater in 1983 than in 1979 simply because the
demand for the mattresses had increased dramatically, the cost of
manufacturing the mattresses had decreased substantially, and any
doubts that the target market would accept a foam-filled self-
inflating air mattress were diminished greatly. In summary, the
mattress was a successful product, and the market value of the
patents was more evident to Cascade and Lea in 1982 than it was
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