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agreements between I-Tech and the R&D companies were based on,
confirm that the R&D companies had complete control over the
research and development of their respective projects. I-Tech
did not control the research and development of the five R&D
companies.
B. Exploitation of New Products
Petitioner asserts that I-Tech anticipated exploiting any
discoveries on its own and that no one else could do so.
Petitioner points to a statement within the PPM indicating that
the purpose of funding the R&D companies is to acquire certain
technologies and to exploit those projects commercially.
However, the PPM does not contain any specific plans or forecasts
relating to the possibility that I-Tech might itself engage in
the marketing of any discoveries, nor does the PPM mention I-
Tech’s plan for hiring staff experienced in the areas of
marketing new technology or acquiring real or personal property.
See, e.g., Harris v. Commissioner, T.C. Memo. 1990-80, affd. 16
F.3d 75 (5th Cir. 1994).
The PPM sets forth the marketing and manufacturing plans for
each R&D company and describes in detail which R&D company or
third party will carry out each function. The PPM fails to
41(...continued)
provided in the original agreement between Efrat and ATA is also
found in the agreements with the other R&D companies.
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