Gerard and Audrey Kathleen Hennessey - Page 5




                                        - 5 -                                         
               In 1994, petitioner and Dr. Youling Lin (also a professor at           
          the University) formed ISOA, Inc., a Texas corporation that was             
          also an S corporation for some of the years in issue.  Petitioner           
          and Dr. Youling Lin each owned 50 percent of ISOA, Inc.                     
          Initially, ISOA, Inc., conducted business in Lubbock, Texas.  In            
          1995, ISOA, Inc., moved the corporation’s business operations to            
          Richardson, Texas.  In addition to ISOA, Inc., petitioner                   
          continued to operate ISOA Consulting.                                       
               As part of an arrangement with the University, ISOA, Inc.,             
          licensed intellectual property developed at the Institute to                
          various third-party entities.  In turn, ISOA, Inc., distributed a           
          portion of the licensing fees received to the University and to             
          student-inventors as royalty payments.  In October 1996, ISOA,              
          Inc., entered into a final royalty fee agreement with the                   
          University as to the distribution of the licensing fees received            
          by ISOA, Inc.  The licensing agreement between ISOA, Inc., and              
          the University provided that ISOA, Inc., would retain 30 percent            
          of the net licensing fees received, the University would receive            
          15 percent, student-inventors would receive 50 percent, and a               
          corporate co-inventor would receive 5 percent.  Additionally, per           
          the terms of the licensing agreement, ISOA, Inc., could be                  
          obligated to refund any licensing fees to the third party if the            
          patents were not approved for the licensed intellectual property.           
          ISOA, Inc., used amounts from the licensing fees to pay various             







Page:  Previous  1  2  3  4  5  6  7  8  9  10  11  12  13  14  15  Next 

Last modified: November 10, 2007