-413-
And I can’t tell you now what might have
conceivably been developed were this product research
and development to have been successful or gone far
enough, but it was our impression and understanding at
this time that it either would--or could produce
something significant and allow for future research and
licensing or something significant enough to be an
actual product that could be commercially manufactured.
* * * [Emphasis added.]
The Court: But there have been no development of
these other rights that you are talking about?
[Kanter]: Well, those rights existed. There was
no preclusion of the rights as far as I know, that
nobody took them away in the form of defined patent
rights. [Kanter, Transcr. at 4853-4854.]
The mystery to the Court is just what those “rights” might
be. The Court is quite skeptical that, in the everyday world, an
investor would pay $980,000 for a bundle of ambiguous property
rights when there is no indication that the rights could be
exploited or developed. Moreover, this Court’s holding in Estate
of Cook was not premised totally or exclusively upon IRC’s
holding no technical legal ownership rights whatsoever in the
research, as Kanter implies. Rather, in Estate of Cook, this
Court concluded, after considering the totality of the attendant
facts and circumstances, including certain highly relevant
factors, that there was no realistic prospect of IRC’s entering
into a trade or business to exploit the technology being
developed under the IRC-Newport R&D and license agreement.159
159 Other factors considered by the Court included a
put/call agreement that allowed the IRC shareholders to “put”
their stock in IRC to Newport, which the stockholders of IRC
(continued...)
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