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the Agreement terminated. USNB's objectives in signing the
Agreement were to gain access to petitioner's mailing list and to
obtain petitioner's endorsement. Those are valuable intangible
property rights. Sierra Club, Inc. v. Commissioner, 103 T.C.
307, 344 (1994). We find respondent's contention about how USNB
designed the credit cards unconvincing. We conclude that
petitioner's income from the affinity credit card program was
received in exchange for the use of valuable intangible property
rights.
2. Whether Petitioner's Use of Its Mailing List Is
Inconsistent With Royalty Treatment
Respondent contends that petitioner's income from its
mailing list is not a royalty because petitioner's use of its
mailing list was a trade or business.
In Disabled Am. Veterans v. United States, 227 Ct. Cl. 474,
650 F.2d 1178, 1184 (1981), the Court of Claims held that the
Disabled American Veterans (DAV) conducted the trade or business
of renting its mailing list. From 1974 to 1979, DAV rented parts
of its donor list 451 times. Disabled Am. Veterans v.
Commissioner, 942 F.2d at 311. DAV continuously rented names on
its list during the years in issue. Disabled Am. Veterans v.
United States, 650 F.2d at 1184. In renting its donor list, DAV
followed the usual practice of the direct mail industry. Id.
DAV prepared rate cards showing the rates it charged to
customers. Id. It was widely known among list brokers that
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