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a. Petitioner's Solicitation of Its Members
Respondent contends that petitioner's solicitation of its
members for the credit card program precludes royalty treatment
for the resulting income because petitioner mailed some
solicitation materials once during the years in issue (1990 and
1991) and twice during prior years.
We disagree. Petitioner's activities were de minimis and
intended to bolster petitioner's relationship with University of
Oregon alumni. Petitioner agreed to inform its members of the
existence of the affinity credit card program at least once per
year, but was not required to mail any solicitation materials to
alumni. USNB developed all marketing materials. Petitioner
reviewed those materials, but USNB retained final decision-making
authority. Petitioner might have asked USNB to "tone down" the
solicitation materials or to correct the spelling of a name.
USNB agreed to prepare and mail promotional materials.
Petitioner's one mailing during the years at issue (1990 and
1991) included a letter and brochure designed by USNB. Ninety-
five percent of the cardholders became cardholders due to USNB's
marketing efforts. Petitioner included information about the
program in its application materials. Petitioner apparently was
using the credit card program in part to encourage alumni to join
the Alumni Association of the University of Oregon.
In Sierra Club, Inc. v. Commissioner, 103 T.C. at 335, a
provider of financial services, American Bankcard Services, Inc.
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