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at 88-792, 88-1 USTC par. 9169, at 83,251. That court
distinguished Texas Instruments, Inc. v. United States, 551 F.2d
599 (5th Cir. 1977), in the following manner:
[T]he intangible information (seismic data) and the
tangible medium (magnetic tape) were inextricably
connected. The former could not exist without the
latter. In the present action, the intangible
information (the software) is not necessarily dependent
upon the tangible medium (the magnetic computer tapes).
The application programs exist on paper and conceivably
in the mind of the programmer as well. The placement
of the program on the tape, facilitates the sale of the
program--it is not, however, the only way that the
program can exist. The computer tape functions merely
as one type of conduit for the ideas contained on it.
The nexus between the intangible information and the
tangible medium is far more attenuated in this action
than in Texas Instruments. [Bank of Vermont v. United
States, 61 AFTR 2d at 88-790, 88-1 USTC par. 9169, at
83,250.]
The Sixth Circuit in Comshare, Inc. v. United States, supra,
explicitly rejected that distinction, finding it to be contrary
to the facts in Comshare, and stated that the ideas and the
medium in the case at bar were inextricably connected because the
“master source code tapes and discs could not exist in usable
form without the tangible medium.” Id. at 1149.
The Sixth Circuit also addressed our opinion in Ronnen v.
Commissioner, 90 T.C. 74 (1988). The court stated that the
discussion in Ronnen regarding the Disney line of cases supported
Comshare's position because Comshare used the master source code
tapes and disks as capital assets to create products for its
customers, whereas the corporation in Ronnen did not purchase a
capital asset used to create copies or possess the master source
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