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transaction, the mailer's rental payment compensates petitioner
for the mailer's use of petitioner's list and, also, compensates
Names, Triplex, and the list brokers for their participation in
the transaction. Certain of these activities exploit and protect
the intangible (i.e., the list). We have held that the owner of
an intangible may engage in certain activities to exploit and
protect the intangible which do not change the nature of the
payment received. See Wm. J. Lemp Brewing Co. v. Commissioner,
18 T.C. 586, 596 (1952) (payment to the owner of the intangible
was a royalty even though the owner reserved the right to
supervise the advertising, marketing, and quality of the product
which was to bear the trademarked name); see also Mississippi
State Univ. Alumni, Inc. v. Commissioner, T.C. Memo. 1997-397
(review of marketing material and endorsement of an affinity
credit card program bearing the name of an exempt organization
were not services provided to the card issuing company). To hold
otherwise, it seems to us, "would require us to hold that any
activity on the part of the owner of intangible property to
obtain a royalty, renders the payment for the use of that right
UBTI and not a royalty." Sierra Club, Inc. v. Commissioner, 86
F.3d at 1536. Accordingly, in the instant case, we carefully
4(...continued)
and Sierra Club and that the courts therefore did not have before
them.
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