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petitioner are royalty-related activities. On the basis of the
foregoing, we conclude that all of the activities in which Names
engages are royalty-related activities.
Petitioner
Petitioner does not directly engage in any significant
activities with regard to a rental list transaction. The only
activities in which petitioner directly engages are review of the
data cards and approval of list rental transactions. As we
discussed above, the data cards are the means by which Names
promotes and advertises petitioner's rental list. Review of
promotional and advertising material by the owner of an
intangible is not inconsistent with royalty treatment. See Wm.
J. Lemp Brewing Co. v. Commissioner, supra; Mississippi State
Univ. Alumni, Inc. v. Commissioner, supra. Similarly, as we
discussed above, petitioner's review of all list rental
transactions is part of the protection of the list.
Consequently, we conclude that all of the activities in which
petitioner directly engages are royalty-related activities.
Triplex
Triplex's activities include: (1) Printing a copy of
petitioner's list on the medium chosen by the mailer; (2)
performing the special selections chosen by the mailer; and (3)
shipping the completed order to the mailer.
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