- 27 -
list brokerage activities do not change the character of the
remainder of the mailers' list rental payments.
In sum, we hold that with the exception of the list
brokerage activities (which are not attributable to petitioner),
all of the activities in which the parties to the list rental
transaction engage are royalty-related activities. Consequently,
with the exception of the list brokerage commissions (which are
not attributable to petitioner), the mailer's list rental payment
in each list rental transaction is a royalty which is excluded
from UBTI under section 512(b)(2). Our holdings obviate the need
to address respondent's trade or business arguments.
Respondent's Remaining Arguments
No Written Licensing Agreement
Respondent contends that the list rental payments are not
royalties because there is no written licensing agreement between
petitioner and Names or Triplex. We conclude that, even though
there is no written agreement termed a "licensing agreement", the
terms and conditions of the transaction between the mailer and
petitioner require the mailer to receive only a one-time right to
use the information contained on petitioner's rental list.
Accordingly, we conclude that each mailing list transaction
represents a separate licensing of petitioner's list by the
mailer and that the absence of a written "licensing agreement"
Page: Previous 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 NextLast modified: May 25, 2011