- 89 -
could have enured from Hyatt International’s use of the name
(i.e., where guests staying at Hyatt Domestic hotels were
familiar with Hyatt International hotels), petitioners have
presented no evidence, one way or the other, on the origin of
guests staying at Hyatt Domestic hotels or any other measure of
any such benefit from the Hyatt International group’s operations
to Hyatt Domestic.26 As a second alternative, petitioners argue
that the Hyatt International group assisted in the development of
the trade names and is entitled to a setoff for that under
section 1.482-2(d)(1)(ii)(b), Income Tax Regs. Petitioners,
however, have presented no evidence of the costs or outlays that
may have been incurred in order to measure and reach such a
determination. See sec. 1.482-2(d)(1)(ii)(c), Income Tax Regs.
Respondent relies on the fact that Hyatt Domestic initiated
lawsuits to protect its trade name. Respondent argued that such
action is evidence that the Hyatt name had great value.
Instituting suits, however, does not automatically reflect that
the name or mark has great value. Such suits may be brought to
protect marginal values, because failure to act against
infringements could lead to loss of the trade name protection.
26 Nor did petitioners present evidence showing that the
$10,000 amount per hotel provided for in the licensing agreement
was an arm’s-length consideration within the meaning of sec.
1.482-2(d)(2), Income Tax Regs.
Page: Previous 79 80 81 82 83 84 85 86 87 88 89 90 91 92 93 94 95 96 97 98 NextLast modified: May 25, 2011