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protecting the worth of its property interest in its good name
and marks. It was not an indirect method of putting petitioner
in the business of marketing, nor was it a marketing service
provided by petitioner to ABS pursuant to the SC-ABS agreement.
d. Conclusion
For the reasons stated, we conclude that petitioner did
not control the affinity credit card program's marketing plans
except to the extent that it reserved the right to approve any
use of its name, marks, and logo. Such reserved right is
commonplace in licensing agreements, and the mere retention of
quality control rights by a licensor in a licensing agreement
situation does not cause payments to the licensor under the
agreements to lose their characterization as royalties. Sierra
Club (1996), 86 F.3d at 1533 n.15 (quoting Rev. Rul. 81-178,
1981-2 C.B. 135); see id. at 1535-1536 (petitioner did not
perform services with respect to the rental of mailing lists
even though it retained the right to approve the contents of
mailings of list users).
3. Member Services
Respondent argues that petitioner offered the credit card
as a member service. While it is true that petitioner endorsed
the credit card program, Chase Lincoln was the financial
institution that extended credit to the members, and it was
ABS’s marketing efforts that brought the possibility of the
credit card and certain other services to the attention of the
members. Although the term “member service” appears in certain
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