We are mindful that the terminology used in the agreement may be of significance; however, the label or name the agreement bears is not determinative, nor is the form thereof conclusive. Tomerlin Trust v.Commissioner, 87 T.C. at 881-882; Taylor-Winfield Corp. v. Commissioner, 57 T.C. 205 (1971), aff'd, 467 F.2d 483 (6th Cir. 1972); Cleveland Graphite Bronze Co. v. Commissioner, 10 T.C. 974, 988 (1948), aff'd, 177 F.2d 200 (6th Cir. 1949). The agreement itself does not contain terms that would suggest exclusivity in the transfer to SGT upon execution of the agreement.

Subsequent cases similarly denied the availability of the foreign tax credit in respect of the British standard tax relating to patent royalties. International Standard Electric Corporation, 1 T.C. 1153(1943), affirmed and modified on other issues 144 F.2d 487 (C.A. 2, 1944); O. K. Tool Co., 4 T.C. 539(1945); Cleveland Graphite Bronze Co., 10 T.C. 974(1948), affirmed per curiam 177 F.2d 200 (C.A. 6, 1949). No amount of interest was involved, however.

The label or name borne by the instrument of transfer is not determinative; nor is the form thereof necessarily conclusive. Cleveland Graphite Bronze Co., 10 T.C. 974, 988 (1948), affd. 177 F.2d 200 (C.A. 6, 1949). Pursuant to these principles, we must look to the documents involved herein and the total factual complex to ascertain whether petitioner and Osaka intended to enter into a sale or a license of the know-how in question.

There is no evidence at all to indicate that the petitioner could not have granted patent rights to other concerns in England. Furthermore, here, as in Cleveland Graphite Bronze Co., 10 T.C. 974, affirmed per curiam (C.A. 6) 177 F.2d 200, there was no grant of the right to use the product covered by the invention. In that case we said:

Accordingly, we hold that the amount of $1,500,000 paid by Madison Avenue Corporation in 1950 for the purchase and subsequent retirement of 4,725 shares of its stock was fully includible in daily capital reduction for the purpose of computing the excess profits credit of Madison Avenue Corporation for that year. Cf. Cleveland Graphite Bronze Co., 10 T.C. 974, 987 (1948), affd. (C.A. 6, 1949) 177 F.2d 200. The third issue is whether Madison Avenue Corporation is entitled to an adjustment in its base period net income for losses from the operation of a farm as a branch.

Waterman v. Mackenzie, 138 U.S. 252; Kronner v. United States, (Ct. Cl.) 110 F.Supp. 730; Kavanagh v. Evans, (C.A. 6) 188 F.2d 234; Watson v. United States (C.A. 10) 222 F.2d 689; Edward C. Myers, 6 T.C. 258; Kimble Glass Co., 9 T.C. 183; Vincent A. Marco, 25 T.C. 544, on appeal (C.A. 9); Arthur C. Ruge, 26 T.C. 138; Halsey W. Taylor, 16 T.C. 376; Carl G. Dreymann, 11 T.C. 153. Cf. Cleveland Graphite Bronze Co., 10 T.C. 974, affd. (C.A. 6) 177 F.2d 200; and Lynne Gregg, 18 T.C. 291, affd. (C.A. 6) 203 F.2d 954. Here the contract of January 1, 1949, is not in form a license.

Cases cited by respondent are distinguishable in that it was there thought that the owner's rights had not been completely transferred. Cf. Broderick v. Neale, 201 F.2d 612 (C.A. 10); Ernest E. Rollman, 25 T.C. 481; Lynne Gregg, 18 T.C. 291, affirmed 203 F.2d 954 (C.A. 3); Cleveland Graphite Bronze Co., 10 T.C. 974, affirmed 177 F.2d 200 (C.A. 6). We do not deem it important that petitioner transferred her interests in 1946, whereas the agreement giving rise to the payments in question was executed in 1949.

We hold, therefore, that the 36 franchise agreements were licensing agreements and that all of the consideration received by petitioner corporation (both lump-sum and gallonage payments) represented royalties taxable as ordinary income. Federal Laboratories, Inc., 8 T.C. 1150; Cleveland Graphite Bronze Co., 10 T.C. 974, affd. 117 F.2d 200; John Randolph Hopkins, 15 T.C. 16 . Broderick v. Neale, 201 F.2d 621; Lynne Gregg, 18 T.C. 291, affd. 203 F.2d 954; Ernest E. Rollman, 25 T.C. 481. Cf. Kimble Glass Co., 9 T.C. 183.

Nor is the form thereof necessarily conclusive. Cleveland Graphite Bronze Co., 10 T.C. 974, affd. 177 F.2d 200. A patent is a franchise which consists of the three-fold right to exclude all others from macing, from using and from vending the thing patented without permission of the patentee.

See Edward C. Myers, supra, and cases therein cited; Carl G. Dreymann, supra; and Kimble Glass Co., 9 T.C. 183. Cf. Cleveland Graphite Bronze Co., 10 T.C. 974, affd., 177 Fed.(2d) 100; and Philip W. McAbee 5 T.C. 1130. We conclude that petitioner made a sale of letters patent and an invention to the corporation in 1945 and that the payment of $100,220.