Kronner v. United States, (1953)

38 Citing cases

  1. Bell Intercontinental Corp. v. United States

    381 F.2d 1004 (Fed. Cir. 1967)   Cited 44 times
    In Bell Intercontinental Corporation v. Commissioner, supra, the Court of Claims approved as a sale a transfer of a patent which excluded the benefits of a return license like the present ones.

    Reid, 26 T.C. 622, 632 (1956); Eterpen Financiera Sociedad de Responsabilidad Limitada v. United States, 108 F. Supp. 100, 104-105, 124 Ct.Cl. 20, 28-30 (1952), cert. denied, 346 U.S. 813, 74 S.Ct. 22, 98 L.Ed. 340 (1953). The question does not depend upon the labels or the terminology used in the agreement; hence, the fact that an agreement is termed a license and that the parties are referred to as licensor and licensee is not decisive. E.g., Kronner v. United States, 110 F. Supp. 730, 734, 126 Ct.Cl. 156, 163 (1953); Watson v. United States, 222 F.2d 689, 691 (10th Cir. 1955); Kimble Glass Co., 9 T.C. 183, 190 (1947). Nor is the question governed by the method of payment, and it is, therefore, immaterial that payment is based on a percentage of sales or profits, or on an amount per unit manufactured.

  2. First National Bank of Princeton v. United States

    136 F. Supp. 818 (D.N.J. 1955)   Cited 20 times   1 Legal Analyses

    There is an impressive array of authority contrary to the contention of the government. Watson v. United States, 10 Cir., 1955, 222 F.2d 689, 691; United States v. Carruthers, 9 Cir., 1955, 219 F.2d 21, 26; Commissioner v. Celanese Corp., 1944, 78 U.S.App.D.C. 292, 140 F.2d 339; Commissioner of Internal Revenue v. Hopkinson, 2 Cir., 1942, 126 F.2d 406, 409-410; Kronner v. United States, 1953, 110 F. Supp. 730, 734, 126 Ct.Cl. 156; Lamar v. Granger, D.C.W.D. Pa. 1951, 99 F. Supp. 17, 36, 38. See also Allen v. Werner, 5 Cir., 1951, 190 F.2d 840. Neither can the government prevail in its contention that the obligation of Prof. Cooke to defend patent infringement suits brought against Pro Phy Lac Tic because of the patents originally held by him and to save Pro Phy Lac Tic harmless therefrom constitutes the reservation by Prof. Cooke of a proprietary interest in the patents sufficient to preclude the existence of a sale.

  3. Crook v. United States

    135 F. Supp. 242 (W.D. Pa. 1955)   Cited 7 times

    In view of the facts as stated above, the court is of the opinion that all of the payments here involved must fairly be attributed to the first patent. Accord, Kronner v. United States, 1953, 126 Ct.Cl. 156, 110 F. Supp. 730, 736. 4. Defendants do not dispute that the patents constituted capital assets in Mrs. Thomas' hands.

  4. Kueneman v. Comm'r of Internal Revenue

    68 T.C. 609 (U.S.T.C. 1977)   Cited 4 times

    In understanding the approach we took in Rodgers, it is helpful to discuss the rationale by which exclusive geographical transfers had qualified as a ‘sale.’ See Kronner v. United States, 110 F.Supp. 730, 731 (Ct. Cl. 1953); Reid v. Commissioner, 26 T.C. 622, 631 (1956); Lamar v. Granger, 99 F.Supp. 17, 41 (W.D.Pa. 1951). Originally, when the courts were confronted with the necessity of deciding when a transfer of patent rights constituted a ‘sale’ for tax purposes, they turned to Federal patent law for guidance as to the recognized and divisible property interests in a patent.

  5. United States v. Zacks

    375 U.S. 59 (1963)   Cited 40 times
    Holding that Congress retroactively reopens claims otherwise barred by the statute of limitations when it creates a "grace period" during which the claims can be brought

    One not engaged in holding patent rights "`primarily for sale to customers in the ordinary course of his trade or business,'" 6 T.C. 266, as distinguished from a "professional" inventor who is so engaged.See Kronner v. United States, 126 Ct. Cl. 156, 110 F. Supp. 730; Allen v. Werner, 190 F.2d 840 (C.A. 5th Cir.). The Commissioner's position was sustained by the Second Circuit in Bloch v. United States, 200 F.2d 63. Prior to 1946, several courts had taken the same position. Commissioner v. Celanese Corp., 78 U.S.App.D.C. 292, 140 F.2d 339: Commissioner v. Hopkinson, 126 F.2d 406 (C.A. 2d Cir.).The relevant portions of § 1235 are: "A transfer (other than by gift, inheritance, or devise) of property consisting of all substantial rights to a patent, or an undivided interest therein which includes a part of all such rights, by any holder shall be considered the sale or exchange of a capital asset held for more than 6 months, regardless of whether or not payments in consideration of such transfer are — "(1) payable periodically over a period generally coterminous with the transferee's use of the patent, or "(2) contingent on the productivity, use, or disposition of the property transferred."

  6. Juda v. Commissioner

    877 F.2d 1075 (1st Cir. 1989)   Cited 3 times   1 Legal Analyses

    Under such circumstances, Cambridge, though in form a buyer, was in substance a middleman or broker. Kronner v. United States, 110 F. Supp. 730, 126 Ct.Cl. 156 (1953), a case that appellants describe as having "some strong factual similarities" to the present situation, involves the assignment of patent rights by an inventor to the manufacturer of the product, not the assignment of rights to a party for the sole purpose of resale to someone else. Events subsequent to the inventor-Cambridge contract bolster our conclusion.

  7. Lehman v. C.I.R

    835 F.2d 431 (2d Cir. 1987)   Cited 3 times
    Holding that receipt of incentive award does not qualify for capital gains treatment because it was not made in consideration for a transfer in the patent rights

    The origin of these uncertainties can be traced to Myers v. Commissioner, 6 T.C. 258 (1946) and the Commissioner's acquiescence (1946-1 Cum.Bull. 3) and later withdrawal of the acquiescence ( see Mim. 6409, 1950-1 Cum.Bull. 9) in the Myers decision. Although the Myers decision did not directly consider the impact of the existence of periodic and contingent royalty-type payments on its "sale or exchange" analysis, Mimeograph 6409 announced the Commissioner's position that such periodic and contingent royalty-type payments would not be accorded capital gains treatment. Judicial decisions subsequent to this announcement appeared to conflict with this position. ( Compare Kronner v. United States, 110 F.Supp. 730, 126 Ct.Cl. 156 (1953) and Allen v. Werner, 190 F.2d 840 (5th Cir. 1951) with Bloch v. United States, 200 F.2d 63 (2d Cir. 1952)). Section 1235, in effect, overruled the position taken in the mimeograph by allowing capital gains treatment for periodic royalty-type payments in the case of qualifying transactions.

  8. Hooker Chemicals Plastics Corp. v. U.S.

    591 F.2d 652 (Fed. Cir. 1979)   Cited 9 times

    The language of the agreements in their entirety must be considered as well as the total factual setting; however, the labels employed and the form used are not determinative. Kronner v. United States, 110 F. Supp. 730, 734, 126 Ct.Cl. 156, 163 (1953); Taylor-Winfield Corp. v. Commissioner, 57 T.C. 205, 215 (1971), aff'd, 467 F.2d 483 (6th Cir. 1972); Pickren, supra, 378 F.2d at 600. Moreover, clauses in an agreement permitting termination by the grantor upon the occurrence of stated events or conditions will not preclude the transaction from being considered a sale; such clauses are uniformly treated as conditions subsequent, akin to provisions in realty conveyances calling for reversion of title previously vested.

  9. Estate of Klein v. C.I.R

    507 F.2d 617 (7th Cir. 1974)   Cited 9 times

    Patent law specifically authorizes the assignment of a patent or of any interest therein or the grant of exclusive rights thereunder to the whole or any part of the United States, 35 U.S.C. § 261. Under § 117(a)(4) royalties based on the use of transferred patent rights had been treated as capital gains for income tax purposes. Myers v. Commissioner, 1946, 6 T.C. 258; Kronner v. United States, 1953, 110 F. Supp. 730, 126 Ct.Cl. 156; United States v. Carruthers, 9 Cir. 1955, 219 F.2d 21. And it was so held in the case of a transfer of patent rights limited to a particular geographical area. Marco v. Commissioner, 1955, 25 T.C. 544. The Commissioner, however, had announced in 1950 in Mimeograph 6490, 1950-1 CB 9, that if in the case of a transfer of patent rights payment was to be measured by royalties based on the production, sale or use of the property transferred or payable periodically over the period of the transferee's use of the property, he would regard the royalties thus paid as ordinary income and not capital gain. It was, in part, to settle the question thus raised that § 1235 of the 1954 Code was enacted. As we have seen, paragraphs (1) and (2) of § 1235(a) deal with this precise problem by providing that the payment of the purchase price in the form of such a periodic or contingent royalty shall not affect the legal nature of such a transaction as a sale or exchange of a capital asset.

  10. Melin v. United States

    478 F.2d 1210 (Fed. Cir. 1973)   Cited 10 times

    Although the agreement of December 8, 1964, between Mr. Melin and Rainier was in the form of a license, it granted to Rainier the exclusive right to make, use, and sell the mechanical off-bear and slab-handling apparatus, and, therefore, it was, in substance, a sale or assignment of the entirety of Mr. Melin's rights (if any) in this invention, rather than a mere license. Waterman v. Mackenzie, 138 U.S. 252, 256, 11 S.Ct. 334, 34 L.Ed. 923 (1891); Kronner v. United States, 110 F. Supp. 730, 734, 126 Ct.Cl. 156, 163 (1953); Bell Intercontinental Corp. v. United States, 381 F.2d 1004, 1011, 180 Ct.Cl. 1071, 1077 (1967). There is, however, a sharp controversy between the parties over the question of who owned the patent and the invention as of the times when the respective agreements were entered into by Mr. Melin with Owens-Parks and Rainier, and whether Mr. Melin had any rights in the lumber-stacking patent or in the mechanical off-bear and slab-handling invention that could be the subject of a sale or assignment.