Danskin, Inc. v. Comm'r
United States Tax Court
Held, (1) legal expenses incurred by reason of a trademark infringement action brought by petitioner where an agreement of settlement was entered into with the alleged infringer are capital expenditures; (2) petitioner cannot now elect to amortize these expenses under the provisions of section 177, I.R.C. 1954, as amended; and (3) petitioner has failed to establish that certain claimed bargain sales made to two stockholders were compensation for services rendered.
1Opinion of the Court
OPINION
Black, Judge:
Issue 1. Trademarh Infringement Litigation Expenses
Petitioner claimed as an ordinary and necessary business expense legal fees paid in connection with a trademark litigation in 1959. On April 28, 1959, petitioner, owner of the registered trademark “Danskin,” 1 for hosiery and stockings, brought an action against the user of the trademark “Gamskin,” used in association with similar goods, for damages and injunctive relief mider the provisions of sections 22, 32(1), 34, 35, 36, and 43(a) of the Trademark Act of 1946.'2 In July 1959, the parties entered into a settlement…
2Cases cited5 opinions
- Campbell Soup Co. v. Armour & Co.Court of Appeals for the Third Circuit · 1949
- Heil Beauty Supplies, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Eighth Circuit · 1952
- Clark Thread Co. v. Commissioner of Internal RevenueCourt of Appeals for the Third Circuit · 1938
- Gould-Mersereau Co. v. CommissionerUnited States Board of Tax Appeals · 1931
- Joseph W. Harris v. United StatesCourt of Appeals for the Ninth Circuit · 1960
3Cited by5 opinions
- Danskin, Inc. v. Commissioner of Internal RevenueCourt of Appeals for the Second Circuit · 1964
- Medco Products Co. v. CommissionerUnited States Tax Court · 1974
- Danskin, Inc. v. Comm'rUnited States Tax Court · 1963
- Medco Products Co. v. CommissionerUnited States Tax Court · 1974
- Saltzman v. CommissionerUnited States Tax Court · 1994