John P. K. Fontaine and Aurelia Fontaine v. George D. Patterson, District Director of Internal Revenue

DeVANE, District Judge.

This appeal involves income taxes for the year 1956 in the amount of $16,-781.87, exclusive of interest. The tax was paid on February 26, 1960, and a claim for refund was filed on March 21, 1960. The claim for refund was denied and this action was instituted in the District Court for the Northern District of Alabama on July 5, 1960. A jury trial was had and final judgment was entered against the taxpayer on March 30, 1961.

The issue in the Court below was whether the patent royalties received by the taxpayer in 1956 were generated by the sale of taxpayer’s basic patent…