Wall Products, Inc. v. Commissioner

OPINION.

Hill, Judge:

The first issue involves petitioner’s claim that it has the right under section 23 (a) (1) (A) of the Internal Revenue Code1 to deduct from its gross income the payments made to Strange and Kastner for the use of their secret formula. The respondent contends that Strange and Kastner possessed no secret formula and, therefore, that they conveyed no property right to petitioner which could be the basis for payments of royalties. The evidence convinces us that they had such a formula during 1942 and 1943.

In Nimms, Unfair Competition and Trade Marks, 3d Ed. (1929), relied upon…