Adrian D. Smith & Nancy Smith, et. al., Docket No. 13382-17, filed 12/18/24, are part of a firm of architectural designers with a worldwide clientele. Here, they’re enmeshed in a brouhaha over Section 41 additional research credits for a trio castles (hi, Judge Holmes), one each in Dubai, Saudi Arabia, and Abu Dhabi.

Judge Christian N. (“Speedy”) Weiler tosses IRS’ summary J motion because of ambiguous language in the contracts. To whom do the results of the research belong? IOW, is this work-for-hire, in which case no credit. And is this funded research, that is, upon whom does the risk of failure fall? Judge Speedy Weiler lays out the conflicting contractual paragraphs.

It comes down to whether the petitioner was paid for research or for results. And foreign copyright and IP law are also in play. IRS’ claim that petitioners’ failure to give a Rule 146 notice before invoking foreign law is treated as a “no hurt, no foul.” These are offshore deals, so from the get go foreign law must be considered. Order, at p. 12.

Plenty of drafting hints (and landmines) here. This is what happens when the large print giveth and the small print taketh away.