In the case of Fox Film Corp. v. Doyal et al., 1931, the U.S Supreme Court ruled in favor of Fox Film Corporation, reversing a decision by the Georgia Supreme Court which had held that films were not subject to taxation under state law because they were copyrighted and thus considered intangible property. The issue arose when Fox Film Corporation refused to pay taxes on its films exhibited in Georgia, arguing that federal copyright laws protected them from such taxation. However, Justice Benjamin Cardozo disagreed with this interpretation and stated that while copyrights are indeed recognized as intangible property under federal law, they do not exempt physical objects (like film reels) embodying intellectual property from being taxed at a state level. Therefore, he concluded that states have the right to tax tangible personal property even if it contains copyrighted material.

In the dissenting opinion for FOX FILM CORP. v. DOYAL et al., Justice Stone argued that the majority's decision to uphold a state tax on royalties from copyrighted films was inconsistent with previous rulings of the Court and violated constitutional protections of copyrights. He contended that, while states have broad powers to tax businesses within their borders, they cannot impose taxes directly on rights granted by federal law such as copyright privileges without violating principles of federalism and supremacy clause in Constitution. The justice believed this ruling could potentially open doors for states to levy taxes on other federally-granted rights or benefits which he saw as an overreach into areas reserved exclusively for federal regulation under constitution.