Hiram is a computer engineer. While unemployed, he invented a switching device for computer networks. He patented the device, but did not reduce it to practice. Hiram has a zero tax basis for the patent. In consideration of $800,000 plus a $1 royalty per device sold, Hiram assigned the patent to a computer manufacturing company. Hiram assigned all substantial rights in the patent. Which of the following is correct?

a. Hiram has long-term capital gain from the lump sum payment, but not from the royalty payments.

b. Hiram has long-term capital gain from the royalty payments, but not from the lump sum payment.

c. Hiram has long-term capital gain from both the lump sum payment and the royalty payments.

d. Hiram does not have long-term capital gain from either the lump sum payment or the royalty payments.

e. None of the above is correct.