In Uncategorized on 08/17/2018 at 13:51

8 Cir has a laundry list of factors Judge Kerrigan missed or misapplied in Medtronic, Inc. & Consolidated Subsidiaries, No. 17-1866, filed 8/16/18.

For Judge Kerrigan’s foray into the Comparable Uncontrolled Transaction, see my blogpost “This Is A Memo?” 6/10/16.

Y’all will recall Judge Kerrigan dwelt heavily on the Siemens deal (which 8 Cir calls “Pascesetter”), and did her own mix-and-match with the dueling experts.

8 Cir dissects poor Judge Kerrigan’s 144 pages in just 13 (count ‘em, 13) pages, including concurrence. Siemens grew out of patent infringement, not licensing of intangibles; Siemens had a lump-sum payout, whereas this was a royalty pay-as-you-earn; things other than patents are involved here, and not in Siemens; this is direct licensing, not cross-licensing; litigation risk and product liability weren’t considered in Siemens.

As Mark Twain said when he and and the great Henry Fairfield Osborn reconstructed a dinosaur skeleton, “It is the very way Professor Osborn and I built the colossal skeleton brontosaur that stands fifty-seven feet long and sixteen feet high in the Natural History Museum, the awe and admiration of all the world, the stateliest skeleton that exists on the planet. We had nine bones, and we built the rest of him out of plaster of Paris.” Twain, Is Shakespeare Dead?

But in deference to poor Judge Kerrigan, Judge Wollman (concurring) realizes the problem.

“To conclude, “any search for a ‘comparable uncontrolled [transaction is “undoubtedly quixotic.”” Order, at p. 13 (Citation omitted).

But still Tax Court is bound by Reg. 1.482-1(D)(1).

A minor Taishoff rant follows. These Regs are at least forty years out of date as far as modern business practices are concerned. Judge Kerrigan tried to craft the best result she could while giving lip service to these obsolete impossibilities. Expecting Congress or Treasury to play catch-up with the best brains in the private sector is what gave us the Brewster Buffalo fighter plane against the Mitsubishi A6N Zero.

But wait, there’s more, as the midnight telehucksters say.

As Judge Reinhart died before Altera Corporation and Subsidiaries, No. 16-70496, filed 7/24/18, was published, 9 Cir has a Mulligan going on in October. See my blogpost “Aspirational Goals,” 7/24/18, for the backstory.

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