The U.S. Court of Appeals remanded the long-drawn litigation proceedings in the case of Medtronic, Inc versus Commissioner back to the U.S. Tax Court, directing the court to justify its opinion from June 2016. The cited opinion accepted the use of the comparable uncontrolled transaction method (CUT) applied by the taxpayer with certain adjustments, against the use of the comparable profits method (CPM) proposed by the U.S. Internal Revenue Service (IRS). In its decision, the U.S. Court of Appeals has vacated the Tax Court’s opinion on grounds of deficiency in demonstrating the comparability of the licensing transaction in question. This article deals with the analysis of the licensing structure adopted by Medtronic, divergent opinions of the parties and the judiciary at various levels, particularly on the nature of the functional profile of the licensee, the content of the comparability analysis and the choice of methods determining the arm’s length nature of intangible transactions. It is found that the comparability analysis could have been more robust, although it is acknowledged that the analysis can never be expected to be perfect. The implications of this decision could mark ...