By denying the petition for certiorari for Altera Corporation (Altera U.S.), the United States Supreme Court has permitted the position of the U.S. Court of Appeals for the Ninth Circuit to prevail. The position maintains the validity of the U.S. cost-sharing rules that necessitates participants to a qualified cost-sharing arrangement (QCSA) to include stock-based compensation (SBC) in the cost base. While the denial ends the duel between Altera and the Ninth Circuit, the larger conflict between the Commensurate with Income standards (CWI) and the arm’s length comparability analysis requirement for cost-contribution arrangements (CCA) remains open. This article identifies linkages between the narrow problem of SBCs under CSAs that concern Altera and the broader direction of the arm’s length standard for CCAs.
