How do you define standard practice?

To be eligible for SR&ED, a company must demonstrate that it is seeking technological or scientific progress in its development. It is necessary to expose an experimental process that attempts to go beyond standard practice. Therefore, establishing what is standard practice, is an essential step for any SR&ED claim.[1]

However, certain prerequisites must be met:

• The R&D activity must require a creative operation for an individual normally competent in this scientific or technological field.
• This operation must have been launched following the absence of existing solutions, that is to say, be justified by a study of the state of the art.
• R&D can not be explained by a lack of internal technical know-how.
• The solution should not appear trivial for a domain expert.

Establishing the state of the art – A matter of specialists!

The state of the art is the state of existing technologies. It consists of all the knowledge accessible at the beginning of the work and usable by an individual normally competent in the field. It can be compiled from a variety of sources, including scientific and technical publications, patents and technical databases.

The preparation of the state of the art is an iterative process in three stages:

1. Make a bibliography as complete as possible in relation to the object of study. You should also establish a list of keywords, collect relevant elements and of select them. Keywords are grouped from general to specific and structured. This organization is very useful for collecting and referencing articles, and specialized publications. The references thus found must be recent, but if there are relatively old reference articles in the field, they must also be considered.
2. Summary of relevant information contained in the references. The objective is to remove from publications or patents consulted what is important for the work to be done and to bring attention to the elements of analysis and interpretation: we must focus on what makes us think rather than at the mere presentation of the data. It is therefore a refinement of the network of keywords, its structure and its organization. For each reference, it is necessary to underline the problem it deals with, the solution it proposes and the results obtained. Then, a structured summary of the main definitions, consensus and standards is drawn up, orienting it more precisely on the research problem to be solved.
3. Write-up the state of the art. The researcher must synthesize the main elements of the content, classify approaches according to criteria to be set, draw conclusions and lessons, and finally suggest hypotheses and recommendations.

The state of the art makes it possible to position the problems as well as the R&D objectives in relation to other existing works in the same technological and scientific field. This confirms the originality of R&D ideas and the surpassing state of the art. Moreover, this makes it possible to verify that the uncertainties and technological walls have not been solved in previous R&D work and if so, how they have been. Do the R&D problem solving approaches you found meet the needs of the technological and scientific walls you encountered?

Documenting the state of the art requires more than just selecting the most relevant R&D items and work in the intended field. This also requires understanding these works and analyzing them so as to draw advantages, disadvantages, scientific and technological walls and to draw inspiration to develop new lines of research and hypotheses.

Establishing the state of the art ensures that the company has identified and exploited the knowledge available to carry out its project. It is the attempt to go beyond the state of the art that demonstrates the eligibility for SR&ED credit.

How to identify and remove technological walls?

According to information circulars issued by the Canada Revenue Agency, experimental development activities are eligible for SR&ED only after the identification of a scientific or technological wall.

There are two main families of walls in an R&D program: Scientific Walls and Technological Walls.

• The scientific wall is an obstacle coming from the very nature of domain science. For example a theory not applicable to answer a particular problem. This type of uncertainty is generally encountered in basic research, but also in applied R&D programs. The scientific wall justifies the need to design a new approach to meet the needs and problems of research, which surpasses the state of the art.
• A technological wall is a barrier related to a particular technology. The inability of technology to meet R&D needs is a technological barrier. The project will be qualified as SR&ED if the work done to achieve this alternative technology aims to lift the identified technological walls. The development of an alternative technology to achieve a level of performance comparable to that of an existing technology can also qualify as SR&ED.

It is therefore necessary to examine the existing scientific or technological knowledge base of the project. If a solution exists on the market or is an accessible result, then one does not go beyond the standard practice and this work can not be considered as SR&ED activities even if this solution was not mastered by the company at the beginning of the project.

It is then necessary to establish and quantify objectives to exceed this standard practice. .

Conclusion for qualifying SR&ED work

In conclusion, it does not matter whether or not one overcomes these objectives. What is important for qualifying experimental SR&ED work (scientific or technological) is:

• HOW are the activities executed in a systematic way?
• and especially WHY we do this  work. One must aim for an advancement,

 “which implies an attempt to resolve what is called scientific uncertainty or technological uncertainty. Basically, the advancement is the targeted outcome of the SR&ED work while the uncertainty is the impetus for the SR&ED work. Therefore, an attempt to achieve advancement is an attempt to resolve uncertainty. “

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[1] Note: In this text we use the terms “standard practice”, “knowledge base” and “state of the art” as interchangeable synonyms.