Understanding Technical Uncertainty and the Start of Experimental Development
Recently, I was engaged in a technical project for which a solution had eluded a manufacturing company for a period of time. What was interesting about this particular project was the question of technical uncertainty, and when did experimental development efforts begin. The client in question is a Canadian manufacturing company conducting business in Canada. In assessing whether or not technical uncertainty is present I will refer to the following table. As illustrated in Table 1, technical uncertainty occurs at the intersection of "no prior knowledge".
When we refer to the concept of no prior knowledge it is likened to saying it is not known based on available knowledge if a direct line of sight solution exists.
When technical uncertainty exists, what reasonable efforts did the organization pursue to render a decision as to whether or not no prior knowledge exists and warrants experimental development?
To answer this question, I will refer to an experience with a client involving a process that blends a number of technologies in the manufacture of foam products used in the food industry. In determining whether or not the company had reasonably addressed the issue of technical uncertainty I sought to know how the company engaged people that had developed the technology along with those who had extensive experience using the technology.
Internal and External Knowledge and the question of technical uncertainty
In the case of the client for which I was engaged, engineering had acquired a significant amount of knowledge gained through years of experience with the manufacturing technology in question. While engineering had correctly identified the sub-system that was the source of their problem, their prior knowledge and routine development efforts failed to achieve the desired outcome. In an effort to access prior knowledge outside the company, engineering engaged external technical experts with the intention of leveraging their prior knowledge in an effort to identify a direct line of sight solution that would require routine development efforts to implement. This endeavour was not successful. The only solution offered by external technical experts required the purchase of new capital equipment. Such an option was not economically viable. At this point, the question as to whether or not other sources of prior knowledge exist was raised. It has been my experience when a number of technologies are blended together, as in this case; such knowledge is unique and usually restricted to the expertise of the company that created it. If their experience could not manipulate the technology in a manner that could yield a solution, it is highly unlikely that prior knowledge as to how this could be accomplished exists outside their realm of expertise. To confirm this observation, the question of prior knowledge was raised with the experts that created the technology in question. Their response to our inquiries confirmed we had met the boundary beyond which it was unlikely that a continued search for prior knowledge had been exhausted.
Constrained by economic realities, the need to use existing equipment, and exhausting sources of knowledge in and outside the organization; it became evident that a course of experimental development was required because there was no prior knowledge to address the technical uncertainty before them. Such technical uncertainty was beyond the knowledge base of the organization and a systematic investigation by experiment and analysis was necessary to remove such uncertainty thereby consistent with the spirit of SR&ED.