Why is prior art searching for R&D Tax Incentive needed?

Prior art searching for R&D Tax Incentive is often overlooked, but is an important part of your application. R&D activities will only be acceptable to AusIndustry if that R&D is necessary to uncover new knowledge that is not publicly available to you. Put simply, the R&DTI can’t be used to fund the re-discovery of knowledge that is already publicly available. So you need to show that that knowledge (prior art) was not publicly available to you. See R&D Tax Incentive: draft refreshed Guide to Interpretation for assistance from AusIndustry.

The key phrase is ‘publicly available’. For example, trade secrets held by another company is not publicly available information. It is perfectly acceptable to use the R&DTI to gain in-house knowledge in order to compete with others in your market sector even if that is the same knowledge needed by your competitors – as long as they haven’t publicly disclosed it.

To have a compliant R&D Tax Incentive application, you must have one or more technical or knowledge gaps – something that stops you in your tracks and prevents further progress. AusIndustry is almost certainly not in a position to judge whether your technical gap is valid or not – they will likely not be experts in your field. AusIndustry covers this by putting the onus back on you – you need to show that you have attempted to find the knowledge you need in the public domain. Hence if your application is reviewed by AusIndustry, they will expect to see temporaneous documentation that describes the searching you did. You may or may not need to show why this was adequate searching.

Where you might be expected to look for prior art

The required knowledge cannot be available:

  • Within your organization
  • In scientific, technical or professional literature
  • From internet searches
  • From patent searches
  • From an expert or experts reasonably accessible to you
  • From blogs or industry forums
  • Or anywhere else that an expert in your field may reasonably be expected to look.

Trade secrets and other knowledge not publicly available

If the knowledge you need is available for a fee, that needs further consideration. If the fee is small compared to the cost of the R&D you think may be needed to uncover that knowledge, then you may be commercially better off paying that fee, and avoiding a possible question from AusIndustry about the necessity for the R&D.

How much searching is enough?

Prior art searching is a subjective test – you need to show that you made a credible attempt to uncover the required knowledge from available sources such as those noted above. In a review by AusIndustry, you will need to provide evidence that you made this attempt. As noted above, AusIndustry will not be in a position to know if you have done adequate searching our not, but they may ask you to convince them that you have done enough, and will then use their judgement.

The other thing to note is that evidence of your prior art knowledge searching may become more important if the review of your application progresses as far as the Administrative Appeals Tribunal. In that forum, AusIndustry can call in domain experts who will have knowledge of your field. If their view is that the knowledge to address your technical gap was publicly available and can show that, your case may be weakened.

Summary

It is in your best interests to put a reasonable effort into your knowledge searching. If publicly available knowledge can be found, you should use it. Re-discovering that knowledge yourself through experimentation will be much more costly even if you are successful in claiming the R&D Tax Incentive. If you can convince yourself that you have looked everywhere you can think of, you should be able to convince an AusIndustry review. Above all else – write your searching down in a tracible document at the time you do it!