Mid-February, 2009


Who owns the SRED?

One of the issues that often arises with compiling SRED claims that involve work that has been outsourced is “Just whose SRED is it anyway?” For example, if you contract SRED tasks to an engineering firm for a fee, should you claim the costs as SRED, or should that engineering firm file a claim for their costs in this work? This is pertinent because a particular dollar of costs can only be claimed by one person.

CRA has established criteria to be considered when evaluating this issue, and it seems to us that the two most important are (1) who bore the risk of the SRED, and (2) to whom does any resultant advancement in knowledge belong?

The risk of the SRED usually has to do with the economic impact of success or failure. For example, if the engineering firm above agreed to charge a fixed fee for delivering a technological advancement, but were unable to charge it in the event of a failure, it is that firm’s risk and this would be indicative of their right to the SRED claim.

We aim to help our clients avoid such squabbles through proper planning. We help their lawyers understand the issues so that contracts can be drawn up to clarify such issues in our clients’ favour.







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