In confirming the denial of the claim of the taxpayer that it had engaged in experimental development in building mobile direct-contact water heaters for use in fracking, Spiro, J. found that:
- there was an absence of any expert evidence demonstrating technological risks or uncertainties which could not have been removed by routine engineering or standard procedures, and the work could instead be characterized as routine engineering.
- the taxpayer could not identify hypotheses that were tested by its work, which could instead be characterized as having been conducted by trial and error;
- it had not been demonstrated that the work constituted a technological advance; and
- insufficient records were kept.