After developing and commercially launching a miniature portable printer, the taxpayer pulled the product in 2009 after identifying problems with curling paper and battery life. The taxpayer performed further work in 2009 and 2010 to remedy these defects (with partial success). The Minister characterized the work as routine engineering.
D'Auray J allowed the taxpayer's appeal. Paragraph (c) of the definition of "scientific research and experimental development" ends with "including incremental improvements thereto," and the French wording ("même légère, de ceux qui existent") makes it clear that experimental development includes "a slight improvement to materials, devices, products, or processes" (para. 100).
The further work included investigating the causes of the defects (which both turned out to be related to the anti-paper-curling mechanism), investigating and implementing a power-consumption curve in the printer's driver to avoid power-costly motor-stalling, finding new materials and surfacing methods in the anti-curling mechanism to make it more resistant to wear, and figuring out how to test paper at different moisture levels. D'Auray J disagreed with the Minister's "analytical approach" of applying the SR&ED tests to each of these activities individually - although, in any event, each individual activity passed those tests (para. 103). Although the taxpayer did not file any documents establishing its systematic investigation, this was established on the testimony of its chief researcher (paras. 92-3) (whose testimony that the required scientific report had been included with a form T661 filing was also accepted).