Great editorial. Tactics like this (whether Oracle or Microsoft) give me a knot in the pit of my stomach.
Why does small and medium business (SMB) ignore the R&D tax credit program? I believe there are two main factors.
One, big government and big business do not understand the motivators behind R&D in the SMB space. Government has wrongly assumed that the tax credit is the goal of R&D and has built its program support infrastructure on that fallacy. It is painfully obvious that there was a lack of SMB input at the planning stages of this program. The SMB sector pursues R&D for the profit motive, not to pay less taxes.
Two, however enticing a government offer appears on the surface, the entrepreneur has learned to be wary of the fine print. To take advantage of the R&D tax credit the rules of engagement require claimants to hire a battery of professionals to assure their applications follow program guidelines, meet the oft-less-than-clear program objectives and are meticulously documented in a way that only a bureaucrat could appreciate. Even when one believes they have done everything correctly, the final affront can come in the form of a hostile government review committee who are determined in saving their employer the payout of the tax credit. All can be for naught based on the subjective whims of some policy wonk.
I would venture to guess that the SMBs who are most adept at claiming R&D credits take advantage of many similar offerings of government largesse. Having embraced the ideal of corporate welfare they congregate in the same hand-out lines as a host of “”support professionals”” who wonder aloud why there are not more participants. The answer may well be that, for some, it creates an unnatural dependency on big brother and chasing the “”tax credit”” becomes an undesirable new business by-product.
Central Microsystems Inc.
We are a small company and we have spent a considerable amount of money to develop a new software product to fill a market niche that was not serviced. We called in experts from two of the big five accounting firms to advise us on how to apply for and collect the R&D tax credit, and how much we were entitled to.
After much analysis we finally decided that the disruption to our business would not be offset by the net return after all of the consultants fees. The additional internal labour to create the documentation was going to cost us about half the available tax credit, and the consultants fees would consume about a third of the available credit. We did not feel the remaining sixth of the potential credit offset the risk of not getting it after the tax department reviews, and the undocumentable cost of these additional people slowing down our project.
We would be interested in using the tax credits, but for a small business they are very hard to justify. For a larger company that can put in place regular staff to deal with the documentation and paperwork issues the justification can be made much easier, however we do not have enough of this kind of work to have an in-house employee.
A. B. Nelson
ESTec Systems Corp.
Your article completely misses the point, in my opinion. Speaking as an owner/manager of a small software company that’s been involved in computer-related research and development for over 15 years, I’ve watched the Canadian government steadily reduce the benefits available to firms like ours from the scientific research and experimental development program.
Canada Customs and Revenue Agency has progressively made the rules for defining research and development narrower and narrower, so that more and more of what we do cannot meet their criteria. In addition, the rules for defining SR&ED have become so complex that we now find ourselves hiring specialists to help prepare our submissions, again reducing our ability to capture benefits. These two factors combine to reduce the value accruing from the R&D programs we conduct, and to make us seriously consider not bothering to apply at all.
The Software Group Limited
I’d just like to say that I applaud your responsible approach to this and other stories. I believe you showed two correct philosophies. One, sticking to your business focus by concentrating on Canadian IT. Two, avoiding the urge to simply move with the herd and publish something just because everyone else has.
I wish I could say that other news media follow your example but mostly you are ahead of the pack. Keep up the good work.
If vendors like Novell are interested in the longevity of their products, they should also be giving them away to educational institutions.
This is where the next generation of managers are being trained. Many high schools and universities cannot afford the cost of software to outfit student labs. Even educational discounts that seem quite attractive become prohibitive when the multiplied by the number of workstations within a lab.
Manager of the Arts Computing Office
University of Waterloo
In this case, the judge is walking a fine line, and is putting the burden of proof on both parties. The defendants will probably take a two-pronged approach. First, show that the patent as granted has nothing to do with Web hyperlinks (not especially tricky, but very technical and most judges hate technical if it’s boring). At the same time, they will probably also go for the prior art thing, and show that it was really invented simultaneously and independently by guys like Kay and Englebart and others prior to the BT claim, plus was re-invented independently by Berners-Lee (re-invention without having seen the original patent attacks the non-obvious bit).
I expect that in the end the judge will find that the patent was either granted in error because of the amount of prior art (and probably revoke it), or will say that the patent has nothing to do with software hyperlinks, but deals with something much more narrow and focused (probably some custom way to connect computers physically, which is probably the original intent. I haven’t seen the patent myself, and try to avoid looking at them to avoid being “”contaminated”” by having seen someone else’s invention) such that future infringement claims will have to be equally narrow and focused because her ruling will be used as the precedent in future cases. There will likely be an appeal, but unless the judges makes a procedural goof, I expect a ruling against BT will stand.
It’s all bull, but why sue the ISPs? Should they not sue the browser makers and Web server software producers that implemented hyperlinks in their software?
This is a very informative article. Thanks for your service and the writer’s effort to make it happen.
As a wireless Internet service provider I take offense to the slant that the article in question takes. It seems the author has not delved deeply enough into where the actual connection to the Internet takes place and whose service is being resold without license or contract. The article makes trivial mention of the legalities of what these people may be doing, and in fact goes as far as to imply that it may be legal.
Please tell me where the freenet connects to the Internet, and who’s paying for that? Have they read their end user agreement which states quite clearly that “”the subscriber may not under any circumstance resell or provide Internet access to any 3rd party””? Who’s going to provide tech support for all these freenet user? Is that to be free, too?
My backbone cost me several thousands of dollars per month. It would be foolhardy indeed to think I could just give away the service.
Not much of a secret.
IBM has rights to AIX5L, SCO lost rights to Monterey as long as IBM markets AIX5L. Both are 64-bit OS’s, and require a high performance Intel 64bit solution. So far the HW has not been available as a strong performance leader. I have played on both the IBM and Compaq Itanium boxes, but the Pentium III servers are turning in similar performance.
No hardware, no market, no sales, Monterey languishes. In the mean time, OpenUnix8 on 32bit Intel is an impressive solution, and SCO/Caldera is investing in what sells now. Cash flow is required.
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