Bridgestone Aust Ltd v Industry Research & Dev Brd

Bridgestone Australia Ltd (Bridgestone) sought judicial review of a decision by the Industry Research and Development Board (the Board) to refuse its application for a tax concession under the *Industrial Research and Development Incentives Act 1986* (Cth) (the Act). The dispute concerned whether Bridgestone's research and development activities qualified as "eligible activities" for the purposes of the tax concession. The matter came before the Full Federal Court of Australia.

The central legal issue before the Full Federal Court was the proper interpretation of the term "eligible activities" as defined in section 3(1) of the Act. Specifically, the court had to determine whether Bridgestone's activities, which involved the development of new tyre manufacturing processes and improvements to existing ones, constituted "research and development" within the meaning of the Act, or whether they were merely routine manufacturing or quality control processes.

The court's reasoning focused on the distinction between genuine research and development and activities that are part of the ordinary course of business. Gaudron and Kirby JJ applied the principles established in previous cases, emphasizing that eligible activities must involve an element of innovation, uncertainty, and the systematic generation of new knowledge or understanding. They found that while Bridgestone's activities aimed to improve efficiency and product quality, they did not demonstrate the necessary degree of novelty or scientific or technological advancement to qualify as research and development under the Act. The court concluded that the Board's decision was correct.