(161) The Commission takes note of the comments submitted by France and summarised in Section 4.1. It understands that France is of the opinion that it notified the main thrust of the structural and contractual changes to the Commission in 2001. Nevertheless, in the Commission’s opinion the growth in IFP’s commercial activity since 2001 through its subsidiaries is such that it significantly affects any previous economic and legal analysis. Hence it is adhering to its assessment, as set out in point 3.2 of the decision to initiate the procedure, as regards the unlawfulness of the aid, according to which the aid at issue must be considered unlawful as from the date of expiry of the validity of its 1998 decision, i.e. as from 1 January 2003.

(162) The Commission takes note of the comments from France and Axens concerning the situation of legitimate expectation on the part of the beneficiaries. Nevertheless, in the light of the elements that follow and insofar as the Commission concludes that the aid granted to IFP and its subsidiaries is compatible with the common market, it is not necessary for the Commission to rule on the matter.

(163) The Commission has not acceded to a request from UOP that it take a decision ordering France to suspend payment of any unlawful aid. First of all, the State support granted to IFP constitutes the main source of financing for activities other than the economic activities of IFP and its subsidiaries Axens and Prosernat, such as training, fundamental research, collaborative R & D and the dissemination of R & D findings, which the Commission considers in principle to be non-economic and which account for more than 90 % of the State support granted to IFP. Secondly, the Commission took the view that such a decision was irrelevant insofar as it was reasonable to anticipate the compatibility of at least part of the aid.

(164) Before examining the research stages provided for in the 1996 R & D framework, the Commission must determine whether IFP’s State-aided activities do in fact come under the heading of research and development. In this connection, the Commission would refer to the Frascati Manual(39), which gives definitions of R & D and classifications of its constituent activities.

(165) The Frascati Manual provides criteria for distinguishing R & D from related scientific, technological and industrial activities. The basic criterion proposed by the Manual is the existence, in the case of R & D, of an appreciable element of novelty and the resolution of scientific and/or technological uncertainty.

(166) There are a number of supplementary criteria in the form of the objectives of projects, the unknown nature of the phenomena, structures or relationships on which projects are based, the novel application of knowledge or techniques already acquired, the likelihood that projects will result in new (extended or deeper) understanding of phenomena, relationships or manipulative principles likely to be of interest to more than one organisation, the patentability of results, the type of staff working on projects, the methods used, the general nature of the findings or results of a project and, where applicable, the more natural classification of the project in other fields of activity.

(167) Lastly, the Frascati Manual states that ‘If the primary objective is to make further technical improvements on the product or process, then the work comes within the definition of R & D. If, on the other hand, the product, process or approach is substantially set and the primary objective is to develop markets, to do pre-production planning or to get a production or control system working smoothly, the work is no longer R & D’.