Intellectual property can be a crucial business tool, however, not everyone thinks hard enough about protecting their big ideas. In 2001, plumber Brad McCarthy got stuck on a remote beach in Cape York in north Queensland and spent about six hours getting his car out with a hand winch. He knew there must be a better way. In response, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the super-tough nylon product, he attended a Queensland Government business seminar, where the advisers stressed getting patent protection before his idea was publicised. “One of the primary things we did was talk with a patent attorney to view how you could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It is actually now purchased in about 30 countries worldwide. McCarthy has How To Get Help With An Invention in key markets including Australia, Europe as well as the US, as well as the business also offers a trademark on the distinctive original “safety orange” hue it uses of its moulded product. Unlike McCarthy, however, many inventors and businesses with recommended cruel their chances of success from day one.
Their big mistake? Ignoring patents or any other intellectual property protection before they spruik their idea to investors, people or even friends. It can be a costly error. Bradley Postma, principal at patent and trademark attorney firm Cullens, says small and medium enterprises (SMEs), in particular, often neglect safeguarding their IP or think it will probably be too expensive. “The vast majority of protectable IP goes unprotected,” he says.
Europe can be considered a particular trap for exporters because, unlike a few other major markets, it lacks a grace period making it possible for public disclosure of an invention without affecting the validity of any subsequent patent application. That opens just how for an idea or product to get copied. “In Australia and the usa you can take action regarding it, provided you’re inside a one-year window – in Europe you can’t, it’s too late,” Postma says. “In that case, businesses have shot themselves inside the foot; they’ve forfeited their rights and anyone can copy [their idea].” Postma observes that company owners often think their idea is just too easy to warrant a patent. “However, if it’s successful and simple, it will probably be copied and you should get advice.”
Unitary patents on way – Margot Fröhlinger is principal director of unitary patent, European and international legal affairs on the Munich-based European Patent Office (EPO), which oversees about 160,000 patent applications per year. She recently completed a road trip warning Australian firms that poor patent and IP safeguards could derail their European market opportunities. Companies need to innovate – and protect their inventions. “You require the protection of your IP and, in particular, patent protection in order to obtain a good return on your investment,” she says.
Many international businesses have baulked at exporting to Europe due to complex patent processes across multiple jurisdictions that can result in potentially high costs and marginal protection. However, the EPO is promoting a whole new unitary patent system that promises to be a game changer. This makes it easy to get protection in as much as 26 participating European Union member states with the submission of the single request for the EPO.
A November 2017 EPO study, Idea Inventhelp, Trade and FDI in the European Union, suggests better harmonisation of Europe’s patent system has the possibility to increase trade and foreign direct investment in high-tech sectors, delivering annual gains of €14.6 billion ($A22.8 billion) in trade and €1.8 billion (A$2.81 billion) in foreign direct investment.
Fröhlinger believes Australian businesses across all sectors have opportunities to expand to the European market, which boasts more than 500 million people, high gross domestic product and robust consumer demand. “It’s very important for Australian businesses to comprehend that there is a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s very important with an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) people in-house they should try to get strategic business advice.”
The need for intangible assets – This call to action for Australian businesses comes as the international Innovation Index 2017 reports on countries’ IP receipts being a percentage of total trade. Essentially, the measure indicates how a country is performing on the IP front. While Australia scores well in terms of inputs into research and development, the usa (5.1 %), Japan (4.7 percent) and Finland (2.9 per cent) easily outperform Australia (.3 percent) on IP royalties.
The content? Being a general rule, Australian companies are certainly not proficient at converting research into value and treat IP almost as an administrative function. The exceptions are health tech leaders, including medical device company Cochlear and sleep-disorder business ResMed, which understand the value of intangible assets like brand and data use, and make their businesses around it.
In a knowledge-based economy, IP has developed into a crucial business tool and governing it is not just dependent on organising trademarks and Prototype Service Inventhelp. Intangible assets are rapidly increasingly important than tangible assets and require appropriate consideration.
An overview of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses such a sentiment. It reveals that 38 % of the companies’ value (in regards to a$550 billion) is not really included on the jjnywy sheets; this suggests that investors are operating without insights right into a significant proportion of the corporate asset base.