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 6 hours getting his car out with a hand winch. He knew there has to be a much better way. In reaction, he invented Maxtrax, a light-weight vehicle-recovery device for bogged off-roaders.
After designing the super-tough nylon product, he attended a Queensland Government business seminar, in which the advisers stressed getting patent protection before his idea was publicised. “Among the first things we did was speak with New Product Idea to view how we could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It is now purchased in about 30 countries worldwide. McCarthy has patents in key markets such as Australia, Europe and the US, and the business also offers a trademark on the distinctive original “safety orange” hue it uses for its moulded product. Unlike McCarthy, however, many inventors and businesses with a good idea cruel their odds 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 be too costly. “The majority of protectable IP goes unprotected,” he says.
Europe can become a particular trap for exporters because, unlike some other major markets, it lacks a grace period allowing for public disclosure of the invention without affecting the validity of the subsequent patent application. That opens just how to have an idea or product to get copied. “In Australia and the United States you can do something 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 within the foot; they’ve forfeited their rights and anyone can copy [their idea].” Postma observes that business owners often think their idea is too easy to warrant a patent. “However, if it’s successful and straightforward, it will likely be copied and you should get advice.”
Unitary patents on way – Margot Fröhlinger is principal director of unitary patent, European and international legal affairs in the Munich-based European Patent Office (EPO), which oversees about 160,000 patent applications a year. She recently completed a road trip warning Australian companies that poor patent and IP safeguards could derail their European market opportunities. Companies must innovate – and protect their inventions. “You have to have the protection of the IP and, in particular, How To Patent in order to acquire a good return on your own investment,” she says.
Many international businesses have baulked at exporting to Europe as a result of complex patent processes across multiple jurisdictions that can lead to potentially high costs and marginal protection. However, the EPO is promoting a new unitary patent system that promises as a game changer. This will make it easy to get protection in as much as 26 participating European Union member states with all the submission of the single request to the EPO.
A November 2017 EPO study, Patents, Trade and FDI inside the European Union, suggests better harmonisation of Europe’s patent system has got the potential 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 chances to expand into the European market, which boasts greater than 500 million people, high gross domestic product and powerful consumer demand. “It’s extremely important for Australian businesses to understand that you will find a big change ahead in Europe. I’m not talking no more than patents,” Fröhlinger says. “It’s essential to have an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) individuals-house they should make an effort to get strategic business advice.”
The value of intangible assets – This call to action for Australian businesses comes as the international Innovation Index 2017 reports on countries’ IP receipts as being a portion of total trade. In essence, the measure indicates how a country is performing on the IP front. While Australia scores well with regards to inputs into research and development, the united states (5.1 %), Japan (4.7 percent) and Finland (2.9 %) easily outperform Australia (.3 %) on IP royalties.
The message? Being a general rule, Australian companies are not proficient at converting research into value and treat IP nearly as an administrative function. The exceptions are health tech leaders, including medical device company Cochlear and sleep-disorder business ResMed, which understand the importance of intangible assets such as brand and data use, and build their briaac around it.
In a knowledge-based economy, IP has become a crucial business tool and governing it has stopped being just a matter of organising trademarks and Inventhelp Inventor Service. Intangible assets are rapidly increasingly important than tangible assets and require appropriate consideration.
Overview of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses this type of sentiment. It reveals that 38 percent from the companies’ value (regarding a$550 billion) will not be included on their balance sheets; this indicates that investors are operating without insights right into a significant proportion of the corporate asset base.