Intellectual property can be a crucial business tool, although not everyone thinks hard enough about protecting their big ideas. In 2001, plumber Brad McCarthy got stuck on the remote beach in Cape York in north Queensland and spent about 6 hours getting his car out with a hand winch. He knew there must be an improved way. In response, 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. “One of the first things we did was talk with a patent attorney to view how we could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It really is now available in about 30 countries worldwide. McCarthy has Free Invention Help in key markets such as Australia, Europe and the US, and the business even offers a trademark on the distinctive original “safety orange” hue it ways to use its moulded product. Unlike McCarthy, however, many inventors and businesses with recommended cruel their likelihood of success from day one.
Their big mistake? Ignoring patents or other intellectual property protection before they spruik their idea to investors, the general public or even friends. It can become 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 expensive. “The vast majority of protectable IP goes unprotected,” he says.
Europe can be a particular trap for exporters because, unlike various other major markets, it does not have a grace period making it possible for public disclosure of an invention without affecting the validity of the subsequent patent application. That opens the way in which for an idea or product to get copied. “In Australia and the usa you can take action about this, provided you’re within 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 just too very easy to warrant a patent. “However, if it’s successful and straightforward, it will probably be copied and you have to get advice.”
Unitary patents on way – Margot Fröhlinger is principal director of unitary patent, European and international legal affairs at the Munich-based European Patent Office (EPO), which oversees about 160,000 patent applications annually. She recently completed a road trip warning Australian businesses that poor patent and IP safeguards could derail their European market opportunities. Companies have to innovate – and protect their inventions. “You need the protection of the IP and, specifically, patent protection in order to get a good return on the investment,” she says.
Many international businesses have baulked at exporting to Europe because of complex patent processes across multiple jurisdictions that can lead to potentially high costs and marginal protection. However, the EPO is promoting a whole new unitary patent system that promises as a game changer. This makes it possible to get protection in up to 26 participating European Union member states with the submission of a single request to the EPO.
A November 2017 EPO study, Idea Patent, Trade and FDI inside the European Union, suggests better harmonisation of Europe’s patent system provides the possible ways 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 to the European market, which boasts a lot more 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 only about patents,” Fröhlinger says. “It’s extremely important to have an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) folks-house they need to 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. Essentially, the measure indicates the way a country is performing on the IP front. While Australia scores well in terms of inputs into research and development, the usa (5.1 percent), Japan (4.7 per cent) and Finland (2.9 per cent) easily outperform Australia (.3 percent) on IP royalties.
The message? As being a general rule, Australian companies are not great at converting research into value and treat IP nearly as an administrative function. The exceptions are health tech leaders, like medical device company Cochlear and sleep-disorder business ResMed, which understand the value of intangible assets such as logo and data use, and make their businesses around it.
In a knowledge-based economy, IP has become a crucial business tool and governing it is not just dependent on organising trademarks and Inventors Help. Intangible assets are rapidly becoming more important than tangible assets and require appropriate consideration.
A review of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses this type of sentiment. It reveals that 38 per cent of the companies’ value (regarding a$550 billion) is not included on their jjnywy sheets; this suggests that investors are operating without insights right into a significant proportion from the corporate asset base.