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 should be a better way. Responding, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the Idea Patent, 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 to a patent attorney to view the way we could protect the thought,” says McCarthy, who launched Maxtrax in 2005. It really 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 of its moulded product. Unlike McCarthy, however, many inventors and businesses with a great idea cruel their chances of success from day one.
Their big mistake? Ignoring patents or other intellectual property protection before they spruik their idea to investors, people as well as friends. It may 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 vast majority of protectable IP goes unprotected,” he says.
Europe can be quite a particular trap for exporters because, unlike a few other major markets, it lacks a grace period allowing for public disclosure of the invention without affecting the validity of a subsequent patent application. That opens the way for an idea or product to get copied. “In Australia and the United States that you can do something about this, provided you’re inside a one-year window – in Europe you can’t, it’s far too late,” Postma says. “In that case, businesses have shot themselves inside the foot; they’ve forfeited their rights and everyone 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 uncomplicated, it will probably be copied and you have to get advice.”
Unitary patents on way – Margot Fröhlinger is principal director of Inventhelp Commercials, 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 firms that poor patent and IP safeguards could derail their European market opportunities. Companies need to innovate – and protect their inventions. “You have to have the protection of your IP and, in particular, patent protection in order to get a great return on your investment,” she says.
Many international businesses have baulked at exporting to Europe because of complex patent processes across multiple jurisdictions that will end in 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 easy to get protection in approximately 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 in the European Union, suggests better harmonisation of Europe’s patent system has 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 opportunities to expand into the European market, which boasts a lot more than 500 million people, high gross domestic product and powerful consumer demand. “It’s essential 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 with an integrated IP portfolio considering patents and trademarks and (covering) design. If they don’t have (IP) individuals-house they ought to try to get strategic business advice.”
The price of intangible assets – This call to action for Australian businesses comes as the worldwide Innovation Index 2017 reports on countries’ IP receipts as a amount of total trade. Basically, the measure indicates just how a country has been doing on the IP front. While Australia scores well when it comes to inputs into research and development, the usa (5.1 percent), Japan (4.7 per cent) and Finland (2.9 percent) easily outperform Australia (.3 %) on IP royalties.
The content? For the most part, Australian companies are certainly not great at converting research into value and treat IP nearly as an administrative function. The exceptions are health tech leaders, like medical device dppdwz Cochlear and sleep-disorder business ResMed, which understand the value of intangible assets like logo and data use, and make their businesses around it.
In a knowledge-based economy, IP is becoming How Do You Get A Patent and governing it is not just a matter of organising trademarks and patents. Intangible assets are rapidly more and 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 % of the companies’ value (regarding a$550 billion) will not be included on their balance sheets; this means that that investors are operating without insights into a significant proportion in the corporate asset base.