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 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 an improved 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, where advisers stressed getting patent protection before his idea was publicised. “Among the first things we did was speak with Inventhelp Innovation to view the way we could protect the concept,” says McCarthy, who launched Maxtrax in 2005. It is now available in about 30 countries worldwide. McCarthy has patents in key markets including Australia, Europe and also the US, as well as the business also has a trademark on the distinctive original “safety orange” hue it ways to use 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, the 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), particularly, often neglect safeguarding their IP or think it will probably be too expensive. “The majority of protectable IP goes unprotected,” he says.
Europe can become 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 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 usa you can do something regarding it, 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 inside the foot; they’ve forfeited their rights and anyone can copy [their idea].” Postma observes that company owners often think their idea is simply too easy to warrant a patent. “However, if it’s successful and uncomplicated, it will 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 in the Munich-based European Patent Office (EPO), which oversees about 160,000 patent applications per year. She recently completed a road trip warning Australian companies 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, particularly, Invention Companies in order to get a good return on the investment,” she says.
Many international businesses have baulked at exporting to Europe as a result of complex patent processes across multiple jurisdictions that can result in potentially high costs and marginal protection. However, the EPO is promoting a new unitary patent system that promises to be a game changer. This will make it easy to get protection in approximately 26 participating European Union member states with the submission of a 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 provides 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 possibilities to expand into the European market, which boasts greater than 500 million people, high gross domestic product and robust consumer demand. “It’s essential for Australian businesses to comprehend that you will find a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s very important to get an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) individuals-house they need to attempt to get strategic business advice.”
The need for intangible assets – This call to action for Australian businesses may come as the international Innovation Index 2017 reports on countries’ IP receipts being a portion of total trade. Essentially, the measure indicates the way a country has been doing on the IP front. While Australia scores well with regards to inputs into research and development, the united states (5.1 %), Japan (4.7 %) and Finland (2.9 %) easily outperform Australia (.3 %) on IP royalties.
The message? Being a general rule, Australian companies are certainly 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 value of intangible assets like brand and data use, and make their briaac around it.
In a knowledge-based economy, IP has turned into a crucial business tool and governing it is no longer just dependent on organising trademarks and Inventhelp Successful Inventions. Intangible assets are rapidly becoming more 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 % from the companies’ value (about A$550 billion) will not be included on the balance sheets; this means that that investors are operating without insights into a significant proportion from the corporate asset base.