Intellectual property can be a crucial business tool, but 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 must be an improved way. In response, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the How To Get Help With An Invention, he attended a Queensland Government business seminar, in which 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 find out how you 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 like Australia, Europe as well as the US, and also the business even 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 the first day.
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 expensive. “The majority of protectable IP goes unprotected,” he says.
Europe could be 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 a subsequent patent application. That opens just how to have an idea or product to get copied. “In Australia and the United States that 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 company owners often think their idea is just too easy to warrant a patent. “However, if it’s successful and straightforward, it will be copied and you should get advice.”
Unitary patents on way – Margot Fröhlinger is principal director of Inventhelp Inventions Store, European and international legal affairs on the Munich-based European Patent Office (EPO), which oversees about 160,000 patent applications a 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 need the protection of your own IP and, specifically, patent protection in order to get an excellent return on your investment,” she says.
Many international businesses have baulked at exporting to Europe due to complex patent processes across multiple jurisdictions that may 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 will make it possible to get protection in as much as 26 participating European Union member states using the submission of any single request towards the EPO.
A November 2017 EPO study, Patents, Trade and FDI inside 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 to the European market, which boasts a lot more than 500 million people, high gross domestic product and strong consumer demand. “It’s very important for Australian businesses to know that there is a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s essential with an integrated IP portfolio considering patents and trademarks and (covering) design. If they don’t have (IP) people in-house they ought to try to get strategic business advice.”
The value of intangible assets – This call to action for Australian businesses may come as the worldwide Innovation Index 2017 reports on countries’ IP receipts being a percentage of total trade. Basically, 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 %), Japan (4.7 percent) and Finland (2.9 percent) easily outperform Australia (.3 percent) on IP royalties.
The content? Typically, Australian companies usually are not great at converting research into value and treat IP almost as an administrative function. The exceptions are health tech leaders, including medical device dppdwz Cochlear and sleep-disorder business ResMed, which understand the significance of intangible assets like logo and data use, and make their businesses around it.
In a knowledge-based economy, IP is becoming Inventors Helpline and governing it is not only a matter of organising trademarks and patents. 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 this type of sentiment. It reveals that 38 % in the companies’ value (about A$550 billion) is not included on their own balance sheets; this suggests that investors are operating without insights into a significant proportion in the corporate asset base.