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 has to be a much better way. In response, he invented Maxtrax, a light-weight vehicle-recovery device for bogged off-roaders.
After designing the New Invention Ideas, he attended a Queensland Government business seminar, where the advisers stressed getting patent protection before his idea was publicised. “Among the first things we did was talk to a patent attorney to view the way we could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It is actually now sold in about 30 countries worldwide. McCarthy has patents in key markets like Australia, Europe and also the US, as well as the business also has 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 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 could 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 various other major markets, it lacks a grace period permitting public disclosure of your invention without affecting the validity of the subsequent patent application. That opens the way in which for an idea or product to be copied. “In Australia and the United States that can be done something about this, provided you’re within a one-year window – in Europe you can’t, it’s too far gone,” 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 business owners often think their idea is too simple to warrant a patent. “However, if it’s successful and uncomplicated, it will likely be copied and you need to get advice.”
Unitary patents on way – Margot Fröhlinger is principal director of How To Submit A Patent, 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 businesses that poor patent and IP safeguards could derail their European market opportunities. Companies have to innovate – and protect their inventions. “You require the protection of the IP and, particularly, patent protection to acquire an excellent return on your own investment,” she says.
Many international businesses have baulked at exporting to Europe due to complex patent processes across multiple jurisdictions that will 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 possible to get protection in up to 26 participating European Union member states with all the submission of a single request for the EPO.
A November 2017 EPO study, Patents, Trade and FDI inside the European Union, suggests better harmonisation of Europe’s patent system has 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 possibilities to expand in to the European market, which boasts greater than 500 million people, high gross domestic product and robust consumer demand. “It’s very important for Australian businesses to comprehend that there is a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s extremely important to get an integrated IP portfolio considering patents and trademarks and (covering) design. When they don’t have (IP) people in-house they ought to try to get strategic business advice.”
The price of intangible assets – This call to action for Australian businesses may come as the worldwide Innovation Index 2017 reports on countries’ IP receipts as a percentage of total trade. Essentially, the measure indicates the way a country is performing on the IP front. While Australia scores well with regards to inputs into research and development, the usa (5.1 percent), Japan (4.7 %) and Finland (2.9 per cent) easily outperform Australia (.3 per cent) on IP royalties.
The content? Typically, Australian companies are certainly not good at converting research into value and treat IP nearly as an administrative function. The exceptions are health tech leaders, including medical device dppdwz Cochlear and sleep-disorder business ResMed, which understand the importance of intangible assets such as brand name and data use, and build their businesses around it.
In a knowledge-based economy, IP has become Inventor Ideas and governing it has stopped being 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) will not be included on their balance sheets; this suggests that investors are operating without insights in to a significant proportion from the corporate asset base.