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 6 hours getting his car out with a hand winch. He knew there must be an improved way. Responding, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the Inventhelp Office Locations, 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 speak to a patent attorney to see how you 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 such as Australia, Europe as well as the US, and also 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 recommended cruel their likelihood of success from the first day.
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), specifically, often neglect safeguarding their IP or think it will likely be expensive. “The vast majority of protectable IP goes unprotected,” he says.
Europe could be a particular trap for exporters because, unlike a few other major markets, it does not have a grace period allowing for public disclosure of your invention without affecting the validity of the subsequent patent application. That opens the way in which to have an idea or product to get copied. “In Australia and the usa you can do something about this, provided you’re in a one-year window – in Europe you can’t, it’s too far gone,” 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 people often think their idea is simply too very easy to warrant a patent. “However, if it’s successful and straightforward, it will likely be copied and you need to get advice.”
Unitary patents on way – Margot Fröhlinger is principal director of New Ideas For Inventions, European and international legal affairs in 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 have to innovate – and protect their inventions. “You have to have the protection of the IP and, specifically, patent protection 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 may lead to potentially high costs and marginal protection. However, the EPO is promoting a new unitary patent system that promises to become a game changer. This makes it easy to get protection in up to 26 participating European Union member states with all the submission of any single request for the EPO.
A November 2017 EPO study, Patents, Trade and FDI within the European Union, suggests better harmonisation of Europe’s patent system has got 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 more than 500 million people, high gross domestic product and powerful consumer demand. “It’s extremely important 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 essential to get an integrated IP portfolio considering patents and trademarks and (covering) design. When they don’t have (IP) individuals-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 Global 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 when it comes to inputs into research and development, the usa (5.1 per cent), Japan (4.7 percent) and Finland (2.9 percent) easily outperform Australia (.3 %) on IP royalties.
Your message? As a general rule, Australian companies are not proficient at converting research into value and treat IP almost as an administrative function. The exceptions are health tech leaders, like medical device dppdwz Cochlear and sleep-disorder business ResMed, which understand the significance of intangible assets like brand and data use, and build their businesses around it.
In a knowledge-based economy, IP is becoming Patent An Idea and governing it has stopped being only a matter of organising trademarks and patents. 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 kind of sentiment. It reveals that 38 per cent of the companies’ value (about A$550 billion) will not be included on their own balance sheets; this means that that investors are operating without insights into a significant proportion of the corporate asset base.