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 6 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 Invention Idea, he attended a Queensland Government business seminar, where advisers stressed getting patent protection before his idea was publicised. “One of the first things we did was talk with a patent attorney to view the way we could protect the idea,” 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, and also the business also 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 great idea cruel their odds of success from the first day.
Their big mistake? Ignoring patents or other intellectual property protection before they spruik their idea to investors, the general public or perhaps 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 be expensive. “The majority of protectable IP goes unprotected,” he says.
Europe can be a particular trap for exporters because, unlike various other major markets, it lacks a grace period making it possible for public disclosure of an invention without affecting the validity of a subsequent patent application. That opens the way in which for an idea or product to become copied. “In Australia and the United States that can be done something regarding it, 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 within the foot; they’ve forfeited their rights and anyone can copy [their idea].” Postma observes that business owners often think their idea is 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 unitary patent, European and international legal affairs in 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 have to innovate – and protect their inventions. “You have to have the protection of the IP and, specifically, patent protection to acquire a great return on your investment,” she says.
Many international businesses have baulked at exporting to Europe due to Invention Advice across multiple jurisdictions that can result in potentially high costs and marginal protection. However, the EPO is promoting a brand 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 using the submission of any single request towards 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 chances to expand into the European market, which boasts a lot more 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) folks-house they should attempt to get strategic business advice.”
The need for intangible assets – This call to action for Australian businesses may come as the worldwide Innovation Index 2017 reports on countries’ IP receipts as being a amount 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 US (5.1 %), Japan (4.7 percent) and Finland (2.9 %) easily outperform Australia (.3 percent) on IP royalties.
The content? For the most part, Australian companies are certainly not proficient at converting research into value and treat IP almost as an administrative function. The exceptions are health tech leaders, such as medical device company Cochlear and sleep-disorder business ResMed, which understand the value of intangible assets such as logo and data use, and wksgqs their businesses around it.
In a knowledge-based economy, Patent Ideas has developed into a crucial business tool and governing it is not only 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 kind of sentiment. It reveals that 38 % in the companies’ value (about A$550 billion) will not be included on their balance sheets; this indicates that investors are operating without insights right into a significant proportion in the corporate asset base.