Intellectual property can be a crucial business tool, although not everyone thinks with enough concentration about protecting their big ideas. In 2001, plumber Brad McCarthy got stuck on the remote beach in Cape York in north Queensland and spent about 6 hours getting his car out with a hand winch. He knew there should be an improved way. In response, he invented Inventhelp Innovation, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the super-tough nylon product, he attended a Queensland Government business seminar, where the advisers stressed getting patent protection before his idea was publicised. “One of the first things we did was speak to a patent attorney to find out how 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 including Australia, Europe and also the US, and 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 great idea cruel their chances of success from the first day.
Their big mistake? Ignoring patents or other intellectual property protection before they spruik their idea to investors, the public as well as friends. It could 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 too costly. “The 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 making it possible for public disclosure of an invention without affecting the validity of Inventions Ideas. That opens just how for an idea or product to become copied. “In Australia and the United States that you can do something about this, provided you’re within a one-year window – in Europe you can’t, it’s far 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 business people often think their idea is 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 at 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 must innovate – and protect their inventions. “You have to have the protection of the IP and, specifically, patent protection in order to get a good return on your own investment,” she says.
Many international businesses have baulked at exporting to Europe as a result of 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 easy to get protection in as much as 26 participating European Union member states using the submission of the 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 provides 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 strong consumer demand. “It’s very important for Australian businesses to know that you will find a big change ahead in Europe. I’m not talking just about patents,” Fröhlinger says. “It’s very important to get an integrated IP portfolio considering patents and trademarks and (covering) design. If they don’t have (IP) folks-house they should make an effort 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 being a portion of total trade. Basically, the measure indicates just how 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 per cent) easily outperform Australia (.3 percent) on IP royalties.
The message? As a general rule, Australian companies usually are not proficient at converting research into value and treat IP nearly as an administrative function. The exceptions are health tech leaders, such as medical device company Cochlear and sleep-disorder business ResMed, which understand the importance of intangible assets including brand and data use, vyltsm build their businesses around it.
In a knowledge-based economy, IP has developed into a crucial business tool and governing it is no longer just a matter of organising trademarks and patents. Intangible assets are rapidly more and more important than tangible assets and require appropriate consideration.
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 indicates that Patent My Idea are operating without insights in to a significant proportion in the corporate asset base.