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 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 has to be a much better way. In response, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the super-tough nylon product, he attended a Queensland Government business seminar, in which 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 see how we could protect the concept,” says McCarthy, who launched Maxtrax in 2005. It is actually now sold in about 30 countries worldwide. McCarthy has How To File A Patent With Inventhelp in key markets including Australia, Europe and also the US, as well as 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 likelihood of success from day one.
Their big mistake? Ignoring patents or some other intellectual property protection before they spruik their idea to investors, the public or even friends. It can become a costly error. Bradley Postma, principal at patent and trademark attorney firm Cullens, says small, and medium enterprises (SMEs), particularly, often neglect safeguarding their IP or think it will be too expensive. “The vast majority of protectable IP goes unprotected,” he says.
Europe can become a particular trap for exporters because, unlike various other major markets, it lacks a grace period allowing for public disclosure of an invention without affecting the validity of a subsequent patent application. That opens the way in which to have an idea or product to get copied. “In Australia and america you can make a move about it, provided you’re in a one-year window – in Europe you can’t, it’s too late,” Postma says. “In that case, businesses have shot themselves in the foot; they’ve forfeited their rights and anyone can copy [their idea].” Postma observes that company owners often think their idea is too very easy to warrant a patent. “However, if it’s successful and straightforward, it will likely 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 on 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 must innovate – and protect their inventions. “You have to have the protection of the IP and, particularly, patent protection in order to obtain a good 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 can 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 up to 26 participating European Union member states using the submission of the single request for the EPO.
A November 2017 EPO study, How To Patent An Invention, Trade and FDI in the European Union, suggests better harmonisation of Europe’s patent system has the possibility 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 opportunities to expand to the European market, which boasts greater than 500 million people, high gross domestic product and strong consumer demand. “It’s essential 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 with an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) folks-house they need to make an effort to get strategic business advice.”
The need for intangible assets – This call to action for Australian businesses may come as the Global Innovation Index 2017 reports on countries’ IP receipts as being a percentage of total trade. Essentially, the measure indicates just how a country is performing on the IP front. While Australia scores well with regards to inputs into research and development, the usa (5.1 per cent), Japan (4.7 per cent) and Finland (2.9 percent) easily outperform Australia (.3 %) on IP royalties.
The message? Being a general rule, Australian companies usually are not great at converting research into value and treat IP nearly as an administrative function. The exceptions are health tech leaders, like medical device company Cochlear and sleep-disorder business ResMed, which understand the value of intangible assets like brand and data use, and 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 Inventhelp Product Licensing. Intangible assets are rapidly increasingly 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 % from the companies’ value (in regards to a$550 billion) is not really included on their own jjnywy sheets; this means that that investors are operating without insights right into a significant proportion of the corporate asset base.