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 six hours getting his car out with a hand winch. He knew there must be an improved way. In reaction, 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 talk to New Invention Idea to find out how you could protect the thought,” says McCarthy, who launched Maxtrax in 2005. It is now sold in about 30 countries worldwide. McCarthy has patents in key markets such as Australia, Europe and also the US, as well as the business also offers a trademark on the distinctive original “safety orange” hue it ways to use its moulded product. Unlike McCarthy, however, many inventors and businesses with a good idea cruel their odds 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 can 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 probably be too costly. “The majority of protectable IP goes unprotected,” he says.
Europe can be a particular trap for exporters because, unlike a few other major markets, it lacks a grace period permitting public disclosure of an invention without affecting the validity of a subsequent patent application. That opens just how to have an idea or product to get copied. “In Australia and the United States you can make a move about this, 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 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 simple to warrant a patent. “However, if it’s successful and simple, 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 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 companies that poor patent and IP safeguards could derail their European market opportunities. Companies need to innovate – and protect their inventions. “You require the protection of the IP and, particularly, Patent An Invention in order to obtain a good return on your own investment,” she says.
Many international businesses have baulked at exporting to Europe because of complex patent processes across multiple jurisdictions that can lead to 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 possible to get protection in up to 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 within 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 possibilities to expand into the European market, which boasts more than 500 million people, high gross domestic product and strong consumer demand. “It’s very important for Australian businesses to understand that there exists a big change ahead in Europe. I’m not talking no more than patents,” Fröhlinger says. “It’s essential with an integrated IP portfolio considering patents and trademarks and (covering) design. If they don’t have (IP) people in-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 a amount of total trade. Basically, the measure indicates just how a country has been doing on the IP front. While Australia scores well in terms of inputs into research and development, the usa (5.1 per cent), Japan (4.7 percent) and Finland (2.9 %) easily outperform Australia (.3 percent) on IP royalties.
Your message? As being a general rule, Australian companies are certainly 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 such as brand name and data use, and make their briaac around it.
In a knowledge-based economy, IP has developed into a crucial business tool and governing it is no longer just a point of organising trademarks and Inventhelp Reviews. Intangible assets are rapidly becoming more important than tangible assets and require appropriate consideration.
Overview of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses this type of sentiment. It reveals that 38 % of the companies’ value (about A$550 billion) is not included on their own balance sheets; this indicates that investors are operating without insights into a significant proportion of the corporate asset base.