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 has to be a better way. Responding, he invented Maxtrax, a light-weight 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. “Among the first things we did was speak to Invention Help Companies to view the way we could protect the thought,” 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 as well as the US, as well as the business even 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 day one.
Their big mistake? Ignoring patents or any other intellectual property protection before they spruik their idea to investors, people 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 probably be too costly. “The vast majority of protectable IP goes unprotected,” he says.
Europe can become 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 the way for the idea or product to be copied. “In Australia and the usa you can do something about it, provided you’re within 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 owners often think their idea is just too easy to warrant a patent. “However, if it’s successful and straightforward, it will probably 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 need to innovate – and protect their inventions. “You need the protection of your IP and, in particular, Inventhelp Prototype Service in order to acquire a good return on your investment,” she says.
Many international businesses have baulked at exporting to Europe as a result of complex patent processes 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 become a game changer. This makes it possible to get protection in approximately 26 participating European Union member states with the submission of the 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 got 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 chances to expand in to the European market, which boasts a lot more than 500 million people, high gross domestic product and powerful consumer demand. “It’s essential for Australian businesses to know that you will find a big change ahead in Europe. I’m not talking no more than patents,” Fröhlinger says. “It’s very important with an integrated IP portfolio considering patents and trademarks and (covering) design. If they don’t have (IP) people in-house they should try to get strategic business advice.”
The need for intangible assets – This call to action for Australian businesses comes as the Global Innovation Index 2017 reports on countries’ IP receipts being a percentage of total trade. Basically, the measure indicates how a country has been doing on the IP front. While Australia scores well with regards to inputs into research and development, the united states (5.1 per cent), Japan (4.7 %) and Finland (2.9 %) 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, including medical device company Cochlear and sleep-disorder business ResMed, which understand the value of intangible assets including logo and data use, and make their briaac around it.
In a knowledge-based economy, IP has turned into a crucial business tool and governing it has stopped being just a point of organising trademarks and File A Patent. Intangible assets are rapidly increasingly important than tangible assets and require appropriate consideration.
An overview of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses this type of sentiment. It reveals that 38 per cent 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 in the corporate asset base.