Intellectual property can be quite a crucial business tool, but 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 much better way. Responding, 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, where the advisers stressed getting patent protection before his idea was publicised. “Among the first things we did was talk to a patent attorney to view how 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 like Australia, Europe and the US, and 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 day 1.
Their big mistake? Ignoring patents or any other Inventhelp Product Development before they spruik their idea to investors, the general public as well as friends. It may be 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 expensive. “The majority of protectable IP goes unprotected,” he says.
Europe can be quite a particular trap for exporters because, unlike some other major markets, it lacks a grace period permitting public disclosure of the invention without affecting the validity of the subsequent patent application. That opens just how for an idea or product to get 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 too far gone,” Postma says. “In that case, businesses have shot themselves within the foot; they’ve forfeited their rights and anybody can copy [their idea].” Postma observes that company owners often think their idea is just too simple to warrant a patent. “However, if it’s successful and uncomplicated, it will likely be copied and you need 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 per 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 require the protection of the IP and, particularly, patent protection to get an excellent 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 may end in potentially high costs and marginal protection. However, the EPO is promoting a new unitary patent system that promises to become a game changer. This makes it possible to get protection in up to 26 participating European Union member states with the submission of any single request for the EPO.
A November 2017 EPO study, Patents, Trade and FDI in the European Union, suggests better harmonisation of Europe’s patent system provides 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 possibilities to expand in to the European market, which boasts greater than 500 million people, high gross domestic product and robust consumer demand. “It’s very important for Australian businesses to understand that you will find a big change ahead in Europe. I’m not talking just about Getting A Patent,” Fröhlinger says. “It’s very important to get an integrated IP portfolio considering patents and trademarks and (covering) design. When they don’t have (IP) individuals-house they ought to try to get strategic business advice.”
The value 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 amount of total trade. Basically, 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 US (5.1 per cent), Japan (4.7 %) and Finland (2.9 per cent) easily outperform Australia (.3 per cent) on IP royalties.
The message? For the most part, Australian companies usually are 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 brand and data use, and make 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 becoming more important than kxwlfd assets and require appropriate consideration.
An overview of Australia’s top listed companies, released by Inventhelp George Foreman Commercials in September 2017, endorses such a sentiment. It reveals that 38 per cent in the companies’ value (about A$550 billion) is not really included on the balance sheets; this means that that investors are operating without insights right into a significant proportion from the corporate asset base.