Intellectual property can be 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 must be a much better way. In response, 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. “One of the first things we did was speak with How To Patent An Invention to view how we could protect the concept,” says McCarthy, who launched Maxtrax in 2005. It really is now sold in about 30 countries worldwide. McCarthy has patents in key markets such as 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 recommended 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, 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 likely be too expensive. “The majority of protectable IP goes unprotected,” he says.
Europe can become a particular trap for exporters because, unlike various other major markets, it does not have a grace period making it possible for public disclosure of your invention without affecting the validity of any subsequent patent application. That opens the way to have an idea or product to get copied. “In Australia and america you can do something about this, provided you’re inside 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 simply too very easy to warrant a patent. “However, if it’s successful and simple, 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 at the Munich-based European Patent Office (EPO), which oversees about 160,000 patent applications annually. She recently completed a road trip warning Australian businesses 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, in particular, Inventhelp in order to get a good return on the investment,” she says.
Many international businesses have baulked at exporting to Europe due to complex patent processes across multiple jurisdictions that can end in potentially high costs and marginal protection. However, the EPO is promoting a brand new unitary patent system that promises as a game changer. This will make it possible to get protection in as much as 26 participating European Union member states with all the submission of the single request to 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 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 into the European market, which boasts more than 500 million people, high gross domestic product and strong consumer demand. “It’s essential for Australian businesses to understand that there is a big change ahead in Europe. I’m not talking no more than patents,” Fröhlinger says. “It’s extremely 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 comes as the worldwide Innovation Index 2017 reports on countries’ IP receipts as being a portion of total trade. Essentially, the measure indicates the way a country is performing on the IP front. While Australia scores well when it comes to inputs into research and development, the usa (5.1 %), Japan (4.7 percent) and Finland (2.9 per cent) easily outperform Australia (.3 per cent) on IP royalties.
The message? As being a general rule, Australian companies usually are not good 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 importance of intangible assets including 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 matter of organising trademarks and Inventions Ideas. Intangible assets are rapidly more and more 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 kind of sentiment. It reveals that 38 percent in the companies’ value (regarding a$550 billion) is not really included on the balance sheets; this suggests that investors are operating without insights right into a significant proportion of the corporate asset base.