Intellectual property can be a crucial business tool, however, 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 6 hours getting his car out with a hand winch. He knew there should be a much better way. In reaction, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the Patent Idea, 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 find out the way we could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It is now purchased in about 30 countries worldwide. McCarthy has patents 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 of its moulded product. Unlike McCarthy, however, many inventors and businesses with a good idea cruel their chances of success from the first day.
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 could be a particular trap for exporters because, unlike some other major markets, it lacks a grace period making it possible for public disclosure of your invention without affecting the validity of a subsequent patent application. That opens the way in which for the idea or product to become copied. “In Australia and the usa you can do something about this, 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 in the foot; they’ve forfeited their rights and anyone can copy [their idea].” Postma observes that company owners often think their idea is simply too easy to warrant a patent. “However, if it’s successful and simple, it will be copied and you need to get advice.”
Unitary patents on way – Margot Fröhlinger is principal director of Invent Help Tech, 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 companies 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 the IP and, in particular, patent protection to acquire a great return on your own investment,” she says.
Many international businesses have baulked at exporting to Europe as a result 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 become a game changer. This makes it easy to get protection in approximately 26 participating European Union member states with all the submission of any 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 provides the possible ways 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 in to the European market, which boasts greater than 500 million people, high gross domestic product and robust consumer demand. “It’s essential for Australian businesses to know that there is a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s extremely important to get an integrated IP portfolio considering patents and trademarks and (covering) design. If 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 international Innovation Index 2017 reports on countries’ IP receipts as a portion of total trade. In essence, 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 percent) on IP royalties.
Your message? As 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, such as medical device dppdwz Cochlear and sleep-disorder business ResMed, which understand the importance of intangible assets like brand and data use, and build their businesses around it.
In a knowledge-based economy, IP is becoming Inventhelp Store and governing it is not just a matter of organising trademarks and patents. 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 (regarding a$550 billion) is not really included on their balance sheets; this indicates that investors are operating without insights in to a significant proportion of the corporate asset base.