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 by helping cover their a hand winch. He knew there has to be a better way. In reaction, 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 advisers stressed getting patent protection before his idea was publicised. “Among the first things we did was talk to a patent attorney to see 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 also the US, and the business also has a trademark on the distinctive original “safety orange” hue it uses for its moulded product. Unlike McCarthy, however, many inventors and businesses with a good idea cruel their chances of success from day one.
Their big mistake? Ignoring patents or any other Inventhelp Invention Marketing before they spruik their idea to investors, people or perhaps friends. It may 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 be too costly. “The vast 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 the invention without affecting the validity of a subsequent patent application. That opens just how for an idea or product to get copied. “In Australia and america that you can do something about this, provided you’re inside 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 anyone can copy [their idea].” Postma observes that business people 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 businesses that poor patent and IP safeguards could derail their European market opportunities. Companies must innovate – and protect their inventions. “You have to have the protection of the IP and, in particular, patent protection to get an excellent 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 will result in potentially high costs and marginal protection. However, the EPO is promoting a whole new unitary patent system that promises to become a game changer. This makes it easy to get protection in up to 26 participating European Union member states with the submission of the single request for the EPO.
A November 2017 EPO study, Patents, Trade and FDI inside the European Union, suggests better harmonisation of Europe’s patent system has 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 to the European market, which boasts greater than 500 million people, high gross domestic product and strong consumer demand. “It’s very important for Australian businesses to know that you will find a big change ahead in Europe. I’m not talking only about Prototype Model,” Fröhlinger says. “It’s very important to have an integrated IP portfolio considering patents and trademarks and (covering) design. If they don’t have (IP) people in-house they need to try to get strategic business advice.”
The need for intangible assets – This call to action for Australian businesses comes as the worldwide Innovation Index 2017 reports on countries’ IP receipts being a amount of total trade. Essentially, the measure indicates the way a country is performing on the IP front. While Australia scores well in terms of inputs into research and development, the US (5.1 percent), Japan (4.7 percent) and Finland (2.9 %) easily outperform Australia (.3 percent) on IP royalties.
The message? For the most part, Australian companies are certainly 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 significance of intangible assets such as brand and data use, and build their businesses around it.
In a knowledge-based economy, IP has become a crucial business tool and governing it is not just a matter of organising trademarks and patents. Intangible assets are rapidly becoming more important than kxwlfd assets and require appropriate consideration.
Overview of Australia’s top listed companies, released by New Invention in September 2017, endorses this kind of sentiment. It reveals that 38 percent in the companies’ value (in regards to a$550 billion) is not included on their own balance sheets; this indicates that investors are operating without insights right into a significant proportion in the corporate asset base.