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 6 hours getting his car out with a hand winch. He knew there must be a much better way. In response, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the New Ideas For Inventions, he attended a Queensland Government business seminar, in which the advisers stressed getting patent protection before his idea was publicised. “Among the first things we did was speak to a patent attorney to see the way we could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It is actually now purchased in about 30 countries worldwide. McCarthy has patents in key markets including Australia, Europe and the US, and the business even offers a trademark on the distinctive original “safety orange” hue it ways to use its moulded product. Unlike McCarthy, however, many inventors and businesses with recommended cruel their odds of success from the first day.
Their big mistake? Ignoring patents or any other intellectual property protection before they spruik their idea to investors, the general public as well as 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 expensive. “The vast majority of protectable IP goes unprotected,” he says.
Europe could be a particular trap for exporters because, unlike a few other major markets, it lacks a grace period making it possible for public disclosure of an invention without affecting the validity of the subsequent patent application. That opens the way to have an idea or product to become copied. “In Australia and america you can do something regarding it, 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 easy to warrant a patent. “However, if it’s successful and uncomplicated, it will be copied and you should get advice.”
Unitary patents on way – Margot Fröhlinger is principal director of unitary patent, European and international legal affairs in 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 have to innovate – and protect their inventions. “You have to have the protection of the IP and, particularly, patent protection to get a great return on the investment,” she says.
Many international businesses have baulked at exporting to Europe due to Inventhelp Intromark across multiple jurisdictions that will result 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 using the submission of a single request to 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 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 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 understand that you will find a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s extremely important to have an integrated IP portfolio considering patents and trademarks and (covering) design. When they don’t have (IP) individuals-house they need to make an effort 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 being a amount of total trade. Essentially, 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 US (5.1 per cent), Japan (4.7 per cent) and Finland (2.9 percent) easily outperform Australia (.3 percent) on IP royalties.
The message? Typically, Australian companies are certainly not great at converting research into value and treat IP almost as an administrative function. The exceptions are health tech leaders, including medical device company Cochlear and sleep-disorder business ResMed, which understand the importance of intangible assets such as logo and data use, and wksgqs their businesses around it.
In a knowledge-based economy, Invent Help Invention Idea has become a crucial business tool and governing it is not only a matter of organising trademarks and patents. Intangible assets are rapidly becoming 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 such a sentiment. It reveals that 38 % 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 in to a significant proportion from the corporate asset base.