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 six hours getting his car out with a hand winch. He knew there has to be a better way. In reaction, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the Inventhelp, he attended a Queensland Government business seminar, where advisers stressed getting patent protection before his idea was publicised. “One of the first things we did was speak to a patent attorney to view how you could protect the thought,” says McCarthy, who launched Maxtrax in 2005. It really is now available in about 30 countries worldwide. McCarthy has patents in key markets like Australia, Europe as well as the US, as well as the business also 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 a good idea cruel their chances of success from the first day.
Their big mistake? Ignoring patents or some other intellectual property protection before they spruik their idea to investors, people 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 likely be expensive. “The majority of protectable IP goes unprotected,” he says.
Europe can be a particular trap for exporters because, unlike various other major markets, it lacks a grace period permitting public disclosure of your invention without affecting the validity of any subsequent patent application. That opens the way for an idea or product to get copied. “In Australia and the United States that can be done something regarding it, provided you’re inside a one-year window – in Europe you can’t, it’s far 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 very 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 Inventhelp Invention Service, 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 have to innovate – and protect their inventions. “You need the protection of your own IP and, in particular, patent protection in order 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 will result in potentially high costs and marginal protection. However, the EPO is promoting a brand new unitary patent system that promises to be a game changer. This will make it easy to get protection in approximately 26 participating European Union member states with the submission of the single request towards 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 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 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 there exists a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s essential to have an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) people in-house they should make an effort to get strategic business advice.”
The value of intangible assets – This call to action for Australian businesses may come as the Global Innovation Index 2017 reports on countries’ IP receipts as being a percentage of total trade. In essence, the measure indicates how 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 per cent), Japan (4.7 %) and Finland (2.9 percent) easily outperform Australia (.3 %) on IP royalties.
Your message? Typically, Australian companies are certainly not proficient at converting research into value and treat IP almost as an administrative function. The exceptions are health tech leaders, like 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 has grown to be I Have An Invention Where Do I Start and governing it has stopped being only a matter of organising trademarks and patents. 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 type of sentiment. It reveals that 38 percent of the companies’ value (in regards to a$550 billion) will not be included on the balance sheets; this suggests that investors are operating without insights in to a significant proportion in the corporate asset base.