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 advisers stressed getting patent protection before his idea was publicised. “Among the first things we did was speak to Inventhelp Company News to see how we could protect the thought,” says McCarthy, who launched Maxtrax in 2005. It really is now purchased in about 30 countries worldwide. McCarthy has patents in key markets such as Australia, Europe as well as the US, and the business even offers a trademark on the distinctive original “safety orange” hue it uses for its moulded product. Unlike McCarthy, however, many inventors and businesses with a great idea cruel their likelihood of success from day one.
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 become a costly error. Bradley Postma, principal at patent and trademark attorney firm Cullens, says small and medium enterprises (SMEs), specifically, often neglect safeguarding their IP or think it will be expensive. “The vast majority of protectable IP goes unprotected,” he says.
Europe can be a particular trap for exporters because, unlike some other major markets, it lacks a grace period permitting public disclosure of an invention without affecting the validity of a subsequent patent application. That opens just how for the idea or product to be copied. “In Australia and the United States you can make a move about it, 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 inside the foot; they’ve forfeited their rights and anyone can copy [their idea].” Postma observes that business people often think their idea is too very easy to warrant a patent. “However, if it’s successful and simple, it will 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 a year. She recently completed a road trip warning Australian firms 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, particularly, Inventhelp Number 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 lead to potentially high costs and marginal protection. However, the EPO is promoting a new unitary patent system that promises to become a game changer. This will make it easy to get protection in as much as 26 participating European Union member states using the submission of a single request towards the EPO.
A November 2017 EPO study, Patents, Trade and FDI within the European Union, suggests better harmonisation of Europe’s patent system has got 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 chances to expand in to the European market, which boasts greater than 500 million people, high gross domestic product and strong consumer demand. “It’s essential for Australian businesses to know that there is a big change ahead in Europe. I’m not talking no more than patents,” Fröhlinger says. “It’s extremely important to have an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) individuals-house they need to attempt 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 being a portion of total trade. Essentially, the measure indicates how a country has been doing on the IP front. While Australia scores well when it comes to inputs into research and development, the united states (5.1 percent), Japan (4.7 %) and Finland (2.9 %) easily outperform Australia (.3 %) on IP royalties.
The message? As a general rule, Australian companies are not proficient at converting research into value and treat IP nearly as an administrative function. The exceptions are health tech leaders, such as medical device company Cochlear and sleep-disorder business ResMed, which understand the value of intangible assets like logo and data use, and make their briaac around it.
In a knowledge-based economy, IP has turned into a crucial business tool and governing it is no longer just a matter of organising trademarks and Patent Attorney. Intangible assets are rapidly becoming more important than tangible assets and require appropriate consideration.
Overview of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses this type of sentiment. It reveals that 38 percent from the companies’ value (in regards to a$550 billion) will not be included on their own balance sheets; this indicates that investors are operating without insights in to a significant proportion from the corporate asset base.