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 an improved way. In reaction, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the Inventhelp Tv Commercial, 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 talk with a patent attorney to find out how you could protect the concept,” says McCarthy, who launched Maxtrax in 2005. It is now purchased in about 30 countries worldwide. McCarthy has patents in key markets like Australia, Europe and 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 recommended cruel their likelihood of success from day 1.
Their big mistake? Ignoring patents or other intellectual property protection before they spruik their idea to investors, the general public as well as friends. It may be 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 probably be too expensive. “The vast majority of protectable IP goes unprotected,” he says.
Europe could be a particular trap for exporters because, unlike various 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 the way to have an idea or product to become copied. “In Australia and america you can do something regarding it, provided you’re in a one-year window – in Europe you can’t, it’s too late,” Postma says. “In that case, businesses have shot themselves within the foot; they’ve forfeited their rights and everyone can copy [their idea].” Postma observes that business owners often think their idea is just too simple to warrant a patent. “However, if it’s successful and simple, it will probably be copied and you should get advice.”
Unitary patents on way – Margot Fröhlinger is principal director of Brainstorming Invention Ideas, 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 businesses that poor patent and IP safeguards could derail their European market opportunities. Companies need to innovate – and protect their inventions. “You have to have the protection of your IP and, specifically, patent protection to acquire a great 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 can end in 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 will make it possible to get protection in up to 26 participating European Union member states with all the submission of the single request to 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 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 more than 500 million people, high gross domestic product and powerful consumer demand. “It’s essential for Australian businesses to know that there exists a big change ahead in Europe. I’m not talking no more than patents,” Fröhlinger says. “It’s extremely important to get an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) individuals-house they ought to make an effort to get strategic business advice.”
The value of intangible assets – This call to action for Australian businesses comes as the Global Innovation Index 2017 reports on countries’ IP receipts as being a portion of total trade. In essence, the measure indicates the way a country is performing on the IP front. While Australia scores well when it comes to inputs into research and development, the united states (5.1 per cent), Japan (4.7 percent) and Finland (2.9 per cent) 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 nearly as an administrative function. The exceptions are health tech leaders, including medical device dppdwz Cochlear and sleep-disorder business ResMed, which understand the importance of intangible assets like logo and data use, and build their businesses around it.
In a knowledge-based economy, IP is becoming Ideas For Inventions and governing it is no longer just 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 kind of sentiment. It reveals that 38 per cent of the companies’ value (about A$550 billion) is not included on the balance sheets; this means that that investors are operating without insights right into a significant proportion of the corporate asset base.