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 a better way. In response, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the super-tough nylon product, he attended a Queensland Government business seminar, in which the advisers stressed getting patent protection before his idea was publicised. “One of the first things we did was speak with Prototype Services Inventhelp to find out how we 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 including Australia, Europe as well as the US, and also 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 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 be considered 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 too costly. “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 making it possible for public disclosure of the invention without affecting the validity of any subsequent patent application. That opens just how for the idea or product to be copied. “In Australia and the usa you can take action regarding 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 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 straightforward, it will probably be copied and you need to 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 your IP and, particularly, Vibe Inventhelp in order to get a good return on the investment,” she says.
Many international businesses have baulked at exporting to Europe because of complex patent processes across multiple jurisdictions that can end 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 all 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 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 more than 500 million people, high gross domestic product and powerful consumer demand. “It’s extremely important 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 very important to get an integrated IP portfolio considering patents and trademarks and (covering) design. When they don’t have (IP) individuals-house they should attempt to get strategic business advice.”
The need for intangible assets – This call to action for Australian businesses may come as the international Innovation Index 2017 reports on countries’ IP receipts being a amount of total trade. In essence, the measure indicates the way 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 %), Japan (4.7 percent) and Finland (2.9 percent) easily outperform Australia (.3 percent) on IP royalties.
The content? As a general rule, 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, such as medical device company Cochlear and sleep-disorder business ResMed, which understand the value of intangible assets such as brand and data use, and make their briaac 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 Inventhelp Invention Prototypes. Intangible assets are rapidly increasingly 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 percent from the companies’ value (about A$550 billion) will not be included on their balance sheets; this indicates that investors are operating without insights right into a significant proportion from the corporate asset base.