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 has to be a 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, in which the advisers stressed getting patent protection before his idea was publicised. “One of the primary things we did was speak to a patent attorney to find out how we could protect the concept,” says McCarthy, who launched Maxtrax in 2005. It is now available in about 30 countries worldwide. McCarthy has Inventhelp Company News in key markets like Australia, Europe and also the US, and the business also offers a trademark on the distinctive original “safety orange” hue it uses of 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 some other intellectual property protection before they spruik their idea to investors, people or even 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 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 the invention without affecting the validity of a subsequent patent application. That opens the way in which for an idea or product to become copied. “In Australia and america you can take action about it, provided you’re inside 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 business owners 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 in the Munich-based European Patent Office (EPO), which oversees about 160,000 patent applications annually. 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 need the protection of your own IP and, particularly, patent protection in order to obtain a good 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 result 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 easy to get protection in approximately 26 participating European Union member states using the submission of the single request to the EPO.

A November 2017 EPO study, Inventhelp Store, Trade and FDI in 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 powerful consumer demand. “It’s essential 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 very important to have an integrated IP portfolio considering patents and trademarks and (covering) design. When they don’t have (IP) folks-house they should make an effort to get strategic business advice.”

The price of intangible assets – This call to action for Australian businesses may come as the Global Innovation Index 2017 reports on countries’ IP receipts as a percentage of total trade. In essence, the measure indicates just how a country has been doing on the IP front. While Australia scores well when it comes to inputs into research and development, the usa (5.1 %), Japan (4.7 per cent) and Finland (2.9 percent) easily outperform Australia (.3 per cent) on IP royalties.

The message? Being a general rule, 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 brand name and data use, and make their businesses around it.

In a knowledge-based economy, IP has become a crucial business tool and governing it is not just dependent on organising trademarks and Invention Prototype. Intangible assets are rapidly increasingly important than tangible assets and require appropriate consideration.

A review of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses such a sentiment. It reveals that 38 percent of the companies’ value (regarding a$550 billion) will not be included on their own jjnywy sheets; this indicates that investors are operating without insights right into a significant proportion of the corporate asset base.

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