Intellectual property can be quite 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 must be a better way. In response, he invented Inventhelp Number, a lightweight 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. “One of the first things we did was talk with a patent attorney to see how we could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It is actually now sold in about 30 countries worldwide. McCarthy has patents in key markets like Australia, Europe and also the US, and also the business also has a trademark on the distinctive original “safety orange” hue it ways to use its moulded product. Unlike McCarthy, however, many inventors and businesses with recommended 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, people or even friends. It may be a costly error. Bradley Postma, principal at patent and trademark attorney firm Cullens, says small, and medium enterprises (SMEs), particularly, 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 some other major markets, it does not have a grace period permitting public disclosure of the invention without affecting the validity of the subsequent patent application. That opens the way in which to have an idea or product to get copied. “In Australia and the usa that can be done something about it, provided you’re in a one-year window – in Europe you can’t, it’s too far gone,” Postma says. “In that case, businesses have shot themselves inside the foot; they’ve forfeited their rights and anybody can copy [their idea].” Postma observes that company owners often think their idea is simply too simple to warrant a patent. “However, if it’s successful and uncomplicated, 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 on the Munich-based European Patent Office (EPO), which oversees about 160,000 patent applications per year. She recently completed a road trip warning Australian companies that poor patent and IP safeguards could derail their European market opportunities. Companies must innovate – and protect their inventions. “You have to have the protection of your own IP and, particularly, patent protection in order to get a good return on your investment,” she says.
Many international businesses have baulked at exporting to Europe because of Patent An Invention processes across multiple jurisdictions that may 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 possible to get protection in up to 26 participating European Union member states with the submission of any single request to the EPO.
A November 2017 EPO study, Patents, Trade and FDI inside the European Union, suggests better harmonisation of Europe’s patent system provides 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 chances to expand in to the European market, which boasts greater than 500 million people, high gross domestic product and robust consumer demand. “It’s very important for Australian businesses to understand that there is a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s very important with an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) folks-house they need to attempt to get strategic business advice.”
The price of intangible assets – This call to action for Australian businesses may come as the worldwide Innovation Index 2017 reports on countries’ IP receipts as a portion 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 percent) and Finland (2.9 %) easily outperform Australia (.3 per cent) on IP royalties.
The content? For the most part, Australian companies are not proficient 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 value of intangible assets including brand and data use, and make rtaotl businesses around it.
In a knowledge-based economy, Patent Your Idea has developed into a crucial business tool and governing it is no longer only a matter of organising trademarks and patents. 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 in the companies’ value (about A$550 billion) is not really included on their balance sheets; this means that that investors are operating without insights into a significant proportion in the corporate asset base.