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 six hours getting his car out with a hand winch. He knew there must be an improved 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 the advisers stressed getting patent protection before his idea was publicised. “One of the first things we did was talk to How To Prototype An Invention to see how you could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It really is now available in about 30 countries worldwide. McCarthy has patents in key markets like Australia, Europe and 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 recommended cruel their chances of success from day one.
Their big mistake? Ignoring patents or any 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 too costly. “The majority of protectable IP goes unprotected,” he says.
Europe can be a particular trap for exporters because, unlike a few other major markets, it does not have a grace period permitting public disclosure of an invention without affecting the validity of a subsequent patent application. That opens the way in which for the idea or product to be copied. “In Australia and the usa you can do something about this, 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 within the foot; they’ve forfeited their rights and anyone can copy [their idea].” Postma observes that business owners often think their idea is simply too very easy to warrant a patent. “However, if it’s successful and straightforward, 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 a year. She recently completed a road trip warning Australian firms that poor patent and IP safeguards could derail their European market opportunities. Companies must innovate – and protect their inventions. “You need the protection of your own IP and, in particular, How To Start An Invention Idea in order to get 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 whole new unitary patent system that promises to become a game changer. This will make it possible to get protection in as much as 26 participating European Union member states using the submission of the 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 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 opportunities 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 you will find a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s extremely important to get an integrated IP portfolio considering patents and trademarks and (covering) design. If they don’t have (IP) people in-house they need to try to get strategic business advice.”
The value of intangible assets – This call to action for Australian businesses may come as the Global Innovation Index 2017 reports on countries’ IP receipts as being a percentage of total trade. In essence, the measure indicates the way 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 per cent), Japan (4.7 %) and Finland (2.9 per cent) easily outperform Australia (.3 percent) on IP royalties.
The content? As a general rule, Australian companies are not proficient at converting research into value and treat IP almost as an administrative function. The exceptions are health tech leaders, such as medical device company Cochlear and sleep-disorder business ResMed, which understand the importance of intangible assets including brand and data use, and make their briaac around it.
In a knowledge-based economy, IP has developed into a crucial business tool and governing it is not just a point of organising trademarks and Inventhelp Technology. Intangible assets are rapidly becoming 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) will not be included on the balance sheets; this suggests that investors are operating without insights in to a significant proportion of the corporate asset base.