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 has to 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 primary things we did was speak to Make A New Invention to find out how you could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It really is now sold in about 30 countries worldwide. McCarthy has patents in key markets such as Australia, Europe and 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 good idea cruel their chances of success from day one.
Their big mistake? Ignoring patents or some 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), specifically, often neglect safeguarding their IP or think it will probably be expensive. “The vast 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 permitting public disclosure of your 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 within 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 people often think their idea is too very easy to warrant a patent. “However, if it’s successful and uncomplicated, it will likely 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 a year. She recently completed a road trip warning Australian companies that poor patent and IP safeguards could derail their European market opportunities. Companies need to innovate – and protect their inventions. “You require the protection of your IP and, specifically, Ideas Inventions in order to obtain a good return on the 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 new unitary patent system that promises as a game changer. This makes it possible to get protection in approximately 26 participating European Union member states with all the submission of any 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 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 in to the European market, which boasts more than 500 million people, high gross domestic product and robust 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 extremely important to have an integrated IP portfolio considering patents and trademarks and (covering) design. If they don’t have (IP) folks-house they should make an effort to get strategic business advice.”
The value of intangible assets – This call to action for Australian businesses may come as the worldwide Innovation Index 2017 reports on countries’ IP receipts as being a portion of total trade. In essence, the measure indicates just how a country is performing on the IP front. While Australia scores well in terms of inputs into research and development, the united states (5.1 per cent), Japan (4.7 per cent) and Finland (2.9 percent) easily outperform Australia (.3 percent) on IP royalties.
The content? As being a general rule, Australian companies are not good 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 name 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 has stopped being just dependent on organising trademarks and How To Patent Ideas. 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 such a sentiment. It reveals that 38 % in the companies’ value (about A$550 billion) is not included on the balance sheets; this suggests that investors are operating without insights right into a significant proportion in the corporate asset base.