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 the remote beach in Cape York in north Queensland and spent about 6 hours getting his car out with a hand winch. He knew there must be an improved way. In response, he invented Invent Help Patent Information, a lightweight 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 primary things we did was speak to a patent attorney to view how we could protect the concept,” says McCarthy, who launched Maxtrax in 2005. It is actually now purchased in about 30 countries worldwide. McCarthy has patents in key markets like Australia, Europe and also the US, as well as the business also offers 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 chances of success from day 1.
Their big mistake? Ignoring patents or some other intellectual property protection before they spruik their idea to investors, the public 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), specifically, 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 allowing for public disclosure of an invention without affecting the validity of Invention Idea. That opens the way to have an idea or product to be copied. “In Australia and america that you can do something about it, provided you’re within a one-year window – in Europe you can’t, it’s far too late,” Postma says. “In that case, businesses have shot themselves in the foot; they’ve forfeited their rights and anybody 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 simple, it will 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 at the Munich-based European Patent Office (EPO), which oversees about 160,000 patent applications per year. She recently completed a road trip warning Australian businesses 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 the IP and, particularly, patent protection 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 will lead to 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 possible to get protection in approximately 26 participating European Union member states using the submission of any single request for 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 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 possibilities to expand in to the European market, which boasts more than 500 million people, high gross domestic product and robust consumer demand. “It’s essential 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 with an integrated IP portfolio considering patents and trademarks and (covering) design. When they don’t have (IP) people in-house they should try to get strategic business advice.”
The need for 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 percentage of total trade. Basically, 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 percent), Japan (4.7 per cent) and Finland (2.9 %) easily outperform Australia (.3 per cent) on IP royalties.
The content? As a general rule, Australian companies usually are not great at converting research into value and treat IP nearly as an administrative function. The exceptions are health tech leaders, like medical device company Cochlear and sleep-disorder business ResMed, which understand the importance of intangible assets like logo and data use, vyltsm build their businesses around it.
In a knowledge-based economy, IP has developed into a crucial business tool and governing it is not just a matter of organising trademarks and patents. Intangible assets are rapidly more and more 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 % of the companies’ value (in regards to a$550 billion) will not be included on their own balance sheets; this indicates that Brainstorming Invention Ideas are operating without insights right into a significant proportion from the corporate asset base.