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 much better way. In reaction, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the How To Pitch An Idea To A Company, he attended a Queensland Government business seminar, in which the advisers stressed getting patent protection before his idea was publicised. “Among the first things we did was talk with a patent attorney to see the way we could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It is actually now purchased in about 30 countries worldwide. McCarthy has patents in key markets including Australia, Europe as well as the US, as well as the business also has 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 likelihood of success from day one.
Their big mistake? Ignoring patents or other intellectual property protection before they spruik their idea to investors, the general public or even friends. It could 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 be expensive. “The vast majority of protectable IP goes unprotected,” he says.
Europe can be quite 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 the subsequent patent application. That opens just how for an idea or product to get copied. “In Australia and the usa that you can do something about it, provided you’re in a one-year window – in Europe you can’t, it’s too late,” Postma says. “In that case, businesses have shot themselves inside the foot; they’ve forfeited their rights and anyone can copy [their idea].” Postma observes that business people often think their idea is simply too simple 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 Invent Help Tech, 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 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 the IP and, in particular, patent protection to acquire an excellent return on your investment,” she says.
Many international businesses have baulked at exporting to Europe as a result of complex patent processes across multiple jurisdictions that may lead to 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 makes it easy to get protection in approximately 26 participating European Union member states using the submission of a single request for the EPO.
A November 2017 EPO study, Patents, Trade and FDI in the European Union, suggests better harmonisation of Europe’s patent system has got 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 into the European market, which boasts more than 500 million people, high gross domestic product and robust consumer demand. “It’s very important for Australian businesses to comprehend that there is a big change ahead in Europe. I’m not talking just about patents,” Fröhlinger says. “It’s extremely important with an integrated IP portfolio considering patents and trademarks and (covering) design. When they don’t have (IP) people in-house they should 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 being a portion of total trade. In essence, the measure indicates the way a country is performing on the IP front. While Australia scores well when it comes to inputs into research and development, the US (5.1 per cent), Japan (4.7 per cent) and Finland (2.9 per cent) easily outperform Australia (.3 %) on IP royalties.
The message? For the most part, Australian companies usually are not proficient at converting research into value and treat IP nearly as an administrative function. The exceptions are health tech leaders, including medical device dppdwz Cochlear and sleep-disorder business ResMed, which understand the significance of intangible assets such as brand and data use, and build their businesses around it.
In a knowledge-based economy, IP is becoming Inventor Information and governing it has stopped being just a matter of organising trademarks and patents. 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 in the companies’ value (regarding a$550 billion) is not included on the balance sheets; this indicates that investors are operating without insights into a significant proportion of the corporate asset base.