Intellectual property can be a crucial business tool, although 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 six hours getting his car out with a hand winch. He knew there has to be a much 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, where advisers stressed getting patent protection before his idea was publicised. “One of the first things we did was talk to a patent attorney to view how you could protect the concept,” says McCarthy, who launched Maxtrax in 2005. It is now sold in about 30 countries worldwide. McCarthy has How To Get A Patent in key markets such as 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 a great idea cruel their odds of success from day one.
Their big mistake? Ignoring patents or some 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), specifically, often neglect safeguarding their IP or think it will probably be expensive. “The majority of protectable IP goes unprotected,” he says.
Europe can be considered 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 a subsequent patent application. That opens just how for the idea or product to be copied. “In Australia and the United States you can take action 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 too very easy to warrant a patent. “However, if it’s successful and simple, it will probably 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 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, specifically, patent protection in order to get 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 brand new unitary patent system that promises as a game changer. This makes it possible to get protection in up to 26 participating European Union member states with all the submission of a single request to the EPO.
A November 2017 EPO study, Vibe Inventhelp, Trade and FDI in 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 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 know that there is a big change ahead in Europe. I’m not talking no more than patents,” Fröhlinger says. “It’s essential to have an integrated IP portfolio considering patents and trademarks and (covering) design. If they don’t have (IP) folks-house they ought to try 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 being a percentage 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 US (5.1 percent), Japan (4.7 per cent) and Finland (2.9 per cent) easily outperform Australia (.3 percent) on IP royalties.
The message? As a general rule, Australian companies are certainly not great 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 importance of intangible assets like logo and data use, and build their businesses around it.
In a knowledge-based economy, IP has turned into a crucial business tool and governing it has stopped being just a matter of organising trademarks and Inventors Helpline. Intangible assets are rapidly more and more important than tangible assets and require appropriate consideration.
Overview of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses such a sentiment. It reveals that 38 % from the companies’ value (in regards to a$550 billion) is not included on the jjnywy sheets; this means that that investors are operating without insights right into a significant proportion in the corporate asset base.