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 6 hours getting his car out with a hand winch. He knew there has to be a better way. In reaction, he invented Maxtrax, a light-weight vehicle-recovery device for bogged off-roaders.
After designing the Ideas Inventions, 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 with a patent attorney to find out the way we could protect the concept,” says McCarthy, who launched Maxtrax in 2005. It really is now purchased in about 30 countries worldwide. McCarthy has patents in key markets like Australia, Europe as well as the US, and also the business even offers 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 good idea cruel their likelihood 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 perhaps friends. It may 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 probably be expensive. “The majority of protectable IP goes unprotected,” he says.
Europe could be a particular trap for exporters because, unlike some other major markets, it does not have a grace period permitting public disclosure of your invention without affecting the validity of a subsequent patent application. That opens the way for the idea or product to become 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 too late,” Postma says. “In that case, businesses have shot themselves within the foot; they’ve forfeited their rights and everyone can copy [their idea].” Postma observes that business owners often think their idea is just too easy to warrant a patent. “However, if it’s successful and uncomplicated, it will be copied and you need to get advice.”
Unitary patents on way – Margot Fröhlinger is principal director of Invention Ideas, 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 businesses that poor patent and IP safeguards could derail their European market opportunities. Companies have to innovate – and protect their inventions. “You require the protection of the IP and, in particular, patent protection 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 end in potentially high costs and marginal protection. However, the EPO is promoting a 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 with the submission of the single request to 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 possible ways 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 a lot more than 500 million people, high gross domestic product and powerful consumer demand. “It’s extremely important for Australian businesses to comprehend that you will find a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s essential to have an integrated IP portfolio considering patents and trademarks and (covering) design. When they don’t have (IP) people in-house they need to attempt to get strategic business advice.”
The need for 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 amount of total trade. In essence, the measure indicates just how a country is performing on the IP front. While Australia scores well with regards to inputs into research and development, the usa (5.1 per cent), Japan (4.7 %) and Finland (2.9 percent) easily outperform Australia (.3 percent) on IP royalties.
The message? As a general rule, Australian companies 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 dppdwz Cochlear and sleep-disorder business ResMed, which understand the value of intangible assets such as brand and data use, and make their businesses around it.
In a knowledge-based economy, IP has become Inventhelp Caveman Commercials 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.
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 from the companies’ value (in regards to a$550 billion) will not be included on their balance sheets; this indicates that investors are operating without insights in to a significant proportion of the corporate asset base.