Intellectual property can be a crucial business tool, but 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 should be a better way. In response, he invented Patent Invention, 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. “Among the first things we did was talk with a patent attorney to find out the way we 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 also the US, and the business even 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 great idea cruel their odds of success from the first day.
Their big mistake? Ignoring patents or other intellectual property protection before they spruik their idea to investors, the public or perhaps 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 too expensive. “The 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 any subsequent patent application. That opens the way in which for an idea or product to be copied. “In Australia and the United States that can be done something about this, provided you’re inside a one-year window – in Europe you can’t, it’s too far gone,” Postma says. “In that case, businesses have shot themselves within the foot; they’ve forfeited their rights and anybody can copy [their idea].” Postma observes that company owners often think their idea is too 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 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 firms that poor patent and IP safeguards could derail their European market opportunities. Companies have to innovate – and protect their inventions. “You need the protection of your own IP and, in particular, patent protection in order to get a great return on the investment,” she says.
Many international businesses have baulked at exporting to Europe due to How Do I Get A Patent processes across multiple jurisdictions that can end in potentially high costs and marginal protection. However, the EPO is promoting a whole new unitary patent system that promises to be a game changer. This makes it easy to get protection in up to 26 participating European Union member states with all the submission of the 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 got 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 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 there exists a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s essential to get 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 value of 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. Essentially, the measure indicates just how a country has been doing on the IP front. While Australia scores well when it comes to inputs into research and development, the united states (5.1 per cent), Japan (4.7 percent) and Finland (2.9 per cent) easily outperform Australia (.3 per cent) on IP royalties.
Your message? For the most part, Australian companies usually are not proficient 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 significance of intangible assets including brand name and data use, and build rtaotl businesses around it.
In a knowledge-based economy, Invention Companies has developed into a crucial business tool and governing it is no longer only 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 this kind of sentiment. It reveals that 38 % from the companies’ value (regarding a$550 billion) is not included on their balance sheets; this suggests that investors are operating without insights in to a significant proportion in the corporate asset base.