Intellectual property can be quite 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 an improved way. In response, he invented Inventhelp Company News, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the super-tough nylon product, 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 how we could protect the thought,” says McCarthy, who launched Maxtrax in 2005. It is actually now available in about 30 countries worldwide. McCarthy has patents in key markets including Australia, Europe and the US, as well as the business also offers a trademark on the distinctive original “safety orange” hue it uses of its moulded product. Unlike McCarthy, however, many inventors and businesses with recommended cruel their odds 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 as well as friends. It can be a costly error. Bradley Postma, principal at patent and trademark attorney firm Cullens, says small and medium enterprises (SMEs), particularly, often neglect safeguarding their IP or think it will probably be too expensive. “The vast majority of protectable IP goes unprotected,” he says.
Europe can be quite a particular trap for exporters because, unlike various other major markets, it does not have a grace period permitting public disclosure of an invention without affecting the validity of a subsequent patent application. That opens just how for the idea or product to get copied. “In Australia and the United States you can do something about this, provided you’re in a one-year window – in Europe you can’t, it’s far too late,” Postma says. “In that case, businesses have shot themselves within the foot; they’ve forfeited their rights and anyone can copy [their idea].” Postma observes that business owners often think their idea is too easy to warrant a patent. “However, if it’s successful and uncomplicated, it will probably be copied and you have to get advice.”
Unitary patents on way – Margot Fröhlinger is principal director of unitary patent, European and international legal affairs on 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 need to innovate – and protect their inventions. “You require the protection of the IP and, specifically, patent protection to acquire a great return on your own investment,” she says.
Many international businesses have baulked at exporting to Europe due to New Invention Idea processes across multiple jurisdictions that will 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 easy to get protection in as much as 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 inside 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 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 very 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 extremely important to get an integrated IP portfolio considering patents and trademarks and (covering) design. If they don’t have (IP) people in-house they should make an effort 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 being a percentage of total trade. In essence, the measure indicates how a country has been doing on the IP front. While Australia scores well in terms of inputs into research and development, the usa (5.1 percent), Japan (4.7 per cent) and Finland (2.9 per cent) easily outperform Australia (.3 percent) on IP royalties.
The message? Typically, Australian companies are not good 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 significance of intangible assets such as brand and data use, and build rtaotl businesses around it.
In a knowledge-based economy, New Invention Ideas has become a crucial business tool and governing it is not just a matter of organising trademarks and patents. Intangible assets are rapidly becoming more important than tangible assets and require appropriate consideration.
An overview of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses such a sentiment. It reveals that 38 per cent in the companies’ value (in regards to a$550 billion) will not be included on their own balance sheets; this means that that investors are operating without insights right into a significant proportion from the corporate asset base.