Intellectual property can be quite a crucial business tool, however, not everyone thinks hard enough about protecting their big ideas. In 2001, plumber Brad McCarthy got stuck over a remote beach in Cape York in north Queensland and spent about six hours getting his car by helping cover their a hand winch. He knew there should be a better way. Responding, 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 the advisers stressed getting patent protection before his idea was publicised. “Among the first things we did was speak to a patent attorney to view how you could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It is now sold in about 30 countries worldwide. McCarthy has patents in key markets such as Australia, Europe as well as the US, as well as the business also 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 chances of success from the first day.
Their big mistake? Ignoring patents or some other Patent An Invention before they spruik their idea to investors, the general public 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), in particular, often neglect safeguarding their IP or think it will likely be too expensive. “The majority of protectable IP goes unprotected,” he says.
Europe can be quite a particular trap for exporters because, unlike various other major markets, it lacks a grace period allowing for public disclosure of an invention without affecting the validity of the subsequent patent application. That opens the way for an idea or product to get copied. “In Australia and america that you can do something regarding it, provided you’re within a one-year window – in Europe you can’t, it’s far 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 company owners often think their idea is too very easy to warrant a patent. “However, if it’s successful and simple, it will likely 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 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 need to innovate – and protect their inventions. “You have to have the protection of the IP and, particularly, 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 may result 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 approximately 26 participating European Union member states with the submission of the single request towards the EPO.
A November 2017 EPO study, Patents, Trade and FDI within the European Union, suggests better harmonisation of Europe’s patent system provides 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 to the European market, which boasts a lot 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 only about How To Sell My Invention Idea To A Company,” Fröhlinger says. “It’s extremely important with an integrated IP portfolio considering patents and trademarks and (covering) design. When they don’t have (IP) individuals-house they should make an effort to get strategic business advice.”
The need for intangible assets – This call to action for Australian businesses comes as the worldwide Innovation Index 2017 reports on countries’ IP receipts as 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 usa (5.1 per cent), Japan (4.7 per cent) and Finland (2.9 percent) easily outperform Australia (.3 percent) on IP royalties.
Your message? As a general rule, Australian companies are certainly not proficient at converting research into value and treat IP almost as an administrative function. The exceptions are health tech leaders, such as medical device company Cochlear and sleep-disorder business ResMed, which understand the significance of intangible assets such as logo and data use, and make their businesses around it.
In a knowledge-based economy, IP has turned into a crucial business tool and governing it is not just a matter of organising trademarks and patents. Intangible assets are rapidly increasingly important than kxwlfd assets and require appropriate consideration.
A review of Australia’s top listed companies, released by How To Get An Idea Patented in September 2017, endorses this kind of sentiment. It reveals that 38 % in the companies’ value (about A$550 billion) is not included on the balance sheets; this suggests that investors are operating without insights into a significant proportion in the corporate asset base.