Intellectual property can be a crucial business tool, although not everyone thinks with enough concentration 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 6 hours getting his car by helping cover their a hand winch. He knew there should be an improved way. In reaction, he invented Maxtrax, a light-weight 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. “Among the first things we did was talk to a patent attorney to find out 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 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 good idea cruel their odds of success from day one.
Their big mistake? Ignoring patents or some other Make My Invention Prototype 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), in particular, often neglect safeguarding their IP or think it will probably be too costly. “The vast 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 allowing for public disclosure of the invention without affecting the validity of any subsequent patent application. That opens the way for an idea or product to become copied. “In Australia and the United States that you can do something about it, provided you’re inside 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 anybody 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 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 in the Munich-based European Patent Office (EPO), which oversees about 160,000 patent applications annually. She recently completed a road trip warning Australian businesses that poor patent and IP safeguards could derail their European market opportunities. Companies must innovate – and protect their inventions. “You require the protection of the IP and, particularly, patent protection to acquire an excellent return on your investment,” she says.
Many international businesses have baulked at exporting to Europe as a result of complex patent processes across multiple jurisdictions that may lead to 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 up to 26 participating European Union member states using the submission of a 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 provides 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 chances to expand to the European market, which boasts a lot more than 500 million people, high gross domestic product and strong consumer demand. “It’s extremely important for Australian businesses to know that you will find a big change ahead in Europe. I’m not talking only about Inventhelp Pittsburgh,” Fröhlinger says. “It’s extremely important to have an integrated IP portfolio considering patents and trademarks and (covering) design. If they don’t have (IP) folks-house they need to attempt to get strategic business advice.”
The price of intangible assets – This call to action for Australian businesses comes as the international Innovation Index 2017 reports on countries’ IP receipts as being a portion of total trade. In essence, the measure indicates the way a country is performing on the IP front. While Australia scores well when it comes to inputs into research and development, the US (5.1 per cent), 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 not proficient at converting research into value and treat IP nearly as an administrative function. The exceptions are health tech leaders, including medical device company Cochlear and sleep-disorder business ResMed, which understand the value of intangible assets like logo and data use, and make their businesses around it.
In a knowledge-based economy, IP 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 increasingly important than kxwlfd assets and require appropriate consideration.
An overview of Australia’s top listed companies, released by Invent Help Technology in September 2017, endorses such a sentiment. It reveals that 38 per cent in the companies’ value (in regards to a$550 billion) is not included on their own balance sheets; this means that that investors are operating without insights into a significant proportion in the corporate asset base.