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 the 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 has to be a much better way. In response, 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 the advisers stressed getting patent protection before his idea was publicised. “One of the primary things we did was speak 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 including Australia, Europe and also the US, and also 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 likelihood of success from the first day.
Their big mistake? Ignoring patents or some other Technology before they spruik their idea to investors, the public or perhaps friends. It could 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 be too costly. “The vast majority of protectable IP goes unprotected,” he says.
Europe could be a particular trap for exporters because, unlike various other major markets, it does not have a grace period making it possible for public disclosure of the invention without affecting the validity of the subsequent patent application. That opens the way to have an idea or product to be copied. “In Australia and america that you can do something about it, provided you’re in 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 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 straightforward, it will likely be copied and you should 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 firms 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, in particular, patent protection in order to get an excellent return on the 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 new unitary patent system that promises to become a game changer. This makes it easy to get protection in as much as 26 participating European Union member states with the submission of a single request for the EPO.
A November 2017 EPO study, Patents, Trade and FDI in the European Union, suggests better harmonisation of Europe’s patent system has 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 chances to expand into the European market, which boasts more than 500 million people, high gross domestic product and robust consumer demand. “It’s essential for Australian businesses to know that you will find a big change ahead in Europe. I’m not talking only about File A Patent,” Fröhlinger says. “It’s extremely important to get an integrated IP portfolio considering patents and trademarks and (covering) design. When they don’t have (IP) individuals-house they should attempt to get strategic business advice.”
The price of intangible assets – This call to action for Australian businesses comes as the worldwide Innovation Index 2017 reports on countries’ IP receipts being a amount of total trade. In essence, the measure indicates the way a country is performing on the IP front. While Australia scores well with regards to inputs into research and development, the US (5.1 %), Japan (4.7 per cent) and Finland (2.9 per cent) easily outperform Australia (.3 percent) on IP royalties.
The message? Typically, Australian companies usually 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 just a matter of organising trademarks and patents. Intangible assets are rapidly becoming more important than kxwlfd assets and require appropriate consideration.
Overview of Australia’s top listed companies, released by Make A New Invention in September 2017, endorses such a sentiment. It reveals that 38 % of the companies’ value (about A$550 billion) is not included on the balance sheets; this indicates that investors are operating without insights into a significant proportion of the corporate asset base.