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 6 hours getting his car out with a hand winch. He knew there should be a much better way. In response, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the Invent Help Patent Information, 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 speak to a patent attorney to find out how we could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It is actually now purchased in about 30 countries worldwide. McCarthy has patents in key markets such as Australia, Europe as well as the US, and 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 a good idea cruel their likelihood of success from the first day.
Their big mistake? Ignoring patents or other intellectual property protection before they spruik their idea to investors, people 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), specifically, often neglect safeguarding their IP or think it will likely be too costly. “The majority of protectable IP goes unprotected,” he says.
Europe could be a particular trap for exporters because, unlike a few other major markets, it does not have a grace period permitting public disclosure of an invention without affecting the validity of the subsequent patent application. That opens the way in which for the idea or product to get copied. “In Australia and the usa that can be done something about it, 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 in the foot; they’ve forfeited their rights and anyone 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 straightforward, it will be copied and you should 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 companies 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, particularly, patent protection in order to get an excellent return on your investment,” she says.
Many international businesses have baulked at exporting to Europe as a result of I Have An Invention across multiple jurisdictions that can lead to potentially high costs and marginal protection. However, the EPO is promoting a new unitary patent system that promises as a game changer. This makes it easy to get protection in approximately 26 participating European Union member states with all the submission of any 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 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 chances 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 extremely important for Australian businesses to know that you will find 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. If they don’t have (IP) individuals-house they ought to make an effort to get strategic business advice.”
The need for intangible assets – This call to action for Australian businesses may come as the international Innovation Index 2017 reports on countries’ IP receipts 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 usa (5.1 percent), Japan (4.7 per cent) and Finland (2.9 percent) easily outperform Australia (.3 per cent) on IP royalties.
Your message? Typically, Australian companies are not good 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 importance of intangible assets like brand name and data use, and wksgqs their businesses around it.
In a knowledge-based economy, Inventhelp New Store Products has developed into a crucial business tool and governing it has stopped being 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 the balance sheets; this indicates that investors are operating without insights right into a significant proportion of the corporate asset base.