Intellectual property can be a crucial business tool, however, 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 Maxtrax, a light-weight vehicle-recovery device for bogged off-roaders.
After designing the Inventhelp Caveman, he attended a Queensland Government business seminar, in which the advisers stressed getting patent protection before his idea was publicised. “One of the primary things we did was talk with a patent attorney to view how you could protect the thought,” says McCarthy, who launched Maxtrax in 2005. It is actually now sold in about 30 countries worldwide. McCarthy has patents in key markets including Australia, Europe as well as 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 day one.
Their big mistake? Ignoring patents or any other intellectual property protection before they spruik their idea to investors, the public or perhaps friends. It may 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 probably be expensive. “The majority of protectable IP goes unprotected,” he says.
Europe can be quite a particular trap for exporters because, unlike a few other major markets, it lacks a grace period making it possible for public disclosure of an invention without affecting the validity of any subsequent patent application. That opens the way for an idea or product to be copied. “In Australia and the usa 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 inside the foot; they’ve forfeited their rights and anybody can copy [their idea].” Postma observes that business owners often think their idea is simply 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 New Invention Ideas, European and international legal affairs at the Munich-based European Patent Office (EPO), which oversees about 160,000 patent applications annually. 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, specifically, patent protection to get a good return on the investment,” she says.
Many international businesses have baulked at exporting to Europe due to complex patent processes across multiple jurisdictions that can lead to potentially high costs and marginal protection. However, the EPO is promoting a whole 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 using 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 has 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 possibilities to expand in to the European market, which boasts a lot more than 500 million people, high gross domestic product and strong consumer demand. “It’s essential for Australian businesses to comprehend that there is 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 try to get strategic business advice.”
The value of intangible assets – This call to action for Australian businesses comes as the international Innovation Index 2017 reports on countries’ IP receipts being a portion of total trade. Essentially, the measure indicates the way a country is performing on the IP front. While Australia scores well in terms of inputs into research and development, the US (5.1 per cent), Japan (4.7 %) and Finland (2.9 per cent) easily outperform Australia (.3 %) 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, such as medical device dppdwz Cochlear and sleep-disorder business ResMed, which understand the importance of intangible assets like brand name and data use, and build their businesses around it.
In a knowledge-based economy, IP has grown to be How To Patent Ideas and governing it is not only a matter of organising trademarks and patents. Intangible assets are rapidly increasingly important than tangible assets and require appropriate consideration.
A review of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses this kind of sentiment. It reveals that 38 per cent of the companies’ value (about A$550 billion) is not included on the balance sheets; this suggests that investors are operating without insights right into a significant proportion of the corporate asset base.