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 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 a much better way. In response, he invented Inventhelp Stories, 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 including Australia, Europe and the US, as well as 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 great idea cruel their chances of success from day one.
Their big mistake? Ignoring patents or any other intellectual property protection before they spruik their idea to investors, the general public or even 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 expensive. “The majority of protectable IP goes unprotected,” he says.
Europe can be a particular trap for exporters because, unlike a few other major markets, it lacks a grace period making it possible for public disclosure of the invention without affecting the validity of any subsequent patent application. That opens just how for an idea or product to get copied. “In Australia and the usa that can be done 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 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 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 per year. 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 need the protection of your own IP and, particularly, patent protection in order to get a great return on your own investment,” she says.
Many international businesses have baulked at exporting to Europe because of Patent Idea processes across multiple jurisdictions that can end in potentially high costs and marginal protection. However, the EPO is promoting a brand new unitary patent system that promises as a game changer. This will make it easy to get protection in as much as 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 inside the European Union, suggests better harmonisation of Europe’s patent system provides the possibility 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 powerful consumer demand. “It’s extremely important for Australian businesses to know that there is a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s extremely important to have an integrated IP portfolio considering patents and trademarks and (covering) design. When they don’t have (IP) folks-house they ought to make an effort to get strategic business advice.”
The price of intangible assets – This call to action for Australian businesses comes as the Global Innovation Index 2017 reports on countries’ IP receipts as a portion of total trade. Essentially, the measure indicates just how a country is performing on the IP front. While Australia scores well with regards to inputs into research and development, the united states (5.1 %), Japan (4.7 %) and Finland (2.9 per cent) easily outperform Australia (.3 percent) on IP royalties.
The content? For the most part, Australian companies are certainly not good at converting research into value and treat IP nearly as an administrative function. The exceptions are health tech leaders, such as medical device company Cochlear and sleep-disorder business ResMed, which understand the value of intangible assets such as brand and data use, and build rtaotl businesses around it.
In a knowledge-based economy, Inventhelp Office 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 tangible assets and require appropriate consideration.
A review of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses such a sentiment. It reveals that 38 percent of the companies’ value (about A$550 billion) will not be included on their own balance sheets; this means that that investors are operating without insights in to a significant proportion of the corporate asset base.