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 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 must be an improved way. In response, he invented File A Patent, a lightweight 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. “One of the primary things we did was speak to a patent attorney to see how we could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It is now available in about 30 countries worldwide. McCarthy has patents in key markets including Australia, Europe and the US, and the business also has a trademark on the distinctive original “safety orange” hue it ways to use its moulded product. Unlike McCarthy, however, many inventors and businesses with recommended 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 general 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), particularly, often neglect safeguarding their IP or think it will be too costly. “The vast 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 allowing for public disclosure of the invention without affecting the validity of any subsequent patent application. That opens the way to have an idea or product to get copied. “In Australia and the United States that you can do something regarding it, provided you’re within 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 business owners often think their idea is simply too simple to warrant a patent. “However, if it’s successful and simple, it will likely be copied and you need to 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 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 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 Inventhelp Locations processes across multiple jurisdictions that will end in potentially high costs and marginal protection. However, the EPO is promoting a brand new unitary patent system that promises to become 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 a single request to the EPO.
A November 2017 EPO study, Patents, Trade and FDI within the European Union, suggests better harmonisation of Europe’s patent system has got 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 more than 500 million people, high gross domestic product and powerful consumer demand. “It’s very important for Australian businesses to comprehend that you will find a big change ahead in Europe. I’m not talking no more than patents,” Fröhlinger says. “It’s extremely important with an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) folks-house they should try to get strategic business advice.”
The value of intangible assets – This call to action for Australian businesses may come as the worldwide Innovation Index 2017 reports on countries’ IP receipts as being a portion of total trade. Basically, the measure indicates how a country is performing on the IP front. While Australia scores well in terms of inputs into research and development, the usa (5.1 percent), Japan (4.7 per cent) and Finland (2.9 per cent) easily outperform Australia (.3 %) on IP royalties.
Your message? For the most part, Australian companies are certainly not good at converting research into value and treat IP almost 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 like brand name and data use, and build rtaotl businesses around it.
In a knowledge-based economy, Product Ideas has become 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 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 (about A$550 billion) is not really included on the balance sheets; this means that that investors are operating without insights right into a significant proportion in the corporate asset base.