Intellectual property can be a crucial business tool, although 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 has to be an improved way. In response, he invented Review For Inventhelp, 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 first things we did was speak to a patent attorney to view how you could protect the thought,” 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 also the business also has a trademark on the distinctive original “safety orange” hue it uses of its moulded product. Unlike McCarthy, however, many inventors and businesses with recommended cruel their chances of success from the first day.
Their big mistake? Ignoring patents or some other intellectual property protection before they spruik their idea to investors, people 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), in particular, often neglect safeguarding their IP or think it will 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 allowing for public disclosure of the invention without affecting the validity of Inventhelp Commercials. That opens the way for an idea or product to get copied. “In Australia and the United States that can be done something about this, provided you’re within a one-year window – in Europe you can’t, it’s too far gone,” 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 uncomplicated, it will probably be copied and you have to get advice.”
Unitary patents on way – Margot Fröhlinger is principal director of unitary patent, 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 must innovate – and protect their inventions. “You need 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 because of complex patent processes across multiple jurisdictions that may end in 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 possible to get protection in up to 26 participating European Union member states with all the submission of a 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 has 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 opportunities to expand into 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 understand that you will find a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s essential to have an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) folks-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 worldwide Innovation Index 2017 reports on countries’ IP receipts being a portion of total trade. Basically, the measure indicates the way 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 %), Japan (4.7 per cent) and Finland (2.9 %) easily outperform Australia (.3 percent) on IP royalties.
The message? As a general rule, Australian companies are certainly not great at converting research into value and treat IP almost as an administrative function. The exceptions are health tech leaders, like medical device company Cochlear and sleep-disorder business ResMed, which understand the significance of intangible assets such as logo and data use, vyltsm build their businesses around it.
In a knowledge-based economy, IP has turned into a crucial business tool and governing it is no longer just a matter of organising trademarks and patents. Intangible assets are rapidly more and more 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 type of sentiment. It reveals that 38 per cent in the companies’ value (regarding a$550 billion) is not included on their own balance sheets; this indicates that New Invention Idea are operating without insights right into a significant proportion from the corporate asset base.