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 six hours getting his car out with a hand winch. He knew there has to be a better way. In response, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the Inventhelp Inventions Store, 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 talk to a patent attorney to see 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 like Australia, Europe and the US, and also the business even offers a trademark on the distinctive original “safety orange” hue it ways to use 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, people or even 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 probably be expensive. “The majority of protectable IP goes unprotected,” he says.
Europe can be quite a particular trap for exporters because, unlike various other major markets, it lacks a grace period permitting public disclosure of your invention without affecting the validity of a subsequent patent application. That opens the way in which for an idea or product to get copied. “In Australia and the usa that can be done something regarding 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 in the foot; they’ve forfeited their rights and everyone 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 probably 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 annually. She recently completed a road trip warning Australian businesses that poor patent and IP safeguards could derail their European market opportunities. Companies must innovate – and protect their inventions. “You have to have the protection of the IP and, particularly, patent protection to get an excellent return on your own investment,” she says.
Many international businesses have baulked at exporting to Europe because of How To Get A Patent On An Idea across multiple jurisdictions that may result in potentially high costs and marginal protection. However, the EPO is promoting a whole new unitary patent system that promises as a game changer. This will make it possible 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 inside the European Union, suggests better harmonisation of Europe’s patent system has got 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 into 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 understand that you will find 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. Should they don’t have (IP) people in-house they need to try to get strategic business advice.”
The price of intangible assets – This call to action for Australian businesses comes as the international Innovation Index 2017 reports on countries’ IP receipts as a amount of total trade. Essentially, the measure indicates how a country has been doing 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 per cent) and Finland (2.9 percent) easily outperform Australia (.3 percent) on IP royalties.
The message? For the most part, Australian companies are not good 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 value of intangible assets like logo and data use, and wksgqs their businesses around it.
In a knowledge-based economy, Inventions Ideas has turned into a crucial business tool and governing it has stopped being just a matter of organising trademarks and patents. Intangible assets are rapidly more and more important than tangible assets and require appropriate consideration.
Overview of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses this type of sentiment. It reveals that 38 % in the companies’ value (in regards to a$550 billion) is not included on their own balance sheets; this suggests that investors are operating without insights into a significant proportion of the corporate asset base.