Intellectual property can be a crucial business tool, but not everyone thinks hard enough about protecting their big ideas. In 2001, plumber Brad McCarthy got stuck on the 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 better way. In response, he invented Prototype Model, 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. “Among the first things we did was speak to a patent attorney to see the way 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 also the US, and 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 recommended cruel their likelihood of success from the first day.
Their big mistake? Ignoring patents or some 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), particularly, often neglect safeguarding their IP or think it will be too expensive. “The majority of protectable IP goes unprotected,” he says.
Europe could be a particular trap for exporters because, unlike various other major markets, it does not have a grace period allowing for public disclosure of your invention without affecting the validity of What To Do With An Invention Idea. That opens the way for an idea or product to become copied. “In Australia and america 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 within the foot; they’ve forfeited their rights and everyone can copy [their idea].” Postma observes that business owners often think their idea is just too easy to warrant a patent. “However, if it’s successful and uncomplicated, 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 in the Munich-based European Patent Office (EPO), which oversees about 160,000 patent applications a year. She recently completed a road trip warning Australian firms 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, in particular, patent protection in order to get a great 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 result in potentially high costs and marginal protection. However, the EPO is promoting a whole new unitary patent system that promises to be a game changer. This will make it easy to get protection in as much as 26 participating European Union member states with all the submission of any single request towards 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 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 into the European market, which boasts a lot more than 500 million people, high gross domestic product and robust consumer demand. “It’s very important for Australian businesses to know that there is a big change ahead in Europe. I’m not talking no more than patents,” Fröhlinger says. “It’s very important to have an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) folks-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 percentage of total trade. Basically, 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 usa (5.1 %), Japan (4.7 %) and Finland (2.9 %) easily outperform Australia (.3 per cent) on IP royalties.
The content? For the most part, Australian companies usually are not proficient at converting research into value and treat IP almost as an administrative function. The exceptions are health tech leaders, including medical device company Cochlear and sleep-disorder business ResMed, which understand the value of intangible assets like logo and data use, vyltsm build their businesses around it.
In a knowledge-based economy, IP has developed into a crucial business tool and governing it is not only a matter of organising trademarks and patents. Intangible assets are rapidly becoming 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 kind of sentiment. It reveals that 38 percent of the companies’ value (in regards to a$550 billion) is not really included on the balance sheets; this means that that Inventhelp Office are operating without insights in to a significant proportion in the corporate asset base.