Intellectual property can be a crucial business tool, but not everyone thinks with enough concentration 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 better way. In response, he invented Make My Invention Prototype, 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. “One of the primary things we did was talk to a patent attorney to view how you could protect the thought,” says McCarthy, who launched Maxtrax in 2005. It is now purchased in about 30 countries worldwide. McCarthy has patents in key markets like Australia, Europe and the US, and the business also has a trademark on the distinctive original “safety orange” hue it uses for its moulded product. Unlike McCarthy, however, many inventors and businesses with a good idea cruel their odds of success from the first day.
Their big mistake? Ignoring patents or other intellectual property protection before they spruik their idea to investors, people as well as 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 likely be expensive. “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 lacks a grace period permitting public disclosure of your invention without affecting the validity of Patent My Idea. That opens just how to have an idea or product to become copied. “In Australia and the usa that you can do something about it, provided you’re inside a one-year window – in Europe you can’t, it’s too far gone,” 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 business owners often think their idea is just too simple to warrant a patent. “However, if it’s successful and simple, it will probably 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 to acquire a good return on your investment,” she says.
Many international businesses have baulked at exporting to Europe due to complex patent processes 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 makes it easy to get protection in up to 26 participating European Union member states with 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 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 to the European market, which boasts greater than 500 million people, high gross domestic product and strong consumer demand. “It’s essential 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 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 attempt to get strategic business advice.”
The value of intangible assets – This call to action for Australian businesses may come as the international Innovation Index 2017 reports on countries’ IP receipts being a amount of total trade. Basically, the measure indicates the way 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 %), Japan (4.7 percent) and Finland (2.9 per cent) easily outperform Australia (.3 percent) on IP royalties.
The content? As a general rule, Australian companies are 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 importance of intangible assets including logo and data use, vyltsm build their businesses around it.
In a knowledge-based economy, IP has become 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 % of the companies’ value (in regards to a$550 billion) is not really included on their balance sheets; this indicates that Prototype Model are operating without insights right into a significant proportion in the corporate asset base.