Intellectual property can be a crucial business tool, however, 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 an improved way. In response, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the super-tough nylon product, he attended a Queensland Government business seminar, in which 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 see how you could protect the thought,” says McCarthy, who launched Maxtrax in 2005. It is actually now purchased in about 30 countries worldwide. McCarthy has How To Sell My Invention Idea To A Company in key markets including Australia, Europe and also the US, and the business also offers a trademark on the distinctive original “safety orange” hue it uses of 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 other intellectual property protection before they spruik their idea to investors, the public or even friends. It can 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 likely be expensive. “The majority of protectable IP goes unprotected,” he says.
Europe can be considered a particular trap for exporters because, unlike some other major markets, it does not have a grace period allowing for public disclosure of the invention without affecting the validity of any subsequent patent application. That opens just how for the idea or product to be copied. “In Australia and the United States you can do something about this, 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 in the foot; they’ve forfeited their rights and anyone can copy [their idea].” Postma observes that business people often think their idea is simply too very easy to warrant a patent. “However, if it’s successful and straightforward, it will 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 firms that poor patent and IP safeguards could derail their European market opportunities. Companies have to innovate – and protect their inventions. “You have to have the protection of your IP and, in particular, patent protection in order to acquire a good return on your own investment,” she says.
Many international businesses have baulked at exporting to Europe because of complex patent processes across multiple jurisdictions that can lead to 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 makes it possible to get protection in approximately 26 participating European Union member states using the submission of a single request for the EPO.
A November 2017 EPO study, How To Build A Prototype With Inventhelp, Trade and FDI inside 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 in to the European market, which boasts more than 500 million people, high gross domestic product and robust consumer demand. “It’s very important for Australian businesses to understand that there exists a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s extremely important to get an integrated IP portfolio considering patents and trademarks and (covering) design. When they don’t have (IP) individuals-house they should try to get strategic business advice.”
The need for intangible assets – This call to action for Australian businesses comes as the Global Innovation Index 2017 reports on countries’ IP receipts as a portion of total trade. Basically, the measure indicates the way a country is performing on the IP front. While Australia scores well when it comes to inputs into research and development, the usa (5.1 per cent), Japan (4.7 per cent) and Finland (2.9 per cent) easily outperform Australia (.3 per cent) on IP royalties.
Your message? Being a general rule, Australian companies are not great at converting research into value and treat IP nearly as an administrative function. The exceptions are health tech leaders, like medical device company Cochlear and sleep-disorder business ResMed, which understand the importance of intangible assets including brand name and data use, and make their businesses around it.
In a knowledge-based economy, IP has become a crucial business tool and governing it has stopped being just a point of organising trademarks and Patent An Invention. Intangible assets are rapidly increasingly 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 from the companies’ value (regarding a$550 billion) will not be included on their own jjnywy sheets; this suggests that investors are operating without insights into a significant proportion in the corporate asset base.