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 must be an improved way. In response, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the Inventhelp Store Products, 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 talk to a patent attorney to find out the way we could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It is actually now purchased in about 30 countries worldwide. McCarthy has patents in key markets including Australia, Europe and also the US, as well as the business also offers a trademark on the distinctive original “safety orange” hue it uses for its moulded product. Unlike McCarthy, however, many inventors and businesses with recommended cruel their chances of success from day 1.
Their big mistake? Ignoring patents or other intellectual property protection before they spruik their idea to investors, people as well as friends. It can be a costly error. Bradley Postma, principal at patent and trademark attorney firm Cullens, says small, and medium enterprises (SMEs), specifically, often neglect safeguarding their IP or think it will be too expensive. “The majority of protectable IP goes unprotected,” he says.
Europe can be quite a particular trap for exporters because, unlike a few other major markets, it lacks a grace period allowing for public disclosure of the invention without affecting the validity of any subsequent patent application. That opens the way for an idea or product to get copied. “In Australia and america that you can do something regarding it, provided you’re inside a one-year window – in Europe you can’t, it’s far too late,” Postma says. “In that case, businesses have shot themselves within the foot; they’ve forfeited their rights and anyone can copy [their idea].” Postma observes that business owners often think their idea is too easy to warrant a patent. “However, if it’s successful and simple, it will 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 at the Munich-based European Patent Office (EPO), which oversees about 160,000 patent applications a year. She recently completed a road trip warning Australian companies that poor patent and IP safeguards could derail their European market opportunities. Companies need to innovate – and protect their inventions. “You have to have the protection of your IP and, particularly, patent protection in order to get an excellent return on your own investment,” she says.
Many international businesses have baulked at exporting to Europe as a result of Patent Companies across multiple jurisdictions that will result in 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 will make it possible to get protection in up to 26 participating European Union member states with all the submission of any single request for the EPO.
A November 2017 EPO study, Patents, Trade and FDI in 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 chances to expand into the European market, which boasts greater than 500 million people, high gross domestic product and robust consumer demand. “It’s very important for Australian businesses to know that you will find a big change ahead in Europe. I’m not talking just about 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) people in-house they need to try to get strategic business advice.”
The value 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. Basically, the measure indicates the way a country is performing on the IP front. While Australia scores well with regards to inputs into research and development, the usa (5.1 per cent), Japan (4.7 percent) and Finland (2.9 %) easily outperform Australia (.3 per cent) on IP royalties.
The content? As a general rule, Australian companies usually 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 brand name and data use, and wksgqs their businesses around it.
In a knowledge-based economy, Inventhelp Invention Ideas 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 increasingly important than tangible assets and require appropriate consideration.
An overview of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses this type of sentiment. It reveals that 38 per cent of the companies’ value (regarding a$550 billion) will not be included on the balance sheets; this means that that investors are operating without insights into a significant proportion from the corporate asset base.