Intellectual property could be a crucial business tool, although not everyone thinks with enough concentration 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 6 hours getting his car out with a hand winch. He knew there should be a better way. Responding, he invented Maxtrax, a light-weight 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 primary things we did was talk with a patent attorney to see how 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 such as Australia, Europe and the US, as well as the business even offers a trademark on the distinctive original “safety orange” hue it uses for its moulded product. Unlike McCarthy, however, many inventors and businesses with a great idea cruel their chances of success from the first day.
Their big mistake? Ignoring patents or other Inventor Ideas 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), specifically, often neglect safeguarding their IP or think it will likely be expensive. “The vast majority of protectable IP goes unprotected,” he says.
Europe can be a particular trap for exporters because, unlike some 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 in which to have an idea or product to become copied. “In Australia and the United States you can do something about it, 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 inside the foot; they’ve forfeited their rights and anyone 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 straightforward, 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 per year. 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 require the protection of your own IP and, particularly, patent protection in order to get a good 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 end 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 possible to get protection in as much as 26 participating European Union member states using the submission of the 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 opportunities to expand to the European market, which boasts more than 500 million people, high gross domestic product and powerful consumer demand. “It’s extremely important for Australian businesses to know that there is a big change ahead in Europe. I’m not talking just about Inventhelp Locations,” Fröhlinger says. “It’s essential to have an integrated IP portfolio considering patents and trademarks and (covering) design. When they don’t have (IP) people in-house they should make an effort to get strategic business advice.”
The need for intangible assets – This call to action for Australian businesses comes as the international Innovation Index 2017 reports on countries’ IP receipts as a portion of total trade. Basically, the measure indicates how a country is performing on the IP front. While Australia scores well in terms of inputs into research and development, the united states (5.1 %), Japan (4.7 %) and Finland (2.9 %) easily outperform Australia (.3 percent) on IP royalties.
The content? For the most part, Australian companies are certainly not proficient at converting research into value and treat IP nearly as an administrative function. The exceptions are health tech leaders, including medical device company Cochlear and sleep-disorder business ResMed, which understand the importance of intangible assets such as logo and data use, and build their businesses around it.
In a knowledge-based economy, IP has developed into a crucial business tool and governing it is not just a matter of organising trademarks and patents. Intangible assets are rapidly becoming more important than kxwlfd assets and require appropriate consideration.
An overview of Australia’s top listed companies, released by I Want To Patent My Idea in September 2017, endorses this type of sentiment. It reveals that 38 per cent from the companies’ value (regarding a$550 billion) is not really included on their own balance sheets; this indicates that investors are operating without insights right into a significant proportion from the corporate asset base.