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 a better way. In response, he invented Inventhelp Office Locations, 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. “Among the first things we did was talk with a patent attorney to find out how we could protect the concept,” says McCarthy, who launched Maxtrax in 2005. It is actually now purchased in about 30 countries worldwide. McCarthy has patents in key markets like Australia, Europe and the US, as well as the business also 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 odds of success from day one.
Their big mistake? Ignoring patents or other intellectual property protection before they spruik their idea to investors, people or even friends. It may 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 be expensive. “The vast majority of protectable IP goes unprotected,” he says.
Europe can be a particular trap for exporters because, unlike various other major markets, it lacks a grace period allowing for public disclosure of the invention without affecting the validity of a subsequent patent application. That opens the way in which for the idea or product to get copied. “In Australia and the usa you can do something about this, provided you’re inside 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 everyone can copy [their idea].” Postma observes that company owners often think their idea is just too very easy to warrant a patent. “However, if it’s successful and straightforward, it will likely 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 a year. She recently completed a road trip warning Australian businesses that poor patent and IP safeguards could derail their European market opportunities. Companies have to innovate – and protect their inventions. “You require the protection of your IP and, specifically, patent protection to get a great return on your investment,” she says.
Many international businesses have baulked at exporting to Europe as a result of New Invention Ideas 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 be a game changer. This makes it easy to get protection in approximately 26 participating European Union member states with all the submission of any single request to 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 opportunities to expand to the European market, which boasts a lot more than 500 million people, high gross domestic product and strong consumer demand. “It’s very important for Australian businesses to know that there is a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s essential to have an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) individuals-house they should attempt to get strategic business advice.”
The price of intangible assets – This call to action for Australian businesses may come as the international Innovation Index 2017 reports on countries’ IP receipts as being a amount of total trade. In essence, 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 per cent) and Finland (2.9 per cent) easily outperform Australia (.3 per cent) on IP royalties.
The content? As a general rule, Australian companies are not proficient 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 value of intangible assets such as brand name and data use, and make rtaotl businesses around it.
In a knowledge-based economy, Inventhelp Review has turned 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.
An overview of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses such a sentiment. It reveals that 38 % in the companies’ value (regarding a$550 billion) will not be included on the balance sheets; this suggests that investors are operating without insights in to a significant proportion from the corporate asset base.