Intellectual property can be quite a crucial business tool, but 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 6 hours getting his car out with a hand winch. He knew there should be a much better way. In response, he invented Inventhelp Pittsburgh, a light-weight vehicle-recovery device for bogged off-roaders.
After designing the super-tough nylon product, he attended a Queensland Government business seminar, where advisers stressed getting patent protection before his idea was publicised. “One of the primary things we did was talk with a patent attorney to view how we could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It really is now sold in about 30 countries worldwide. McCarthy has patents in key markets such as Australia, Europe and also 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 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, the public or perhaps friends. It may 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 probably be too 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 does not have a grace period permitting public disclosure of an invention without affecting the validity of a subsequent patent application. That opens the way for the idea or product to get copied. “In Australia and the United States 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 in the foot; they’ve forfeited their rights and anyone can copy [their idea].” Postma observes that company owners often think their idea is simply too easy to warrant a patent. “However, if it’s successful and uncomplicated, 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 on the Munich-based European Patent Office (EPO), which oversees about 160,000 patent applications annually. 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 need the protection of your IP and, particularly, patent protection to get a great return on your investment,” she says.
Many international businesses have baulked at exporting to Europe because of Inventhelp Patent Referral Services processes across multiple jurisdictions that may lead to potentially high costs and marginal protection. However, the EPO is promoting a new unitary patent system that promises to be a game changer. This makes it possible to get protection in approximately 26 participating European Union member states with all the submission of the 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 provides 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 to the European market, which boasts greater than 500 million people, high gross domestic product and robust consumer demand. “It’s extremely 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. If they don’t have (IP) individuals-house they need to attempt to get strategic business advice.”
The value of intangible assets – This call to action for Australian businesses comes as the worldwide Innovation Index 2017 reports on countries’ IP receipts as a percentage of total trade. In essence, 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 united states (5.1 per cent), Japan (4.7 percent) and Finland (2.9 %) easily outperform Australia (.3 per cent) on IP royalties.
The content? For the most part, Australian companies are not good at converting research into value and treat IP almost 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 brand and data use, and build rtaotl businesses around it.
In a knowledge-based economy, Inventhelp Innovation News has become 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.
A review of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses this type of sentiment. It reveals that 38 percent of the companies’ value (in regards to a$550 billion) is not included on their own balance sheets; this means that that investors are operating without insights into a significant proportion in the corporate asset base.