Intellectual property can be 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 has to be a better way. In response, he invented Invent Help, 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 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 find out how you could protect the thought,” says McCarthy, who launched Maxtrax in 2005. It is now sold in about 30 countries worldwide. McCarthy has patents in key markets such as Australia, Europe and also the US, and the business even 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 chances of success from day 1.
Their big mistake? Ignoring patents or other intellectual property protection before they spruik their idea to investors, people 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), particularly, often neglect safeguarding their IP or think it will probably be too 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 making it possible for public disclosure of the invention without affecting the validity of a subsequent patent application. That opens just how for the idea or product to be copied. “In Australia and the United States that you can do something regarding it, provided you’re inside a one-year window – in Europe you can’t, it’s too far gone,” Postma says. “In that case, businesses have shot themselves in the foot; they’ve forfeited their rights and anybody can copy [their idea].” Postma observes that business owners often think their idea is too simple to warrant a patent. “However, if it’s successful and straightforward, it will 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 need the protection of the IP and, specifically, patent protection to get an excellent return on your investment,” she says.
Many international businesses have baulked at exporting to Europe due to Idea Patent processes across multiple jurisdictions that will end in potentially high costs and marginal protection. However, the EPO is promoting a new unitary patent system that promises to become a game changer. This makes it easy to get protection in approximately 26 participating European Union member states with the submission of a single request for the EPO.
A November 2017 EPO study, Patents, 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 opportunities to expand into the European market, which boasts more than 500 million people, high gross domestic product and strong consumer demand. “It’s essential for Australian businesses to comprehend that there is 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. When they don’t have (IP) individuals-house they ought to 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 a percentage of total trade. Basically, the measure indicates the way a country has been doing on the IP front. While Australia scores well with regards to inputs into research and development, the US (5.1 percent), Japan (4.7 per cent) and Finland (2.9 percent) easily outperform Australia (.3 percent) on IP royalties.
Your message? Typically, Australian companies usually are not good 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 significance of intangible assets including brand and data use, and make rtaotl businesses around it.
In a knowledge-based economy, How To Start An Invention Idea has turned into a crucial business tool and governing it is not only 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 percent in the companies’ value (about A$550 billion) is not included on the balance sheets; this indicates that investors are operating without insights into a significant proportion from the corporate asset base.