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 six hours getting his car out with a hand winch. He knew there should be a better way. In response, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.
After designing the Inventhelp Caveman Commercial, he attended a Queensland Government business seminar, where advisers stressed getting patent protection before his idea was publicised. “One of the first things we did was talk with a patent attorney to view how you could protect the thought,” says McCarthy, who launched Maxtrax in 2005. It really is now sold in about 30 countries worldwide. McCarthy has patents in key markets including Australia, Europe as well as the US, and also 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 a good idea cruel their likelihood of success from day one.
Their big mistake? Ignoring patents or any other intellectual property protection before they spruik their idea to investors, the public as well as 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 probably be too expensive. “The majority of protectable IP goes unprotected,” he says.
Europe could be a particular trap for exporters because, unlike some other major markets, it does not have a grace period permitting public disclosure of the invention without affecting the validity of the subsequent patent application. That opens the way for the idea or product to get 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 far 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 business people often think their idea is too simple to warrant a patent. “However, if it’s successful and simple, it will probably 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 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 companies that poor patent and IP safeguards could derail their European market opportunities. Companies have to innovate – and protect their inventions. “You need the protection of your own IP and, particularly, patent protection to get an excellent return on the investment,” she says.
Many international businesses have baulked at exporting to Europe due to Idea Help across multiple jurisdictions that may end in potentially high costs and marginal protection. However, the EPO is promoting a new unitary patent system that promises to be a game changer. This will make it easy to get protection in up to 26 participating European Union member states using the submission of the single request to 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 possible ways 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 in 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 you will find a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s extremely important to have an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) folks-house they should try to get strategic business advice.”
The value of intangible assets – This call to action for Australian businesses may come as the Global Innovation Index 2017 reports on countries’ IP receipts as being a portion of total trade. Essentially, the measure indicates just how a country has been doing 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 per cent) and Finland (2.9 percent) easily outperform Australia (.3 per cent) on IP royalties.
Your message? For the most part, Australian companies are certainly not great 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 logo and data use, and wksgqs their businesses around it.
In a knowledge-based economy, Inventhelp has developed into a crucial business tool and governing it is no longer 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 per cent of the companies’ value (regarding a$550 billion) is not really included on their own balance sheets; this suggests that investors are operating without insights right into a significant proportion in the corporate asset base.