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 an improved way. In response, 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. “Among the first things we did was speak to New Ideas For Inventions to see the way we could protect the concept,” says McCarthy, who launched Maxtrax in 2005. It is actually now sold in about 30 countries worldwide. McCarthy has patents in key markets including Australia, Europe and also 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 great idea cruel their odds of success from day one.
Their big mistake? Ignoring patents or any other intellectual property protection before they spruik their idea to investors, the general 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), particularly, often neglect safeguarding their IP or think it will be too expensive. “The vast majority of protectable IP goes unprotected,” he says.
Europe can become 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 in which for an idea or product to get copied. “In Australia and the United States you can do something about it, 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 anyone can copy [their idea].” Postma observes that company owners often think their idea is simply too very easy to warrant a patent. “However, if it’s successful and straightforward, it will likely 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 per 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 the IP and, in particular, How To Get A Patent For An Idea in order to acquire a good return on your own investment,” she says.
Many international businesses have baulked at exporting to Europe due to complex patent processes across multiple jurisdictions that can result in potentially high costs and marginal protection. However, the EPO is promoting a whole new unitary patent system that promises to be a game changer. This will make it possible to get protection in as much as 26 participating European Union member states using the submission of any single request towards the EPO.
A November 2017 EPO study, Patents, Trade and FDI in 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 opportunities to expand in to the European market, which boasts greater than 500 million people, high gross domestic product and strong consumer demand. “It’s extremely important for Australian businesses to comprehend that you will find a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s essential to get an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) people in-house they should try to get strategic business advice.”
The need for intangible assets – This call to action for Australian businesses comes as the Global Innovation Index 2017 reports on countries’ IP receipts as being a amount of total trade. Basically, the measure indicates just how a country is performing on the IP front. While Australia scores well in terms of inputs into research and development, the US (5.1 percent), Japan (4.7 %) and Finland (2.9 per cent) easily outperform Australia (.3 per cent) on IP royalties.
The message? As a general rule, Australian companies 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 like brand and data use, and build their briaac around it.
In a knowledge-based economy, IP has turned into a crucial business tool and governing it has stopped being just dependent on organising trademarks and Inventhelp Stories. Intangible assets are rapidly more and 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 such a sentiment. It reveals that 38 percent from the companies’ value (in regards to a$550 billion) is not really included on their balance sheets; this suggests that investors are operating without insights right into a significant proportion of the corporate asset base.