Intellectual property can be a crucial business tool, although 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 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, where 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 you could protect the concept,” says McCarthy, who launched Maxtrax in 2005. It is now available in about 30 countries worldwide. McCarthy has How To Invent A Product in key markets including Australia, Europe and also the US, and the business also has 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 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 can 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 likely be too costly. “The vast majority of protectable IP goes unprotected,” he says.

Europe can be considered a particular trap for exporters because, unlike some other major markets, it lacks a grace period making it possible for public disclosure of an invention without affecting the validity of the subsequent patent application. That opens the way for an idea or product to be copied. “In Australia and the usa you can take action regarding 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 too very easy to warrant a patent. “However, if it’s successful and uncomplicated, 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 at 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 have to have the protection of the IP and, in particular, patent protection in order to acquire a good return on the 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 as a game changer. This makes it easy to get protection in up to 26 participating European Union member states using the submission of any single request to the EPO.

A November 2017 EPO study, Cool Invention Ideas, Trade and FDI inside the European Union, suggests better harmonisation of Europe’s patent system provides the possibility 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 into the European market, which boasts a lot more than 500 million people, high gross domestic product and powerful consumer demand. “It’s very important for Australian businesses to understand that there is a big change ahead in Europe. I’m not talking just about patents,” Fröhlinger says. “It’s essential to get an integrated IP portfolio considering patents and trademarks and (covering) design. When they don’t have (IP) people in-house they ought to try 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 portion of total trade. Basically, the measure indicates the way a country is performing on the IP front. While Australia scores well when it comes to inputs into research and development, the US (5.1 percent), Japan (4.7 %) and Finland (2.9 per cent) easily outperform Australia (.3 percent) on IP royalties.

Your message? As being a general rule, Australian companies are certainly 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 value of intangible assets like brand name and data use, and build their businesses around it.

In a knowledge-based economy, IP has developed into a crucial business tool and governing it is no longer just a point of organising trademarks and How To Patent An Invention. Intangible assets are rapidly more and more important than tangible assets and require appropriate consideration.

Overview of Australia’s top listed companies, released by Glasshouse Advisory in September 2017, endorses such a sentiment. It reveals that 38 percent of the companies’ value (about A$550 billion) will not be included on the jjnywy sheets; this suggests that investors are operating without insights into a significant proportion from the corporate asset base.

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