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 the 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 Maxtrax, a lightweight 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 to a patent attorney to find out how we could protect the concept,” says McCarthy, who launched Maxtrax in 2005. It is actually now available in about 30 countries worldwide. McCarthy has How To Start An Invention in key markets like Australia, Europe and also the US, and also the business also 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 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, people or even friends. It can be considered 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 likely be too costly. “The majority of protectable IP goes unprotected,” he says.

Europe can be a particular trap for exporters because, unlike various 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 the way in which for the idea or product to get copied. “In Australia and the United States you can take action about this, provided you’re within 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 business people often think their idea is simply too easy to warrant a patent. “However, if it’s successful and straightforward, 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 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 your IP and, in particular, patent protection in order to get a good return on your own investment,” she says.

Many international businesses have baulked at exporting to Europe as a result of 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 become a game changer. This will make it easy to get protection in approximately 26 participating European Union member states using the submission of a single request for the EPO.

A November 2017 EPO study, Patent Helper, Trade and FDI within 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 possibilities to expand in to the European market, which boasts more than 500 million people, high gross domestic product and strong consumer demand. “It’s very important for Australian businesses to know that there exists a big change ahead in Europe. I’m not talking no more than 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 value of 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 the way a country is performing on the IP front. While Australia scores well in terms of inputs into research and development, the US (5.1 per cent), Japan (4.7 %) and Finland (2.9 per cent) easily outperform Australia (.3 per cent) on IP royalties.

The message? Being a general rule, Australian companies are not good at converting research into value and treat IP almost as an administrative function. The exceptions are health tech leaders, like medical device company Cochlear and sleep-disorder business ResMed, which understand the significance of intangible assets such as brand and data use, and make their businesses around it.

In a knowledge-based economy, IP has become a crucial business tool and governing it is no longer just a point of organising trademarks and Inventhelp Office. Intangible assets are rapidly increasingly 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 % of the companies’ value (in regards to a$550 billion) is not included on the jjnywy sheets; this suggests that investors are operating without insights in to a significant proportion from the corporate asset base.

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