Intellectual property can be a crucial business tool, however, 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 six 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, 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 you could protect the idea,” says McCarthy, who launched Maxtrax in 2005. It really is now purchased in about 30 countries worldwide. McCarthy has How To Make An Invention Prototype With Inventhelp in key markets like Australia, Europe and 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 a good idea cruel their odds of success from day one.

Their big mistake? Ignoring patents or some other intellectual property protection before they spruik their idea to investors, the public or even friends. It can become 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 probably be too expensive. “The majority of protectable IP goes unprotected,” he says.

Europe can be a particular trap for exporters because, unlike a few other major markets, it does not have 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 in which for the idea or product to become copied. “In Australia and the United States you can make a move regarding it, provided you’re in 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 simple to warrant a patent. “However, if it’s successful and straightforward, it will 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 annually. 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 require the protection of your own IP and, particularly, patent protection in order to obtain 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 end 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 as much as 26 participating European Union member states with all the submission of a single request towards the EPO.

A November 2017 EPO study, How To Pitch An Invention To A Company, Trade and FDI in the European Union, suggests better harmonisation of Europe’s patent system has got 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 opportunities to expand in to 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 know that there is a big change ahead in Europe. I’m not talking only about patents,” Fröhlinger says. “It’s very important to have an integrated IP portfolio considering patents and trademarks and (covering) design. Should they don’t have (IP) folks-house they ought to attempt to get strategic business advice.”

The need for intangible assets – This call to action for Australian businesses comes as the international Innovation Index 2017 reports on countries’ IP receipts as a percentage of total trade. Basically, the measure indicates just how a country has been doing on the IP front. While Australia scores well in terms of inputs into research and development, the united states (5.1 per cent), Japan (4.7 %) and Finland (2.9 %) easily outperform Australia (.3 %) on IP royalties.

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

In a knowledge-based economy, IP has become a crucial business tool and governing it has stopped being just a matter of organising trademarks and Inventhelp Innovation. 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 kind of sentiment. It reveals that 38 percent of the companies’ value (about A$550 billion) is not included on their own jjnywy sheets; this indicates that investors are operating without insights into a significant proportion from the corporate asset base.

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