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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 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. Responding, he invented Maxtrax, a lightweight vehicle-recovery device for bogged off-roaders.

After designing the Inventhelp Patent Services, 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 speak to a patent attorney to find out how we could protect the concept,” says McCarthy, who launched Maxtrax in 2005. It really is now sold in about 30 countries worldwide. McCarthy has patents in key markets like Australia, Europe and also the US, and the business even 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 good idea cruel their chances of success from day one.

Their big mistake? Ignoring patents or other intellectual property protection before they spruik their idea to investors, people or perhaps 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 likely be too expensive. “The vast majority of protectable IP goes unprotected,” he says.

Europe can be quite a particular trap for exporters because, unlike a few other major markets, it lacks a grace period allowing for public disclosure of the invention without affecting the validity of the subsequent patent application. That opens just how for the idea or product to get copied. “In Australia and america that can be done something 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 in the foot; they’ve forfeited their rights and everyone 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 simple, it will be copied and you have to get advice.”

Unitary patents on way – Margot Fröhlinger is principal director of Inventhelp Commercial, 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 your IP and, specifically, patent protection to acquire a great return on the investment,” she says.

Many international businesses have baulked at exporting to Europe as a result of complex patent processes across multiple jurisdictions that may result in potentially high costs and marginal protection. However, the EPO is promoting a new unitary patent system that promises to become a game changer. This makes it easy to get protection in as much as 26 participating European Union member states with the submission of any single request for 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 powerful consumer demand. “It’s extremely important for Australian businesses to know that there is 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. If they don’t have (IP) individuals-house they ought to try 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 how a country has been doing on the IP front. While Australia scores well when it comes to 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.

Your 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 dppdwz Cochlear and sleep-disorder business ResMed, which understand the significance of intangible assets such as brand name and data use, and build their businesses around it.

In a knowledge-based economy, IP has become Famous Inventors and governing it is not just a matter of organising trademarks and patents. Intangible assets are rapidly more and more 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 from the companies’ value (regarding a$550 billion) is not included on their own balance sheets; this means that that investors are operating without insights into a significant proportion in the corporate asset base.

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