Have you heard the common misconception that IP rights are the domain of big companies and that intellectual property (IP) is too expensive for Australian SMEs? We have some good news for you – it’s definitely not true that you need a big budget to have an effective global IP plan – especially if you are prepared to learn a little.
Recent studies* have shown that SMEs holding a single IP right, whether a patent, trade mark or a design, have 67 per cent greater revenue per employee than their competitors without any IP rights.
Your SME’s New Product Development Plan should always include an IP plan. While working with a good patent and trade mark attorney, and with the right approach, IP protection is affordable and should always be considered.. When forming on an IP plan, some basic DIY can help reduce IP costs and provide a solid foundation to work with. It might also help to work with supporters who have travelled the commercialisation road before, who can de-risk your IP journey.
Let’s work on the scenario of you and your team developing a new product. While there are plenty of challenges, you have confidence that it will be a market success. You have a long and expensive commercialisation road ahead. Should you spend some of your limited budget on IP? And, if so, when and how much?
Each situation will be different, but questions to ask include:
- If successful, will products arising from the project have a long commercial life?
- Are profits likely to be high enough to attract competitors and, if so, are competitors likely to produce a marketable copy?
- What would the impact to our company be if third-party IP rights prevented the sale of the new product?
If you answered yes to at least some of the above questions, then you should explore IP protection and conduct patent searching.
Large companies, be they consumer-product companies, medical device companies, research institutions or food and wines business, typically have a well-developed IP plan to navigate questions of freedom to operate, when to pursue patent rights and how to licence IP SMEs however, sometimes only deal with IP issues infrequently and may have a more difficult time navigating the patent system.
Fortunately, laws to protect IP (patents, trade marks, design and copyright) are all designed such that, early in the product life, costs are relatively modest. Later, typically years later, and ideally when your product is generating significant revenue, costs build. Costs are, however, always within the owner’s control.
Agreements between countries are such that a single patent, trade mark or design filing can be made in Australia and provide the basis of future overseas filing. This keeps initial costs low, while still preserving the option of US, Chinese and European filings (and in hundreds of other countries). Applicants have 12 months in which to file patents overseas based on an initial Australian patent filing, and this time frame can be extended to 30 months through an international (PCT) application. For trade marks and designs, six months is provided.
After an initial Australian filing, a medical devices start-up, for instance, might focus on a small target group of countries where there are well-established health systems with good reimbursement processes (e.g. one of more of Australia, the UK or China). A resources start-up or SME might focus on countries where there are well-established and relatively low-risk paths to market (e.g. one of more of Canada, South Africa and Australia). Each company should carefully consider what countries are relevant to their business plan and whether the costs, risks, and benefits support IP filings in those countries.
As an SME, you may be concerned about the significant costs of enforcement. Fortunately, enforcement action is rarely required and typically occurs many years down the track when revenue is being generated. In many ways, obtaining IP rights can be thought of as a form of insurance, buying the option to enforce at a later time. Further, a strong and layered IP position acts as a deterrent to competitors and can attract investors.
There are many simple steps you can take at little or no cost that will provide a strong foundation for the pursuit of valuable IP rights:
- Consider the best branding for your product or service https://madderns.com.au/tips-for-selecting-a-unique-trade-mark/
- Explore Entrepreneurs’ Programs and grants https://madderns.com.au/business-sa-entrepreneurs-programme/
- See how others have benefited from the patent system
- See how SME’s with IP rights generate more revenue per employee
At Madderns, we have more than 20 patent and trade mark attorneys with a broad range of expertise and experience who have helped many companies navigate their way through IP issues. Our team is your team. Which of our team has the technical skills and experience that most closely aligns with your needs? See their profiles:
Give us a call or send us an email and we’ll help you on your journey.