Global presence: Frank Hurley says the demand for patent services is growing.
Photo: Ross Swanborough
Mid-Market Awards 2013 | Best Mid-Market Exporter: Wrays
When global companies go to war over patents, one mid-market firm in Australia is there to help them win the battle.
The question of who owns patents, and over what assets (whether those assets are tangible or not), is a crucial one. Tech giants such as Apple and Samsung, which are in a legal battle over control of the global smartphone market, know only too well that court decisions about rights over patents can be a game changer.
Perth-based intellectual property group Wrays is one of the biggest exporters of intellectual property services; 50 per cent of its $13 million annual revenue is from overseas clients, which include highly specialised companies protecting potentially lucrative inventions.
Established in 1920, Wrays operates nationally and exports its services around the world, including several countries in Europe, the United States, Canada, China, Japan and South Korea.
Chief executive Frank Hurley says while he remains optimistic about the overseas market, particularly the US, he worries about the future of innovation in Australia.
He says neither of the major political parties has released comprehensive policies supporting innovation.
“It’s my great despair,” he says. “IP is all about innovation.
“We work with agribusinesses, biotech companies and universities who are all about R&D and innovation. Yet, I have not heard any political party talking about innovation. The university and start-up biotech sector isn’t getting the support it once got.”
Despite that, Hurley sees room to grow. There’s rising demand for experts in patent litigation, and few firms that serve that niche.
An IBISWorld report on IP leasing suggests over the past five years there’s been an “alarming rise in patent litigation”.
It says technology and communication companies have been the “worst offenders”, with companies such as Apple, Microsoft, Google, Yahoo and Samsung acquiring patents and engaging in expensive litigation against each other for patent infringement.
The report predicts a rise in global investment in technology, healthcare and consumer products will boost demand for patent leases.
Demand is already so strong that Wrays has seen revenue rise from $10.7 million in 2010-11 to $13.3 million in 2012-13.
Wrays operates in three main areas: filing patents, defending patents, and a consulting arm that focuses on helping clients understand and manage their IP.
Hurley says, in most cases, they are called on to protect non-tangible assets.
He comes from a consulting background and previously worked at Freehills.
“A significant part of our growth is patent litigation,” he says. “If you want a patent in Australia, you need to go through a patent attorney firm like ours. We are also the largest filer of Chinese patents to Australia.”
A niche within a niche
IP law is a small part of the legal services market. An IBISWorld report on legal services in Australia shows commercial law – which most of the top-tier law firms including Allens, Herbert Smith Freehills, Norton Rose Fulbright, King & Wood Mallesons and Ashurst specialise in – accounts for 35 per cent of $21 billion worth of industry revenue. In comparison, intellectual property law makes up just 4.4 per cent of total revenue.
Wrays operates in a niche within a niche. Few patent attorneys are also specialists in biochemistry and pharmaceuticals.
“We deal at the top end of the niche,” Hurley says.
The firm has expanded. After opening offices in Brisbane and Adelaide in 2010, Wrays opened its Sydney office a year later.
“For a WA firm to run a major patent litigation firm is a real ‘tick’,” he says.
Wrays has a small team of 63 staff.
As well as employing IP lawyers, patent attorneys, and trademark attorneys, it has technical experts with advanced degrees in law, science and engineering.
“The patent attorneys are the scientist types,” Hurley says, “while the lawyers who come from the arts side of law deal with infringement of IP and patents. They’re two very different groups to manage.”
Hurley says while the legal side of the business is only four years old, it’s been a big growth area.
“We have senior counsel lawyers who can interpret the science and explain it to a judge who isn’t an expert in biochemistry.”
Hurley says the export of its services has meant the firm has strong connections with patent attorney firms overseas.
Wrays associates work with patent attorney firms in the US and China. Its clients are leading changes in the biochemical and pharmaceutical industry. Take, for instance, BioHeap, owned by Western Areas, which has obtained six patents in China over the past 14 years. The company specialises in a bacterial culture that helps to leach or liberate valuable metals from sulphide ores.
The leaching can occur in tanks and is a low-cost way of producing high-value products (nickel, copper, cobalt, zinc and refractory gold ores).
Since the technology can be applied in a wide range of climates, it’s well-suited to the harsh summers of Western Australia’s Pilbara region.
Other clients on Wrays’ list include Galaxy Resources, which has filed a patent application in China for a process that produces lithium carbonate, and Australian resource company TNG, which has filed a patent on a technology used to process ores containing vanadium, titanium and iron.
Consulting arm growing
Hurley says the firm’s consulting arm only makes up about 10 per cent of revenue but it’s growing.
Called “Brand and Culture”, this is the arm that helps big mining and power-generation companies better understand their IP issues.
He says Wrays’ strategy is to “target non-competing law firms”.
“That is firms that don’t do IP,” he says. “We don’t compete with them; these firms typically do general commercial law. They have a little more branding dollar than we do, so we market to them and they market to the wider population.”
Hurley says while the US and China will continue to grow, Germany is shaping up to be a hot spot.
He says the Germans are leaders in the automotive industry, electronics and chemical industries.
“All those big industries that want to file into Australia,” he says. “We don’t target them as well as we could.”
Wrays is also expanding its service offering.
By the end of the year, Hurley hopes to have a brokering service for tech businesses.
“If a company has built a widget in Australia and wants to licence it to America, we can use our network to help them,” he says. “It also goes the other way. Our associates in America might want to set up a process to sell in Australia. We are like an agent selling their technology to a third party. We are not involved in the valuation process, we simply link the two parties together.”