Freedom to Operate and why you need it
Your new product is setting the world on fire. The functionality has been hailed
as "revolutionary". So it would be unfortunate if, a month after launch, you
received a letter from a law firm telling you that your product infringes the
patent rights of another company. How can you minimise this risk – and the
massive associated legal costs? By evaluating your Freedom to Operate.
What is Freedom to Operate?
In terms of Intellectual Property (IP), Freedom to Operate (FTO) is an
evaluation of whether you infringe the patent, design or trademark rights of
Freedom to Operate from a patent perspective
Freedom to Operate (FTO) from a patent perspective means that you have
established – with a reasonable certainty – that your product does not infringe
the Intellectual Property (IP) rights of others. We say "with a reasonable
certainty" because "freedom to operate" can never be determined with absolute
certainty due to inherent features of the patent system.
How do you establish Freedom to Operate
The first step in establishing FTO is to conduct a Clearance Search or Infringement Search to locate
grated patents, or patent applications (which upon grant) determine whether your
product would infringe. Most companies will engage a reputable IP Analytics firm
to do this.
When a limitation is an opportunity
The terrible thing about patents when you own them is that they have
limitations. These same limitations become a heaven-sent opportunity when you
don’t own the patents.
Patents are limited to territories
It costs money to take out patents so most firms will seek to protect their
inventions in only certain territories. If you would infringe a patent in say,
Canada and the USA, but that patent has not been taken out in Australia and New
Zealand - you would face problems in North America but have significant
opportunities in Oceana. Firms may also have applied for a patent in some
territories but not been granted it. What is - and is not patentable - changes
from country to country.
Patents are limited in duration
In most countries, the monopoly granted by a patent is for a maximum duration of
20 years. Even if a patent has been maintained for 20 years, once that limit
expires anyone is free to commercialise the technology. However, companies need
to maintain those patents – by paying money to the patent authorities - and many
lose enthusiasm for the invention well before those 20 years are up.
Patents are limited in scope
A patent document sets out "claims" for the invention. Any element of the
technology not covered in the claims is not covered by the patent. What is
covered by the claims can change during examination and from country to country.
Most importantly, it is only the valid claims that are allowed after
examination that define the monopoly – the claims published with a published
patent application are almost always much broader that those in the published
Some patents have exceptions
While patents may be current in a territory, there may an exemption that gives
you freedom to operate for a specific use. Germany, for example, has an exemption
What if you don’t have freedom to operate?
Imagine the gut-wrenching feeling if you perform this Clearance Search and find
that you would infringe an existing patent? Don’t despair. You have options.
Invalidate the patent with Prior Art
The patent examiner who determines what scope of monopoly to grant to the patent
applicant is a public servant who has limited Prior Art resources available to
them. During examination the patent examiner typically only looks at earlier –
and in most cases English language – published material such as: patents, a
limited subset of scientific literature and other publications. However, the
prior art is any publication or material available to the public - in any language
- anywhere in the world. It could be a Russian language article in a
Kazakhstanian newspaper – or that someone has sold the same product at an
earlier date in Bolivia. By performing a Validity Search you may be able to
invalidate the patent or have a good position for negotiating a license for the
License the technology
Many companies take out patents with no intention of commercialising the
technology themselves. They hope to make money by licensing the technology to
others. This can be an option – but it can be expensive.
With the upsurge in patent applications, it is becoming increasingly common for
companies to cross-license with others. This means that two companies come to a
legal agreement entitling one another to use technologies for which the other
holds a patent.
Invent an alternative
If a patent exists, you may need to invent an alternative way to achieve the
same outcome. As they say, necessity is the mother of invention.
Prevention cheaper than the cure
Establishing Freedom to Operate should be an integral – early and ongoing –
element in your product development cycle. It can help you avoid potentially
crippling legal bills – or worse – and help you sleep better at night.
Contact Filament today to determine your Freedom to Operate.