When is Freedom to Operate Analysis Cost-Effective?

 

Most organizations nowadays have recognized the value of taking the patents on the inventions before launching a product. Getting the patents of your invention adds value to the bottom line by enhancing intangible assets and providing your company with big-headed rights. The patent mainly enhances the power of your company in the marketplace and stops your competitors from using your invention without permission.

Less obvious but equally important are the advantages of product clearance, also known as Freedom to Operate.

FTO analysis incorporates recognizing and analyzing patents of others that might subject your organization to patent-infringement liability. Performing FTO analysis before launching and developing a product or acquiring a new company, your organization can avoid the risk of future litigation and minimize unnecessary expense. The FTO analysis done early in the stage of product development affords the company to change the design and reduce infringement.

Despite as an advantage, FTO analysis also can recognize the opportunities for patenting or future development. Identically, performing FTO analysis as a part of due diligence enables us to steer clear about an opportunity filled with the risk of litigation.

The Freedom to Operate search starts with an assessment of service or product. Which are the new components in the product visible to the public and likely to bring analysis? Does any of them subject to an existing license? Do any components create under agreements that incorporate any indemnification clauses? Do products or services differentiate from country to country? Simultaneously, a clearance search is done for the published applications or unexpired patents which might claim several components. At last, an experienced patent provider can analyze the data and conclude on risk while going forward with service, product, or any acquisition.

It is crucial to know that FTO analysis can not guarantee that your organization will not be sued. The applications and patents recognized mainly depend on the search quality, and the degree of relevance of every application or patent will be subjected to clarification. Some applications by others are on the file but not published at search time, so they are not considered at the research part.

As FTO study is expensive and time-consuming, most organizations select where and when to do FTP study to reduce the risk and boost value. Here are some factors which can enhance the decision:

1.      Consider product value and investment amount

As an initial step, it is crucial to consider the service or product acquired or launched in terms of its value to the organization. What is projected revenue? Is this product can offer high or low-margin profit

The products that have high volume or high margin are probable to lead to more damage. Thus, it is more worthy of taking an extra step and clear product before proceeding. The products in this incorporate cell phones or television. If an organization has a restricted amount to spend for clearance, then the product can be least ranked in value terms.

The services or product needed an investment relevant to the company’s overall research and development budget. Freedom to Operate outcome might be utilized to lessen costs or enable time for designing any recognized patents. For the products that need less investment, the FTO study is delayed ending of the product launch but needs to be done before product release.

2.     Check whether identical products have Flickered Litigation

If your company is thinking of launching a product or service in the competitive market, getting FTO analysis done is ideal. If you are preparing for a high-profile launch of some new service or product, it is better to identify the risk before the launch.  

3.     Check competitive community for the product

How large and how drenched in the market? How many competitors are providing, and what is the history among players in the area? Is domain litigious, like TV and cell phone domains, or are challenges mainly from non-competitors? In this scenario, FTO analysis can reveal the patents in those litigations.

If your organization has technical individuals and developers, then you probably will get a great source of information. Ask some related businesses to recognize entities they believe might be highly motivated to keep the proposed new product off the market and as technical individuals whose competitors closely resemble your product. It is highly common in the marketplace for the development to get inspired from the competitors.

4.     Consider Sources

What if you are sourcing all or some of your services or products from some other company? Don’t you think that organization bears the risk of patent infringement? Well, it does not always work this way. The marketing and selling of a company product are done under their private label products, mainly manufactured under the contract y others for the organization under their brand.

What are the objectives and risk tolerance of your business?

Prior to taking any FTO analysis, an organization must give some serious thoughts on how they can handle the results. Does the organization seek to avoid all the litigations at all costs? Are they ready to walk away if a new product, service, or acquisition is unfavorable?

If any organization goes ahead without considering the results, then FTO analysis might not be effective. This results in the organization being completely comfortable with all litigation risks and the possibility it will require collecting required resources to defend. With all this in mind, this tactic rarely seems pragmatic.

Conclusion

Analysis of FTO plays a significant role in the IP strategy. It enables an organization to recognize, reduce, and handle risk while simultaneously identifying the fields where the patent coverage is unavailable and thus present the opportunities.

The only side to the regular FTO analysis on all the products is cost. As few organizations only have an unlimited budget for the legal fees, most of the organizations consider the level of the FTO analysis on new acquisitions and products in their budget and risk tolerance. Having an experienced patent attorney can assist in creating a policy that is right for your organization. 

Delineating The Dimensions Of FTO Search

Freedom to Operate (FTO) analysis is an elaborated search strategy to ascertain that a particular product, service, or service is not infringing on the existing patent(s) owned by others. This search affirms whether the product is commercially considered ‘safe.’ for launching in a particular market and does not violate existing third-party rights.  An FTO search includes screening a broad range of documents, including expired and expired patents. 

The team conducts the FTO search for a prospected innovation at various stages till its commercialization. The search for patent documents that are potential threats is either completed once or often during the product/innovation development cycle.

Different IP Counsels base the decision to go for a one-time FTO search or recurring FTO search on several factors. The main determining factor for this decision-making is the speculated time required for the product’s research and commercialization. In general, the products or features that need a shorter research time of around 8-10 months can rely upon a one-time FTO search result. This single FTO search is, in most cases, conducted just after the patentability search at the start of the development process. On the other hands, the products requiring a longer time for research need to regularly perform FTO searches to ensure that no related patents have been filed in that timespan between FTO study and final product launch.

The relevance of performing FTO search

FTO analyses are conducted for a wide range of reasons and by different parties. Conducting an FTO search just after the patentability search rules out the several risks relating to the infringement litigation that can come up at the final innovation stages.

Another important use of performing FTO search is in making ‘Research tree decisions.’ For any innovation, several potential research paths are considered technologically possible. An intensively performed FTO search can help choose a research pathway with the least third-party IP to reduce the risk of potential litigations and to license royalties maximally.

Ways to steer past the challenges

FTO analyses by screening the available patent documents are the first step. If the investigation results reveal that one or more patents can potentially pose a risk in commercializing the product, then the respective company’s IP counsel set out to devise the strategies to bypass the challenge.

There are several options for this, like:

·       Licensing In or Purchasing the patent: Licensing involves deriving an authorization in the written form stating the patent owner’s agreement to use his patented technology for the specified product. All the terms and conditions for usage, including time and targeted market, are defined. Though this method involves paying a lump-sum amount to the patent holder, this is considered the most straightforward way out of the situation.

·  Cross-licensing: This mode involves the exchange of patent licenses between the partnering companies. The pre-requisite for this method is a well-protected patent portfolio of the potential licensing companies that is useful to its partners.

·   Patent pools: This is a common practice observed with companies manufacturing related products. The aim is to pool the patents; it is similar to a clearinghouse for patent rights and helps the partnering companies avoid the long process of acquiring permission to use the patented technology.

·   Inventing around: Another alternative is to Invent around the patent. It involves making changes to the prospected technologies in the development of the product. If the company successfully finds a working alternative, it is saved from paying heavy amounts for licensing the patented technology.

Conclusion

Every company must compulsorily conduct FTO analyses at the very early stages of any product, process, or service development cycle. This feat is to mitigate the third-party IP  from hindering the successful commercialization of the product. The steps involved include searching for any related patent, trademark, or copyright and obtaining legal insight about the patent’s noninfringement and invalidity.

In case certain overlapping technologies or processes are pointed out in the previously patented literature, the experts, improvise the most effective way to bypass the challenge.

Freedom to Operate Search: Understanding FTO Search Analysis

 

Suppose- You have hit on a great idea, which has high potential. You started working on it with your product development team. You spent a lot of money on its R&D. As you are completely known of Intellectual Property, you can easily secure several features of your products after performing a patentability search. But, now as your product is ready to be launched in the market, but it results that there is an issue.  

Do you commit one big mistake in the procedure that could result in some unwanted litigation? Do you know what mistake you have made?

It turns out that you relied on a patentability search at the end and hire an intellectual property firm for conducting an FTO search just before the launch of a product. 

With FTO search, you come to know that your product cannot be launched in the market on which you spent thousands of dollars. Your product is infringing on various patents, which incorporates your competitors. But, canceling the commercialization of your product is not an option as you have spent a large amount of money on the development of the product and patent filing. 

Now, what can you do?

In this scenario, you have two options:

• Filing an IPR for the patents with identical claims 
• Purchase all the relevant patents 

Well, this option only works when you spend thousands of dollars, but still, there is not any certainty of thwarting litigation. 

This situation can be mitigated by getting an FTO search done in the started stage of product development. Performing FTO searches prior has many advantages too. It can help you avoid all the main barriers in the phase of development. And when you are ready to launch your product, you will have the freedom to operate. Following this valuable approach can help you reap great benefits. 

Let us now get to know in detail what FTO Search is…!

What is FTO (Freedom to Operate) Search?

The purpose of FTO or right to use search is to ascertain whether your planned product would infringe any patents or not. A Freedom To Operate Search might also incorporate the potential designs (possible product modification can mitigate the risk of patent infringement).

 The aim of the FTO search will be on patent claims and not the detailed descriptions or drawings. The main goal is to check If the product ignores any feature of each claim in the patents evaluated in the search. Not the same as validity or novelty search where the primary aim is on disclosure of prior art, the focus of FTO is mainly on the claims where time is needed to analyze. Due to this reason, an Freedom to Operate search costs more than the novelty search.

Why is it important to carry Freedom To Operate Search?

Below are several reasons to carry FTO search:

• Reduces the risk of getting sued by others for infringing patent rights 
• Assists in recognizing the patents which are expired and also identify technology that can be utilized from these expired patents 
• Assists in recognizing the patents which are related to technology or product and build financial tactics such as the purchase of patents, licensing, patent invalidation. 

The Success of FTO Search

The success of the FTO search lies in three questions: What? Where? How?

‘What’ describes the boundaries of the search. This elucidates our understanding of the process or product in question. What is the product or procedure in question, and what kind of issue can it solve? What are the primary or non-primary subject features of the product or procedure? Are we required to limit the search with application areas? How roughly or closely are subject features explained? What are the related geographies? Do we need to look for some alternative features of a product for the evasion option?

‘Where’ explains the tools and strategies to analyze and search patents for a Freedom To Operate search where to explore and get relevant patents from? Do we need to incorporate several data sources and types? Which section of a patent should a searcher analyze? Where is the subject feature disclosed?

‘How’ explains the differences between the new searcher and an experienced searcher. How does a knowledgeable searcher checks a pile of patents to access relativity? How does the decision-making procedure work? How do you decide which one to keep and which one to refuse? 

All the above questions act as a tool for understanding the key terms relevant to the product exhaustively, mentioning scope, assembling several search concepts. 

Process Overview of Freedom to Operate 

• Know the scope, therapeutic areas, subject matter, and particular market of technology
• Create a search tactic for recognizing patents the invention might infringe. Recognize and make keywords to evaluate technology in the claims section of patent application applied to technology
• Understand country-specific doctrines, statutes, and case laws for infringement
• Search patent-related prior art
• Check patents and review individual claims. Recognize technology and patents mainly to block the technology in question. Refuse results that are not related and keep a subset of patents with the claim, which presents an obstacle for entering the market 
• Recognize the solutions for potential problems such as patent status, possible expiration, or analysis.
• Create an FTO opinion as per the complete analysis and main findings
• Display the results to inventors. Show potential IP issues and solutions.

Benefits of FTO Opinion?

An FTO opinion can be beneficial in mitigating the risk. For instance, FTO offers:

• Assistance in protection against willful infringement charges by displaying an attempt at due diligence
• Reduction of investigator or concern about the risk of infringement 

Hire Ingenious to Serve you Better 

If you are doing business safely, then thanks to the freedom to operate search. It needs to be noted that an FTO search can never offer a complete guarantee that you are not at infringement risk. The search, however, provides a great indication of where you stand. You will come to know how and where you can market your product perfectly as well as safely. This can prevent annoying squabbles and potentially high costs. 

With this blog, you must have been familiar with the concept of freedom to operate search. If you are looking for experts offering intellectual property services that can help with FTO searches for launching your product successfully, then Ingenious e-Brain is the right choice. Our experience reflects in the service we offer to our clients. 

Importance of Freedom to Operate Search in Launching New Products in the Market

The companies conduct market research, before launching the product in the market, conduct market research to ensure that they have a successful product. Organizations might have distinct reasons of their own to conduct market research. Some of the reasons are below:

• Check if there is any requirement for their product.

• Recognize the market to launch its product

• Know about the competitors

• Build a plan for marketing

• Come up with the pricing.

It is essential to conduct market research, but also it is crucial to find out if your product has Freedom to Operate (FTO).

Now you might be thinking if this has to be done by obtaining a license from the government professionals. But, this is nothing to do with the license. FTO is relevant to find out if your product or process will infringe on the claims of issued or pending patent applications. The product infringes upon the patent rights of any other product. If it violates, then you are required to strategize the launch of your product according to it.

Do you know what is FTO or Freedom to Operate and why you need to consider it?

In simple words, FTO is the freedom to commercialize a process without infringing on the rights of other patents. Commercialization of the infringing products might result in expensive lawsuits. Thus, an FTO search is highly essential to carry out before the launch of the product in the market.

How is FTO Search conducted?

It is required to be noted that the rights of patents are territorial. For instance, if anyone has a patent over a particular kind of “laptop” in the US and not in the UK, then one can launch that “laptop” in the UK without the stress of infringing the US patent. Thus, an FTO analysis for any process or product is particular to a territory and considers the patents in the region. So, if you are going to commercialize any product and want to find out whether you have the freedom to operate in the US, related patents in the US are taken into consideration.

To seek out, if your product is infringing on the patent rights of others in some country, a search is needed to discover all the related patents in that country. This search will consider the granted patents as well as patent applications that are not yet granted into consideration.

Now you might ask, why to consider the patent forms which are yet not granted, and how can your product be infringing upon such kind of patent forms. Well to answer this question, a published patent that might be granted in the future, and once a patent is granted, they have the complete right to sue some product which has infringed their own patent rights.

Why carry out FTO search analysis and what advantages you can gain?

The Freedom to Operate search is required to be carried out at an initial stage of the development of the product, such that you do not acquire vast costs of development in the process of developing infringing products that do not come in a legal issue later, as the charges of infringement.

Some of the advantages of FTO are listed below:

• Reduces the risk of getting sued by other companies, for having infringed upon their patent rights
• The FTO search can dig out the patents deeper which have been expired. Additionally, there might be several useful technologies which can be utilized from these expired patents
• Get a list of patents which are related to your technology or products and help you build strategies like:

1. You are purchasing the patents which are related to your product such that you can get the FTO rights in that region.
2. Getting a license from the patent holder for a particular time by working out a payment option. This will provide you with the complete right to operate without infringing on the other patent rights.
3. If you are having a patent of your own, then you can try to come up with cross-licensing of the patents to get the benefits.
4. Redesigning your product/service in a way such that it does not infringe upon other patents rights
5. Invalidate and try the patents in question such that you can gain FTO in the desired region

Conclusion

At last, Freedom to Operate search is an essential step which every technology organization is required to take before launching their product in the market such as to avoid costly lawsuits and get the knowledge about strategies which they can adopt to get FTO in the concerned territory.

Are you a technology company? Want to launch your product in the market? Then, get FTO analysis done by the Ingenious e-Brain experts. We can provide you with a complete search and help you adopt better strategies.