Patents Informational:

Freedom To Operate Opinions

Impacts of Third-Party Patents on Business Operations

A patent grants the patent owner the exclusive right to prevent others from making, using, selling, or importing the claimed invention. The significant number of active patents in the United States creates risks for businesses commercializing products or services. A freedom to operate (FTO) opinion can be an effective tool for addressing such risks.

FTO Analysis as a Business Strategy and Cost Management Tool

Businesses often use FTO opinions as part of product launch strategies to understand whether any active third-party patents may give rise to infringement suits when the product enters the market. Such preparation is an important part of cost management. First, legal bills can accumulate quickly when faced with cease-and-desist letters and the threat of legal action. Second, engineering, marketing, and/or distribution costs can surge should the need arise to re-design, re-market, and/or halt/delay products.

FTO Analysis Process

An FTO analysis can be performed by a licensed attorney to understand whether any active third-party patents may create a risk of alleged patent infringement. The FTO process begins by developing a full understanding of the subject product or service to be commercialized. This is followed by identifying third-party patents or pending patent applications that claim or could claim features of the product or service in a way that would substantiate an allegation of patent infringement. An in-depth FTO analysis of the identified patent assets, including their claims and corresponding prosecution histories, is foundational to understanding how likely it is that the subject product or service will create a patent infringement risk.

Personalized FTO Scope

An FTO can be scoped based on client parameters ranging from a broad FTO search to a narrower FTO focus. For example, a client may wish to start the FTO process by commissioning a broad FTO search to uncover any patent assets that may be problematic. Alternatively, when a client has a deep understanding of its competitors and industry players that create the highest patent infringement risks, the scope of an FTO opinion can be focused on patent assets of those particular third parties.

Take Action

FTO opinions can be useful to established businesses seasoned in product launches, corporations looking to acquire companies that may create patent infringement risks, and startups looking to develop new products or services.

If you believe an FTO may be a helpful part of your business strategy, P3ip can work with you to understand whether it is right for you. If an FTO fits your strategy, P3ip can work alongside you to define the scope of an FTO analysis and personalize a course of action that fits your business needs.

IMPORTANT DISCLAIMER - The contents of this document are not legal advice, do not create an attorney-client relationship, and do not establish an attorney-client privilege. Instead, this document is for general informational and/or educational purposes only.

This document is not a substitute for consulting a licensed attorney. A consultation with a licensed attorney is necessary to consider a complete picture of your circumstances and to provide you with a personalized recommendation.