Patent-FTO caveats

There is a surprising failure to appreciate the value and importance of US ‘freedom-to-operate’ (FTO) opinions, which determine whether commercialising a product will infringe others’ valid intellectual property rights.

While there is a general recognition of the need to obtain patent protection before the full development and marketing of new products, not enough attention is normally focused upon the need to avoid and mitigate the risks associated with patent infringement litigation.

FTOs typically begin with an analysis of the invention to be marketed. Thereafter, a ‘clearance search’ is performed, which seeks to locate and identify relevant US patents which are either unexpired or are about to expire. Published US patent applications which claim aspects of the invention are also sought. An experienced patent attorney considers the degree of relevance of these uncovered patent publications, as well as their meaning and scope. These efforts result in an opinion in which any risks of infringement are clearly spelled out.

The magnitude of risks will vary, and the client is provided with options should it wish to proceed with a product launch. The patent attorney serves as a guide who leads his client through a patent infringement ‘minefield’. Just imagine the ramifications for a start-up if, after completing its research and product development, and accepting monies from investors, it launches a product, only to be faced with the threat of damages and a possible injunction. There is no guarantee that a patent holder will agree to grant a licence to such a start-up, or whether the terms of such a licence may be commercially reasonable.