Mon 13th Mar 2023

Why founders, developers and investors benefit from a freedom-to-operate review

A freedom to operate (FTO) analysis should be an essential part of the intellectual property (IP) management and compliance process for new product development in every manufacturing or merchandising company.

German and European patent, trade mark and design attorney Olaf Ungerer, a partner in Munich, has undertaken numerous freedom-to-operate searches on behalf of clients and he emphasises the benefits.


The results of the relevant FTO research provide important information to enable founders, developers, and investors to assess the risk of potential infringement of the IP rights of a third party as a basis for key decisions in product planning.


Is there a legal requirement to carry out an FTO search?


Although there is no legal requirement for a company to obtain an FTO opinion before taking a new product, process, or service to market, obtaining one can be very beneficial.  It is a valuable step in minimising the risk of patent litigation and provides critical material which can be used in defending the company if anyone asserts that their patent has been infringed.


Unlawful use of another company’s patented technology implies negligence on the part of the user, and you will be liable if you cannot prove otherwise.


By minimising litigation risks, an FTO opinion will also provide confidence to potential investors about the marketability of the company’s product, process, or service.


What is covered in an FTO analysis?


The FTO analysis typically covers a search of issued patents and published patent applications for inventions similar to the company’s proposed new product.  Having reviewed these search results, we would provide an opinion and an assessment of any patent infringement litigation risk those patent matters may present. Often the analysis can clarify that many of these patents pose little or no risk of litigation. In some instances, the search may uncover patents that appear to cover the company’s product and where certain elements could limit the company’s freedom to operate.


It is important that the FTO analysis should not be seen as a simple snapshot at a certain point in time close to market entry. Rather, it should be a continuous process that runs in parallel to the technology life cycle, from formulation of the technology concept via prototyping to final market release. This allows for early corrective actions whenever critical patent matters pop up in the parallel FTO analysis.


How we can help


In critical high-value cases, an FTO opinion should be ordered from an external law firm due to their broader range of experience and high professional liability insurance.


Our attorneys are experienced in conducting FTO searches and providing supporting details to explain, analyse, illustrate, or develop key information in an FTO opinion.


Please get in touch if you require further information about a freedom-to-operate search.


This briefing is for general information purposes only and should not be used as a substitute for legal advice relating to your particular circumstances. We can discuss specific issues and facts on an individual basis. Please note that the law may have changed since the day this was first published in March 2023.


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