FREEDOM TO OPERATE I
t is surprising to encounter the many tech-oriented companies that have never authorised or obtained a reasoned
freedom to operate (FTO) patent opinion directed to products that they hope to market. T e considerable cost associated with obtaining an FTO opinion is an obvious reason why this is so. However, a company must take into account
the risks resulting from the proliferation of patent grants and the litigious society we live and work in. T e number of patent-related lawsuits is increasing, with the median legal costs in a simple patent infringement action approaching, and in some cases exceeding, $5 million. Complex patent lawsuits will oſt en cause this
fi gure to multiply exponentially. FTO analysis and opinion should be viewed as a valuable tool for both managing risk and uncovering opportunities. T ose who forgo obtaining an FTO opinion before launching a new product will oſt en face the music down the road. T e prime purpose of the patent FTO is to
determine whether the commercialisation of a particular
product process may be
accomplished without infringing the valid and enforceable patent rights of others. Some refer to an FTO analysis as a “product clearance”. T e FTO analysis and opinion will be
directed to the intellectual property rights of a specifi c country's jurisdiction, such as the US. It is the end result of a search of unexpired patents and published pending patent applications, an analysis of their patent claims, and arriving at the underlying bases of the ultimate opinion. One must always remember that a favourable FTO opinion does not in any way serve as a guarantee that no infringement will exist. Some may be surprised by the foregoing
reference to pending patent applications, since their claims cannot be infringed unless and until they are allowed and granted. A reason for one to examine and analyse such pending patent claims is to be forewarned that in fact they may ultimately be granted. Since June 8, 1995, the term of a US patent is 20 years from its eff ective fi ling date. Before this date, patents expired 17 years from their date of grant. Let us examine what
constitutes patent
infringement, so that we have the proper context within which to consider the FTO. Patent infringement involves the commission of
an unlawful act involving a patented
invention without obtaining a licence from the patent owner. Examples of
making, using, off ering for sale, and/or selling something that is covered by one or more claims of
such unlawful acts include the patent in question. It is these 68 World Intellectual Property Review Annual 2015 World Intellectual Property Review November/December 2014
www.worldipreview.com
A valuable risk management tool
The patent freedom to operate opinion, aka ‘product clearance’, is used to determine whether a particular product process can be commercialised without infringing the rights of others. Paul Sutton of Sutton Magidoff reports.
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