Freedom to Operate when marketing or developing a product
The principle of territoriality applies to patents, which means that they grant protection only in the countries in which they are registered. In countries outside that scope there is “Freedom to Operate” (FTO).
Thus we may find that there is freedom to test, market or sell a product or process that is already registered in one or more specific territorial areas without infringing a third party’s intellectual property rights. This means that in order to be protected all over the world it is necessary to register the patent in every country.
How can we tell whether we might be infringing intellectual property rights, namely patents, with our product or process? The best way would be to conduct a FTO search. This will identify patents granted which are valid in a specific region of interest and enable us to assess whether certain actions might infringe registered intellectual property rights. Here it is important to note the difference between the FTO search and the patentability analysis. The former tells us whether we are potentially infringing any rights, while the latter’s objective is to establish whether the product is new and therefore capable of being registered as a patent. FTO searches usually also include government regulations, since safety standards often vary from country to country.
This kind of search should be done as soon as possible in the product development cycle, not only because it avoids possible costs and the wasted allocation of resources but also because it diminishes the risk of costly and time-consuming future litigation.
The FTO search can even reveal opportunities to license existing technology, saving time and money with the development of the product.
However, if the result of the FTO is that there is a blocking patent, licensing or buying might not be possible: in other words the owner might not be willing to sell or license. Other alternatives can be:
- Cross-selling, if two or more companies exchange licenses;
- “Inventing around”, where changes are made to the product in order to avoid the specific patent infringement that was detected in the FTO;
- Patent pools: consortia of two or more companies agreeing to cross-license patents relating to a particular technology.
If the FTO search does not indicate that there is a patent blocking access to the market, the product developer may consider registering his invention as a patent or keeping it as a trade secret.