Freedom-to-operate: This is what you need to know

If you want to use a technical invention, a trade mark or a special design, you should not only think about applying for an IP right, but also about a “freedom-to-operate” (FTO) search. This is the only way for inventors and entrepreneurs to ensure that no third-party IP rights are infringed during the entire manufacturing, development and sales process.

To avoid legal disputes, in particular court proceedings, we recommend investing in a professional FTO search carried out by a patent attorney. You can find out what this means and how such a search works in this article.

Whether it's a trade mark application, registered design or patent - WSL Patent has been successfully helping established companies and start-ups to protect their intellectual property for 70+ years. As patent attorneys and attorneys-at-law, we have extensive industry knowledge and can advise you on all matters. Feel free to contact us for a non-binding initial consultation - whether in person at our offices or digitally.

IP and freedom-to-operate

Before a patent or trade mark can be applied for, a patent or trade mark search is usually carried out. These searches serve to identify conflicting IP rights and guarantee a successful application.

This is to be distinguished from a “freedom-to-operate” search, the aim of which is to examine the freedom to use a technology or product. The core of the “freedom-to-operate” search is the identification of valid third-party property rights that could restrict your own business activities. It is therefore ideally carried out before product development or market launch in order to obtain a risk analysis for the upcoming commercialization.

What are IP rights?

The abbreviation IP stands for “intellectual property”. The term IP rights thus summarizes the various intellectual property rights, such as patents, trade marks, utility models and the like. These rights grant the respective owner exclusive prohibition rights for a limited period of time and serve to promote and protect innovation, creativity and investment in research and development.

Freedom-to-operate is, as the name suggests, the freedom to operate at all. The “freedom-to-operate” search is therefore an essential measure to ensure that you can market your product or technology without infringing the property rights of third parties.

Compared to a “classic” patent, trade mark or design search, the “freedom-to-operate” search does not (only) identify conflicting patents or utility models that stand in the way of a potential application. Instead, it is used to specifically identify intellectual property rights such as patents that could prevent the production and/or marketing of your own technology.

Frequent risks here are infringements due to conflicting IP rights and the associated legal consequences such as a possible warning or legal proceedings.

Performing a “freedom-to-operate” search: What needs to be considered

The aim of the “freedom-to-operate” search is to find out which IP rights exist and how much room for maneuver you have. It is rarely the case that there are no other IP rights in the area being searched for and the scope for action is unlimited. Hence, in order to find out how much freedom to act you have, a comprehensive search is recommended.

The following key points should be considered as part of a “freedom-to-operate” search:

  1. Scope of protection and relevant IP rights:
    • Define exactly what is to be searched for. What is the core of your technology?
    • Focus on patents that could affect your product manufacture or use.
    • Pay attention not only to patents and patent applications, but also to other relevant intellectual property rights such as utility models or designs.
  2. Pending applications:
    • In particular, consider published but not yet granted applications whose scope of protection may still change.
    • These could force you to restrict the use of your invention in the future.
  3. Geographical scope:
    • Depending on the intended use, check national, EU-wide and international IP rights.
    • Consider all markets relevant to your business activity when selecting countries.
  4. Analysis and evaluation:
    • Evaluate the relevance and validity of the IP rights found.
    • Identify possible workarounds or licensing opportunities.
  5. Attack existing intellectual property rights:
    • Consider attacking existing IP rights to expand your scope of action.
    • However, you should always check with an attorney beforehand whether such a measure is likely to be successful.

We are often asked whether a “freedom-to-operate” search can be carried out single-handedly. Experience has shown that it is often difficult for legal laypersons to carry out a legally compliant FTO search.

The advantage of professional support:

  • access to comprehensive patent databases
  • legal expertise for the interpretation of patent claims
  • experience in the assessment of infringement risks
  • knowledge of current case law

A “freedom-to-operate” search is more than a simple database search. It requires a deep understanding of patent law, case law and market dynamics. Professional support can help you make informed decisions and minimize risks.

We will be happy to advise you transparently on all steps and the expected costs.

Do I have to perform a “freedom-to-operate” search?

There is no law that would oblige you to carry out a “freedom-to-operate” search. However, as business person, you are obliged to find out what the applicable legal situation is and to ensure that you do not infringe applicable law. This also includes considering existing IP rights of third parties.

If you infringe the rights of third parties, you may not only be threatened with a warning letter requesting you to cease and desist and possibly pay damages and attorney’s fees, but legal proceeding may also be initiated by the IP rights holder.

Things to know about the “freedom-to-operate” analysis

The “freedom-to-operate” search should always be followed by an analysis and final assessment of the results. Only in absolutely exceptional cases will the result of an FTO search be that there are no other relevant IP rights on the market and that you can operate without any restriction.

This is precisely why the subsequent “freedom-to-operate” analysis is necessary in order to define the exact scope of action. It is necessary to check whether third-party IP rights restrict the planned use of the invention or even make it impossible. A patent attorney is the right partner to obtain a comprehensive risk assessment.

Even if the result of such an analysis is negative, at least for the current technology, such a result also has several positive effects:

  • You avoid the legal risks associated with the introduction of an infringing product: By recognizing potential patent infringements at an early stage, you can avoid costly legal disputes including injunctive relief and claims for damages.
  • You save development and distribution costs: A negative result of the “freedom-to-operate” analysis allows you not to invest resources in a potentially infringing technology, but to develop and market alternative solutions.
  • You gain valuable insights for future development: The analysis can show in which areas third-party patents exist. This provides you with valuable information for the direction of future R&D projects.
  • You secure your market position and competitiveness in the long term: By avoiding infringements and focusing on legally unobjectionable technologies, you can consolidate and expand your market position in the long term.
  • You promote a spirit of innovation: A negative result of a “freedom-to-operate” search can serve as an incentive to find innovative ways and alternative technical solutions that are not blocked by existing patents.
  • No investment in “hopeless” own IP rights: If there is no freedom to operate, the cost and effort of securing the relevant technology with your own IP can be saved.

“Freedom-to-operate” analysis: These costs should be expected

The costs depend on the scope of the “freedom-to-operate” search. Depending on how complex your project is, the costs are staggered accordingly. As a rule, the costs range from a low to mid four-digit amount, but in complex cases (e.g., in the case of highly complex pharmaceutical products) they can be as high as 100,000 euros.

Please note, however, that a missing or incomplete “freedom-to-operate” search can be significantly more cost-intensive if you are subsequently faced with warning letters or even lawsuits.

By identifying relevant intellectual property rights, the FTO search is the central instrument for minimizing risk when using and marketing your technology. The scope of the search can and should be customized, whereby the focus is always on a cost-benefit consideration - tailored to your business case. Various levels are possible, from a basic examination to a comprehensive analysis of the intellectual property rights situation.

As a general rule, the more intensive the search, the lower the remaining risk. At the same time, the more extensive the search, the higher the costs. The “optimum depth” of the search must therefore be worked out.

You can decide whether you would also like an attorney’s analysis of the results of the search. The opinion includes a detailed assessment of the legal and market situation and helps to avoid potential conflicts.

We will be happy to provide you with a reliable list of the costs for a “freedom-to-operate” search after consultation. Contact us at any time without obligation.

How a patent attorney supports you in the “freedom-to-operate” search

A specialist patent attorney is the right partner for the complex task of a “freedom-to-operate” search. We have the technical expertise and the right tools to support you in your project. Thanks to our experience and know-how, we can provide you with comprehensive advice on the possible options and give you an assessment of your market position based on the “freedom-to-operate” search. In addition, we are happy to support you throughout the entire process of filing your intellectual property rights.

Once your IP rights have been successfully registered, we are happy to take over the long-term patent monitoring to find out which other patents have been registered and whether they are similar or identical to yours. This enables us to take legal action against imitations and unlawful practices as early as possible. The aim is to strengthen your company and your brand in the long term and to secure your unique selling points.

Conclusion

A thorough FTO search is crucial for the safe market launch of your technology. It helps to avoid infringements and gives you the certainty that you can market your innovation freely. In particular, a comprehensive search serves to minimize risk in order to avoid subsequent legal or procedural costs.

As a law firm specialised in patent and trade mark law, we have the expertise and the right tools to support you with your FTO search. Thanks to decades of experience, we can provide you with comprehensive advice on the possible options and give you an assessment of the market and legal situation based on a suitable analysis. Please feel free to arrange a non-binding initial consultation with us.

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