Welcome to Innovation Café, where we break down the essentials of intellectual property and innovation. Today, let’s explore freedom to operate (FTO) opinions, an important but complex tool for businesses launching new goods or services.
What Is a Freedom to Operate Opinion?
A freedom to operate opinion is a legal assessment provided by an attorney to determine whether your new product or service infringes on existing patents. Normally this would be done by a patent attorney, but it could be done by an attorney not licensed to practice before the USPTO (such as a patent litigator). Note that the extreme risk posed by creating a business or expanding a business in a way that requires patent infringement counsels strongly in favor of using a law firm with a strong reputation in the patent space.
- It’s essentially a risk analysis to help you avoid lawsuits or costly patent disputes.
- By reviewing existing patents and pending applications, the attorney evaluates whether your offering is likely to violate anyone’s intellectual property rights.
- Anybody who claims that they can issue a freedom to operate opinion that is 100% accurate does not understand patents well enough to rely on.
Why Are FTO Opinions Important?
The U.S. has over 11 million issued patents, with hundreds of thousands of new patents added annually. Navigating this vast landscape of intellectual property is daunting, but an FTO opinion offers:
- Risk Mitigation: Helps identify potential infringement risks early.
- Legal Defense: May be helpful against a claim of wilful infringement.
- Strategic Insight: Guides design-around strategies to avoid infringement.
Challenges of Freedom to Operate Opinions
Despite their value, FTO opinions are far from foolproof:
- Volume of Patents
- With millions of issued patents and a growing number of pending applications, no search can guarantee complete accuracy.
- Unpublished Applications
- Some patent applications remain confidential until published, meaning a potential risk might not yet be discoverable. You should be aware of the risk of submarine patents.
- International Complexity
- A U.S. FTO opinion doesn’t cover patents in other countries, and global markets add layers of complexity.
- Human Error
- Even the most thorough attorney or search firm might miss relevant patents, leaving a degree of uncertainty. Indeed, “might miss” is an understatement. It is difficult to imagine a device of any significant level of complexity not being vulnerable to claims based on patents that the FTO did not identify.
Best Practices for Using FTO Opinions
- Get an Opinion Early
- Conduct the review before significant investment in production or marketing.
- Complement with Additional Research
- Don’t rely solely on the FTO opinion. Use internal or third-party patent searches for extra assurance.
- Develop a Risk Management Plan
- Even with an FTO opinion, consider insurance or contingency plans in case of unforeseen claims.
- Focus on Design-Arounds
- If the opinion identifies risks, work with engineers or designers to modify the product and avoid infringement. Beware of the doctrine of equivalents, however.
- There is One Document That Operates as a (Nearly Always) Reliable FTO
- If your proposed new product was described identically, and the techniques you plan to use to manufacture the product were also described identically, in a document published more than twenty years old (a patent term is 20 years from filing), you are probably ok. This is because no patent issuing after that prior art will be valid if accurately analyzed by a court, because it would be obvious and would not be novel. There is one caveat, though: If a patent exists that was filed prior to the publication of the document you are relying on, and that patent has a patent term extension that causes it to still be in effect beyond 20 years, you could end up infringing that patent. This would be unusual, and the risk is further mitigated with increasing age of the document you are relying on. For example, relying on a document published 50 years ago that exactly describes your product and means of producing the product will invalidate any subsequently filed patent (if the judge gets it right) and the chance of a patent issued prior to the publication having a patent term extension greater than 30 years is vanishingly small.
Final Thoughts
Freedom to operate opinions are a vital tool for innovators and businesses, but they’re not a guarantee against legal risks. They are exactly what you would think: An indication that the person doing the patent search was unable to find a patent that you will infringe. Use them as part of a broader strategy to protect your business while navigating the complex world of patents, but don’t count on the FTO accurately capturing every possible patent you might infringe.
Gary Shuster
Innovation Café