Freedom to Operate (FTO) search
Originally posted by The ICEHOUSE on Friday, February 07, 2014
By Anton Blijlevens, AJ Park
A freedom to operate (FTO) search is done to see if you are free from infringing the IP rights of others. That is, can you make or sell your product in light of the IP of others. It’s a determination made irrespective of whether you can get IP protection yourself. In my hypothetical example above, whilst the bike is unique and patentable compared to the unicycle, the unicycle inventor may hold the patent for the wheel. This means that the bike inventor cannot sell their bike, unless they can license in the wheel patent.
The amount to spend on FTO searching depends on the commercial exposure you face. A $3m spend on research and development and tooling up to get a product to market requires a larger FTO spend than if you are only spending $10,000 to launch a product. It also depends on what it is you are commercialising. If you are a me-too start-up repackaging ubiquitous technology, then the risks are a lot lower. You may only conduct trade mark FTO searching or perhaps do no searching at all because for start-ups, it’s typically easier to change brands than it is for companies that already have a large established international market.
If a start-up is in the software space, then even scratching the surface to uncover FTO risks can increase your burn rate to an unsustainable level. Start-ups often have other options available to mitigate patent infringement risks.
A staged approach to FTO searching may be best for a start-up. An FTO search looking only for low hanging fruit is best. This may be a search limited to finding patents owned by direct competitors or exit targets.
The Resources Guys:TRG have an NZTE Capability Voucher registered workshop targeted at those who:
- Are new to intellectual property and want to know more
- Aren’t sure if they have freedom to operate risk
- Think patenting might be a good idea but don’t really know what that implies
- Are new to research and development and would like to understand more
- Are working on a tight budget
- Are many of the above in any combination
It is a very practical and applied workshop that explains the innovation process and intellectual property to budding entrepreneurs and/or technologists. For further details, follow this link.