"Patent freedom to operate" refers to whether one can conduct its business model without infringing another's patent rights.
“Patent freedom to operate” refers to whether one can conduct its business model without infringing another’s patent rights.

Part 1 of this series discussed the concept of patent freedom to operate (“FTO”) and why it might be important to analyze at the early stages of a technology-based startup.  There may be situations, however, where it might NOT be appropriate or your startup to invest resources in having an attorney analyze your FTO.  In particular, despite the benefits of an FTO opinion, hiring an attorney to perform an FTO search can be costly, and the results might not provide the benefits you’re looking for.  One should weigh the following considerations before deciding to whether (and how much) to invest in a FTO analysis.

(1) Time and Cost.  FTO analyses can be very costly, in terms of both time and money. An attorney needs to understand your product or service, conduct an extensive search for potentially problematic patents, and review those patents.  For potentially problematic patents, an attorney must closely read the entire patent, construe the elements of the patent claims, review the prosecution history of the patent (the documented application process), and apply the patent claims as construed to your product or service.  This process can easily cost tens of thousands of dollars, if not more.

(2) Ambiguous Patent Claim Language. Even a well-funded FTO analysis will not provide absolute certainty regarding whether you are in the clear. Patent claims are notoriously difficult to interpret—although a well-trained attorney can make educated guesses, nobody can be certain of how a court might interpret a certain claim. Accordingly, an attorney is likely to encounter patent claims where she cannot guarantee whether your product will or will not infringe.

(3) Unpublished Applications. It is not possible to identify all potentially problematic patents.  The PTO does not publish pending applications until 18 months after they are filed.  This means that even the most thorough searcher may not find certain applications that will ultimately pose a problem because they are not yet accessible.

(4) Changing Patent Scope. Even if potentially problematic patent applications have published, their claims may change during the application process.  Pending patent applications include draft claims that the searching attorney must analyze. It is not uncommon for these claims to change before the patent is ultimately issued. Since the attorney cannot predict how these claims will change, the effect of a pending patent application is very difficult to determine.

(5) Difficulty of Keyword Searching. It is also difficult to identify problematic patents because they may use different terminology.  Patentees are permitted to create their own terminology in describing their inventions.  Even if a patentee is not purposefully ambiguous with their terminology, patents may not use the accepted terminology in a field because that patent was filed before a particular market developed standardized vernacular. Accordingly, it might be hard to identify potentially problematic patents if they don’t contain the terms you use in your keyword searches.

(6) Do the results matter?  You might not want to know (or might not care about) the answer.  As we discussed above, willful infringes can face increased damages.  Therefore, some companies may decide to avoid becoming aware of problematic patents to limit the risk of being found to have acted willfully in infringing another’s patent.  This concern might be especially relevant in the information technology field, where it is common more numerous overlapping patents to relate to various aspects of accessing and transferring information via computers.  Accordingly, it might not be possible to design any product or service in the information technology field in a way that avoids any potentially problematic patents, an companies may make the business decision that a freedom to operate analysis does not provide any information that is relevant to their product design.

(7) Premature?  You should have an understanding of your potential product or service.  If you have a general idea for your actual invention, but don’t have a working prototype (or at least some idea of the specifics of your product or service), your invention is probably too early stage for a robust FTO analysis. You definitely don’t need to wait until your technology is finalized before you move forward with a FTO search, but performing a search too early is likely to be inefficient. You may have a strong business plan, or a general idea of how your invention will work, but you haven’t tested it yet. At this point, your design is likely to change dramatically. Since every patent claim has unique boundaries, even a small change in your design can have a big impact on whether you may or may not infringe a patent. Particularly given the ambiguities discussed above, an FTO search at this point may soon become obsolete if you encounter a technical or business obstacle that requires you to redesign your invention. At that point, you’ve spent a lot of time and money to procure an opinion that will not be very helpful in the long run.

Analyzing patent freedom to operate can be a valuable step in deciding whether to pursue a technology venture or how to design a particular product or service.  Startups should consider the above in deciding whether and when to expend valuable resources in addressing patent freedom to operate.  Being strategic in addressing patent freedom to operate can help one more efficiently obtain a more relevant and helpful analysis concerning patent infringement issues.


See Patent Freedom to Operate Part 1: Why Analyzing Patent Freedom to Operate is Important.