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Top 10 IP Mistakes: No. 4 Confusing Patentability with Freedom to Operate

istockIf you do not know the difference between patentability and freedom to operate (FTO), you are not alone. Most often people seem to think that a patent gives you the right make, use, and sell an invention. Not so. A patent does not give you the right to do anything but sue others for patent infringement. In my experience with talking to numerous innovators, the only people who seem to really understand this are patent attorneys, venture capitalists, and people with substantial patent portfolios.

In a nutshell, FTO works basically like this. Your competitor invents and patents A. You invent A+B. You can patent A+B but you cannot make, use, or sell it without licensing A. So, the combination of components A and B is in fact inventive and therefore entitles you to a patent, but your competitor invented the component A, and he also has rights. That seems simple enough, but it is still very abstract. What is the real world significance?

To put it in concrete terms, what if you have a great idea, patent it, introduce a very promising product that is selling very well, and then ... you get sued for patent infringement. You have a patent but you got sued anyway. Would it not be better to know about that litigation risk earlier in this process? If you had known, you could have addressed it and avoided the problem. That is freedom to operate. Your freedom to operate needs to be assessed early and then reassessed as inventing continues throughout the product development process.

This graphic illustrates a generalized workflow. An initial assessment should be done very early in the conceptual stage of product development. At this stage the design team should be advised by counsel of any FTO threats to avoid, and they should be given some product development guidelines if any threats are detected so that they can keep their design in the whitespace. Typically, this might be coupled with a patentability search. In the second stage we are actively engaged in product development, and the development process is monitored for trigger events, i.e. things that should raise a red flag indicating that FTO needs to be reassessed. In short, if you are inventing you have to consider that someone else may have already done so, and may have a valid patent. So, there may be some supplemental FTO searching and analysis during this time. Finally, the product design should be frozen at the end of the development process, and freedom to operate should be reviewed one last time just prior to launch. This is intended to ensure that any changes to the design have been addressed since the last FTO assessment.

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