Most startups are fanatically focused on the development of their technology and products. But what many often ignore is the “freedom to operate” — what patent lawyers refer to as the ability to make, use and sell one’s own products without violating another person’s patent or other intellectual property (IP) rights.
When it comes to developing your own technology, here’s how to avoid potentially infringing on existing patents.
Understanding the Patent Landscape
As a patent lawyer, this is a scenario that comes up all too often: A startup is developing the next great thing and its lawyers have applied for patents. But the startup does not know that their new product may be utilizing underlying technology that is itself patented. Thus, the company could be infringing another’s patents and become liable for damages.
It is important to remember that patents give their owners the right to exclude other people from making, using and selling the inventions claimed in the patent. Patents, however, do not give their owners the legal right to actually make, use and sell what is patented. So, even if your new technology is patentable, you still may unwittingly infringe on a prior patent.
A simple example is illustrative. Let’s say you are developing a new medical suture infused with a chemical that provides a visual indication of infection. Your technology is based on your discovery that the chemical provides such visual indication. But the infusion process you use is itself patented. If you do not know that the process is patented, you may develop your product right into a patent infringement.
If you do know about the patent, though, you can manage the problem. You may be able to avoid patent infringement, or at least strategically manage the development to minimize the repercussions, by obtaining a freedom-to-operate opinion (FTO) of counsel.
What Is an FTO?
An FTO is a written opinion of patent counsel that advises a product manufacturer that it is reasonably safe to make, use and sell the product without infringing any known patent.
An FTO is created by counsel, working closely with the innovators, to completely understand the product being developed. While the innovators develop, patent counsel will simultaneously search issued patents and published patent applications, and other sources of public information, to assess the technology landscape.
Generally, counsel will continue to search periodically on an ongoing basis (as the technology development progresses), to assess whether the product design will encroach onto a known patent.
Using an FTO to Get Ahead of Problematic Patents
Developing a new product or technology often takes many twists and turns, with each step creating a new potential risk of patent infringement. Commissioning an FTO early in the process can help avoid those risks.
If counsel finds a problematic patent through their FTO research, for instance, then a startup can work with counsel to modify their design or pivot to design around what is claimed in the patent. Or, perhaps, the patent owner may collaborate or license their patent to the startup.
Keep in mind that patent applications are confidential, at least until they become published by the U.S. Patent and Trademark Office (USPTO). So, you can never completely determine if your product or technology will infringe a future patent. But, the USPTO publishes most patent applications 18 months after they are filed.
Counsel can readily monitor for newly published patent applications, as an FTO is being drafted, to minimize that risk of future patents as well.
Other practical benefits to obtaining an FTO include:
- Getting a head start understanding and utilizing new technologies first disclosed in recent patents or published applications, which could be used to further enhance their own technology. In the previous suture example, if a patent search discovers other chemical compounds or non-patented infusion techniques (that are identified in technical literature, for instance) that could accomplish similar detection goals, those potentially could be utilized in the new products too.
- Reducing the possibility of enhanced damages or attorney’s fee award if there is infringement. Courts have the discretion to triple an infringement award or to award attorney’s fees where a case is found to be “exceptional.” One factor courts consider when deciding to enhance damages or determining an “exceptional case” can be whether or not infringement is “willful.” Because the goal of an FTO is to find a way to not infringe on known patents, obtaining one can help negate a determination of willfulness and reduce the possibility of a finding of an exceptional case.
- The ability to design a product to maximize the potential likelihood of it being patentable while avoiding others’ patents.
By commissioning an FTO during product and technology development, startups will gain invaluable insight and value to help them avoid patent infringement, lessen potential damages and improve the overall design of the innovation.
The opinions expressed here are the present opinions of the author and may not reflect the opinions of McAndrews, Held & Malloy, its clients, or any individual attorney or employee. This is for general information purposes and is not intended to be, and should not be taken as, legal advice.