Patentability vs. Freedom-to-Operate

March 12, 2021
Dominic A. Frisina

You are not alone if you do not know the difference between patentability and freedom-to-operate. Most often people believe that a patent grants them the right to make, use, and sell an invention. This is perhaps the single most misunderstood feature of patents. A patent does not confer the right to do anything but sue others for patent infringement.

Freedom-to-Operate (“FTO”)

FTO basically works like this:

Your competitor invents and patents “A”. You take your competitor’s pre-existing invention “A” and add component “B” to invent “A+B”. Assume that you can patent new invention “A+B” because the combination is inventive over “A” alone. You still cannot make, use, or sell “A+B” without obtaining a license for your competitor’s patented component “A”. The competitor also maintains rights.

To put it in clear terms, consider this surprisingly common scenario. You have invested time and money in developing and patenting a product, which is succeeding in the marketplace, and then … you get sued for patent infringement. You have a patent, but you got sued anyway. Would it not be better to be aware of any litigation risk early in the development process? If you had known, you could have designed around the prior art and avoided the problem. This is freedom-to-operate.

Engage patent counsel early in the process. Your FTO needs to be assessed in the conceptual stage and reassessed as inventing continues throughout the product development process. Consider that every time you devise a creative solution to a technical problem it is possible that a patent already exists covering that very same solution. Inform counsel of your creative solution and have him/her conduct a supplemental FTO search. At this stage, counsel is principally discerning whether patent protection is available, but at the same time, reviewing the prior art for potential FTO threats (which would be live patents in relevant jurisdictions). For U.S. innovators, the “relevant jurisdictions” are at minimum the United States, but may also include foreign jurisdictions if the product is to be made or sold in other countries.

The objective is not to formulate a full-scale FTO opinion; the objective is merely to spot threats, and then determine how best to address the threats. When a possible FTO threat is identified, counsel should determine whether the claims clearly do not read on your invention. If counsel cannot rule out reference as an FTO threat, there are two options available: (a) design around; or, (b) conduct the necessary legal analysis to determine either non-infringement or invalidity of the FTO threat. The legal analyses can be quite costly, as the stakes are very high for both the innovator and the patent owner. Frequently, when an FTO threat is identified during the product development stage, the better choice is to design around.

When choosing to design-around the FTO threat, patent counsel should advise you of specific and unambiguous steps that your design team can take to ensure that product development proceeds in the white-space. At some point prior to product launch, the design must be frozen, and FTO should be reviewed one last time. This ensures that any changes to the design since the last FTO assessment have been addressed. Changes that might not have been reported to counsel previously would be captured here.

By systematically integrating FTO into the product development workflow, patent counsel can work closely with innovators to avoid costly FTO mistakes before they become matters for delay or litigation.