10 August, 2018
Whenever a company plans to develop or launch a new product or service, a major risk, mainly in technology sectors where there is extensive patenting, is that commercialization may be obstructed by a competitor who holds a patent for a technology integrated within that product. This is why many companies, at an early stage, first ensure “freedom to operate” (FTO) against others valid IP rights in operating territories.
Searching patent documents
FTO analysis invariably begins with searching for issued or pending patents and obtaining a legal opinion as to whether a product, process or service may be considered to infringe any patent(s) owned by others.
Recognizing Chances in Patent Limitations
In conducting an FTO search and analysis, it is worth bearing in mind that some of the limitations on patents also offer potential opportunities, for example:
- Patent protection is territorial. While a certain technology may be protected in a company’s main markets, it may be in the public domain in other countries. In the latter case, no permission (or license) is needed from the patent owner in order to commercialize the product.
- Patents have a limited duration. Patent protection lasts for a maximum period of 20 years. Thereafter, a patent is considered to be in the public domain and the technology of expired patents may be freely used by anyone. Moreover, the European Patent Office (EPO) estimates that fewer than 25 % of all patents granted through the EPO are maintained for the maximum 20-year term. Many patents are allowed to lapse through non-payment of maintenance fees by the patent holders before the 20 years also.
- Patents have limits of scope. The claims section in a patent document determines the scope of the patent. Any aspect of an invention not covered by the claims is not considered to be protected. Having said that, it is not always easy to determine the scope of a patent and come with a design around. It requires considerable experience in interpreting the claims, the written specification and the history of the application process.
Selecting the right path
Whichever path is chosen, it is generally advisable to consider various options at an early stage. In some cases, minor product adaptations, or payment of a small licensing fee to the patent owner, may be sufficient to avoid future disputes. Systematically evaluating a company’s freedom to operate prior to launching a new product is, therefore, a way of minimizing the risk of infringement of patents owned by others. It also improves company’s chances of finding business partners and attracting investors to support its business development plans.
Scope of the search
Freedom to operate can never be determined with absolute certainty. This is because the patent landscape is dynamic, new patents issue, old patents expire, and some patents are abandoned.
Therefore, freedom to operate does not imply absolute freedom from the risk of infringing someone else’s intellectual property. That is why there is a need to adopt certain practices while conducting a search, thereby, at least minimizing the risks of infringement, ensuring proper due diligence, and claiming unintentional infringement in case of future litigation. Some of the practices are discussed below.
An FTO study should definitely concentrate on identifying immediate threats, i.e., granted patents that may be relevant to the technology. Granted patents may be of four types, which are listed below with comments on how to deal with them.
- In force, with renewal fee paid (Immediate attention should be given while commercializing technology)
- Lapsed due to non-payment of renewal fees, with the option of being reinstated (Should be traced till the time till restoration date lapses)
- Lapsed due to non-payment of renewal fees, without the option of being reinstated (safe to use)
- Expired after completing their full term (safe to use)
An FTO study should also consider identifying pending patent applications. Patent applications may be of three types, viz., and patent applications awaiting examination, patent applications undergoing prosecution and abandoned patent applications.
An FTO study should also consider identifying PCT applications designating the countries in which the technology is proposed to be commercialized.
Scrutiny in an FTO study
After having shortlisted patents and applications by conducting a search, the next step of the study is to examine the identified references. Various portions of a patent document and documents associated with the patent/applications may be relevant from an FTO perspective, some of which are discussed below:
The claims, especially the independent claims, of the patents have to be analysed in detail. The analysis may try to ascertain whether all the limitations of the claims read on to product or service under consideration
The prosecution history of patents should also be considered during analysis to properly construe the claims. The claims may be given a broadest reasonable interpretation in an infringement proceeding.
Apart from considering the claims, the description of the patent application may be considered to anticipate claims that may be presented in future. Hence, in cases where a patent family has at least one pending patent application, the disclosure as a whole (not just the claims) may be of relevance in an FTO study.
An effective FTO study involves gathering relevant information at the beginning, bearing in mind the right data for search, and complete review of relevant references. Although an FTO study cannot assure an absolutely threat free clearance, it does mitigate risk to a substantial extent by showcasing opportunities to acquire patents, cross-license, work around, and invalidate patents. While an absolute guarantee of freedom to operate may never be attainable, but there are definitely ways of minimizing the risks that can save a company significant costs and resources.
For further information, please contact:
Mayank Joshi, LexOrbis