FTO and Role of Expired Patents: Saving You From Paying Royalties

January 2, 2023
- Freedom to Operate
- State of the Art

Product development, from ideation to final market launch is a strenuous journey. One major concern while developing a product is presence of overlapping Intellectual property (i.e., IP) in the domain. This overlapping IP could be an issued patent or a patent application.

This overlap means that you have accidentally designed an infringing product, and this could end up in redesigning or modifications a few weeks before product launch, in order to avoid infringements. So, It is strongly preferable to analyze the technology gaps and possible competitors during the early stages of product development, before launching it.

As early and as much, as you search for patents during the initial stages of product development process, fewer will be problems later, when the final product is developed or finalized. By doing a simple search at the ideation stage, you can identify overlapping patents and even track competitors.

Also, most companies know their direct competitors, but there are many companies that are innovating or creating intellectual property outside their primary domain or market. So, by searching for their patents new trends or technology gaps and new markets can be identified.

Freedom to Operate

The search solution for abovesaid points is FTO, i.e. Freedom to Operate or Clearance search. Companies conduct FTO searches to steer and optimize their R&D developments to avoid any patent infringement or lawsuit on their product.

Points to keep in mind while conducting a Freedom to Operate search:

Key Features: From the technical disclosure of the product, identify the key competitive features of your product. These features should be unique and relatively compared to identify the most important key features among all. These can be arranged in a ranked way and should be searched based on importance. This important factor is decided by the company or inventors of the technology/product. Such an analysis strategy can result in high-quality searches.
Jurisdiction: Jurisdiction defines the coverage area or region in which the product is to be launched. The Freedom to Operate search is conducted as per the client’s area of interest i.e., jurisdictions in which the client is interested to launch its products.
Date: This is an important factor while performing a Freedom to Operate search. The patents filed in the last 20 years in interested jurisdictions are considered relevant for this analysis.
Target Companies: This is also an important aspect of freedom to operate search. Identify the active players of any technical domain, which have a huge patent portfolio. By analyzing these patents of key competitors, technology gaps and trends as well as potential infringing patents of such big players can be identified, and thus product R&D developments can be steered or optimized.
Classifications: During the freedom to operate search, one should analyze the patent classes or classifications to draw a clear and better conclusion related to the classes or classifications that include most of the patents of interest.

Worst Situation!

Imagine you have developed a product and you are about to launch it in the market, but later you observed that your product is infringing someone’s IP or patents. This could be a nightmare because at this stage you have two options either hold the product launch or become a licensee and pay royalties (i.e. Patent royalties are payments made by the licensee to the licensor for the use of the patent) to the patent owners, for which they were not even looking for.

Role of Expired Patents

In order to avoid the case that leads to payment of patent royalties to the licensor of the patent. We can identify abandoned or expired patents that are solving similar problems and offers similar advantages that our product includes. We can use such designs to achieve the same objective by developing a new non-infringing design, and without paying royalties to anyone.

Also, expired patents may sometime help in invalidating the infringing patent. For example, if a person intends to invalidate an infringing patent in a specific jurisdiction for a product planned to be commercialized in that jurisdiction, then the expired patent may act as prior art for invalidation.

Conclusion

The following key observations can be kept in mind while launching a product in a specific jurisdiction i.e. any specific country, geography, or region.

It is highly preferable to conduct FTO i.e., freedom to operate search considering the key points mentioned above, during the initial product development stages, so that redesigning can be done, and a new non-infringing design can be developed keeping in mind the goal of achieving it with minimal R&D costs which is also an important aspect.
The expired patents may sometime help in invalidating the infringing patent. Also, it is always a good practice to search and include expired or abandoned or, dead patents in the FTO search report or analysis. This analysis could prevent payment of patent royalties or damages to infringing patent owners.

About TTC

We’ve constantly identified the value of new technology carried out by our pretty skilled executive crew with backgrounds as our professionals. Like the IP professionals we empower, our starvation for development is never-ending. We IMPROVISE, ADAPT, and IMPLEMENT in a strategic manner.

TT Consultants offers a range of efficient, high-quality solutions for your intellectual property management ranging from