What is a freedom to operate or patent infringement search?
A freedom to operate search or review is basically an analysis to see if you can sell your product without infringing patents. Also known as an FTO review, the purpose is to assess the risk of patent infringement for a particular product or service.
Need an infringement or FTO search? Call US patent attorney Vic Lin at (949) 223-9623 or email vlin@icaplaw.com to see how we can help you safely sell your products with reduced risks of patent infringement.
Are all patent searches the same?
Those unfamiliar with patents need to know that is more than one type of patent search. What is typically meant by a “patent search” is a novelty search to see if an invention is patentable. Novelty searches, however, do not provide any assurances on infringement. Just because your product is patentable does not mean that it is free from infringement.
To determine the risk of patent infringement for selling your product, you need an infringement search. An infringement search goes by a few other names: freedom to operate (FTO), product clearance, patent clearance, infringement clearance, etc. The purpose of an FTO search and analysis is to assess the risk of patent infringement associated with your particular product. So the specific details and features of your product – as opposed to those of your competitors – will matter a great deal.
Keep in mind that a patent clearance might not be exhaustive. Risk may remain even if an FTO opinion says that you do not infringe certain patents. Experienced patent litigators would say that a favorable freedom to operate opinion does not prevent a particular patent owner from suing you. Just when you think there is no reasonable way your product would infringe a particular patent, you can still be sued. Patent owners may use the high cost of patent litigation as leverage to shake down smaller companies lacking financial resources to fight a protracted patent lawsuit.
What is the purpose of a patent clearance?
If a freedom to operate search does not prevent a patent infringement lawsuit, then why bother doing an infringement search? There at least two reasons for considering an FTO review.
First, what you learn from a patent infringement search may help guide your sales, product development and any product modifications. Suppose that a detailed review of the claims in a utility patent helps you understand that certain critical features must be avoided in your product. This may help you design around the patent by modifying your future versions of your product.
Second, a well written legal opinion serves an exculpatory purpose if and when you are found liable for patent infringement. In other words, a sound written opinion of noninfringement shows the accused infringer’s state of mind during the time when the infringement took place. Specifically, the infringer acted reasonably and that the resulting infringement was not willful. Avoiding willfulness will save you from paying enhanced money damages and attorney’s fees to the patent owner if and when you are found liable for infringement.
How does a freedom to operate search differ from a patentability search?
Most IP product clearances are concerned with utility patents because changes to the appearance of a product will not be sufficient to avoid infringing a utility patent. Therefore, infringement searches of utility patents focus on the claims, and not on the drawings or associated written descriptions. While an FTO opinion may refer to examples, or embodiments, shown in a patent for context, you must understand that claims are broadly written to cover concepts that go beyond the preferred embodiments discussed in the specification of the patent.
Patentability searches typically overlook the claims because the primary issue in a patentability search is figuring out whether the client’s invention is novel. This difference in analyses explains the vast difference in costs.
When does a patent infringement search make sense?
Naturally, any business launching a new product with innovative features will want to know if they’re going to be sued for patent infringement. Does that mean that every new product should receive IP clearance prior to launch?
In my humble opinion, it boils down to a cost-benefit analysis. If an FTO search can provide a greater than 50% assessment that the product would not be infringing, then it may be worthwhile to invest up to tens of thousands for that peace of mind.
If your product development is at an earlier stage where modifications are possible, then an FTO search may be a wise investment. By identifying key patents early on, you may be able to find ways to design around the claims of the patents that present the highest risk of infringement. In fact, the value of an FTO search may well exceed its cost by spurring design-around efforts that reduce infringement risks and increase the patentability of your product.
How much does an FTO search cost?
The cost of an FTO search primarily depends upon the number of patents to be reviewed. Typically, we conduct an FTO search in the following stages:
- Stage 1: Find live relevant patents that relate to the product(s) at issue (starting at $3,000);
- Stage 2: Compare each independent claim of each relevant patent to product(s) at issue to assess risk of infringement (approx. $2,000 to $4,000 per patent found);
- Stage 3: Verbally communicate results to the client;
- Stage 4 (optional): Written noninfringement opinion letter (starting at $6,000 per patent).
What does a freedom to operate review include?
Task 1 of an FTO search is finding relevant patents that have not yet expired. The cost of this initial task starts at $3,000. If the relevant patents are already known or fixed (e.g., a handful of utility patents by a certain competitor on a specific technology), then our firm may be able to skip this first part of locating relevant patents.
Task 2 of an FTO search depends upon how many live relevant patents are found or already known. If only a couple of live relevant patents are found, for example, then Task 2 of the FTO search might cost another $2,000 to $4,000. On the other hand, the cost of this claim analysis might be significantly higher if several patents are located. After locating live relevant patents, a fee flat may be provided for comparing the claims of the found patents to the client’s product.
Task 3 of a patent infringement search relates to how we communicate results to the client. The reason we keep this communication verbal is for the client’s protection. We may need to share concerns about infringement risks which would be best left unwritten. By keeping these infringement discussions verbal, the client avoids documentation that would might discoverable in any future litigation. My firm typically does not charge additional fees for a conference call to communicate our findings verbally.
Task 4 is optional. If a written noninfringement opinion letter is desired, we can provide a flat rate estimate for drafting the letter which typically starts at $6,000.
Ballpark estimates for Tasks 1-3 may range from $3,000 to $15,000 or more, depending upon the number of relevant patents warranting an infringement analysis.
FTO Verbal vs. Written Communications: When to keep infringement thoughts unwritten
It may make sense to communicate the results of an FTO in two stages:
- Verbal: initial review followed by verbal discussion with client
- Written (optional): written noninfringement opinion if desired.
The reason for avoiding written communications at the first stage is to protect the client. Suppose the client’s product has a medium to high risk of infringing a patent. You don’t want to have a written communication stating, for example – “Dear client, your product X infringes patent Y.” – which may be discoverable by the patent owner in any potential future litigation.
If the conclusion of the first stage review is that your product safely avoids infringement, then the client can choose to have a noninfringement opinion letter written at an additional cost. Keep in mind that a nonfringement opinion letter will not save you from a lawsuit. A well-written opinion letter can serve an exculpatory purpose in patent litigation by showing that you acted in good faith, thereby avoiding attorney’s fees and enhanced damages that might have resulted from willful infringement.
Need a Freedom to Operate Search or a Patent Infringement Analysis?
Are you planning on selling a product and worrying about patent infringement? Email registered US patent attorney Vic Lin anytime at vlin@icaplaw.com or call (949) 223-9623 to get started on your FTO search and review.
Our patent attorneys can help you navigate around the landmines and find a safer path to market.
