What is a Freedom to Operate opinion?
Freedom to Operate is the ability of a company or individual to proceed with marketing and use of a proposed product, process, or service without infringing on the intellectual property of another. An FTO opinion is a legal opinion from a licensed intellectual property attorney that concludes such. While an FTO opinion does not guarantee no liability exists, the opinion can save company resources and decrease potential liability to other patent holders.
Importance of an FTO Opinion
While not a legal requirement, an FTO opinion can be a preemptive measure against patent litigation. This decrease in potential liability gives a company more flexibility in developing new products, processes, or services. In fields more crowded or notoriously litigious, an FTO opinion is valuable and can defend against a party seeking treble damages for willful infringement of an existing patent. In addition to guarding against potential litigation, an FTO opinion also eases concerns of exposure potential investors may hold.
To decrease investors’ exposure to liability, a company or individual can pursue an FTO opinion before fundraising efforts.
A factor frequently in patent litigation is whether a defendant willfully infringed a patent. Courts rarely find “willful infringement” when a company or individual has shown it investigated the patent and formed a good-faith belief no infringement existed. A proper FTO analysis can provide the good-faith belief.
An FTO analysis begins with researching patent literature for both issued and pending patents. If an IP attorney identifies issued or pending patents that limit the FTO, a company can attempt to purchase or license the existing patent, cross-license, invent around, or enter into patent pools. A new FTO analysis is necessary for each unique product, process, or service. A company has the freedom to operate if no limiting patents exist after a reasonable search of existing or pending patents.