Freedom to operate (FTO)

What Is FTO and Why Is It Important?

Securing a patent allows the owner to exclude others from practicing your invention. A granted patent does not give the owner exclusive right to practice the invention. By way of example, another party may have an broader scope patent, (termed “dominant patent”) which encompasses your invention. FTO assessment and 3rd-party right determination can help ascertain whether your proposed commercial activities such as a product or method can be practiced without infringing potentially valid patent rights of another.

Preparing for commercialisation and actually commercialising your invention would inevitably involve a considerable investment and expense. Therefore, risk management is critical before such an investment is committed. The risk of being blocked from making, using, selling, storing, importing or exporting your invention can be mitigated by performing an FTO assessment and determination early and preferably before or during product development to provide a roadmap that can help you avoid potential risks.

IP Due Diligence is an important part of licensing, mergers & acquisitions (M&A), and private equity deals. Intellectual Property (IP) assets, including but not limited to patents, trademark, copyrights, trade secrets, databases, and other know how, drive many high technology strategies. Now more than ever before, technology companies contemplating commercial transactions need to have a thorough understanding and appreciation of the value and potential risks associated with the transfer of IP assets as part of a deal. For a variety of reasons, too many technology companies own IP rights without having an accurate understanding of the true value and real/potential risks associated with their portfolio or acquire(d) IP portfolio rights without initially developing and executing an assessment to thoroughly understand what the IP portfolio would actually bring.

IP Due Diligence (IP DD) involves a detailed investigation and examination of IP assets, performed by investors and/or their attorneys, in an effort to determine for example the validity/enforceability of the rights, rightful ownership of the rights (requiring detailed assessment of the legal chain of transfer of ownership), and the quality of the assets themselves (possible work around strategies). As such, IP DD is typically conducted prior to the transfer of these rights or IP assets.