"Freedom To Operate"

Freedom to operate patent searches refer to the amount of freedom an individual or a company has in a particular territory with a particular technology without infringing the IP rights of someone else. This is a preventive step taken by innovators to minimize the risk of infringing others’ patents. However, it is very difficult to get all the information regarding patents because of the sheer number of patents that are granted every week. Further, there are also patents that are hidden for some period and published only after 18 months of filing. Hence, the Freedom To Operate Report (hereafter, FTO) cannot always be relied upon.

FTO Opinions

The FTO Opinions are provided by lawyers to their clients. These opinions help the clients to understand the potential risk of patent infringement and they can also make strategies to mitigate the risk. This is similar to the Search Reports that are made before filing any patent application in order to prevent any potential infringement. Generally, there are two types of FTO Opinions: Non-Infringement Opinion and FTO Opinion. The former gives an assurance to the client that his innovative product will not violate anyone’s patent. Here the client wants to get an assurance that his product will not infringe any particular product which he already knows. In the latter case, it is more like a comprehensive report as it addresses whether any intellectual property right will be infringed by the client’s product. Here the client does not know about the other products.

The Process

In this section, I will discuss the process of conducting FTO Opinions. Before starting an FTO Opinion, one has to keep three things in mind. Firstly, patents are territorial in nature. Hence, it is valid only in the country where the application is filled. Thus, the region where the patent application is filed becomes very important while making the FTO Opinion. Secondly, a patent can last for a maximum period of 20 years. Thirdly, a patent has limited scope and every aspect of an innovation cannot be granted patent. Commercial value of the market also becomes important because companies tend to file patent application in countries where they will earn profit by selling their product. Hence, they tend to avoid low value market. Further, the degree of novelty requirement also vary from country to country.

Next the person making the FTO Report has to understand the technology. Hence, the person not only needs to have the adequate know-how of the technology, he should also need to have a clear communication with the developer of the product. Any lack of clear communication can lead to flawed FTO Report.

After that, the clearance search is conducted. It is conducted by the professional data mining experts with data analytics tools. There are various websites, public search facilities of the patent offices which contain all the information regarding the valid patent application. The profession has to see whether the innovation violates anyone’s patent on the same subject technology. The person has to be well versed on the perfect keywords/classifications to conduct the search properly. A public search can be conducted at the Indian patent database. Finally, the person making the FTO Report has to be well versed in the law of the land as well. For example, the US Courts use the Doctrine of Equivalence in order to evaluate patent infringement. The doctrine says that if the substituted elements perform substantially the same functions in the same way, then it will lead to patent infringement even if the elements are different. This doctrine was not applied initially by the Indian courts. Thus, since the standards and the court’s interpretation of the law vary from country to country, hence it should be done by a lawyer.

The Report might tell about three possibilities. It can say that the client’s product will not infringe anyone’s patent. Secondly, it can give the possibility of infringement at the current stage which could be avoided by making some minor changes in the client’s product. Thirdly, it can say outright that the client’s product is infringing someone’s patent which cannot be overcome even by making changes. Hence, the product cannot be patented.

Benefits of FTO

It is very important to conduct a prior art search in order to prevent future litigation. To give an example, TVS Motor Company Ltd. launched its brand new motorcycle without doing a prior art search. They filed several patent applications for the same. They did not conduct any prior art search because they were confident by the positive patentability study. This is a kind of study which tells a developer whether its product would qualify for patent. Later they were sued by the Bajaj Autos who had a broad claim. The Madras High Court found that the TVS Motorcycle Engine is infringing an essential feature of the Bajaj Auto Engine. Hence, it granted injunction against launching of the TVS Motorcycle. This has resulted in a huge loss for the TVS Motor Company which could very well be avoided had they conducted a prior art search before developing their product.

Now in another case from US, leading pharmaceutical company Ranbaxy wanted to launch their medicine in US. Before launching the product, they conducted a prior art search where they found that their product ‘cefuroxime axetil’ is infringing the process patent of Apotex. However, in the FTO Report, it was found out that Ranbaxy has used acetic acid which has not been used by Apotex. By conducting the FTO Report, Ranbaxy was able to prove that their product did not infringe Apotex’s product. Thus, conducting a prior art search in the form of FTO Report saves both time and money.