Freedom to Operate or FTO
Freedom of Use or Freedom to Operate (FTO) reports are an effective and preventive method for anticipating possible third-party infringement of patents or industrial designs. These studies are aimed at determining whether what is known as the “Freedom to Act’’ applies, which means ensuring that the production, marketing and use of a new product, process or service does not infringe upon third-party intellectual property rights.
The increasingly intensive use of intellectual property as a competitive tool has also generated in recent years an increase in the number of conflicts over the infringement of patents, trademarks and industrial designs.
Upon planning the design, manufacture and launch of new products, one of the most significant risks, particularly within those technology sectors where there is a high concentration of exclusive rights to intellectual property, commercialisation can be stalled by a competitor being in possession of a patent for the technology which has been integrated into the product in question.
Aside from the financial loss incurred as a result of the product’s suspension, and the effort invested in its development and marketing up to this point, there is also the risk of having to face possible legal proceedings, including, as the case may be, significant indemnity costs which may arise.
In those cases where legal actions are instructed, the proceedings can end up being both extremely costly and risky, often with an uncertain outcome, which is why companies launching new products onto the market should take all precautions at their disposal.
Thus, the analysis and subsequent Freedom of Use report enables a client to confirm or rule out the existence of legal obstacles to the manufacture or marketing of a product or process in a specified territory, and therefore avoid investing unnecessary effort in sectors with strong entry barriers.