1. Things to Consider With an FTO Search
2. Benefits of an FTO Search
3. The Cost Factor of an FTO

An FTO patent search is conducted to assess if there is a risk that a product being designed or developed is infringing on the patent of an already existing particular product.

An FTO search provides an analysis that identifies and analyzes patents of other individuals or businesses that could result in your company being liable for patent infringement. A search is usually conducted prior to developing and/or launching a service or product in a specific part of the world and before finalizing a product's design or investing in a marketing strategy.

The information generally provided or an FTO search includes:

  • A detailed description of the product or service. This would also include a list of the product's key features that require clearance.
  • The geographical regions where you plan to launch and market your product and service that will require a clearance.
  • A list of patents, competitors, and patent holders that may be relevant to the product or service you plan to launch.

Performing a Freedom to Operate (FTO) search before beginning development and launching a new product limits the risk factor of future litigation and avoids unnecessary expense. While it may be expensive to invest in a search, the results are worthwhile since they provide peace of mind as you continue your product's development.

If the development of your product is in the early stages where changes and modifications are likely, it is to your advantage to invest in an FTO search. In this way, any key patents that your product is infringing on can be worked around and redesigned to reduce infringement risks and avoid infringement claims. This increases the patentability of your product.

Experienced patent attorneys will most likely warn clients that a patent clearance is neither 100 percent foolproof nor a guarantee that you may not be sued. This is because patent searches may not be exhaustive, which results in a level of risk of infringement.

Before proceeding with an FTO search, consider the following:

  • The value of the product and the amount of investment.
  • Whether similar products have resulted in litigation.
  • The targeted community/region for competitors of the product.
  • Your monetary sources.
  • Your company's objectives and tolerance for risk.

When an FTO analysis takes place, the assessment involves determining the following:

  • If any of the components are new and/or which components are visible to the public.
  • If any of the components are subject to existing licenses.
  • If any of the components have been developed by others or if any of the components are under agreements that may include indemnification clauses.

A clearance search is performed concurrently to find unexpired patents as well as published applications that may lay claim to the various components. With the provided information, a patent attorney can evaluate the findings and form an opinion of the risks of moving forward with plans for the product, service, or acquisition.

If the FTO search is done early on in the development of the product, a company will have the opportunity to avoid infringement and possible litigation by making modifications before it's too late. Performing an FTO analysis can identify opportunities for a company to minimize, identify, and manage risk while pointing out areas where the patent coverage for a product or service is negligible or non-existent.

The Cost Factor of an FTO

Cost is a downside to regular FTO analysis on all products. Having an FTO performed on a single product can range from a couple to a few thousand into the tens of thousands. The wide range in prices is attributed to the amount of work involved and the stakes are much more involved and higher for a product to be cleared versus a patent search. Some products, especially those with numerous features, may not be practical or feasible candidates for an FTO search.

Determining the flat rate cost of a preliminary FTO analysis can be done with a simple formula. This would mean setting a flat rate to cover the review of each independent claim multiplied by the number of products and the number of independent claims. In other words, FTO cost equals (the number of products) multiplied by (the flat rate divided by the independent claim) multiplied by (the total number of independent claims).

If you need help with an FTO patent search, you can post your legal need on UpCounsel's marketplace. Upcounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.