Role of Freedom-to-Operate Search in Competitive Intelligence

The technology sector is brimming with inventions, wherein every product or service is a combination of unique functional concepts and ideas. In this scenario, it only becomes imperative for organisations to have a clear idea about the proprietary ownership of their inventions. Freedom-to-operate (FTO) search enable businesses to do just that. This article encapsulates every aspect of FTO searches and explains in detail how it plays a key role in competitive intelligence.

Understanding Freedom to Operate Search and its Importance

FTO, as the name suggests, is legal freedom inherited by organisations to commercially manufacture products, without any liabilities towards external patent holders. This is an important part of patent protection wherein companies seek to protect their patents across jurisdictions in order to curtail their competitor’s FTO. The due diligence required before developing a product or working on an innovation involves conducting FTO searches.

Competitors also strive to do the same through FTO searches, making it an integral part of competitive intelligence. Similarly, it helps organisations to understand the commercial and legal liability of the particular invention in different regions and markets.

The visual below lists six steps that businesses must follow while conducting FTO searches.

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Role of FTO Search in Competitive Intelligence

The World Intellectual Property Organisation (WIPO) has issued detailed guidelines on the necessary steps needed before launching a new product. The key focus of these guidelines is FTO searches. Since organisations indulge in competitive analysis before the launch of new products, it can be agreed that FTO searches form an integral part of their competitive analysis. To further understand this role, let’s take a look at a few more aspects outlined below:

  • Identifying Non-practising Entities (NPEs): These are the entities that hold patents but do not manufacture products based on those patents. Such organisations are usually not commercially active in their respective domains. So, an FTO search helps to accurately identify these NPEs to prevent businesses from infringing on their patents. This process of identifying NPEs gains significance because a rapid rise in infringement litigation by these entities has been recorded in the USA in 2020.
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USA: Number of NPE vs. Non-NPE Patent Infringements in 2020
  • Identifying Countries Where Infringement is Possible: Since FTO searches deal with several geographical and national regions, they help organisations to identify countries where their innovations are most likely to be infringed upon. These searches also enable businesses to find countries/regions where they cannot commercialize their inventions due to existing patents.

    With the help of such information (countries where the competitor’s patent is either active or abandoned), organisations can develop a more robust competitive intelligence prior to international product launch.
  • Finding Expired Patents: Similarly, FTO searches also help businesses to identify expired patents in a given geographical region. These patents can be used by them to develop new innovations that are commercially viable in the international market. With such comprehensive competitive analysis, organisations can develop infringement-free products.
  • Analysing Scope of Collaboration: When a company seeks to enter a market space that is already dominated by a market leader, they often form collaborations to avoid patent infringement-related hassles. FTO searches help businesses in their competitive analysis as well. It allows them to identify scope of collaborations so that both the company and its competitor can operate in the same region without infringing upon each other’s IP rights.

    Similarly, FTO searches help to identify patents that have expired or are alive in a given jurisdiction. By identifying these, a company can analyse whether to establish a monopoly or to collaborate in the given jurisdiction.

  • Identifying Active Collaborations: On the other hand, if such partnerships and collaborations already exist in the target market space or geographical region of an organisation, then FTO searches can help in identifying these. FTO searches analyse which patents have been utilised from such collaborations in developing innovative products and technologies. This information becomes an integral part of the competitive intelligence of an organisation.
  • Determining Patents to be Targeted For Invalidity: Before a successful product launch, organisations attempt to invalidate their competitor’s patents that fall within the same technological domain. This enables them to negate the competition and make the entire product launch a massive success. FTO searches provide the much-needed due diligence when organisations attempt to invalidate such patents that may become a potential threat to their new products.

Conclusion

Gathering competitive intelligence holds great value for an IP-centric organisation in crafting strategic action plans. It also helps businesses to gain deeper insight into the behaviour of consumers and resources as well as the competitor influence.

Therefore, FTO search is an integral part of such competitive intelligence as it prevents new technological innovation from being targeted for infringement. Furthermore, it helps businesses to generate decent revenue from their product and services.

Sagacious IP’s freedom to operate search services enable businesses to not only assess potential infringement of patents rights but plan their next phase of technical development. Our team of highly trained IP professionals provides detailed search reports that allow organisations to make sound IP-related business decisions.

-The Editorial Team

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