Even if your business is small and local, you can get by without an FTO analysis, but there are a few instances where it makes sense to do so:
How Valuable or Important Is the Product?
Important goods with high-profit potential merit a larger investment. This covers the entire product, not simply the results of the FTO analysis. A large profit margin carries with it the risk of a large loss should something go wrong, thus a thorough and early investigation is necessary. This is especially true for products that have significant R&D expenditures since, if you don't have operating flexibility, you've wasted a lot of money.
What Amount Of Risk Can You Handle?
Like insurance, you do not need to purchase a policy to do an FTO study. However, doing so could set you up for later fines and court appearances. The risk of skipping the research could be justified if the product won't be a major seller or won't have an impact on the company's bottom line. A high-risk, high-reward venture, however, calls for study.
How Strictly Competitive Is the Market?
Many businesses can sue you if you fall when there is a lot of competition. Although the consumer electronics sector is an exception, competition also implies that it is not as important to launch your product as soon as feasible. Take time and see the level of competitiveness shown in the market and then begin.
How Possible Is a Lawsuit for Infringement?
Patent infringement litigation is practically how businesses introduce themselves in areas like mobile phones and pharmaceuticals. Markets with large profit margins, lots of competition, and cutting-edge technology are more likely to result in lawsuits. If any of them ring a bell, you should at the very least get an FTO analysis for the preservation of your due diligence. There are resources you can utilize to determine how legal a business is.
components of a Freedom to Operate (FTO) analysis:
Geographical Restrictions:
Given that different jurisdictions have differing intellectual property rights, a "freedom to operate" should be specific to the geography/countries/regions where the product is intended to be released/commercialized. Additionally, the search may take into account PCT applications from the previous 30 months.
Time frames:
The "freedom to operate" research should take 20 years from the date of publication into account because patent rights last for 20 years. Thus, patents that are more than 20 years old can be disregarded for the FTO investigation. The FTOe study needs to take active patents into account.
Features and components of the product:
All of the product's components should be the subject of Freedom to Operate investigations. The technology, product, device, or process may have several different features that need to be looked at separately or in tandem.
Legal Status of the Patents:
For the Freedom to Operate study, Patents that are In Force or Active should be taken into Account. The study has to exclude patents that have expired, lapsed, or been withdrawn.
