Freedom to Operate Analysis

The technology space is getting crowded day by day. Every product, be it a simple toy or a small automobile component or a highly technologically intensive product like the spare part of a satellite launching vehicle, is an amalgamation of diverse ideas and functional concepts which are protected by a bevy of patents, utility models and design registrations. For example, even a simple product like Gillett’s Mach 3, a razor is protected by more than 40 different patents which protect each and every engineering feature of Mach 3.

In such a scenario, even before one initiates the design and development of a new product, one should first have a very clear idea about the proprietary technology in and around the product to be developed. The term ‘proprietary technology’ means the features of the product that have been protected by various intellectual property tools like patents (functional features), or designs (aesthetics features).

“Freedom to Operate” Search:

There is enormous risk if one launches a product without any freedom to operate analysis and search. In such case the newly launched product is quiet vulnerable to infringement suits which can threaten the business of the company itself. At this stage, the cost associated with IPR litigation and the uncertainty involved in it, is usually fatal and it may force the company to withdraw itself from the business altogether. A very famous case study which is often quoted to emphasize the importance of a thorough freedom to operate search is that of Polaroid Vs Kodak. Kodak was a pioneer in the segment of photography in USA. Polaroid made a late entry into the market and developed its proprietary technology for ‘instant photography’. Eventually, Kodak too decided to make a foray in the instant photography segment. One week after the Kodak’s product launch, Polaroid filed infringement suits against Kodak for infringement. The courts held that Kodak infringed Polaroid patents. Kodak had to pay $ 900 million. This forced Kodak to withdraw from the instant photography business altogether.

The best way therefore is to undertake a thorough Freedom to operate search and analysis even before one starts making investments in setting up plants for manufacture of the proposed product.

A ‘freedom to operate’ search and analysis is exactly meant for the purposes of understanding the ‘degrees of freedom’ that are available to the product development team while designing and developing a new product in the market. The ultimate goal of a product development team is to come out with a product that does not infringe a patent or a registered design.

A “freedom to operate” analysis is but a type of due diligence which has to done with lot of care and seriousness before undertaking any manufacturing activity. Freedom to operate analysis provides the details based on which one can ascertain whether or not the proposed product or the existing product can be made, used, offered for sale or sold without infringing another valid enforceable patent.

The outcome of a typical exhaustive freedom to operate analysis assumes a strategic significance in making the following vital decisions:

Selection of a product for manufacture

From a freedom to operate search one understands the feasibility of launching a product into the market with an optimized infringement threat.

Selection of a process of manufacture

Even through the product is not new, one can manufacture it by a new process, in such cases freedom to operate analysis ascertains whether the proposed process is non-infringing or not. If it is infringing, it also provides the details of the players with whom one will have to make the licensing arrangements.

Selection of the equipments and design of the plant and work flow

Freedom to operate analysis provides insights as to how to design around the existing proprietary technology by consciously choosing non-infringing variables in the overall process flow.

Selection of the packaging, labels and other details

Packaging and labeling of the proposed products comes into the picture at a very late stage. Freedom to operate search provides lots of insights so as to preclude the possibility of infringement of other forms of intellectual property, especially copyrights and trademarks.

Selection of markets (country-wise)

Patents are territorial in nature and therefore, an act that constitutes an infringement in India may not do so in other country where there is no valid enforceable patent related to the product or process in question.

Selection of technology partners, strategic alliances and cross-licensing partners.

In a typical complex business situation, coming across a purely non-infringing process or product is a rare thing. In such cases, product development becomes a collaborative effort. Freedom to operate analysis gives an overall idea about the various players in a given product segment with their specialties. One can thus make the strategic decisions regarding licensing, cross-licensing and forming strategic alliances with the other players based on the findings of the freedom to operate search.

Conducting a Freedom to operate Analysis has become imperative in today’s times. Freedom to operate analysis must come from an independent patent attorney from outside the organization. This ensures impartial and objective analysis. Furthermore, a freedom to operate opinion from a professional patent attorney is also considered in the court of law during the infringement proceedings. One can therefore use the ‘Freedom to Operate’ opinion from an attorney as defense against the allegations of will infringement.

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