A Freedom to Operate (FTO) search is conducted to ensure a product does not infringe valid in-force patents. These patents are held within a country/region where an organization intends to conduct business. FTO Search is also known as Freedom to Practice search.
The organization may have some options available even after FTO search provides existence of one or more patents. These patents are the ones which block/limit an organization’s ability to operate in desired market.
Options available for companies to get rid of a blocking patent
Following are the few options which are available for companies to get rid of blocking patents:
A license, in this case, is an agreement between the organization and the patent holder. It grants the organization the permission to commercialize its products. This, otherwise, would be an infringement of the rights without the license.
Licensing involves obtaining written authorization from the patent holder. This authorization is to use the patented technology for specified acts. These are in specified markets and for a specified period of time. The license usually requires payment of a lump sum and/or periodic royalties. This is the easiest way of entering a market for commercialization of a product in case of a blocking patent.
Cross-licensing is another option that can be worked out. This can be opted when a FTO search reveals a blocking patent. In some cases, the owner of the blocking patent may himself be a competitor. He may be involved in the same technology business and/or manufacturing similar products. The organization with a significant patent portfolio can negotiate with the blocking patent owner. This is done so as to license the blocking patent(s) among others. In a way that they are able to use certain patents owned by the other parties. This is in exchange for licensing some of the patents from its own portfolio.
This is one of the reasons that a lot of multi-national companies maintains significant patent portfolios and are always on look-out to acquire new ones.
Patent pools are an alternative to licensing that can be worked upon. Using these, two or more companies involved in related business technologies put all or some of their selected patents in a pool. These pools are available for all its members.
High technology industries, such as Telecom, Internet, etc. have established many significant patent pools. They allow their members to use the shared patent technologies without the risk of infringement.
Design around is also known as “inventing around”. It involves making changes to the product and/or process. These changes are done to avoid infringing on the blocking patent(s) found in FTO search.
For example, design-arounds are considered fairly easy in the field of vaccines. It is often possible to use the original patent as a guide for developing an alternative. This alternative does not infringes the original patent.
Consequently, Design-Around is always preferred as it saves licensing cost.
Read Also: Types of Patent Search
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