Why No Company Should Operate Without ‘Freedom To Operate Searches’
Patents are an elementary component of corporate innovation, which can also become risky for economic operators in global competition. Not only that, the competitive world of patents is becoming increasingly opaque. Without assistance, however, many companies cannot take the necessary measures to protect themselves in international competition and to bring products safely to market. That’s why there are now various patent search tools on the market that provide support in conducting searches.
In this article, we would like to take a closer look at how you can take the right measures.
What is an FTO?
Freedom to Operate searches aim to identify patents and utility models that stand in the way of the commercial utilisation of a technical product or process. The search examines which intellectual property rights could be infringed during manufacture, commercialisation or other commercial use. This includes pending patent applications, patents granted and in force as well as utility models in force.
This is necessary for a company to be ‘free to operate’. The likelihood of a costly and resource consuming infringement is then minimised and the company can perform a certain action, such as manufacturing or marketing a product, without running the risk of infringing a patent. The FTO search is therefore used to assess whether third-party property rights could be infringed.
Patent search is mandatory
In commercial trade, the FTO search is part of the obligation. This means that every craftsman is generally obliged to inform themselves about the legal situation applicable to their business project – this also includes the patent law situation.
For example, unlike prior art searches, FTOs are always limited to those countries that are relevant to the planned commercial use. At first glance, this limitation may sound like good news in terms of search effort. However, for an FTO search, the regional or international patent applications relevant to the country must be considered in addition to national IP rights.
Did you know that regional patent applications alone include not only all European patent applications before the European Patent Office, but also all patent applications filed with the Eurasian Patent Organization (EAPO), the Gulf Cooperation Council (GCC) or the African Regional Intellectual Property Organization (ARIPO) and other regional patent organizations?
Facts:
For a Freedom to Operate Search in Germany, the following documents, among others, must be taken into account:
- German patents and utility models that are in force
- German patent applications and utility model applications that are pending, i.e. have initially only been received by the authorities by post
- International patent applications during the international phase
- Pending European patent applications and European patents in force, as well as any worldwide patents that are still in their priority period.
For example, a Chinese utility model may be relevant to your activities in Germany if the twelve-month priority period is still running for it. The priority period is the period during which applications for the same invention can be filed subsequently and starts as soon as the first application is received by the Office.
Conducting a thorough and reliable Freedom to Operate search may sound like an unmanageable task. But because FTOs are not an option, but a must for every technology company, we at predori have made it our mission to completely redefine this type of search in its workflow. But why can’t you, as a technology company, do without FTOs?
Why you need FTO
The goal is to find out if there are competitors that have property rights in a specific country that could be infringed, which potentially needs to be avoided. This is also becoming increasingly difficult and dangerous because more and more property rights are being added.
Gaining and maintaining an overview here is becoming an even greater challenge. The most important answer to why companies should nevertheless accept this challenge is the liability of the managing director in the event of patent infringement.
Did you know?
A limited company or Ltd. (Gesellschaft mit beschränkter Haftung, GmbH) is usually founded to limit liability. Above all, the private assets of the shareholders should be protected from third-party access in the event of liability. But did you know that there are exceptions to this? Namely the so-called managing director liability for patent infringement. It stipulates that the managing director or other legal representatives can be held personally and jointly and severally liable with the GmbH for patent infringements if reasonable measures have not been taken to avoid patent infringements. This is based on the judgement of the Federal Court of Justice (Bundesgerichtshof, BHG) of 15 December 2015 under case no. X ZR 30/14.
The Federal Court of Justice even ruled that a managing director has increased liability in the event of patent infringement. He is liable if he has failed to take reasonable measures to prevent the infringement of property rights. The infringed party does not have to prove the omission.The representative of a company, on the other hand, must demonstrate and prove that there was no compelling reason to take measures as part of a secondary burden of proof. However, when placing products on the market, it is increasingly assumed that a ‘decision was made at management level’, meaning that the management must also ask about the rights of third parties.
As a company, you must therefore prove that you have taken all reasonable measures to the best of your knowledge and belief to avoid patent infringements. If you can do this, you will meet your obligation and need not fear that your private assets will be seized.
FTO searches with predori
And now the good news: Freedom to Operate searches are simple and highly efficient with predori. We have developed a tool for you that specialises in carrying out FTOs.
While you can concentrate on the description of your product, predori automatically takes care of setting all the necessary filters and restrictions to give you access to all patent information, including that of the USA and China. predori has filter options like no other tool to date. This gives you a level of efficiency that you could never achieve manually in just one search. And to ensure that this efficiency is not only part of the search, but also part of the assessment, the hits are displayed in a clear matrix. This makes it easy to evaluate the results at a glance.
In international business transactions, you know with predori what is permitted where and where you need to focus your attention. And because you need to know what is being searched for and how, especially in FTOs, predori stands for complete transparency.
We create this transparency with our radically new approach – and we do it through human-machine interaction. You control the search, predori’s AI supports you and documents every step.
Here's a brief overview of the advantages:
Documentable
Fulfil your legal obligations easily and securely. (Managing director liability)
Globally actionable
Freedom to Operate searches leave no room for blind spots. Our unique filter option covers patent information from the USA to China.
Simple
Thanks to the interactive workflow, predori makes patent searches accessible to everyone.
No long learning curve
The intuitive user interface does not require a long training period.
Fast
A FTO search with high-precision hits takes no longer than 40 minutes with predori.
If you now also feel the need for more security when placing products on the market, don’t wait any longer and get in touch with us. Our advisory team will be happy to answer your questions and help you integrate predori into your day-to-day work.
Related posts
Transformation in Patent Law Firms: Empower Business Activities and Enhance Success
