Why No Company Should Operate Without ‘Freedom To Operate Searches’
Patents are a fundamental part of business 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, many companies cannot take the necessary measures to protect themselves in international competition and to bring products safely onto the 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 a FTO?
Freedom to Operate searches aim to identify patents and utility models that stand in the way of the commercial use of a technical product or process. It is examined which property rights could be infringed during production, marketing or other commercial use. This includes pending patent applications, patents granted and in force, and utility models in force.
This is necessary for a company to be “free to operate.” Then the likelihood of a costly and resource consuming IP infringement is minimized and the company can perform a particular action, such as manufacturing or marketing a product, without running the risk of infringing a patent. The FTO search is used to determine whether third party intellectual property rights may be infringed.
Patent search is mandatory
In commercial trade, the FTO search is part of the obligation. In concrete terms, this means that every trader is generally obliged to inform himself about the legal situation of his business venture applicable to him – this also includes the patent legal situation.
FTOs, for example, unlike prior art searches, 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 a FTO search, regional or international patent applications relevant for the respective 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?
For a Freedom to Operate Search in Germany, the following documents, among others, have to be considered:
- German patents and utility models that are in force
- German patent and utility model applications that are pending, i.e. received by the authorities initially only by mail
- 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 it is still within the twelve-month priority period. The priority period is the period during which subsequent applications for the same invention can be filed and begins 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 any 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 protection rights in a specific country that could be infringed, which is something to potentially avoid. Finding out is becoming more and more difficult and dangerous, because more and more protective rights are being added, too.
Getting and keeping an overview here is becoming more and more challenging. The most important answer as to why companies should nevertheless take on 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 are to be protected from the access of third parties in the event of liability. But did you know that there are exceptions to this? Namely, the so-called managing director liability in case of patent infringement. It stipulates that the managing director or other legal representatives may be held personally and jointly and severally liable with the GmbH in the event of patent infringement if reasonable measures have not been taken to avoid patent infringement. This can be traced back to the ruling of the Federal Court of Justice (Bundesgerichtshof, BHG) of December 15, 2015 under the file number 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 within the framework of a secondary burden of proof that there was no compelling reason to take measures. However, when products are placed on the market, it is increasingly assumed that a “decision has been made at management level”, so that the question of third party rights must also be raised on the part of the management.
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 infringement. If you can do this, you will meet your obligation and will not have to fear a crackdown on your private assets.
FTO searches with predori
And now the good news: Freedom to Operate searches are easy and highly efficient with predori. We have developed a tool for you that specializes in conducting 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 USA and China. predori has filtering capabilities like no other tool so far. This gives you an efficiency that you will never achieve manually in just one search.And to ensure that this efficiency is not only part of the search, but also of the evaluation, the hits are displayed in a clear matrix. This makes it easy to evaluate the results at a glance.
With predori, you know what’s allowed where in international business transactions and what you have to watch out for. And because you need to know what and how to search, 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:
Meet your legal obligation easily and securely. (Managing director liability)
Freedom to Operate searches leave no room for blind spots. Our unique filtering capability covers patent information from the USA to China.
With its interactive workflow, predori makes patent searching accessible to everyone.
No long learning curve
The intuitive user interface does not require a long training period.
An FTO search with high precision hits takes no longer than 40 minutes with predori.
If you also feel the need for more security when placing products on the market, don’t wait any longer and contact us. Our consulting team will be happy to answer your questions and help you integrate predori into your daily work.