What is an infringement search?
A patent infringement search goes by a few other names: freedom to operate (FTO), product clearance, patent clearance, infringement clearance, etc. The crux of an infringement search is to assess the risk of patent infringement associated with a particular product.
Most seasoned patent attorneys would wisely warn their clients that a patent clearance may not be exhaustive and that there still may be a certain level of risk even if the FTO opinion says otherwise. Experienced patent litigators would also say that even if it appears that there is no way a product would infringe a particular patent, a favorable FTO opinion does not prevent that particular owner from suing you. Patent owners may sometimes use the high cost of patent litigation to shake down smaller companies lacking financial resources to fight a protracted patent lawsuit.
How does an FTO search differ from a patentability search?
Most IP product clearances are concerned with utility patents because changes to the appearance of a product will not be sufficient to avoid infringing a utility patent. Therefore, infringement searches of utility patents focus on the claims, and not on the drawings or associated written descriptions. While an FTO opinion may refer to examples, or embodiments, shown in a patent for context, you must understand that claims are broadly written to cover concepts that go beyond the preferred embodiments discussed in the specification of the patent.
Patentability searches typically overlook the claims because the primary issue in a patentability search is figuring out whether the client’s invention is novel. This difference in analyses explains the vast difference in costs.
How much does an FTO search cost?
An FTO search for a single product can range from a couple thousand to tens of thousands. The high cost can be attributed to both the amount of work involved and the fact that the stakes are much higher for a product clearance than a patentability search.
In fact, for certain products containing a high number of features (think devices with hardware and software), an FTO search might not even be practical or feasible.
After locating live relevant patents, a flat rate may then be estimated for analyzing the found patents with respect to the products. At our firm, the cost of an FTO analysis depends primarily on:
- number of (accused) products; and
- number of independent claims.
One formula for determining the flat rate cost of a preliminary FTO analysis would be to set a flat rate for reviewing each independent claim, and then multiply that rate by the number of products and the number of independent claims:
FTO cost = (# of products) x (flat rate / independent claim) x (# of independent claims)
When does an FTO search make sense?
Naturally, any business launching a new product with innovative features will want to know if they’re going to be sued for patent infringement. Does that mean that every new product should receive IP clearance prior to launch?
In my humble opinion, it boils down to a cost-benefit analysis. If an FTO search can provide a greater than 50% assessment that the product would not be infringing, then it may be worthwhile to invest up to tens of thousands for that peace of mind.
If your product development is at an earlier stage where modifications are possible, then an FTO search may be a wise investment. By identifying key patents early on, you may be able to find ways to design around the claims of the patents that present the highest risk of infringement. In fact, the value of an FTO search may well exceed its cost by spurring design-around efforts that reduce infringement risks and increase the patentability of your product.