Bad News (and Helpful Information) for Patent Owners

Freedom To Operate (FTO) Series

I have some bad news for patent owners. Hopefully, this isn’t actually news to you; if it is, you’re going to want to read closely. Don’t worry, though—there’s a solution. And you’ll be in better shape in terms of your risk management after learning about and applying the solution.

This is a little like suddenly realizing there are bears in the forest you’re hiking through. They were always there, even if you didn’t realize it. Once you know they are there, things feel different, but you really are better off knowing and being prepared.

But what does this have to do with patents?

Here’s the bad news:

Having a patent does not give you the right to use your own patented technology. Read that again. It’s 100% true.

A patent is an exclusionary right. It gives you the right to keep others from using your patented technology without your permission. But it provides no guarantees about what you can do.

Here’s an example:  suppose you invent a new drug that will reduce high blood pressure, and you get a patent on the drug. Can you just start selling the drug?  No, you can’t. The FDA will have a say in when and how you can sell it. You will probably also need a business license, and you will need to comply with safety and environmental standards in your manufacturing, etc. You can’t simply say to the various regulatory agencies “Leave me alone. I have a patent. I can do what I want.”

In addition to these obvious obstacles, suppose your drug is a new combination of A + B, and someone else–Barry—has a patent on B. Barry may place some restrictions on who is free to make or use B, because of his patent. The fact that you invented the useful combination of A + B doesn’t force Barry to deal with you.

In order to make your drug, you’ll need a license from Barry, or you’ll need to use something like B that still works but isn’t covered by Barry’s patent. Or you’ll need to have very high confidence that Barry’s patent is invalid, so you could win if he were to sue you for patent infringement.

The important point is that, in addition to having a patent, you also need to be free to use it. This requires a careful identification and analysis of the patent rights that might interfere with your “freedom to operate” (often referred to by lawyers as FTO).

Nobody wants to have their business derailed by a patent-infringement lawsuit. Barry is out there, just like the bears in the woods. Now you know. While Barry might be scary, there are ways of being prepared, and avoiding a business crisis.

FTO work involves:

     (a) identifying technologies you are using commercially (including but not limited to those covered by your own patents);

     (b) searching to identify existing patents that may cover those technologies; and

     (c) analyzing the patents in view of your commercial activities to assess your risk of patent infringement.

FTO work may also involve:

     (d) modifying your activities or products so that they are not covered by problematic patents; and/or

     (e) carefully analyzing the problematic patent to identify ways of invalidating the patent.

Now that you know there are bears in the woods, and what to do about them, you’re more prepared for a safe hike.

This is the first in a series of posts that will explain FTO in detail. So watch for upcoming posts. If you would like some advice about your own situation, you can email the author here.

Written By: Dale C. Hunt, PhD, JD


The statements and views expressed on this site are solely those of Dale Hunt and do not reflect those of his colleagues or clients. They are intended for general informational purposes only, and do not constitute legal advice or a legal opinion.