Pham Quoc Anh

FREEDOM TO OPERATE
Freedom to operate, also known as FTO or right to use, means you have the freedom to test,
market, or sell a product or service in a specific area. Sometimes, intellectual property rights only
count in a country or a region, and outside of them you have the FTO to do whatever you want. The
phrase is often used when determining if a specific action can take place without infringing on the
intellectual property rights of another(1). The term “freedom” in FTO does not imply an absolute
freedom or guarantee, but instead indicates a carefully executed analysis leading to a reasoned
opinion that one can legally proceed with research, development or sale, in a given jurisdiction at a
given point in time(2).
FTO analysis needs to be conducted to know if indivduals or companies have FTO for a
product or service in a specific area. FTO Analysis is about risk management: providing the maximum
amount of sound information and proficient analysis, such that informed decisions are made, and a
reasonable course of action taken based on a database searches(2). There are three steps in FTO
analysis: subject scope assessment, patent search and infringement analysis(3). There are several
benefits associated with FTO analysis. By performing FTO analysis before developing and launching a
new product or before acquiring a new company, your company can limit the risk of future litigation
and avoid unnecessary expense. FTO analysis done early in the cycle of product development affords
companies the opportunity either to modify the design and avoid infringement before reaching the
point of no return, or to take a license. As a side benefit, FTO studies can identify opportunities for
patenting or further development. Similarly, performing FTO analysis as part of due diligence may
allow you to steer clear of an opportunity fraught with the danger of litigation(4).
Based on the results of FTO analysis, FTO Opinion can indicate the likelihood that the product
or services infringes property rights of others(2). If you get an all-clear from your FTO analysis, you
should act fast and secure all the patents, trademarks, and other IP rights available. If you don't,
someone else might, which is why trade secrets are so risky(1). It is important to understand that FTO
analysis and opinion can never guarantee that your company will not be sued. The patents and
applications identified will depend on the quality of the search, and the degree of relevance of each
patent or application will be subject to interpretation. Some applications by others may be on file but
unpublished at the time of the search and therefore not considered as part of the study(4).

Reference:
(1) https://www.upcounsel.com/freedom-to-
operate#:~:text=Freedom%20to%20operate%2C%20also%20known%20as%20FTO%20or,have%20the
%20FTO%20to%20do%20whatever%20you%20want.
(2) https://www.wipo.int/edocs/mdocs/mdocs/en/wipo_ip_wk_ge_11/wipo_ip_wk_ge_11_ref_3_ko
walski.pdf
(3) https://www.iam-media.com/article/fto-assessments-what-rights-holders-need-
consider#:~:text=A%20standard%20FTO%20assessment%20comprises%20three%20main%20steps%3
A,3%20providing%20the%20infringement%20risk%20analysis%20with%20conclusions.
(4) https://www.finnegan.com/en/insights/articles/when-is-a-freedom-to-operate-opinion-cost-
effective.html#:~:text=FTO%20analysis%20can%20play%20a%20valuable,or%20absent%20and%20th
erefore%20present%20opportunities.&text=FTO%20analysis%20can%20play,and%20therefore%20pr
esent%20opportunities.&text=can%20play%20a%20valuable,or%20absent%20and%20therefore

ALL RESOURCES WERE VIEWED IN FEBRUARY 27, 2023