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  • What is "freedom to operate" or "FTO".

    What is "freedom to operate" or "FTO".




    "Freedom to operate" as a concept can be defined as the ability to sell or commercialise a product or service in a specific field and time frame without infringing intellectual property rights owned by another entity. Prior to any key business decision, especially before a new product or technology enters a foreign market, a freedom to operate analysis[1] is essential. Thanks to the analysis of the 'freedom to operate' criterion, it can be determined whether similar or identical products, technologies or know-how are already present in a particular field and whether there is a risk of their infringement as intellectual property rights.

    A freedom to operate (FTO) analysis can be carried out at any point in the development of a new product or technology. When the idea for the new product is already clear to the inventor, it is worth checking the patent databases to see if they are trying to re-invent something that is already on the market, or if there is an expired patent that could be used to further develop the new invention. Therefore, if it is planned to enter a new market with a technology already developed, FTO can lead to significant cost savings by also avoiding the presumed litigation on the basis of a request to invalidate a patent or concerning patent infringement claims.

    From this perspective, ignoring the FTO analysis may be an unwise step for a variety of financial and legal reasons. One of the most interesting relatively recent examples in this regard is the case involving Mercedes' "Airscarf"[2] technology, used to warm drivers' necks with warm air exhausted from the headrest of convertible cars. On the subject - in 2016 Mercedes lost a lawsuit against German inventor Ludwig Schatzinger, who had patented similar technology ten years earlier. As a result of this patent lawsuit, Mercedes had to temporarily stop(from May 9 to December 25, 2016) selling all of the company's convertible cars equipped with this solution and pay compensation to the patent holder of a significant value of $280,000[3]. It was only due to the expiration of the patent(in December 2016), shortly after this lawsuit, that Mercedes was once again given the opportunity to reinstate the offering of this product for their convertibles, as it became public for use. This example shows that "patent wars" are not only fought between large corporate adversaries like Samsung or Apple, but also between "small" inventors and international companies, and it is never clear in advance how such a case will end.