What is Freedom To Operate (and Why Does it Matter to Med Device Startups)?
While the core steps of a startup’s journey often translate across industries, medical device companies are subject to more nuanced steps in their path to success. Intellectual property protection is one such step that requires proper attention and timing, typically beginning with a Freedom to Operate (FTO) search.
What is Freedom To Operate?
Freedom to operate (FTO) is the ability of a company to produce and distribute products without liabilities to third parties based on IP. In other words, FTO ensures that a business’s products and services do not infringe on the patent rights of another person or company.
Why is FTO important to med device companies?
Consideration of freedom to operate is paramount to the early planning of medical device startups seeking commercialization. Without freedom to operate, a startup may be blocked or otherwise restricted in its commercial opportunities by a patent-holding competitor.
In the medical device industry, research and development costs are exponentially higher than in other industries. Global competition is also incredibly fierce. For these reasons, companies are frequently advised to ascertain their potential IP and financial risks as early as possible. Potential investors will often require a FTO analysis and opinion as part of their due diligence requests before investment. This way, their risk is minimized before encountering potential roadblocks in the quest for commercialization.
What is a FTO search, analysis and opinion?
A freedom to operate search generally involves searching for issued or pending patents, industry-specific publications, and other relevant published materials which may reveal potential patent rights of others. An experienced IP professional will ensure that the analysis covers key competitors within the technical field to minimize the risk of missing any crucial third-party IP.
After analyzing the results, an IP attorney can provide a legal opinion as to whether any rights uncovered pose a potential risk of infringement. Because the level of scrutiny of the IP is more extensive than general patentability searches, the FTO opinion can minimize risk for all parties involved.
Intellectual property firms with experience in medical device IP are best equipped to conduct FTO analyses and provide FTO opinions because of their familiarity with the IP and industry landscapes. If the FTO opinion suggests that there is freedom to operate, this can minimize the risk of other patents blocking access to the market. In this case, startup founders will often pursue their development plans and protect their innovation with patenting.
If the FTO opinion suggests that there is limited freedom to operate, founders may consider patent purchase, licensing, or cross-licensing as alternatives. In any case, freedom to operate provides the necessary clarity early-stage medical device startups need to plan properly, safeguard valuable business IP, and preserve other critical resources like time and money.
Cognition IP can help with Medical Device IP Strategy and Freedom To Operate.