Freedom to Operate

Before a new product or service is developed or launched, it is important to search for possible foreign IP rights that could be infringed by the new product or service. The proprietor of an infringed patent, utility model, trademark or design patent can ask for damages and file for injunctive relief for stopping the distribution of a product or offering a service. If a court remits an injunctive relief all efforts for development and marketing may turn out to be an unprofitable investment.

A freedom to operate analysis may considerably reduce the risk of infringement of intellectual property rights of competitors when launching a product or service. In general, infringement proceedings involve much higher costs and can discourage clients and customers. It has to be noted that a granted patent only can be revoked by opposition proceedings (limited period), a cancelation request or nullity action. In particular, nullity actions may take a long time (depending on the jurisdiction) and involve high costs.

A freedom to operate analysis generally starts with a search for existing IP rights and applications that might be infringed by the developed product or service. It is also possible to search for older prior art (including non-patent literature) that could cause that a potential IP right is not valid. Such older prior art can be used in negotiations with a possible IP right holder, settlement out of court, opposition proceedings, cancelation request or nullity action.

Generally, the more efforts and costs are spent, the more accurate is a search. Nevertheless, there will always remain a risk of not revealing all relevant documents. Depending on the product and market, a compromise must be found between costs and remaining risk. One should also always bear in mind that it is impossible to access all documents worldwide, and that there are documents not yet published. In addition, it is difficult and cost-intensive to search for documents in other characters (e.g. Japanese, Chinese, Russian, …).