The number of patent infringement suits being filed has been on the rise over the years. While it may not always be possible for companies to anticipate such lawsuits well in advance, some of suits may have been anticipated, and some of the anticipated ones could have been avoided by taking precautionary measures. A Freedom to Operate (FTO) study is one such precautionary measure to anticipate patent infringement and provide a chance to avoid infringement. A comprehensive FTO study takes several things into consideration, such as purpose of the study, jurisdiction, R&D stage and nature of analysis desired, among others.
Purposes of conducting an FTO
An FTO study may be conducted for one or more reasons, some of which are discussed below.
Assessing infringement risks
One of the most obvious and primary reasons of an FTO study would be to identify third party patents that might be infringed incase a technology is commercialized. Hence, an FTO study can provide an insight into patent infringement risks associated with a technology.
Uncover licensing requirements and opportunities
An FTO study may uncover essential patents for which licenses may have to be acquired to be able to commercialize the technology without being liable for infringement. While some of these patents might be available for licensing at reasonable terms, others might be held by direct competitors and may not be available for licensing.
Patents that are essential for commercializing a technology, but held by competitors may become a road blocks in successfully commercializing the technology. Even in such scenarios, an FTO study may uncover essential patents that may be relevant to both the company and its competitors, but held by a party who may be ready to sell the patent. Acquisition of such patents may enable the company to bargain with competitors and engage in cross-licensing arrangements, thereby reducing the risk of patent infringement.
Provide direction to R&D activities
An FTO study may also uncover patents that may not be essential for commercializing a technology, but may be infringed if technology is not tweaked to work around such patents. Identification of such patents may enable R&D teams to design products/process in such a way that the patents are not infringed. Hence, the study not only enables anticipation of infringement, but provides a chance to avoid infringement.
Right time to initiate an FTO study
The right time to conduct an FTO study may vary based on various factors. In case a study is conducted at a very early stage, such as during an early technology conceptualization phase, the final technology may evolve in unexpected ways and much of the study may turn out to be inapplicable. Moreover, a very early study may not be able to determine the certainty of the risk, as the market needs and the patent landscape may change. On the other hand, waiting too long to conduct the study is also a problem, as it usually means that the project is too far along to change. Hence, a moderately early research is preferred or recommended over a late research to avoid unnecessary investment in research.
Prerequisites of an FTO study
An effective FTO study can be conducted by collecting certain information at the initiation of the study. The quality of the information gathered may play a pivotal role in making the study effective. Such information may be provided by various stakeholders within the company, such as scientists, engineers, in-house IP counsel and business leaders. A short list of information that may be collected at the initiation of the FTO study, and the stakeholders who may furnish such information is provided below.
A detailed description of the technology, including a list of features requiring clearance
Scientists, engineers, in-house IP counsel
List of countries in which the technology has to be commercialized
A list of known competitors, patent holders, and/or patents that may be relevant to the technology
Business leaders and in-house IP counsel
Scope of the search
Freedom to operate can never be determined with absolute certainty. This is because the patent landscape is dynamic, new patents issue, old patents expire, and some patents are abandoned. Therefore, freedom to operate does not imply absolute freedom from the risk of infringing someone else’s intellectual property. That is why there is a need to adopt certain practices while conducting a search, thereby, at least minimizing the risks of infringement. Some of the practices are discussed below.
An FTO study should definitely concentrate of identifying granted patents that may be relevant to the technology. Granted patents may be of four types, which are listed below with comments on how to deal with them.
In force, with the renewal fee having paid
Caution should be exercised while commercializing technology claimed by such patents.
Lapsed due to non-payment of renewal fees, with the option of being reinstated
Should be tracked till the time reinstatement date is lapsed. Different countries may have different provisions for reinstating a lapsed patent.
If reinstated, then caution should be exercised while commercializing technology claimed by such patents.
Generally such patents are good targets for acquisition, since the status of such patents indicates that the patent owner may not consider the patent to be worthy enough to be maintained.
Lapsed due to non-payment of renewal fees, without the option of being reinstated
One may explore the option of using the claimed technology without being liable for infringement of the patent in consideration. However, it may be noted that, there could be other patents which are in-force, which may be infringed upon by using the technology of the patent in consideration.
Expired after completing their full term
The technology disclosed in the patent may be safe to use, unlike the lapsed patent discussed immediately above.
An FTO study should also consider identifying patent application. Patent applications may be of three types, viz., patent applications awaiting examination, patent applications undergoing prosecution and abandoned patent applications. The first two types of patent applications may eventually issue and can have an impact on the FTO of the technology. However, in case of abandoned patent applications, one has to reconfirm whether any pending family application are present or not. In case pending family applications are present, then the disclosure of such applications will be relevant to the FTO study.
An FTO study should also consider identifying PCT applications, which are designating the countries in which the technology is proposed to be commercialized. In any case, most PCT applications designate all the PCT contracting states. Hence, from a practical perspective, all PCT applications that still have the option of entering national phase may be consider in the study.
Non patent literature
Non-Patent Literature (NPL) is usually not a primary sources of date in an FTO study. However, NPL may provide one with knowledge and means of identifying potential competitors in the market. Further, NPL may be helpful while contemplating possible workarounds.
Analysis in an FTO study
After having shortlisted patents and applications by conducting a search, the next step of the study may be analysis of the identified references. Various portions of a patent document and documents associated with the patent/applications may be relevant from an FTO perspective, some of which are discussed below.
The claims, especially the independent claims, of the patents have to be analyzed in detail. The analysis may try to ascertain whether all the limitations of the claims are present in the technology. It may be noted that independent claims of pending patent applications may be modified before a patent is issued. Generally, one or more limitations of dependent claims may be introduced into the independent claims to facilitate patent grant.
The prosecution history of patents should also be considered during analysis. Claims are given the broadest reasonable interpretation in an infringement proceeding. Hence, considering the prosecution history in an FTO study may enable assessment of the scope of the claims and the likelihood of infringing the claims.
Apart from considering the claims, the description of the patent application may be considered to anticipate claims that may be presented in future. It may be noted that, granted patents or abandoned patent applications, which have pending family patent applications may present claims, which are enabled by the disclosure. Hence, in cases where a patent family has at least one pending patent application, the disclosure as a whole (not just the claims) may be of relevance in an FTO study.
FTO studies are among important tasks involved in defining IP strategies. An effective FTO study involves gathering relevant information at initiation, considering the right data for search, using comprehensive search strategies and holistic review of relevant references. Although an FTO study cannot guarantee an absolutely risk free landscape, it does mitigate risk to a substantial extent by showcasing opportunities to acquire patents, cross license, work around and invalidate patents.
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Patent invalidation/validation searches are performed to assess the validity of a granted patent. In general, an invalidation search is sought by companies sued for infringing a granted patent claim(s), and a validation search is sought by an entity/individual before suing an infringer to assess the patent’s validity. The procedure followed for preforming both these searches is identical to a large extent. However, the terminology and preferences may vary depending whether the search is sought by a patent holder or an alleged infringer. Additionally, invalidation/validation searches may also be considered before seeking license for a patent, and in evaluating the strength and value of patent portfolio during mergers and acquisitions.
Establishing priority date:
Before performing an invalidation search, one has to first establish the priority date of the claims in the patent which needs to be invalidated. In general, any disclosure that is available to the public before the date of filing of the patent to be invalidated is considered prior art. Also, even if a patent application is published after the filing date of the patent to be invalidated, but the published patent applications filing date is before the filing date of the patent in question, then the published patent application is considered to be a prior art.
That being said, there will be scenarios where the patent to be invalidated is a continuation patent or a continuation-in-part patent (referred to as patent of addition in some countries), which can claim priority from one or more patent applications. In such scenarios, it may be difficult to identify the exact priority date since the patent is claiming priority from multiple applications. A searcher has to analyze the claims of the patent to be invalidated to determine the first patent application in the entire family, which discloses all the limitations in the claims (at least the independent claim) of the patent to be invalidated. In most of the cases, majority of the features may be disclosed in the previously filed patent applications, however there may be features which are be disclosed only in the patent to be invalidated. In case such features/limitations are part of the claims of the patent in question, then it can be argued that the priority date for such claims should be the filing date of the patent to be invalidated.
In case a searcher faces any difficulty in identifying the priority date, it may be better to discuss the same with the attorney and the client. However, as a rule of thumb, it’s always advisable to consider the filing date of the patent in performing an invalidation search, as an attorney can take the final decision and filter the references at a later stage, if required.
Additionally, in case a reference found to invalidate the patent is a PCT (Patent Co-operation Treaty) application or a national phase application claiming priority from different applications, a searcher should keep in mind that the effective date calculation for the reference may vary based on the jurisdiction of the patent to be invalidated. For example, in certain scenarios, as per US laws, a U.S. patent application publication of a National Stage application and a WIPO (World Intellectual Property Organization) publication of an international application are considered to be prior art as of the international filing date only if the international application was filed on or after November 29, 2000 designating the United States and was published in English.
Sources and strategies:
Once the priority date is established for the patent to be invalidated, the searchers next goal is to find references (non-patent literature or patent literature) which are available before the established priority date and disclose the claimed limitations of the patent in question. Essentially, the main objective will be to find a single reference disclosing all the claimed limitations; however it may not always be possible.
A searcher in analyzing the claimed features must adopt broadest reasonable interpretation, and may also refer to the file history of the patent in order to identify the novel aspects of the claims. Such analysis may also provide an insight into keywords, key strings, and classification used by the examiner, references cited by examiner and applicant, arguments of both parties, and reasons for allowing claims, among others. Further, the searcher may have a clear idea about the aspects of the claims which are critical, and can lay out strategies for finding references teaching such aspects. In some cases, analyzing the references cited by the examiner and there family members can be helpful, as it’s always possible that the examiner may have missed out on few key excerpts which may help in invalidating the patent.
Paid patent databases usually enable identification of superior results as compared to free databases for various reasons such as, wide data coverage, abundant options to query the database, flexible search interface, and various additional features like similar patent search and citation analysis, among others. However, one may also consider free databases as they may also provide good results at times. Searchers should also focus on Non-Patent Literature (NPL) as not all examiners rely on them during prosecution. NPL includes any public document or disclosure other than patent literature. One common problem faced with NPL’s is in determining the date they are made available to public, for example, disclosure on websites may sometime not include date on which it is made available. In such scenarios, searchers can utilize web archive resources like “waybackmachine.org” to check whether the disclosure is available before the established priority date.
Searcher should also keep in mind that every search is different and a single protocol for all searches does not exist. The keywords, key strings, classifications and search strategies used for a search should evolve with time based on the search results found.
To know more about general prior art search strategies click here
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A prior art search is conducted for several reasons. Some of the reasons may include assessment of novelty, invalidation of patents, competitor and technology monitoring, and patent landscape study among others. A prior art search may be carried by using a combination of various techniques. Typically, techniques for carrying out prior art search include key-words strings, patent classifications, inventor based searching, assignee based searching and citation based searching.
Among the techniques of searching, citation based searching is frequently ignored, although citation based searching can deliver extraordinary results.
A patent citation is an instance where a patent or an application mentions or includes a reference to an earlier patent or patent application. Its function is similar to an academic paper citation which cites an earlier published work. Patent citations may be added by the patent examiner as well as the applicants of the patent.
Generally, patent citations included by the examiner are for the purpose of restricting patent claims, while those included by the inventor/applicant are for demonstrating prior art related to the invention. In either case, prior art patent citations are used to assess patentability of an alleged invention.
A patent/application, which may be referred to as a root document, may primarily have two types of patent citations, viz., backward citations and forward citations. Backward citations of a root document are patents/applications that are referred by the root document. Forward citations of a root document are patent/application referring to the root document. Any of the backward and forward citations may be a self-citation. Self-citation is when the root document cites or be cited by a patent/application that mentions the same author or assignee as the root document.
Finding patent citations
Backward citations of a root document may be found in the root document itself under a heading of “References cited” or similar headings. Forward citations may be found in online patent databases. One should note that the list of forward citations, unlike backward citations, may grow over time. The European Patent Office database is a freely available resource where both forward and backward citations can be found. Most other free databases only make backward citations available. Most of the paid private patent databases make both the citations available, since these databases use INPADOC, which is a database created and maintained by the European Patent Office.
Reasons for using patent citation based search
There are several reasons why patent citation based searching technique has to be part of the overall prior art search strategy, and some of the reasons are discussed below.
Tapping into ready-to-use human curated relevant search results
Patent citations are a result of one or more (in case of forward citations) examiners' efforts to identify relevant prior art references while conducting examination. The examiner cites a prior art reference after having reviewed the reference in detail, and not just because the prior art reference has a few key words that appear to be relevant. Hence, human intelligence would have been applied in citing a reference as relevant. It would be wise to use the set of documents grouped together by way of citations in prior art searching. Once a patent/application has been identified as relevant, its citations may disclose aspects related to the root document, which may also be relevant to the prior art search.
Improving the ability to structure claims and description better
One of the key challenges in claims drafting is defining the spread of prior art. A set of citations, when considered together, can help in defining the spread of prior art teaching in the context of a proposed invention. Such a contextual understanding of prior art can help in defining the scope of the claims in a way that the claims are neither too broad, thereby resulting in the prior art rendering the claims un-patentable, nor too narrow, thereby failing to exploit the full potential of the invention.
Identify a technological trend
Patent citations are one of the best sources to track the flow of innovation in a particular field of technology. With the help of backward and forward citations, it is possible to map knowledge spill-overs from earlier inventors to later inventors. Additionally, citations help in recognizing trends in technology and innovation which may be useful in determining potential research fields. It is also possible to identify seminal patents by analysing patent citations, among other factors. A seminal patent covers an invention which is considered to be so important that it creates a technological shift in a particular field of technology. A patent having a relatively large number of forward citations when compared to other patents in its field may be a seminal patent.
Assessing patent’s commercial value
A variety of situations may require a market value to be estimated for patents. As an example, patent valuation may be required when a patent owner is looking for investors or manufacturers, in case of company takeovers, or during the buying/licensing of patents. In such situations, analysis of patent citations may help towards assessing commercial value of patents. It is generally accepted that a patent having numerous forward citations may turn out to be more valuable when compared to patents with fewer forward citations. This is because, having many forward citations means that the technology disclosed by the patent was used by many other inventors in subsequent developmental efforts, resulting in various new innovations that have their roots in this patent, thereby increasing the value of the patent.
Mitigating infringement risks
Freedom to operate studies are conducted to identify patents that might have the potential of being infringed by a product/process. In case patents that may adversely impact the freedom to operate are identified, then it would be wise to also consider citations of such patents in the freedom to operate study. Since citations mostly disclose information that may be closely related to the root patent, there is a likelihood that claims of such citations may also be relevant in assessing freedom to operate.
Effectiveness of prior art search has far reaching implications. Hence, attempts are made to make prior art search as robust as possible by using various search strategies. Among the search strategies, classification based searching and key-words strings based searching will in most scenarios be the primary search strategies. Once a bunch of relevant references are identified by using these primary strategies, citation based searching using the identified relevant references will exponentially improve the quality of the prior art search exercise. Hence, although citation based searching can most often be a secondary search strategy, its impact should not be neglected and citation based searching should always be part of prior art search exercise.
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