Freedom to Operate Reports (FTO)
In a context where Intellectual Property rights are often the most valuable corporate assets, and mergers and acquisitions of legal entities are increasingly technology driven, IP Due Diligence and correct evaluation of the IP assets is a delicate process with a high impact on the transaction.
Freedom to Operate (FTO)
Due Diligence often needs a Freedom to Operate (FTO) analysis, to identify potential barriers or limitations to the manufacture and commercialization of the technology to be acquired, by identifying relevant third party IP rights and assessing the possibility of infringing these IP rights by the prototype product or proposed process.
FTO reports begin by searching patent literature (published patent applications and granted patents, plant varieties, utility models and design patents) and will lead to a legal opinion as to whether a prototype product or process may infringe earlier patents owned by third parties.
Apart from the strictly technical considerations on the scope of protection, key elements to be taken into account in conducting a FTO analysis include legal issues such as the legal status of the IP rights found, their territorial scope and duration.