Freedom to Operate: What Founders Need to Know

You’ve built a product. Before you launch, there’s a critical question: Can you actually sell it without getting sued for patent infringement?

This is called “freedom to operate” (FTO) — and it’s different from patentability.

FTO vs. Patentability: The Difference

Patentability: Can I get a patent on my invention? Freedom to operate: Can I sell my product without infringing others’ patents?

These are independent questions. You can have:

Patentable invention + FTO ✓ (best case)
Patentable invention + NO FTO (you can patent it but can’t sell it)
Not patentable + FTO ✓ (you can sell it but can’t protect it)
Not patentable + NO FTO (worst case)

Why FTO Matters

The nightmare scenario: You spend $500K developing a product, launch successfully, then receive a cease-and-desist letter from a patent holder. Options:

Stop selling (lose your investment)
Pay licensing fees (eat into margins)
Fight in court ($500K-$3M in legal fees)
Redesign the product (more development cost)

FTO analysis identifies this risk before you invest heavily.

What FTO Analysis Involves

Step 1: Define What You’re Actually Doing

Document your product/process in detail:

Every component
Every method
Every feature
How they work together

The more specific, the better the analysis.

Step 2: Search for Relevant Patents

Search for patents that might cover:

Your exact product
Individual components
Methods you use
Combinations of features

This is broader than a patentability search — you’re looking for anything you might infringe, not just things similar to your novel aspects.

Step 3: Analyze the Claims

For each potentially relevant patent:

Read the independent claims
Check if you practice ALL elements of any claim
Identify differences between your product and the claims

Remember: You only infringe if you do everything in a claim. Missing one element means no infringement of that claim.

Step 4: Check Patent Status

Not all patents are enforceable:

Expired? No issue
Abandoned? No issue
Maintenance fees unpaid? Might have lapsed
Being challenged? Might be invalidated

Step 5: Assess Risk Level

For each remaining patent:

How close is the match?
How strong is the patent?
Who owns it? (Likely to sue?)
What are the damages exposure?

FTO Risk Levels

Green (Clear): No relevant active patents found, or identified patents clearly don’t cover your product.

Yellow (Caution): Patents exist that might be relevant. Differences exist but aren’t certain. Consider:

Legal opinion
Design-around options
Licensing inquiry

Red (Risk): Active patents appear to directly cover your product. You need:

Patent attorney analysis
Design-around if possible
Licensing negotiation
Decision: proceed or pivot

Common FTO Mistakes

Mistake 1: Assuming “No One Has Sued Us Yet” = Clear

Just because you haven’t received a letter doesn’t mean you’re clear. Patent holders might:

Not know about you yet
Be waiting until you’re bigger (more damages)
Be preparing litigation

Mistake 2: Only Searching US Patents

If you sell internationally, you need FTO in each market. A US FTO doesn’t protect you in Europe.

Mistake 3: Confusing Design Patents and Utility Patents

Design patents protect appearance. Utility patents protect function. You need to check both.

Mistake 4: Thinking Your Own Patent Gives You FTO

Having a patent on your invention doesn’t mean you can practice it. Someone else’s broader patent might still cover it.

Example: You patent an improved wheel. But someone else has a patent on all wheels. Your patent doesn’t give you the right to make wheels.

Mistake 5: DIY on High-Stakes Decisions

For serious commercial products, get professional FTO analysis. The cost ($2,000-$15,000) is cheap compared to litigation ($500K+).

When to Do FTO Analysis

Before major investment:

Before significant R&D spending
Before manufacturing setup
Before marketing launch

At key milestones:

Before fundraising (investors may require it)
Before acquisition (acquirers will do it)
Before scaling

Ongoing:

New patents issue constantly
Review periodically as you grow

FTO for Different Stages

Early Stage (Exploring)

DIY search using Google Patents
Cost: $0-$200
Goal: Identify obvious blockers
Acceptable risk: Higher

Pre-Launch

Professional FTO search
Cost: $2,000-$10,000
Goal: Comprehensive clearance
Acceptable risk: Lower

Growth/Fundraising

Full legal FTO opinion
Cost: $10,000-$30,000
Goal: Defensible analysis
Acceptable risk: Minimal

What If You Find Blocking Patents?

Option 1: Design Around Modify your product to avoid the patent claims. This requires careful analysis of exactly what the claims cover.

Option 2: License Contact the patent holder and negotiate a license. Costs vary widely — could be reasonable or could be prohibitive.

Option 3: Challenge the Patent If the patent is weak, you might challenge its validity. Options:

Inter partes review (IPR) at USPTO
Litigation Expensive, but sometimes necessary.

Option 4: Acquire If the patent holder is a small company, acquiring them might be cheaper than licensing or litigation.

Option 5: Proceed and Accept Risk Sometimes the risk is low enough (small patent holder, weak patent, low damages exposure) that you proceed anyway. Risky but sometimes rational.

Option 6: Pivot If the blocking patents are strong and unavoidable, sometimes the right answer is to change direction.

FTO Documentation

Whatever you find, document it:

Search terms used
Patents reviewed
Analysis of each relevant patent
Conclusions reached
Date of analysis

This documentation matters if you’re ever accused of infringement — it can show you did due diligence.

Summary

Freedom to operate analysis answers: “Can I sell this without getting sued?”

Key points:

FTO is different from patentability
Do it before major investment
Scale the analysis to your risk level
Document everything
Get professional help for high-stakes decisions

Don’t launch your product and then discover you can’t legally sell it.

Need a freedom-to-operate assessment? Start with a search →