Intellectual Property (IP) must be a core element of deep tech startups. Entering the market without a solid patent portfolio creates critical risks. On the one hand, the core innovation could be easily copied by competitors; on the other hand, there is a risk of infringing existing patents which could lead to a legal dispute with hefty costs.
Consequently, before entering the market, innovative companies must ensure that their products (including the commercial production, marketing and use of them) respect the IP rights of other companies, that is, they must secure their Freedom To Operate (FTO).
Why you need FTOs
FTO analysis give companies the freedom they need to test, commercialize and sell a product or service in a particular area. If companies do not conduct a freedom to operate search, they may infringe the IP rights of another entity, which means expensive legal battles, bad reputation and, possibly, the loss of a potential market. However, ensuring FTO will facilitate legal compliance, improve funding opportunities and drive commercial success.
Who usually prepares FTOs?
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Usually, intellectual property attorneys are the ones in charge of preparing FTOs. They do a thorough search (looking for issued patents, applications covering a similar technology and an assessment of patent infringement litigation) and they analyze the results to see if FTO is feasible or not. A more comprehensive FTO could also involve the analysis of relevant market, quality or safety regulations as well as standards. Apart from IP attorneys, there are also specialized IP agencies that also provide services such as strategic support, IP watch and IP consultancy.
How to prepare an FTO for the EIC
Since 2021, the EIC Accelerator, requests applicants to upload a FTO analysis together with the Step 2 application. Although it can be avoided in very specific cases (eg. software), most evaluators welcome the FTO and it is indispensable in industries such as engineering, biotech or materials among others.
These are the elements that the EIC is typically looking for:
1) A list of current patents (incl. pending) and a brief summary of each family.
2) A patent search with relevant keywords that covers the use cases and markets relevant to the project.
3) A summary of the key patents identified that could have any impact on the project and commercialisation and a short explanation of why they are not of concern (or if they are concerning, how you can mitigate the issue).
4) A concluding summary which clearly states that there will be no issues with the freedom to operate.
In addition, we recommend EIC applicants to describe the IP strategy followed from a more general perspective, which includes all the measures taken to protect the innovation and ensure freedom to operate. These can include not only proprietary patents but also copyrights, trademarks, and design rights as well as licensees over third-party IP.