Startups usually find out about the need for an FTO search in one of two ways: an investor requests it as part of due diligence, or a letter arrives from a competitor’s lawyer. The second option is far more expensive.
Consider a hardware startup that is eighteen months into its development, with only one week left before it launches. A letter arrives that refers to a single patent that no member of the team has ever looked at. At this point, the options are to carry out a redesign, to obtain a license at whichever price the patent owner sets, or to delay the launch while the funding timeline continues.
An FTO search is there to prevent such situations. It determines if it is possible to sell your product on the market without infringing on the patents of others. The founders hesitate to carry out an FTO search because they consider it to be time and money-consuming. But it is not if the right moment is chosen and the scope is set correctly.
In this article on FTO search for startups, we explain when to run one, what drives the cost, and practical ways to keep spending under control. We also share how the team at Ingenious e-Brain (IeB) can supports through the process.
What an FTO Search Checks?
A freedom to operate search looks for patents that are still in force and for pending applications that could be granted, which might cover what your product does. The analyst performing the search looks at the claims of existing patents that may affect the functionality of your invention one by one in different countries where you intend to sell your product or manufacture it. You get a filtered list of relevant patents with the names of the patent owners, expiry dates, and whether each patent is granted or not.
It is common for people to mix up an FTO search with a patentability search. The patentability search determines whether your idea is new enough to be patented. The FTO search checks whether you are allowed to sell it. You can hold a patent for your invention and still infringe someone else’s. Many founders think that if the first applies, then the second does too, and that is not the case.
An FTO search reduces risk but cannot remove it, since new patents publish every week. For the few patents that look serious, you will want an opinion from a patent attorney.
When a Startup Should Run an FTO Search?
Timing can affect costs more than anything else. A change that takes an afternoon’s work on paper can take months to make if the tooling has been ordered, certification is complete, or the software is rebuilt.
These are the moments to watch:
- Before the core design is frozen
- Before a funding round, because investors will ask
- Before entering a new country, since patents stop at borders
- Before a licensing deal or acquisition
- Straight away, if a competitor starts filing patents near your space or sends you a letter
It is not necessary to carry out a comprehensive search on the first day. The majority of the startups we work with start with a preliminary screening when the idea is formed, then carry out a more detailed search when the design is finalized and the target markets have been identified. This way early costs remain low while you still have something to present to investors.
What Drives the Cost of an FTO Search?
There is no fixed price for an FTO search, and anyone who quotes one before asking about your product is guessing. What you pay depends on a few things.
- How many features are searched.
- How many countries are covered.
- How crowded the technology is.
- How many patents need a close read.
- And whether you also want a legal opinion.
A single product in a quiet sector, checked in two countries, is a minor task. A device incorporating three technologies, sold in ten countries within an area where large companies file frequently, is a major one. Most of this difference is determined before the search begins, and haggling about the fee afterwards is of little use. It is important to decide on the scope properly.
How to Keep FTO Search Costs Under Control
A well-planned Freedom to Operate (FTO) search can help businesses manage costs without compromising the quality of the analysis. The following practices can make the process more efficient:
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Prioritize Revenue-Generating Features
Start with the part of the product that generates revenue. Although in theory any feature could infringe something, the main function and the aspects that customers pay for carry the greatest exposure. Check these first and leave the accessories for a later stage.
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Focus on Relevant Markets
Identify the countries where you would like to sell or manufacture your product and markets where major competitors are located. Search in jurisdictions that relate to your business and commercialization plans; do not waste time and resources searching in countries that are not commercially relevant in the foreseeable future.
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Screen Broadly Before Conducting Detailed Analysis
Start with a wide search for patents that might be relevant, and then filter the results according to technical relevance, claim scope and legal status. Instead of analyzing every loosely related document in depth, the in-depth analysis should focus on those patents that really pose a risk.
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Provide Clear Technical Information
Give the search team a quick tech brief, product diagrams and a list of key features. Clear documentation can help researchers to understand the product, define the scope of the search and identify relevant patents more efficiently. Unclear or incomplete information means extra searches and extra costs.
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Maintain and Update Previous FTO Reports
Organize former search reports, patent listings, claim analysis and supporting documentation. New patents are published and the status of patents changes. Periodic updates can identify new risks without repeating the entire initial search. How often the right update is needed depends on the product, industry and commercialization timeline.
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Separate Patent Searching from Legal Analysis
A patent search is performed to identify potentially relevant patents. A detailed claim analysis is then conducted to determine if those patents may cover the product or its features. Patents with material issues may require legal opinions, especially prior to commercialization or other major business decisions. Breaking out these stages helps focus specialist legal resource on the issues that matter most.
Ultimately controlling your FTO search costs is all about how you approach it. Having a clear scope, focussed jurisdictions, good screening processes and focussed legal analysis means that you’ll make the most of your budget and make commercial decisions based on the information you have.
Common FTO Search Mistakes Startups Make
The first mistake is mixing up patentability and FTO. The second is searching by keywords alone, since this method fails to identify patents that describe your idea in different words. A proper search also uses classification codes and looks at the claims rather than the titles.
Another mistake is to search only at home. A product may be allowed in India and blocked in Germany. Some teams also disregard pending applications since they have not yet been granted. However, if an application is granted by the time you launch, it is just as valid as any other.
How Ingenious e-Brain Helps Startups with FTO Searches
IeB is an IP research and consulting company, and FTO work for startups is a regular part of what we do. A founder rarely needs a hundred-page report. They need to know which patents could hurt the launch and what to do about each one.
We start with a scoping call, where you tell us about the features and functionality of your product, the markets where you plan to sell, and when you want to launch. From that, we decide what search needs to be delivered immediately and what can wait, so you do not waste resources on a clear country you do not plan to enter for two years. Our fees are flexible and can scale to fit your budget, but you only pay when you are happy with our results.
Then comes the search. Analysts with technical backgrounds build the strategy from keywords and classification codes, using AI along with human judgment, and run it across paid databases such as Derwent Innovation, PatSnap, and Questel Orbit. We also have native language capability in more than 25 countries, including China, Japan, and Korea, so filings in those languages are read properly and not skimmed through translation. Pending applications are included too, because a PCT filing can still enter the US later.
You get the results in Excel or Word, with a key feature matrix and a risk assessment sheet that highlights the patents worth worrying about. For each one, we will walk through your options: design around, license, fight the patent, or enter another territory first. We typically take four to six weeks for a search, and we can move faster when a funding round or launch date is close.
Get a Scoped FTO Plan. Before the Letter Arrives
Launch, funding round, or is a new country coming up? Send us a short note about your product and the markets you are looking at. We will come back with what to search first, what to hold back, and a realistic timeline. Write to contact@iebrain.com or fill out the form to discuss your requirements.
