Home > Topics > Freedom to Operate and Risk Management > Freedom to Operate: The Preparations > Editor's Summary, Implications and Best Practices

Modern products (or services), especially those derived from biotechnology, be they in health or agriculture, are technically increasingly complex. A cursory glance at a “materials and methods” section of any paper published in a scientific or medical journal will reveal a plethora of components and processes. This technical complexity mirrors the corresponding IP complexity. Each component, process, and/or combination of these that went into the product might have attached to it either IP rights (for example, patents) or tangible property (TP) rights (for example, material transfer agreements) that belong to other parties. Unless licenses have been obtained for each component, a given ag-biotech or pharma product/process will not have freedom to operate (FTO) status. Moving ahead with R&D and commercialization could constitute infringement of another’s IP and/or TP rights.

The potential risk of infringing third-party IP and TP rights, however, can be systematically managed and significantly reduced. This is the reason to conduct an FTO: guiding management to know what IP might need to be licensed and be able to determine the various risks. FTO is the ability to proceed with the research, development, and/or commercial production of a new product or process with a minimal risk of infringing the IP or TP rights of third parties. The procedure used to assess whether or not a given product or process has FTO is called an FTO analysis.

An FTO analysis is conducted by a group of experts, many of whom are not lawyers. By meticulously dissecting the product or process into its fundamental components, processes, and combinations thereof, and then scrutinizing each for any attached IP or TP rights, an FTO team assesses whether or not third parties might possess potentially relevant proprietary rights. This is called product deconstruction. For example, an ag-biotech product might be developed using plant transformation methods, plasmid constructs, gene promoter elements and tissue culture techniques; each of these might have IP and/or TP rights (often both) of third parties attached. Hence, by focusing on such questions, an FTO analysis provides valuable guidance as a tool for assessing, understanding and managing infringement risk.

Early preparations for an FTO analysis are absolutely crucial, in that they will guide all that follows and hence determine the quality and precision of the final work product. Preparations include:

• assembling the FTO team
• analyzing and dissecting the technology
• assessing plant pedigrees
• recognizing pharmaceutical technical considerations
• interviewing researchers
• locating notebooks and other records
• finding material transfer agreements, bag-tags, bags of seed and any unknown property trail
• formulating a series of FTO questions
• selecting appropriate scientific and patent databases
• identifying special resources for pharmaceutical patents
• remaining aware of the 18 month patent application “zone of silence” and
• maintaining due diligence throughout the FTO analysis.

This type of thorough preparation will lay a solid foundation, supporting a credible and reliable FTO analysis.

It is also important to routinely review and update the FTO analysis. IP and TP rights are territorial and also temporary. Patents issue and expire; trade secrets and related know-how enter the public domain. Hence, the FTO analysis is only a snapshot, for a specific product in a given territory (jurisdiction or country), at a certain point in time.

As developing countries continue to develop their R&D capabilities in biotechnology, it will be essential to develop a coherent and comprehensive strategy to manage IP and TP rights, so as to protect one’s own rights and to also respect the rights of third parties. Capacity in FTO analysis is one of the important means for implementing best practices in IP and TP rights management, and once established will facilitate the long-term missions of research institutions and the developing countries that they serve.

Key Implications and Best Practices

Given that IP management is heavily context specific, these Key Implications and Best Practices are intended as starting points to be adapted to specific needs and circumstances.

For Government Policymakers

• National research-based institutions engaged in the development of products or services will increasingly need to master freedom to operate (FTO). This will increase their efficiency in handing over products for further development and/or commercialization, even if the goal is to address the needs of the poor. Demonstrating commitment to managing and resolving issues related to FTO will also help to increase opportunities for international collaboration, and may be a requirement for public-private partnerships.
• Managing FTO requires a strategic mindset and good IP management practices within organizations. National governments have much responsibility in encouraging the establishment of best practices in IP management through their allocation of funding and national policies.

For Senior Management (university president, R&D manager, etc)

• Managing freedom to operate (FTO) requires a strategic mindset and good IP management practices within organizations. Senior management has the responsibility in setting the overall strategy for FTO and in building an FTO “culture” within an organization. This includes the promulgation of best practices in IP management through the allocation of resources and institutional IP policies.
• IP management is not inconsistent with the mission of the university or research institution. FTO represents a foundation for sound IP management when a given project’s goal is the development of products or services.
• While most view IP rights as only a way to exclude others from using products and processes, IP rights, if managed properly, will work to include. Hence, IP rights management can serve the mission of the university by facilitating technology development, transfer and dissemination to those who most need such advancements.
• Commitment to the principles of FTO will demonstrate that the university or institution both understands and also is committed to managing intellectual property.
• FTO awareness and implementation will show others, both at home and abroad, that the university or institution manages intellectual property so as to advance its mission of serving the public good. FTO is thus equally relevant for public good projects as it is for private goods.

For Scientists

• Your collaboration with those who conduct freedom to operate (FTO) studies is essential. You are the most important person to explain what different “things” mean and help others make sense of patent claims.
• Your inputs in FTO reviews is also important because you best know your area of research and can provide important leads to other scientific groups, publications, synonyms and so forth.
• FTO is a foundation of IP management, but it is also something more. It is a way to demonstrate to your colleagues, and beyond, that you respect their property rights, and understand that when properly managed, IP leads to the greater sharing of technology and related information. In a very real sense, it is a way of building trust.
• There are lots of parallels between access to intellectual property and access to information. Sharing of proprietary information is part of IP management. Hence access to intellectual property, such as patents, though licenses, concurrently allows access to know-how and show-how.
• Be aware of both intellectual and tangible property that is coming into, going out of, and being generated by your program. As a member of an FTO team, you will need to provide this type of basic information for the FTO analysis. Good record keeping is an essential tool in this area.

For Technology Transfer Officers

• Capacity in freedom to operate (FTO) is a key component of an integrated institutional IP management strategy. This is an important responsibility of a technology transfer office especially if your scientists are in the business of developing products.
• Your role, and that of attorneys who may produce FTO opinions, is advisory to senior management. It is their purview, based on your inputs, to judge the risks and how to deal with them.
• The organization of information necessary for conducting FTO analyses goes beyond the technology transfer office. Your role is important in instituting an IP management “culture” throughout the organization.
• Much for an FTO can be done in house, working with scientists, technology transfer professionals, business people, and others. The role of patent counsel is important for formal legal FTO opinions but this may not often be required in public research settings.