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About
Editor-in-Chief, Anatole Krattiger
Editorial Board
Concept Foundation
PIPRA
Fiocruz, Brazil
bioDevelopments- Institute
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Why This Topic Is Important
Freedom to operate (FTO) is the absence of any third party IP claims against ones commercial
operations. The more that public institutions use IP protection to transfer and develop new technology,
the more likely it is that third parties will have competing IP. However, this section explains that the efforts
to analyze and deal with competing IP should be commensurate with the amount of value put at risk.
Therefore, the burden to analyze and manage FTO is usually on the licensee. However, there can be
times when the public sector institution needs to be aware of its FTO or that of its partners.
Key Implications and Best Practices: Section 14
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.
- As public sector and nonprofit institutions increasingly move in the direction of product development, whether they do so independently or in partnership with other organizations, freedom to operate (FTO) will contribute increasingly to sound IP management strategy. As such, an FTO analysis is a management tool for assessing and managing certain types of risks.
- Some public sector institutions need not be concerned with FTO. For example, a typical university that mainly licenses patents or occasionally forms a spinout company can leave FTO concerns to others.
- Public sector research institutions should not necessarily assume that they are exempt from IP infringement liability due to their nonprofit (or governmental or parastatal) status. Although government institutions per se may be shielded from liabilities, FTO rarely ends with these institutions. Eventually other institutions taking on the products may need to be able to deal with FTO (such as commodity exporters). Hence FTO analysis is just one tool for making the technology transfer process more effective, and FTO is particularly warranted as an institution expands its mission into product development and distribution.
- FTO opinions do not eliminate risks related to third-party intellectual property. Instead, they allow for the development of sound risk-management strategies (which may be of a legal/licensing nature, involve business approaches, or be research based). Implementing the strategy requires clear pathways of communication and dialogue between science managers, product development, licensing personnel, and senior management.
- Obtaining FTO includes the review of the patent landscape (FTO analysis) and may include a formal legal FTO opinion. But, in essence, obtaining FTO is a process to be “managed” as an interdisciplinary endeavor and considered within the context of the institution’s overall mission (as such it involves senior management), business development, research and technology transfer, and tolerance for risk.
- Institutional policies that support capacity building in IP management should include the training of senior management in FTO strategies, including institutional boards. A dialogue between boards (responsible for policy) and senior management (more concerned with implementation) is essential, since FTO analysis is a risk-management tool.
- Commitment to the principles of FTO will demonstrate that a given institution is committed to respecting, and of building upon, the intellectual property of others.
- The more downstream a research-based institution operates, the more important FTO considerations become. A system should be in place to help decide whether, when, and how a public sector institution should conduct an in-house FTO analysis or commission a legal FTO opinion.
 Abstract
Freedom to Operate, Public Sector Research, and Product-Development Partnerships: Strategies and Risk-Management Options
by Anatole Krattiger
Abstract:
Freedom to operate (FTO) is—first and foremost—a strategic management tool. It is the synthesis of scientific, legal, and business expertise coupled with strategic planning. Strictly speaking, however, FTO is a legal concept. It is a legal opinion by patent counsel on whether the making, using, selling, or importing of a specified product, in a given geographic market, at a given time, is free from the potential infringement of third-party intellectual property (IP) or tangible property rights. As such, it is one type of input among many that managers use to make strategic risk-management decisions in relation to R&D and product launch. For academic and public research institutions, bringing products to market is often not a main goal. However, as a portion of their research moves downstream into product development, FTO becomes—or should become—an integral component of their endeavors. This is particularly relevant for product-development partnerships (PDPs) in health and for various public–private partnerships (PPPs) in agriculture, as well as for the Consultative Group on International Agricultural Research (CGIAR) and national agricultural research systems (NARS), all of which are concerned about global access.
Research exemptions exist in many jurisdictions, so most university research does not generally need to be concerned with FTO unless product development takes place. But PDPs, such as the Malaria Vaccine Initiative or the TB Alliance, are in a different category since their purpose is directly related to the distribution of products in the developing world. This chapter discusses three main categories of options that are available to reduce risk and obtain a manageable level of FTO. In practice, a combination of two or more options will often be pursued concurrently. These are:
- Legal/IP management strategies: license-in, cross-license, oppose third-party patents, seek nonassert covenant, seek compulsory license
- R&D strategies: modify product, or invent around
- Business strategies: merge and/or acquire, wait and see, abandon project
Each option presents its own risks and opportunities. Any action—including the decision not to take action—carries risk. Delaying the licensing of third-party intellectual property, for example, could lead eventually to expensive licensing terms, the inability to obtain a license, or the possibility of being sued for patent infringement. But for some organizations, such as those developing genetically modified crops, the reverse may be the case. For the public sector, the challenge will be to balance the various types of risks that each option presents.
The chapter concludes by urging the public sector to judiciously evaluate whether and when FTO concerns should be considered, and to build in-house capacity to conduct patent searches and cursory FTO analysis (as opposed to legal opinions). This will lead to benefits like better competitive intelligence and culture change in public sector organizations engaged in product development. An FTO strategy, therefore, is a plan that begins with research and evolves into an attitude throughout a product’s R&D and commercialization/distribution cycle.
Abstract
Managing Liability Associated with Genetically Modified Crops
by Richard Y. Boadi
Abstract:
Recent years have seen intense global debate about whether or not agricultural biotechnology—particularly genetically modified organisms (GMOs) and genetically modified crops (GM crops)—should be covered by a specially designed liability regime. This chapter examines common and statutory law theories of liability, various attempts at the national and international levels to design liability regimes for GMOs, and liability risk-mitigation measures.
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