Third Party Intellectual Property

• Published date: 25 May 2021
• Subject Matter: Intellectual Property, Patent, Trademark
• Law Firm: J A Kemp LLP
• Author: Mr Patrick Campbell, Andrew Clark, Martin Jackson, Graham Lewis, Chris Milton, Mark Roberts, Sarah Roques, Amanda Simons and Ravi Srinivasan

When developing a new product, it is therefore important to check whether any third parties hold IP rights that could prevent you from carrying out your intended commercial activities and, where necessary, clear the way by ensuring that you will not infringe such IP rights. Checks for potentially relevant third party patent or design rights are generally referred to as "freedom to operate" (FTO) studies. Checks and analysis for prior trade mark rights involve a wholly different set of parameters and concerns, and are not the subject of this briefing note. They are however extremely important to carry out before a new product is launched. For further advice on trade mark clearance, please contact a member of the trade marks team.

Failure to perform adequate FTO studies can have serious consequences, primarily because it may mean that you become aware of relevant third party IP rights only at a late stage in the development of your product, and perhaps even after launch. This can make it difficult (or impossible) to clear the way in a cost effective manner. In a worst case scenario, if your product infringes IP rights held by a third party you may face costly and time-consuming legal action. This carries the following significant commercial risks:

• Uncertainty: as to whether you will be permitted to continue your commercial activities
• Reputational damage: if the third party can force you to cease supply to your customers
• Financial loss: if you are required to pay damages or an account of your profits to the third party
• These risks can be minimised by conducting appropriate FTO studies during your product development programme. The IP profession can advise on the extent of FTO searching that you may wish to undertake, carry out the searching and analysis for you and advise on options for dealing with any potentially relevant IP hurdles uncovered. These matters are discussed in more detail below.

Tips for FTO searching and analysis

Conducting a proper search and reviewing the results takes some time, so aim to start work as soon as possible after you have designed the relevant product and you are reasonably certain that you intend to commercialise it.

Remember that IP rights are territorial, and you should therefore define your search strategy with reference to the countries in which you plan to be commercially active. For example, if you are only planning to sell a product in the EU, there is no need to search for IP rights in the USA.

Remember also that...