Do You Have Freedom to Operate watermark watermark

Do You Have Freedom to Operate? @watermark © watermark Dr Tania Obranovich B. Sc. (Hons), Ph. D. , LL. B. , Dip IPP (IPTA) Special Counsel

What is Freedom to Operate? • The ability to proceed with research, development and/or commercial activity without infringing a third party’s valid IP rights • IP rights - Patents - Trademark - Designs - Plant Breeder’s Rights etc • Considered on a jurisdiction by jurisdiction basis

Third Party IP Rights vs Your IP Rights • Two separate and distinct sets of rights • FTO relates to your ability to use technology owned by a third party without infringing that third party’s IP rights to that technology • Securing and exercising your own IP rights does not provide a defence to infringement • Securing your own IP rights may create a FTO issue for a third party wanting to use your technology

What type of activity requires FTO? • • Research - however, consider research use and safe harbour/Bolar exemptions - existence and scope of exemption varies from jurisdiction to jurisdiction Commercial activity - beware limited licences granted with commercially available kits and reagents • Non-commercial activity (eg. pro bono/free services) • Filing and prosecuting a patent application which details/recommends using third party proprietary IP is not an infringement of that IP

Why is it necessary to ensure that you have FTO? • Need to know where your organisation stands - due diligence - risk management • Can impact on product development • Can impact on value of company/technology • Capital raising/IPO implications • Forewarned is forearmed - assess risks - manage risks

FTO Searching • Entirely different to novelty searching in terms of its focus and execution • Can be time consuming and expensive • Need to balance complexity / expense against outcome sought • i. e. budget vs risk mitigation FTO can never be determined with absolute certainty. It is a risk management tool to provide the best estimate of FTO relative to the depth of analysis which is performed

FTO Searching • Determine if a third party has filed a patent claiming the technology you wish to use • Only patent literature relevant • Only the scope of what is claimed is relevant • Only granted claims can create a FTO issue • Look at expiry date of patent

FTO Searching • Beware the complexity of considering a published patent application which is still under prosecution and therefore not yet granted since claim scope not finalised • Patent applications are typically drafted with broader claims than are ultimately granted • Novelty and inventive step are still under consideration • Once initial subject matter search completed analysed, perform patent family and status search of relevant patent documents

FTO Searching – additional issues to consider • 18 month non-publication blackout • Timing of Search - ideally early - expensive therefore early not always realistic - technology focus and/or markets of interest can change therefore a later search can be more relevant - calculated infringement risk during research stage

Once you have the FTO Report • Identify the nature and scope of the risks • Evaluate options and address risks • Issues such as strong vs weak patent or application vs granted patent status are very significant when deciding strategy going forward

Once you have the FTO Report • Strategies for obtaining FTO § § § § § design around to avoid infringement wait for patent to expire watch a patent application, file 3 rd party observations, oppose grant carry out activity in another, patent free territory argue non-infringement invalidate patent or render patent unenforceable in court i. e. “clear the way” negotiate a licence/assignment continue your activities and wait to receive a Letter of Demand (risky) cross-licencing opportunity

Miscellaneous FTO Points • Put others on notice of existence of your IP • Umbrella patents vs selection patents: cross-licencing • Patent portfolio structuring to discourage third party validity challenges and encourage licencing

Thank you Contact: Dr Tania Obranovich 613 98191664 t. obranovich@watermark. com. au www. watermark. com. au © watermark Do you have freedom to operate? (May 2016)