Part 6: Common Freedom-to-Operate Mistakes (and How to Avoid Them)

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The Freedom to Operate (FTO) Deep Dive: Questions Your Company Should Be Asking

This is Part 6 of a six-part series on freedom-to-operate analysis.  The series walks through what an FTO is, why it matters, how it works, what to do with the results, how it changes for software, AI, and international products, and the most common ways it goes wrong.  See the full table of contents here. 

Part 6: Common Freedom-to-Operate Mistakes (and How to Avoid Them).

The substantive parts of an FTO (the search, the claim construction, the limitation-by-limitation analysis) are what most people think of when they think of FTO quality.  But a lot of FTOs go wrong in ways that have nothing to do with the substantive work.  The scope was defined too narrowly, the opinion was never refreshed, the wrong person wrote it, or the company managed it so loosely that privilege was waived.  This post covers these issues.

What Are the Most Common Ways FTOs Go Wrong?

The list below works as a quick audit of any FTO in your file, and most of these failure modes are easier to fix when you spot them yourself than when opposing counsel does.

Scope Drift.  The opinion was written about an earlier version of the product; the product has since changed, and nobody updated the opinion.  By the time someone notices, the opinion in the file no longer covers what’s actually being sold.  Material product changes (new features, redesigned components, new use cases) should trigger a refresh, not be silently absorbed under an old opinion.

Ignoring Continuations.  The original search caught issued patents but ignored pending continuations of those patents.  A competitor with a live continuation can draft new claims years after the original filing, informed by your product, and get the benefit of the original priority date.  An FTO that doesn’t track active continuations from relevant assignees has a known blind spot for exactly the patents most likely to be asserted against you.

Keyword-Only Searches.  Patents often use different terminology for the same technology, especially in fast-moving fields where the language has shifted since the patent was drafted.  A search that relies only on current keywords misses older patents using older language, and those older patents are exactly the ones that have had time to issue and become enforceable.  A robust search layers classification searches, citation chains, and assignee searches alongside keyword searches.

Conclusory Opinions.  A letter that says “we think you’re fine” without working through the limitations isn’t a real opinion, and it won’t help you in litigation.  The whole point of the opinion is the reasoning, not the conclusion.  An opinion that doesn’t show its work can’t support a willfulness defense, and worse, it can affirmatively damage one by suggesting the company didn’t take the analysis seriously.

Ignoring DoE/Estoppel.  A non-infringement conclusion that doesn’t address the doctrine of equivalents and prosecution history estoppel is incomplete.  DoE is what catches naive design-arounds; PHE is what makes thoughtful design-arounds work.  An opinion that only addresses literal infringement gives the reader half the picture and creates exposure on the half that’s missing.

Foreign Jurisdictions.  They should be either covered properly or excluded explicitly.  Quickly addressing them with a vague disclaimer doesn’t work.  An opinion that says “this analysis focuses on the U.S.,” but then discusses the product’s global sales without separating the two, creates ambiguity about what was actually cleared.  Either commit to the analysis (and pay for the multi-jurisdictional work) or write the scope tightly enough that the limit is unmistakable.

Ignoring Indirect Infringement.  Especially for platforms, components, and dev tools, induced and contributory infringement are real exposures even when the product itself doesn’t directly infringe.  An FTO that only addresses direct infringement leaves the most relevant question unanswered for these product categories.  The analysis should cover both “does our product infringe?” and “does what we ship, document, or know our customers will do create indirect infringement exposure?”

Treating the Opinion as a One-Time Deliverable.  The opinion gets written, filed, and forgotten.  The product evolves, the patent landscape evolves, and continuations issue, but nobody re-engages with the opinion until something goes wrong.  The FTOs that actually protect companies are the ones that get refreshed at the moments that matter (product changes, market entry, fundraising, M&A) rather than the ones that get written once and shelved.

Who Should Do Our FTO?

For early-stage product clearance with low commercial exposure, a structured internal review by counsel familiar with the field can be enough.  For anything significant, like a major product launch, a fundraising or M&A milestone, or a known competitive threat, you want an outside opinion from counsel with both technical expertise in your field and patent law expertise.

What does this cost?  A focused FTO on a single product in a single jurisdiction typically runs $15,000 to $40,000 from competent outside counsel (can be significantly higher in big cities and BigLaw firms).  The number depends on the size of the patent landscape, how many patents need full claim-by-claim analysis, how much prosecution history work is involved, and how many jurisdictions are covered.  A comprehensive multi-jurisdictional analysis on a complex product can run over $100,000.

Even the cheap end of patent law is expensive by normal business standards.  An ex parte reexamination runs $50,000 to $100,000 in real-world practice, and that’s the budget option for invalidity work.  A defensive IPR runs several hundred thousand.  District court litigation runs into the millions.  The business question to consider is whether the cost of the FTO is reasonable relative to the risk it manages.  For successful products, the answer is usually yes.

A few quality markers:

  • The opinion is built around limitation-by-limitation analysis, not conclusions.
  • Claim construction is grounded in the specification and prosecution history.
  • DoE and estoppel are explicitly addressed.
  • Search methodology is documented.
  • Limitations of the opinion (scope, search depth, jurisdictions) are stated clearly.

A one-page conclusory letter from any source is worse than no opinion. It reads as superficial, and in litigation, it gets cross-examined and falls apart, taking your willfulness defense with it.

How Do We Manage Privilege Around the Opinion?

Opinions are protected by attorney-client privilege and work-product doctrine, but privilege can be waived, and patent litigation has lots of waiver traps.

A few baseline practices:

  • Mark opinions clearly as privileged and confidential.
  • Distribute internally only to people with a real need to know.  Avoid sending it to the broader engineering team or sales team.
  • Don’t copy or quote the opinion in unrelated documents (board decks, internal wikis, customer presentations) where it might lose its privileged status.
  • Be cautious about sharing with third parties.  Forwarding the opinion to outside consultants, lenders, prospective acquirers in early-stage diligence, or board members outside formal board meetings can break the privilege, depending on the circumstances.  If you need to share the substance, talk to counsel first about the right way to do it.
  • If you’re considering using the opinion as a defense in litigation, talk to litigation counsel first.  Using the opinion can waive privilege over related materials in ways that are hard to predict.

This is one of those areas where small process mistakes can have outsized consequences.

What’s the Key Takeaway?

FTO should be treated as an ongoing process.  The companies that handle it well treat it as ongoing landscape awareness, scoped properly, written down properly, refreshed at the moments that matter, and integrated into product and strategic decisions.  The companies that handle it badly either skip it entirely or do it once, file the opinion in a drawer, and forget about it until a demand letter shows up.  By then, the cheap and easy options are gone.  If you’re at any of the trigger points covered earlier in the series (product launch, fundraising, market entry, M&A, major customer deployment) and you don’t have a current, defensible answer to the FTO question, that’s worth fixing before someone else makes it urgent.

That’s the throughline of this series.  An FTO is a discipline rather than a checkbox or a one-time clearance.  The companies that build that discipline early have options when problems show up.  The companies that don’t are stuck with whatever options remain when the demand letter arrives.

Do you still have questions? The NK Patent Law Team is here is help. Contact us today.