An FTO search allows a business to evaluate potential commercial risks before investing resources in research, development, or commercialisation activities. An FTO is often undertaken as a precautionary measure before the launch of a new product or entering a new market.
It’s important to remember that having a patent does not give you the right to manufacture, import, export or sell a particular product – it simply gives you the right to prevent others from doing so. An FTO search is still necessary, even if you have a patent.
Typically, a business should be carrying out an FTO search if they are:
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The biggest reason FTO searches are conducted is having a clear picture of the potential commercial risks associated with patent infringement. By thoroughly researching existing patents within specific markets that are relevant to your technology or product, a business can avoid expensive litigation and damages that may arise from unintentional infringement.
An FTO search provides valuable, strategic insights that can elevate a business by allowing them to make informed decisions about their own innovation strategy. The patent information discovered during the search can be used to help assess novelty and inventiveness of innovations, identify potential licensing opportunities, keep up to date on known competitors, as well as identifying new competitors entering the market. This information can provide a business with a competitive edge through strategic use of its IP.
If an FTO search is conducted early in the R&D process it can help streamline investments, both from a finance perspective and a time perspective. It achieves this by permitting a business to focus on areas with minimal legal risk and maximum commercial potential. R&D strategies can be adapted, and different opportunities explored. This approach not only streamlines R&D from a resource perspective but also increases the pace of innovation within the business.
For businesses engaged in collaborations, partnerships, or seeking investment, demonstrating freedom to operate is essential for building trust and credibility. Conducting an FTO search showcases a commitment to compliance, risk management, and responsible innovation practices. It reassures stakeholders, investors, and partners that the business is proactive in addressing potential legal issues and protecting its intellectual property, thereby enhancing its reputation, and fostering stronger relationships.
Source Advisors has a wealth of experience helping companies of all sizes navigate uncertainties surrounding tax and licensing of IP, allowing them to confidently maximise the advantages of IP ownership, licensing and accessing the UK’s Patent Box incentive.
Our IP consultancy services, including Patent Box, are closely linked with R&D tax relief and a company can often claim tax relief under both schemes, including Research and Development Expenditure Credit (RDEC), the new merged scheme and the Enhanced R&D Intensive Support (ERIS) scheme.
Find out more about our R&D tax relief services.
