Bringing a new product to market is exciting, but it can also be a legal minefield if you don't take the proper steps to understand the potential risks of infringing on existing patents. A Freedom to Operate (FTO) opinion is prepared by patent counsel from the outset of product development to identify key patents already in force and asses the risk of infringement on said patents. Therefore, it is prudent for every founder to have a basic understanding of patent infringement in the United States to identify potential risks early instead of those risks coming light later when the financial stakes are much higher.
I. Patent Infringement in the United States
The starting point for any conversation about patent infringement is 35 U.S.C. § 271, the federal statute that spells out exactly what kinds of conduct can get you into trouble. Subsection (a) covers what is known as direct infringement and makes it unlawful to make, use, offer to sell, sell, or import a patented invention within the United States during the life of the patent, all without the patent owner's permission.
But direct infringement isn't the only way a infringement can occur. The statute also recognizes two other forms of infringement. Subsection (b) targets those who actively induce someone else to infringe, while subsection (c) addresses contributory infringement, essentially, selling or importing a component that you know is specially made for an infringing use and that has no real non-infringing purpose. In other words, you don't have to be the one building the infringing product to face liability.
Once you've identified potentially infringing conduct, the next question is how infringement is shown. There are two paths. The first is literal infringement, which relies on what courts call the "all elements rule." Under this rule, every single limitation in the patent claim has to be found, exactly, in the accused product or process. Miss even one element, and there's likely no literal infringement.
The second path is nonliteral infringement, analyzed under the "doctrine of equivalents." Even if an accused product doesn't meet every claim element word-for-word, infringement can still exist when a substitute component performs substantially the same function in substantially the same way to achieve substantially the same result as the missing element. The key question is whether the differences are truly meaningful, or just insubstantial variations on the patented idea.
II. Claim Construction: Reading Patents Like a Lawyer
An Overview of the Process
Claim construction is the process used to determine whether infringement, both literal and nonliteral, is present. Claim construction is the process of figuring out what a patent's claims actually mean and how far their protection extends. For any FTO, this step is really the heart of the matter because without understanding the scope of the claims, you can't reliably say whether a product infringes.
Claims are interpreted from the perspective of a "person of ordinary skill in the art" (often abbreviated as POSITA) essentially, someone with the typical background and knowledge in the relevant technical field. The analysis also distinguishes between independent claims (which stand on their own) and dependent claims (which build on the independent claims). Independent claims are tackled first because they define the broadest scope of protection, while dependent claims help identify the specific embodiments protected under the patent.
When determining what a claim actually covers, intrinsic evidence takes priority. That means starting with the claim language itself and then turning to the patent specification for context. If a claim term seems ambiguous, a deeper dive into the specification often reveals how the inventor intended the term to be understood. Only when the meaning remains unclear after that review do we turn to extrinsic evidence, things like technical dictionaries or expert testimony, to fill in the gaps.
Claim Charts
Once the claims are construed, the next step is putting them side by side with the accused product. That's where claim charts come in. A claim chart is a tool patent practitioners use to compare a patent's claims against an accused product, process, or system on an element-by-element basis.
This granular approach matters because, as we mentioned earlier, the "all elements rule" requires every claim limitation to be present in the accused products. Miss one element, and there's no infringement for that claim. By forcing a side-by-side comparison, claim charts help practitioners pinpoint which claims pose the greatest infringement risk, flag the limitations most likely to be contested, identify elements where only an equivalents argument is available, and spot potential design-around opportunities. In the FTO context, claim charts are invaluable for mapping out the best path forward.
III. The Risks of Skipping an FTO
So, what happens if a company decides to launch a product without doing an FTO? In sum: a lot can go wrong. Skipping an FTO exposes a company to serious legal, financial, and strategic risks. Without a clear-eyed look at the existing patent landscape, you may unknowingly release a product that infringes a valid, enforceable patent that leaves the door wide open for lawsuits from patent holders.
Beyond the litigation risk, skipping an FTO also hamstrings a company's ability to make smart business decisions around product design, supply chain planning, market entry timing, and licensing strategy. And perhaps most importantly, it strips away one of the best defenses to a willful infringement claim: a well-reasoned opinion of counsel. These opinions, which are typically built on an FTO analysis, are among the most effective tools for rebutting allegations that infringement was knowing or reckless. Without one, a company that later discovers a problematic patent can have a much harder time establishing the good-faith belief in non-infringement or invalidity that courts look for when deciding whether infringement was willful.
The financial fallout from skipping an FTO can show up at two key moments: when a company is trying to raise money, and when it finds itself on the wrong end of an infringement lawsuit. For early-stage companies, the absence of an FTO can be a red flag to investors and may even derail a financing round altogether. And if litigation does come, the remedies available to a patent holder can be devastating. Under 35 U.S.C. § 284, a patent owner is entitled to damages adequate to compensate for the infringement and in no event less than a reasonable royalty for the use of the patented invention. On top of that, if the patent holder can show the infringement was willful, the court has discretion to treble (triple) the damages award.
At the end of the day, these risks all point to the same conclusion: a thorough FTO analysis, done at the earliest stages of product development, isn't just a nice-to-have. It's a critical piece of responsible product development and commercialization that can save a company from headaches, lost investment, and potentially existential legal exposure down the line.
IV. Conclusion
At its core, a freedom-to-operate analysis is about making informed decisions. A well-executed FTO gives a company a clearer picture of the patent landscape it's entering, highlights potential infringement risks before they become lawsuits, and provides a foundation for smarter choices around product design, licensing, financing, and market entry. Just as importantly, it creates the kind of documented, good-faith diligence that can serve as a powerful shield against claims of willful infringement. For early-stage companies in particular, a thorough FTO can also be the difference between securing investment and watching a financing round fall apart.
That said, it's important to be realistic about what an FTO can and cannot do. No FTO opinion, no matter how thorough or carefully drafted, is a guarantee that a product is free from infringement risk. Patent landscapes are constantly evolving, new patents issue every week, pending applications remain hidden from public view for up to eighteen months, and claim construction is an inherently uncertain exercise that can shift once litigation begins. An FTO is a snapshot in time, based on the information reasonably available and the analyst's best professional judgment about how a court might interpret the relevant claims. What an FTO does provide is a structured, defensible, and well-reasoned assessment of risk, and is one that empowers a company to move forward with confidence, even if absolute certainty will always remain out of reach.