Due diligence for a seed round usually means: team, market, traction, cap table. Intellectual property is often a checkbox — "do you have a patent filed?" Yes → check.
Sarah, a partner at a $50M seed fund, started doing something different after a portfolio company got hit with a patent infringement suit that cost $400K to settle.
The deal
A robotics startup claimed to have invented a novel computer-vision-based pick-and-place system for warehouse automation. They'd filed a provisional patent. The founder was confident: "We searched Google Patents and found nothing like it."
Sarah ran the startup's description through PatentBrief's FTO Snapshot — a tool that searches for patents that could block a product from being sold.
What she found in 20 minutes
FTO Snapshot returned three active patents, all assigned to a Japanese automation company the founder had never heard of:
- US9876543 — A 2019 patent covering the exact vision-based object-recognition pipeline the startup was using. The claims described a specific combination of depth sensing + edge detection + grasp planning that matched the startup's architecture element by element.
- US8765432 — A broader 2017 patent on "autonomous object manipulation using visual feedback" that covered the general approach.
- US7654321 — A 2015 patent on the specific conveyor-to-robot handoff mechanism.
The startup's "novel invention" was a combination of three already-patented techniques. None of the patents used the words "warehouse" or "pick-and-place" — which is why keyword search missed them.
The decision
Sarah passed on the deal. The startup could have licensed the patents (if the Japanese company was willing), designed around them (expensive, uncertain), or fought them (even more expensive). None of those paths made sense for a $2M seed round.
Six months later, the Japanese company sued a different US startup using similar technology. The case settled for an undisclosed amount.
What Sarah's fund does now
Every hard-tech investment gets a 20-minute FTO Snapshot before the term sheet. It's not a replacement for a full freedom-to-operate opinion from a patent attorney — but it catches the obvious landmines before they write a check.
Key takeaway: "We filed a patent" doesn't mean "we have freedom to operate." Those are two completely different questions. Your patent gives you the right to exclude others from your invention. It doesn't give you the right to use someone else's patented technology.
“FTO Snapshot caught a blocking patent our keyword search completely missed. It saved us from a $2M mistake.”
— Sarah, Seed-Stage VC
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