The functional gene is a product of functional information expression methods inspired by biological genes. Product innovation design is essentially a process of functional problem-solving, which has an intrinsic connection with biological gene expression. The analogy of biological genes, which standardize product function information into functional genes and apply them in product innovation design, holds enormous potential. This paper provides a comprehensive analysis of relevant literature. Firstly, it elaborates on the development of functional genes from the refinement of product genes, clarifying the relationship between functional genes and product genes. Then, it discusses the theoretical foundations of functional gene research, such as the concept, characteristics, and information transmission pathways of functional genes. Moreover, it analyzes key technologies for the application of functional genes, such as functional information encoding forms, and functional gene structure, while summarizing research case studies on functional gene applications. Finally, it explores three key challenges: determining functional gene information content, protecting intellectual property rights, and identifying defects. It also proposes research entry points, aiming to provide references for the field of product innovation design.