Risks Related to Our Intellectual Property
If our efforts to protect our intellectual property related
to vonapanitase or any additional product candidates are not adequate, we may not be able to compete effectively in our market.
We rely upon a combination of patents, patent
applications, know-how and confidentiality agreements to protect the intellectual property related to our only product candidate,
vonapanitase, and will use a similar strategy to protect any additional product candidates. The patent position of biotechnology
companies is generally uncertain because it involves complex legal and factual considerations. The standards applied by the United
States Patent and Trademark Office, or USPTO, and foreign patent offices in granting patents are not always applied uniformly or
predictably. For example, there is no uniform worldwide policy regarding patentable subject matter or the scope of claims allowable
in biotechnology patents. The patent applications that we own may fail to result in issued patents with claims that cover vonapanitase
or any additional product candidates in the United States or in other countries. There is no assurance that all potentially relevant
prior art relating to our patents and patent applications has been found, and prior art that is not before the patent examiners,
as well as prior art that is before the patent examiners, could be used by a third party to invalidate a patent or could be relied
on to prevent a patent from issuing from a pending patent application. Even if patents do successfully issue and even if these
patents cover vonapanitase or any additional product candidates, third parties may challenge their validity, enforceability or
scope, which may result in our patents being narrowed or invalidated.
Furthermore, even if they are unchallenged,
our patents and patent applications may not adequately provide exclusivity for vonapanitase or any additional product candidates,
prevent others from designing around our patents with similar products that are outside the scope of our patents, or prevent others
from operating in jurisdictions in which we did not pursue patent protection. Any of these outcomes could impair our ability to
prevent competition from third parties, which may have an adverse impact on our business.
If patent applications we hold with respect
to vonapanitase or any additional product candidates fail to issue, if their breadth or strength of protection is threatened, or
if they fail to provide meaningful exclusivity for vonapanitase or any additional product candidates, it could dissuade companies
from collaborating with us. As of June 30, 2017 we own 34 issued patents and own 24 pending patent applications, most of which
cover aspects of vonapanitase or its use. We cannot offer any assurances about which, if any, of the pending patent applications
will issue as patents, the breadth of any such patents or any of our currently issued patents, or whether any issued patents will
be challenged by third parties or will be found invalid and unenforceable if challenged. Any successful challenge to these patent
applications, or patents that may issue from them, or to currently issued patents owned by us, could deprive us of rights necessary
for the successful commercialization of vonapanitase or any other product candidate that we may develop. Since patent applications
in the United States and most other countries are confidential for a period of time after filing, and some remain so until issued,
we cannot be certain that we were the first to file a patent application relating to any particular aspect of a product candidate.
Furthermore, if third parties have filed such patent applications, an interference proceeding in the United States can be initiated
by these third parties, or by the USPTO itself, to determine who was the first to invent any of the subject matter covered by the
patent claims of our patents and patent applications.
In the United States, for patent applications
filed prior to March 16, 2013, assuming the other requirements for patentability are met, the first to invent is entitled to the
patent, while outside the United States, the first to file a patent application is entitled to the patent. Our currently pending
utility patent applications are examined under the system in place before March 16, 2013. Third parties are allowed to submit prior
art prior to the issuance of a patent by the USPTO, and may become involved in reexamination, inter partes review or interference
proceedings challenging our patent rights. An adverse determination in any such submission, proceeding or litigation could reduce
the scope of, or invalidate, our patent rights, which could adversely affect our competitive position with respect to third parties.