We may be subject to claims challenging the inventorship or
ownership of our patents and other intellectual property.
We enter into confidentiality and intellectual
property assignment agreements with our employees, consultants, outside scientific collaborators, sponsored researchers and other
advisors. These agreements generally provide that inventions conceived by the party in the course of rendering services to us will
be our exclusive property. However, these agreements may not be honored and may not effectively assign intellectual property rights
to us. For example, even if we have a consulting agreement in place with an academic advisor pursuant to which the academic advisor
is required to assign any inventions developed in connection with providing services to us, the academic advisor may not have the
right to assign these inventions to us, as it may conflict with his or her obligations to assign all intellectual property to his
or her employing institution.
Litigation may be necessary to defend against
these and other claims challenging inventorship or ownership of inventions. If we are unsuccessful in defending against any of
these claims, in addition to paying monetary damages, we may lose valuable intellectual property rights, such as exclusive ownership
of, or right to use, valuable intellectual property. Such an outcome could have a material adverse effect on our business. Even
if we are successful in defending against such claims, litigation could result in substantial costs and be a distraction to management
and other employees.
Obtaining and maintaining our patent protection depends on
compliance with various procedural, document submission, fee payment and other requirements imposed by governmental patent agencies,
and our patent protection could be reduced or eliminated for non-compliance with these requirements.
The USPTO and various foreign governmental patent
agencies require compliance with a number of procedural, documentary, fee payment and other provisions during the patent process.
There are situations in which noncompliance can result in abandonment or lapse of a patent or patent application, resulting in
partial or complete loss of patent rights in the relevant jurisdiction. In such an event, competitors might be able to enter the
market earlier than would otherwise have been the case.
Issued patents covering vonapanitase or covering any additional
product candidates could be found invalid or unenforceable if challenged in court.
If we initiated legal proceedings against a
third party to enforce a patent, if and when issued, covering vonapanitase or any additional product candidate, the defendant could
counterclaim that the patent covering our product candidate is invalid and/or unenforceable. In patent litigation in the United
States, defendant counterclaims alleging invalidity and/or unenforceability are commonplace. Grounds for a validity challenge include
alleged failures to meet any of several statutory requirements, including lack of novelty, obviousness or non-enablement. Grounds
for unenforceability assertions include allegations that someone connected with prosecution of the patent withheld relevant information
from the USPTO, or made a misleading statement, during prosecution. Third parties may also raise similar claims before administrative
bodies in the United States or abroad, even outside the context of litigation. These mechanisms include reexamination and inter
partes review in the United States and equivalent proceedings in foreign jurisdictions, e.g., opposition proceedings.
These proceedings could result in revocation or amendment of our patents in such a way that they no longer cover, for example,
vonapanitase or competitive products. The outcome following legal assertions of invalidity and unenforceability is unpredictable.
With respect to validity, for example, we cannot be certain that there is no invalidating prior art, including prior art of which
we and the patent examiner were unaware during prosecution. If a defendant were to prevail on a legal assertion of invalidity and/or
unenforceability, we would lose at least part, and perhaps all, of the patent protection on the applicable product candidate. A
loss of patent protection would have a material adverse impact on our business.