Any loss of, or failure
to obtain, patent protection could have a material adverse impact on our business. We may be unable to prevent competitors from
entering the market with a product that is similar to or the same as our products.
Confidentiality agreements with employees
and third parties may not prevent unauthorized disclosure of proprietary information.
We seek to protect
our proprietary technology and processes, in part, by entering into confidentiality agreements with our employees, consultants,
scientific advisors and contractors. We also seek to preserve the integrity and confidentiality of our data and know-how by maintaining
physical security of our premises and physical and electronic security of our information technology systems. Nonetheless, despite
these precautions, agreements or security measures may be breached, and we may not have adequate remedies for any breach. In addition,
our know-how may otherwise become known or be independently discovered by competitors. To the extent that our consultants, contractors
or collaborators use intellectual property owned by others in their work for us, disputes may arise as to the rights in related
or resulting know-how and inventions.
Enforcing a claim that
a third party illegally obtained and is using any of our know-how is expensive and time consuming, and the outcome is unpredictable.
In addition, courts outside the United States sometimes are less willing than United States courts to protect know-how. Misappropriation
or unauthorized disclosure of our know-how could impair our competitive position and may have a material adverse effect on our
We may become involved in lawsuits
to protect or enforce our intellectual property, which could be expensive, time consuming and unsuccessful, and which may lead
to a finding that our patents are invalid and/or unenforceable.
Competitors may infringe
our patents or misappropriate or otherwise violate our intellectual property rights. To counter infringement or unauthorized use,
litigation may be necessary to enforce or defend our intellectual property rights, to protect our know-how and/or to determine
the validity and scope of our own intellectual property rights. Intellectual property litigation can be expensive and time consuming.
Many of our current and potential competitors have the ability to dedicate substantially greater resources to litigate intellectual
property rights than we can. Accordingly, despite our efforts, we may not be able to prevent third parties from infringing or misappropriating
our intellectual property. Litigation could result in substantial costs and diversion of management resources, which could harm
our business and financial results. In addition, in an infringement proceeding, a court may decide that our patents are invalid
or unenforceable, and may refuse to stop the other party from using the technology at issue, including on the grounds that our
patents are invalid or unenforceable or do not cover the technology in question. An adverse result in any litigation proceeding
could put one or more of our patents at risk of being invalidated, held unenforceable or interpreted narrowly. Furthermore, because
of the substantial amount of discovery required in connection with intellectual property litigation, there is a risk that some
of our confidential information could be compromised by disclosure during this type of litigation.
Third-party claims of intellectual
property infringement or misappropriation may prevent or delay our development and commercialization efforts.
Our commercial success
depends in part on our ability to develop, manufacture, market and sell vonapanitase or any additional product candidates, and
to use proprietary technologies without infringing the patents and proprietary rights of third parties. There is a substantial
amount of litigation and adversarial proceedings, both within and outside the United States, involving patent and other intellectual
property rights in the biotechnology and pharmaceutical industries, including patent infringement lawsuits, interferences, oppositions,
reexamination, and inter partes review proceedings before the USPTO and corresponding foreign patent offices. Third parties
own patent rights both within and outside the United States in the fields in which we are developing and may develop vonapanitase
or any additional product candidates. As the biotechnology and pharmaceutical industries expand and more patents are issued, the
risk increases that vonapanitase or any additional product candidates may be subject to claims of infringement of the patent rights
of third parties.
Third parties may assert
that we are employing their proprietary technology without authorization. There may be third-party patents or patent applications
with claims that may cover vonapanitase or any additional product candidates and/or the use, manufacture, sale and/or offer for
sale of vonapanitase or any additional product candidates. We are aware of European Patent No. EP 1 012 307 B1, or the '307 patent,
which claims, among other things, autocatalytically cleavable zymogenic precursor of a serine protease wherein a naturally occurring
non-autocatalytic cleavage site is replaced in the zymogenic precursor by an autocatalytic cleavage site. The '307 patent expires
on August 12, 2018. We currently estimate that the soonest that we will market vonapanitase is after this date.
In some cases, we may
have failed to identify relevant third-party patents or patent applications. For example, applications filed before November 29,
2000, and certain applications filed after that date that will not be filed outside the United States remain confidential until
patents issue. Except for the preceding exceptions, patent applications in the United States and elsewhere are generally published
but, only after a waiting period of approximately 18 months after the earliest filing. Therefore, patent applications covering
vonapanitase or future product candidates could have been filed by others without our knowledge. Additionally, pending patent applications
which have been published can, subject to certain limitations, be later amended in a manner that could cover vonapanitase or any
additional product candidates and/or the use, manufacture, sale and/or offer for sale of vonapanitase or any additional product