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.
We will not seek to protect our intellectual
property rights in all jurisdictions throughout the world, and we may not be able to adequately enforce our intellectual property
rights even in the jurisdictions where we seek protection.
and defending patents on product candidates in all countries and jurisdictions throughout the world would be prohibitively expensive,
and our intellectual property rights in some countries outside the United States could be less extensive than those in the United
States, assuming that rights are obtained in the United States. In addition, the laws of some foreign countries do not protect
intellectual property rights to the same extent as federal and state laws in the United States. Consequently, we may not be able
to prevent third parties from practicing our inventions in all countries outside the United States, or from selling or importing
products made using our inventions in and into the United States or other jurisdictions.
Competitors may use
our technologies in jurisdictions where we do not pursue and obtain patent protection to develop their own products and further,
may export otherwise infringing products to territories where we have patent protection, but enforcement is not as strong as that
in the United States. These products may compete with our products and our patents or other intellectual property rights may not
be effective or sufficient to prevent them from competing. Even if we pursue and obtain issued patents in particular jurisdictions,
our patent claims or other intellectual property rights may not be effective or sufficient to prevent third parties from so competing.