Patents have a limited lifespan. In the
United States, the natural expiration of a patent is generally 20 years after it is filed. Although various extensions or adjustments
may be available, such as adjustments based on certain delays caused by the United States Patent and Trademark Office, or the USPTO,
the life of a patent, and the protection it affords, is limited. Given the amount of time required for the development, testing
and regulatory review of new product candidates, patents protecting such candidates might expire before or shortly after such candidates
are commercialized. As a result, our owned, co-owned and licensed patent portfolios may not provide us with sufficient rights to
exclude others from commercializing products similar or identical to ours or otherwise provide us with a competitive advantage.
Even if patents covering our product candidates are obtained and unchallenged, once the patent life has expired for a product,
we may be open to competition from generic medications.
While patent term extensions under the
Hatch-Waxman Act, in the United States and under supplementary protection certificates in Europe may be available to extend the
patent exclusivity term for our products, we cannot provide any assurances that any such patent term extension will be obtained
and, if so, for how long. The Hatch-Waxman Act permits a patent extension term of up to five years as compensation for patent term
lost during the FDA regulatory review process. A patent term extension cannot extend the remaining term of a patent beyond a total
of 14 years from the date of product approval, only one patent may be extended and only those claims covering the approved drug,
a method for using it or a method for manufacturing it may be extended. However, we may not be granted any extension because of,
for example, failing to exercise due diligence during the testing phase or regulatory review process, failing to apply within applicable
deadlines, failing to apply prior to expiration of relevant patents or otherwise failing to satisfy applicable requirements. Moreover,
the applicable time period or the scope of patent protection afforded could be less than we request. If we are unable to obtain
patent term extension or the term of any such extension is less than we request, such result could have a material adverse effect
on our business.
We or our licensing or collaboration partners
may become subject to intellectual property-related litigation or other proceedings to protect or enforce our patents or the patents
of our licensors or collaborators, any of which could be expensive, time consuming, and unsuccessful, and may ultimately result
in our loss of ownership of intellectual property.
Competitors may infringe our patents or
the patents of our licensors or collaborators. To counter such infringement, we may be required to file claims against those competitors,
which can be expensive and time-consuming. If we or one of our licensing or collaboration partners were to initiate legal proceedings
against a third party to enforce a patent covering one of our product candidates, the defendant could counterclaim that the patent
covering our product candidate is invalid or unenforceable, or that we infringe the defendant’s patents. In patent litigation
in the United States, defendant counterclaims alleging invalidity or unenforceability are commonplace. Grounds for a validity challenge
could be an alleged failure to meet any of several statutory requirements, including lack of novelty, obviousness, obviousness-type
double patenting, lack of written description, or non-enablement. Grounds for an unenforceability assertion could be an allegation
that someone connected with prosecution of the patent withheld relevant information from the USPTO, or made a misleading statement,
during prosecution. In addition, third parties may raise similar claims before administrative bodies in the United States or abroad,
even outside the context of litigation. Such mechanisms include re-examination, post grant review, inter partes review,
interference and derivation proceedings as well as equivalent proceedings in foreign jurisdictions. The outcome following legal
assertions of invalidity and unenforceability is unpredictable. Such proceedings or patent litigations could result in the revocation
or cancellation of or amendment to our patents in such a way that they no longer cover our product candidates or otherwise provide
any competitive advantage. With respect to the validity question, for example, we cannot be certain that there is no invalidating
prior art, of which the patent examiner and we or our licensing or collaboration partners were unaware during prosecution. A court
may also refuse to stop a third party from using the technology in question on the grounds that our patents do not cover that technology.
An adverse result in any proceeding could put one or more of our patents at risk of being invalidated or interpreted narrowly,
which could have a material adverse effect on our business and financial condition.
Interference proceedings provoked by third
parties or brought by us or declared by the USPTO may be necessary to determine the priority of inventions with respect to our
patents or patent applications or those of our licensors or collaborators. An unfavorable outcome could require us or our licensing
or collaboration partners to cease using the related technology or to attempt to license rights to it from the prevailing party.
Our business could be materially harmed if the prevailing party does not offer us or our licensing or collaboration partners a
license on commercially reasonable terms or at all. If we or our licensing or collaboration partners are unsuccessful in any interference
proceedings, we may lose our ownership of intellectual property or our patents may be narrowed or invalidated. There can be no
assurance as to the outcome of the interference and opposition proceedings, and any of the foregoing could result in a material
adverse effect on our business, financial condition, results of operations or prospects.