RISK FACTORS 4 to comply with these requirements with respect to our in-licensed or patents we may own in the future, at risk of being invalidated intellectual property and rely on advice from our outside counsel or interpreted narrowly and our in-licensed patent applications, to comply with these requirements with respect to our patent or patent applications we own or may own in the future, at risk applications and any other patent rights we may own in the future. of not issuing and could provoke third parties to assert claims In certain cases, an inadvertent lapse can be cured by payment against us. We may not prevail in any lawsuits that we initiate of a late fee or by other means in accordance with the applicable and the damages or other remedies awarded, if any, may not be rules. There are situations, however, in which non-compliance can commercially meaningful. Accordingly, our efforts to enforce our result in abandonment or lapse of the patent or patent application, intellectual property rights around the world may be inadequate resulting in partial or complete loss of patent rights in the relevant to obtain a significant commercial advantage from the intellectual jurisdiction. In such an event, potential competitors might be able property that we develop or in-license. to enter the market and this circumstance could have a material adverse effect on our business. Issued patents that we in-license and that cover our product candidates could be found invalid or unenforceable, and we may We may not be able to protect our intellectual property rights not be able to protect our trade secrets in court. throughout the world. If we or one of our licensing partners initiate legal proceedings Filing, prosecuting, defending and enforcing patents on product against a third party to enforce a patent covering one of our candidates in al l countries throughout the world would be product candidates, assuming such a patent has issued or prohibitively expensive, and our intellectual property rights in does issue, the defendant could counterclaim that the patent some countries outside the United States and the European covering our product candidate is invalid or unenforceable. In all Union could be less extensive than those in the United States or patent litigation, counterclaims by defendants alleging invalidity the European Union. or unenforceability are commonplace. Grounds for a validity challenge include, without limitation, an alleged failure to meet Our patent applications and in-licensed patent rights may not any of several statutory requirements, such as lack of novelty, have corresponding patents or patent applications in other obviousness, written description or non-enablement. Grounds countries. In addition, the laws of some other countries do not for an unenforceability assertion in the United States include, protect intellectual property rights to the same extent as federal without limitation, an allegation that someone connected with and state laws in the United States or patent laws in Europe. prosecution of the patent withheld information material to Consequently, we may not be able to prevent third parties from patentability from the USPTO or made a misleading statement, practicing our inventions in al l countries outside the United during prosecution. Third parties also may raise similar claims States and Europe, or from selling or importing products made before administrative bodies in the United States, the European using our inventions in and into the United States or in Europe Union or elsewhere, even outside the context of litigation. Such or other jurisdictions. Competitors may use our technologies in mechanisms include re-examination, post grant review, inter jurisdictions where we have not obtained patent protection or partes review and equivalent proceedings in foreign jurisdictions, may export otherwise infringing products to territories where we and such proceedings could result in the revocation or cancellation have patent protection, but enforcement is not as strong as in the of, or amendment to, our patents or licensed patents in such a way United States or in Europe. These products may compete with that they no longer cover our product candidates. The outcome our products patents or other intellectual property rights that we fol lowing legal assertions of invalidity and unenforceability is license from third parties. unpredictable. With respect to the validity question, for example, we cannot be certain that there is no invalidating prior art, of Many companies have encountered significant problems in which the patent examiner and we or our licensing partners were protecting, defending and enforcing intellectual property rights unaware during prosecution. If a defendant were to prevail on a in other jurisdictions. The legal systems of certain countries, legal assertion of invalidity or unenforceability, we could lose at particularly certain developing countries, do not favor the least part, and perhaps all, of the patent protection on one or more enforcement of patents, trade secrets and other intel lectual of our product candidates. Such a loss of patent protection could property rights, particularly those relating to biotechnology have a material adverse impact on our business. products, which could make it difficult for us to stop the infringement of our in-licensed patents or any patents that issue In addition to the protection afforded by patents, we rely on from our applications or the marketing of competing products trade secret protection and confidentiality agreements to protect in violation of our proprietary rights. Proceedings to enforce our proprietary information, including know-how, processes, our intellectual property rights in other jurisdictions could result techniques and data, and technology that is not patentable or that in substantial costs and divert our efforts and attention from we elect not to patent or which patents are difficult to enforce. other aspects of our business, could put our in-licensed patents, However, trade secrets and other proprietary information can 48 – GENSIGHT BIOLOGICS – 2017 Registration Document