RISK FACTORS 4 be difficult to protect and some courts inside and outside the could materially and adversely affect our ability to commercialize United States and the European Union are less willing or unwilling our GS010 or GS030 product candidates or any other of our to protect trade secrets and other proprietary information. If any product candidates or technologies covered by the asserted of our trade secrets or other proprietary information were to be third-party patents. In several major territories, including the lawfully obtained or independently developed by a competitor, United States, in order to successfully challenge the validity of we would have no right to prevent them, or those to whom they any such U.S. patent in federal court, we would need to overcome communicate it, from using that information to compete with a presumption of validity. As this burden is a high one requiring us. We seek to protect our trade secrets and other proprietary us to present clear and convincing evidence as to the invalidity information, in part, by entering into confidentiality agreements of such U.S. patent claim, there is no assurance that a court of with our employees, consultants, scientific advisors and competent jurisdiction would invalidate the claims of any such contractors. We cannot guarantee that we have entered into such U.S. patent. In addition, even if we were to prevail in any such agreements with each party that may have or have had access to litigation, the cost and diversion of management and employee our trade secrets or other proprietary information. We also seek attention could be significant and could adversely affect our to preserve the integrity and confidentiality of our trade secrets business. Where a patent issued by the EPO, otherwise known and other proprietary information by maintaining the physical as a European Patent, is concerned, it may be necessary to do security of our premises and the physical and electronic security this on a country-by-country basis, leading to increased litigation of our information technology systems. While we have confidence costs and diversion of management and employee attention. The in these individuals, organizations and systems, agreements risks of such third-party action apply equally outside the United or security measures may be breached, and we may not have States or the European Union, where it may also be necessary adequate remedies for any such breach and we cannot guarantee to establish, through a court or other procedure, that a patent is that our trade secrets and other proprietary know-how will not invalid. be publicly disclosed. If we are found to infringe a third party’s valid and enforceable Third parties may initiate legal proceedings alleging that we are intellectual property rights, we could be forced, including by court infringing their intellectual property rights, the outcome of which order, to cease developing, manufacturing and commercializing would be uncertain and could have a material adverse effect on the the infringing technology or product candidates. In addition, we success of our business. could be found liable for monetary damages, including treble damages and attorneys’ fees if we are found to have wil lful ly Our commercial success depends upon our ability and the infringed a patent or other intellectual property right. A finding ability of our existing or future col laborators and third-party of infringement could prevent us from manufacturing and service providers to develop, manufacture, market and sell our commercializing our product candidates or force us to cease some product candidates and use our proprietary technologies without of our business operations. Claims that we have misappropriated infringing the proprietary rights and intel lectual property of the confidential information or trade secrets of third parties third parties. The biotechnology and pharmaceutical industries could have a similar negative impact on our business, financial are characterized by extensive and complex litigation regarding condition, results of operations or prospects. We may be able patents and other intel lectual property rights. We may in the to avoid such an outcome by obtaining a license from such third future become party to, or be threatened with, adversarial party to continue developing, manufacturing and marketing our proceedings or litigation regarding intellectual property rights product candidates and technology; however, we may not be able with respect to our product candidates and technology, including to obtain such a license on commercially reasonable terms or at all. interference proceedings, post-grant review and inter partes Even if we were able to obtain a license, it could be non-exclusive, review before the USPTO, the EPO or equivalent measures thereby giving our competitors and other third parties access to outside the United States and the European Union. the same technologies licensed to us, and it could require us to Third parties may assert infringement claims against us based make substantial licensing and royalty payments. on existing patents or patents that may be granted in the future, Intellectual property litigation could cause us to spend substantial regardless of their merit. We are aware of certain third-party resources and distract our personnel from their normal patents relating to gene delivery to ocular cells and certain vector responsibilities. manufacturing methods that may relate to, and potentially could be asserted to encompass our product candidates. There is a Competitors may infringe our intel lectual property or the risk that third parties may choose to engage in litigation with us intellectual property of our licensors, or we may be required to to enforce or to otherwise assert their patent rights against us. defend against claims of infringement. To counter infringement A court of competent jurisdiction could hold that these third- or unauthorized use claims or to defend against claims of party patents are valid, enforceable and infringed by us, which infringement can be expensive and time-consuming. Even if GENSIGHT BIOLOGICS – 2017 Registration Document– 49