Risks related to Galapagos’ intellectual property
Galapagos' ability to compete may decline if Galapagos does not adequately protect its proprietary rights.
Galapagos endeavors to protect its proprietary technologies and know-how by entering into confidentiality and proprietary information agreements with employees and partners, and by setting up special procedures (e.g. with respect to the handling of the laboratory books).
Galapagos' commercial success depends on obtaining and maintaining proprietary rights to its product candidates, as well as successfully defending these rights against third party challenges. Galapagos will only be able to protect its product candidates, and their uses from unauthorized use by third parties to the extent that valid and enforceable patents, or effectively protected trade secrets, cover them. If Galapagos fails to maintain to protect or to enforce its intellectual property rights successfully, its competitive position could suffer, which could harm Galapagos' results of operations.
Pharmaceutical patents and patent applications involve highly complex legal and factual questions, which, if determined adversely to Galapagos, could negatively impact its patent position.
The patent positions of biotechnology and pharmaceutical companies can be highly uncertain and involve complex legal and factual questions. The interpretation and breadth of claims allowed in some patents covering pharmaceutical compositions may be uncertain and difficult to determine, and are often affected materially by the facts and circumstances that pertain to the patented compositions and the related patent claims. The standards of the United States Patent and Trademark Office, the European Patent Office, and other foreign counterparts are sometimes uncertain and could change in the future. If Galapagos fails to obtain and maintain patent protection and trade secret protection of its product candidates, it could lose its competitive advantage and competition Galapagos faces would increase, reducing any potential revenues and adversely affecting its ability to attain or maintain profitability.
Galapagos will not seek to protect its intellectual property rights in all jurisdictions throughout the world and Galapagos may not be able to adequately enforce its intellectual property rights even in the jurisdictions where Galapagos seeks protection.
Filing, prosecuting and defending patents on Galapagos' product candidates in all countries and jurisdictions throughout the world would be prohibitively expensive, and Galapagos' intellectual property rights in some countries could be less extensive than those in the United States and Europe. Consequently, Galapagos may not be able to prevent third parties from practicing its inventions in all countries, or from selling or importing products made using Galapagos' inventions.