BIOCARTIS ANNUAL REPORT 2022 60
In addition, Biocartis may require access to additional third party technologies for which an additional (sub)license, or
(sub)licenses, need to be obtained in order to be able to sell certain of its products. If Biocartis is unable to sustain or enter into
adequate (sub)licensing agreements to access these technologies, either on acceptable terms or at all, it may be unable to sell
all, or certain of, its products, or access some geographic or industry markets.
Intellectual property infringement claims from third parties could be time-consuming and costly to defend
and may result in liability for damages, or prevent Biocartis from commercializing its products.
The MDx industry is characterized by a large number of patents, claims of which appear to come close to one another or overlap
in certain cases. Furthermore, certain proprietary rights of third parties may be unknown to Biocartis up until the point of
enforcement. As a result, there is a degree of uncertainty regarding the extent of patent protection and infringement. Biocartis
may have unknowingly infringed in the past, and may still be infringing, the proprietary rights of third parties. In addition, third
parties may have pending patent applications, which are typically confidential for the first eighteen months following filing, and
which may cover technologies Biocartis and/or its partners incorporate in their MDx platforms and tests. Following the
publication of such patent applications, Biocartis may need to obtain additional third party licenses, but may not be able to obtain
these on acceptable terms, or at all.
To date, no intellectual property infringement claims from third parties have been initiated against Biocartis. In the event that
third parties accuse Biocartis of infringing their patents, Biocartis could incur substantial costs and consume substantial resources
in defending against these claims. If such claims prove to be valid, this could lead to significant damages, royalty payments or an
injunction preventing the sale of certain of Biocartis' products.
Certain of Biocartis' past and present employees were previously employed at Biocartis' competitors and executed proprietary
rights, non-disclosure and non-competition agreements in connection with such previous employment. Although Biocartis tries
to ensure that Biocartis' employees do not use the proprietary information or know-how of others in their work for Biocartis,
Biocartis may be subject to claims that it, or these employees, have used or disclosed IP, including trade secrets or other
proprietary information, of any such employee's former employer.
Biocartis' employees, independent contractors, investigators, consultants, commercial collaborators,
service providers, distributors and other counterparties may engage in misconduct or other improper
activities, including non-compliance with applicable laws and regulations, which may result in the
imposition of significant fines or other sanctions.
Biocartis and its employees, independent contractors, investigators, consultants, commercial collaborators, service providers,
distributors and counterparties are, or may be, subject to numerous regulations in the countries in which they operate, such as
anti-bribery, anti-corruption, anti-kickback, competition, fraud, insider trading, data protection, health information privacy and
security, adulteration related to quality manufacturing deficiencies, misbranding related to unlawful marketing or promotion
beyond the scope of a marketing authorization, or environmental and health and safety laws. The costs of compliance with
applicable regulations, requirements, guidance, or guidelines could be substantial, and failure to comply could result in sanctions,
civil penalties, injunctions, criminal penalties, or disgorgement, which could significantly increase Biocartis' costs and delay the
development and commercialization of its products.
Biocartis is also exposed to the risk that such persons may engage in fraudulent or other illegal activity. Acts or omissions of any
of the parties Biocartis relies on could potentially cause Biocartis to incur liability under applicable laws and regulations, such as
the US Foreign Corrupt Practices Act (the "FCPA"), the UK Bribery Act, the OECD Anti-Bribery Convention and other anti-bribery
laws and regulations, export and import control laws in the EU, US and other jurisdictions, and sanctions programs, including
those administered by the US Office of Foreign Asset Controls and the European Commission. Misconduct by these parties could
include intentional, reckless or negligent conduct or other unauthorized activities that violate laws and regulations, including
those laws that require the reporting of true, complete and accurate information to such regulatory bodies, manufacturing
standards, healthcare fraud and abuse and health regulatory laws, or laws that require the true, complete and accurate reporting
of financial information or data.