Amgen 2013 Annual Report Download - page 35

Our intellectual property positions may be challenged, invalidated, circumvented or expire, or we may fail to prevail in present and future
intellectual property litigation.
Our success depends in part on our ability to obtain and defend patent rights and other intellectual property rights that are important to the
commercialization of our products and product candidates. The patent positions of pharmaceutical and biotechnology companies can be highly uncertain and
often involve complex legal, scientific and factual questions. Third parties may challenge, invalidate or circumvent our patents and patent applications relating
to our products, product candidates and technologies. In addition, our patent positions might not protect us against competitors with similar products or
technologies because competing products or technologies may not infringe our patents. For certain of our product candidates, there are third parties who have
patents or pending patent applications that they may claim necessitate payment of a royalty or prevent us from commercializing these product candidates in
certain territories. Patent disputes are frequent, costly and can preclude, delay or increase the cost of commercialization of products. We have been in the past,
and may be in the future, involved in patent litigation. A determination made by a court, agency or tribunal concerning infringement, validity, enforceability,
injunctive or economic remedy, or the right to patent protection, for example, are typically subject to appellate or administrative review. Upon review, such
initial determinations may be afforded little or no deference by the reviewing tribunal and may be affirmed, reversed, or made the subject of reconsideration
through further proceedings. A patent dispute or litigation may not discourage a potential violator from bringing the product that is alleged to infringe to market
prior to a final resolution of the dispute or litigation. The period of time from inception until resolution of a patent dispute or litigation is subject to the
availability and schedule of the court, agency or tribunal before which the dispute or litigation is pending. We may be subject to competition during this period
and may not be able to fully recover for the losses, damages, and harms we incur from infringement by the competitor product even if we prevail. Moreover, if
we lose or settle current or future litigations at certain stages or entirely, we could be subject to competition and/or significant liabilities, be required to enter into
third-party licenses for the infringed product or technology or be required to cease using the technology or product in dispute. In addition, we cannot guarantee
that such licenses will be available on terms acceptable to us, or at all.
Further, under the Hatch-Waxman Act, our products approved by the FDA under the FDCA may be the subject of patent litigation with generic
competitors before expiry of the five year period of data exclusivity provided for under the Hatch-Waxman Act and prior to the expiration of the patents listed
for the product. Likewise, our innovative biologic products may be the subject of patent litigation prior to the expiration of our patents and, with respect to
competitors seeking approval as a biosimilar or interchangeable version of our products, prior to the twelve year exclusivity period provided under the
Biologics Price Competition and Innovation Act of 2009.
Certain of the existing patents on our principal products have recently expired or will expire over the next few years., (See Item 1. Business —
Marketing, Distribution and Selected Marketed Products — Patents.) As our patents expire, competitors may be able to legally produce and market similar
products or technologies, including biosimilars, which may have a material adverse effect on our product sales, business and results of operations. (See Item
7. Management's Discussion and Analysis of Financial Condition and Results of Operations — Financial Condition, Liquidity and Capital Resources.) We
have received, and we continue to seek, additional patent protection relating to our products, including patents on our products, specific processes for making
our products, formulations and particular uses of our products. However, competitors may be able to invalidate, design around or otherwise circumvent our
patents and sell competing products.
Our sales and operations are subject to the risks of doing business in emerging markets.
We expect a significant portion of growth in our future business to come from expanding our footprint and presence in emerging markets. As we continue
our expansion efforts in emerging markets around the world, through acquisitions and licensing transactions as well as through the development and
introduction of our current products into new markets, we face numerous risks to our business. There is no guarantee that the Company’s efforts and
strategies to expand sales in emerging markets will succeed or that the growth rates experienced in these countries will continue in the future. Emerging market
countries may be especially vulnerable to periods of global political, legal, regulatory and financial instability, including sovereign debt issues and/or
fluctuations in currency exchange rates. The Company may also be required to increase its reliance on third-party agents and unfamiliar operations and
arrangements previously utilized by companies that we partner with or acquire in emerging markets (See We must conduct clinical trials in humans before we
can commercialize and sell any of our product candidates or existing products for new indications.). Our international operations and business may also be
subject to less protective intellectual property or other applicable laws, diverse data privacy and protection requirements, changing tax laws and tariffs, far-
reaching anti-bribery and anti-corruption laws and regulations and an evolving legal and regulatory environment. These legal and operational challenges along
with the imposition of governmental controls, the challenges of attracting and retaining qualified personnel and obtaining and/or maintain necessary regulatory
or pricing approvals of our products may result in a material adverse impact on the international sales of our products, our business and results of operations.
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