Form 10-K FUELCELL ENERGY INC For: October 31st

other financial and operational matters that may make it difficult for us to raise additional capital and pursue business opportunities. If we are unable to raise additional funds when necessary, our business and prospects could fail or be materially affected. In addition, we must change, reduce, postpone or eliminate parts of our current and expected future projects if we do not raise additional funds in the future or sell some or all of our assets.

Risks Associated with Our Intellectual Property and Technology Licenses

We depend on our intellectual property, and our failure to protect that intellectual property could adversely affect our future growth and success.

Failure to protect our existing intellectual property rights could result in the loss of our exclusivity or the right to use our technologies. If we fail to adequately ensure our freedom to use certain technologies, we may have to pay others for the rights to use their intellectual property, pay damages for infringement, misappropriation or other infringement, or be prohibited from using that intellectual property. We rely on patent, trade secret, trademark and copyright law to protect our intellectual property.

We previously licensed some of our intellectual property rights in the manufacture of carbonate fuel cells exclusively for the South Korean and wider Asian markets to POSCO Energy, and under the terms of the settlement agreement with POSCO Energy, we plan to do so on a limited, non-exclusive basis to only existing LTSAs – Enable customers of POSCO Energy to exchange modules. (For more information on the limited license granted to POSCO Energy and KFC, see the section “Business – License Agreements and License Income; Relationship with POSCO Energy – License Agreements and Disputes with POSCO Energy; Settlement Agreement” above.), Effective June 11, 2019, we have entered into the EMRE license agreement under which we have undertaken, subject to the terms of the EMRE license agreement, to give EMRE and its affiliates a non-exclusive, worldwide, fully paid, perpetual, irrevocable, non-transferable license and the right to use our patents , Data, know-how, improvements, device designs, methods, processes and the like, insofar as this is useful for the research, development and commercial use of carbonate fuel cells in applications in which the fuel cells use carbon dioxide from industrial and energy sources and for everyone else with it related or related purpose conc ntrate. This right and license are sublicensable to third parties who perform work for or with EMRE or its affiliates, but may not otherwise be sublicensed. In addition, on November 5, 2019, we entered into the EMRE Joint Development Agreement, under which we undertook to give EMRE and its affiliates a worldwide, non-exclusive, royalty-free, irrevocable, perpetual, sublicensable, non-transferable right (subject to certain exceptions) and license to run certain of the Company’s background intellectual property (if not already licensed under the EMRE license agreement) for the new carbonate fuel cell technology in carbon capture and hydrogen applications. We rely on POSCO Energy and EMRE to protect our intellectual property rights as well, but we cannot assure you that POSCO Energy or EMRE will do so.

As of October 31, 2021, excluding our subsidiaries, we owned 113 US patents and 222 patents in other jurisdictions covering our fuel cell technology (in certain cases covering the same technology in multiple jurisdictions), with patents covering various aspects of our SureSource technology, SOFC technology, PEM fuel cell technology and their applications. As of October 31, 2021, 45 patent applications were also pending in the United States and 92 patent applications in other jurisdictions. As of October 31, 2021, our subsidiary Versa Power Systems, Ltd. (“Versa”) over 30 US patents and 85 international patents covering SOFC technology (in certain cases covering the same technology in multiple jurisdictions). As of October 31, 2021, Versa also had 5 pending U.S. patent applications and 16 pending patent applications in other jurisdictions. In addition, our subsidiary FuelCell Energy Solutions, GmbH had license rights to 2 US patents and 7 patents outside the USA as of October 31, 2021 (in certain cases covering the same technology in multiple jurisdictions) for carbonate fuel cell technology licensed from Fraunhofer IKTS.

Some of our intellectual property is not covered by patents or patent applications and includes trade secrets and other know-how that cannot be patented, particularly with regard to our manufacturing processes and technical design. In addition, some of our intellectual property includes technologies and processes that may be similar to the patented technologies and processes of third parties. If we are found to infringe, embezzle, or otherwise infringe on the intellectual property of a third party, we have no way of knowing whether we can obtain licenses, if at all, to use that intellectual property on acceptable terms. Our patent position is subject to complex factual and legal issues that can create uncertainties about the validity, scope, and enforceability of any particular patent.

We cannot assure you that any of our US or international patents (including our subsidiaries) or any other patents that third parties license to us will not be invalid, evaded, challenged, made unenforceable, or licensed to anyone else our own or licensed pending or future patent applications are issued with the breadth of the claim

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