ITC judge: ClearCorrect infringes Align patents

Align Technology appears to have moved a step closer to excluding ClearCorrect from the U.S. clear aligner market.

An International Trade Commission (ITC) administrative law judge yesterday issued an initial determination finding that ClearCorrect and ClearCorrect Pakistan infringe seven patents asserted by Align in an ITC investigation initiated last year, Align noted in a press release.

But ClearCorrect maintains that the ITC judge's ruling will have little impact on its business.

Align initially filed a complaint with the ITC in March 2012, asserting that ClearCorrect's aligners are made using digital data and treatment plans imported from Pakistan that infringe seven of Align's patents.

In his May 6 ruling, Administrative Law Judge Robert Rogers found that all 40 of the claims in the seven patents are valid and that ClearCorrect infringes 37 of the 40 claims, according to Align. Align had requested that, in the event the judge found infringement, a cease-and-desist order be entered against ClearCorrect; however, the notice does not include the requested remedy, Align noted.

"The presiding administrative law judge's recommendation is an important step in the vindication of our patent rights against this persistent foreign infringement," said Roger E. George, Align Technology vice president and general counsel, in the release. "We support fair competition, but competitors should be required to compete on the basis of their own original technology."

As of press time, Align had not responded to a request for additional comment.

The complete initial determination is expected to be issued later this week. The final decision in this case, based on the deliberation of the full ITC commission, is expected by September.

A 'big win'

ClearCorrect CEO Jarrett Pumphrey called the preliminary ruling a "big win," because the judge found that ClearCorrect did not infringe any of Align's product claims, only that its manufacturing process infringed Align's method claims, the company noted in a press release.

ClearCorrect maintains that Align is simply trying to drive its competitors out of the U.S. market. In an April 19 investor call discussing the company's first-quarter financials, George told analysts "one simple thing to remind everybody of is that the remedy that is available at the ITC [in this case] as a forum is exclusion from the domestic market. We remain cautiously optimistic that the ruling will be in our favor and that ClearCorrect will be excluded from the domestic market."

But ClearCorrect will continue to serve its customers regardless of the ITC's final ruling, according to Anthony Penketh, chief marketing officer for ClearCorrect.

"Unfortunately, there has been a rumor being spread that, based on the ITC ruling, we could be out of business, that we could no longer service the domestic market," Penketh told DrBicuspid.com. "The truth is, the judge gave his recommendation to the ITC, and the ITC will make its decision in September. So right now, what happened doesn't affect anything in our business."

Even if the ITC agrees with the judge on any or all of the patent infringement claims, ClearCorrect will remain in the clear aligner business, Penketh emphasized.

"Worst-case scenario, if the ITC decides the judge is right and this is upheld, ClearCorrect will need to do one of two things: bring the digital process back to the U.S. or modify how we do what we do," he said. "But in either case, we will not stop servicing our doctors."

If the ITC upholds the judge's recommendation, "it won't have any material impact on our company or our ability to make aligners," Pumphrey added. "That's what counts."

Align also has a patent infringement action pending against ClearCorrect in the U.S. District Court for the Southern District of Texas alleging infringement of nine Align patents, including four additional patents not included in the ITC litigation. However, that case remains stayed pending the ITC process.

"ClearCorrect has always held that orthodontists taught Align about clear aligners, not the other way around," Mike Myers, ClearCorrect counsel, stated. "ClearCorrect will pursue its arguments all the way up to the Federal Circuit Court of Appeals -- the same court that held Align's patents invalid in the Ormco case."