A legal update… most likely more paperwork in store for the attorneys.

A recent decision made by the Federal Circuit Court of Appeals holds that the International Trade Commission did not follow their own internal procedures in the way it announced the ClearCorrect victory.

It was decided that the case would be returned to the ITC so that their findings can be decided in strict compliance with their own internal procedures.

In laymen's terms, Align still bears the burden of proving its case—that ClearCorrect is somehow Orthoclear reconstituted—and there is nothing in the court of appeals' decision contradicting the ITC staff's position that ClearCorrect is not Orthoclear.

Therefore, while the lawyers may need to file more papers to ensure that all of the ITC's internal procedures are followed, we're confident that the ITC's conclusion will remain the same.

ITC grants ClearCorrect's motion to stay orders

As you may have heard, it was announced yesterday that the US International Trade Commission (ITC) stayed the cease and desist orders that were issued against us in the patent infringement action filed by Align Technology, Inc.

The ITC found that the equities of the case required that the status quo be maintained until the appeal is decided. As such, there will be no disruption to ClearCorrect's business operations during the appeal. 

The ITC’s ruling came shortly after the ITC was notified of recent developments in a case in Germany. In the German case, Align sued a competitor for patent infringement.  In that case, several of Align’s patents were recently found by the German court to be invalid.  One of the patents at issue in the German case is the European equivalent of one of the key patents at issue in Align’s action against ClearCorrect.

In summation, it's business as usual at ClearCorrect... and we look forward to continuing to service our providers.

Ortho Caps invalidates two Align patents in Germany

In a victory for the free market and clear aligner companies around the world, Ortho Caps GmbH, manufacturer of Orthocaps® aligners, successfully invalidated two of Align Technology's patents.

In December 2011, Align filed a patent infringement lawsuit against Ortho Caps, asserting that Ortho Caps infringed five Align patents.

In response, Ortho Caps filed two invalidity lawsuits against two of the patents in dispute before the Federal Patent Court in Germany, one of which is the European equivalent of the '325 patent ClearCorrect is currently contesting. Ortho Caps also filed oppositions before the European Patent Office for the remaining three patents at issue, in which determinations are pending.

It was recently announced that the German Federal Patent Court nullified the German part of both patents at issue. In a last ditch effort to save parts of the overly broad patents, Align filed auxiliary claims during the hearing. However, the court invalidated both of the patents in their entirety.

To read more about the findings, check out Ortho Caps' press release here.

Update on April 3rd ITC ruling

On April 3rd, the International Trade Commission (ITC) made its ruling in the patent infringement case Align filed against ClearCorrect. As a ClearCorrect provider, here’s what you need to know:

What was the decision?

The ITC reversed the majority of the adverse claims in ClearCorrect’s favor. Of the 7 patents and 40 claims at issue, the ITC found ClearCorrect did not infringe on 2 patents and 22 claims.

While most claims went our way, the Commission did find that we infringed 18 claims related to the digital data we receive from ClearCorrect Pakistan. As a result, the Commission issued an order to cease and desist importing that specific digital data. The order does not prevent us from continuing to make aligners.

Is it still safe to submit cases to ClearCorrect?

Yes. We will continue to make aligners for both new and existing cases. The only material restriction is on the importation of digital data that would infringe Align’s patents. While we still consider Align’s patents overly-broad and invalid, we’ve made adjustments to our process in order to comply with the ITC’s decision while we appeal it.

Will my current cases be interrupted or suspended mid-treatment?

No. The ITC has not made any ruling that would prevent us from completing any existing cases.

Well, why does Align keep saying I should be concerned?

That’s just Align being Align. They’ve been known to resort to these sorts of tactics in the past to get doctors to do what they want. This is just more of the same.

We maintain Align’s patents are overly-broad and invalid. That said—despite whatever Align represents to the contrary—the patents at issue do not cover every possible way of making aligners.

We’ve been making aligners for over seven years now. We’ve improved our process countless times along the way, and now we’ve made further adjustments to our process in anticipation of the ITC’s order.  We can continue making aligners in full compliance with the ITC for the foreseeable future.

We’re not going anywhere.

Is the ITC decision final?

No. Like most court or agency decisions, the ITC’s determination can be appealed. We will appeal this decision to the US Court of Appeals for the Federal Circuit as soon as we’re allowed to do so.

It isn’t uncommon for decisions in one court to be overturned by another. For instance, in Align’s patent litigation with Ormco Corp., the US Court of Appeals for the Federal Circuit ruled that key Align patents were invalid, reversing the lower District Court’s decision.

Patent litigation is a long process, even when conducted in the ITC (where things are supposed to move quickly). We’ve spent a couple years fighting our way through this case already and we expect at least another couple years before it’s ultimately decided.

Can I help invalidate Align’s patents?

Yes! Though we have mounds of prior art to support our arguments of invalidity, we’re happy to throw more on the pile. Here are the core topics and themes of the patents at issue:

  1. Making dental appliances.
  2. Thermoformed appliances.
  3. Orthodontic appliances.
  4. Using systems like 3D printers to print digital models.
  5. Treatment planning on a computer.
  6. Planning a goal for treatment before treatment begins.
  7. Digital dentistry or digital medicine.

If you know of any patents, papers, articles, documents, manuals, promotional materials, printed media of any kind, video, movies, TV programs, recorded lectures, transcripts, etc., that discussed any of the above topics or any related topics before October 1, 1996, please contact us at legal@clearcorrect.com with your name and contact info. We’d like to speak with you.

What happened this week at the ITC?

The rumor mill has been spinning overtime, so let's make a few things clear:

  • Align has not won any of their suits against us.
  • We are still making aligners.
  • Nothing has changed.

First, a quick recap. As you probably know, our good buddies at Align have a long history of suing their competitors. This doesn't usually work out that well for them—Align has had patent claims invalidated and they've paid out tens of millions of dollars in settlements.

But old habits die hard, and they've stuck to this strategy against us. In March 2011, Align sued us in California and Texas, and in March 2012, they filed two complaints with the ITC. These cases take a long time to play out: nothing significant has happened in the California case, and the Texas case is on hold. The first ITC complaint was decided in our favor this January.

This week, Administrative Law Judge (ALJ) Rogers issued his initial determination for the second ITC complaint. His opinion was that ClearCorrect did not violate Align's product claims, but Align's method claims were violated. Naturally, we disagree with that opinion. Regardless, here's what you need to know:

  1. This is not the final ruling on the case. The ALJ's initial determination will be reviewed by the ITC before they make their final decision, scheduled for September 2013. Then that decision is likely to be appealed in the U.S. Court of Appeals for the Federal Circuit. The ultimate conclusion is probably still years away.
  2. In the previous complaint, the ITC reversed this same judge's initial determination and ruled in our favor.
  3. We don't have to do anything differently right now. There's no effect on our day-to-day operations until the ITC makes their final decision.
  4. This initial determination has been incorrectly reported as "a ruling to block U.S. imports of a competing product by ClearCorrect." We make our aligners right here in Houston, Texas, so it's impossible for the ITC to block us from "importing" them. The only "imports" at stake in this case are digital files transmitted by diagnostic technicians in Pakistan. (We've argued that data transmissions shouldn't even be considered imports.)
  5. Align's legal VP recently claimed to investors that if the ITC ruling went their way, "ClearCorrect will be excluded from the domestic market." That's simply not true. Even if the ITC rules completely in Align's favor, we can continue manufacturing and selling aligners in the U.S. The only thing the ruling will determine is how and where we can stage the treatment plans.

In short, don't panic. We're sticking around. We've just invested in scaling up our production capacity by 30%, and we've got a really cool announcement to share with you tomorrow. Until next time…

Update: Align put out a second press release shortly after this was posted, but nothing has changed. The "cease and desist orders" they refer to are just the ALJ's recommendations from his initial determination. As explained above, the ITC is not expected to make a decision until September. If the ITC does issue cease & desist orders, they will apply only to imported data—our ability to design, manufacture, and sell aligners in the U.S. is not at risk.

ITC ruling will not affect ClearCorrect's products or service

ClearCorrect's US operation remains unrestricted; Align Technology's litigious campaign remains unsuccessful

ClearCorrect, LLC announced today that it received notice of an initial determination in the patent infringement complaint filed by Align Technology, Inc. with the US International Trade Commission (ITC).

Align's complaint, filed in March 2012, alleged that ClearCorrect and ClearCorrect Pakistan (Private) Ltd. ("ClearCorrect Pakistan") infringed claims of seven Align patents and sought to have ClearCorrect excluded from the US market. Administrative Law Judge (ALJ) Rogers' initial determination presents his opinion that ClearCorrect did not infringe any of Align's product claims, but that Align's method claims (those claims concerning the way a certain process is performed) were infringed. The ALJ's opinion will be one of the factors that the ITC will take under consideration when making its final ruling, expected in September 2013. In Align's previous ITC complaint against ClearCorrect, the ITC decided to reverse ALJ Rogers' initial determination and found no wrongdoing by ClearCorrect.

"We view the preliminary ruling on the product claims as a big win and look forward to the Commission's review of the method claims," said Jarrett Pumphrey, ClearCorrect CEO. Indeed, the ITC's own staff attorneys have interpreted US patent law to mean that ClearCorrect does not infringe most of Align's method claims and ClearCorrect will present that interpretation when it asks the Commissioners to find no infringement of any of Align's patents. "We're hopeful the Commission will view the law as both we and their staff attorneys do," continued Pumphrey, "but even if the Commission upholds the Judge's recommendation in full, it won't have any material impact on our company or our ability to make aligners. That's what counts." In fact, ClearCorrect recently invested in increasing the production capacity of its US-based manufacturing facility by another 30%. "Business has been good lately," Pumphrey added, "and we're happy we can continue servicing our doctors who have all been so supportive."

The notice of the initial determination did not include the recommended remedy. However, the worst-case scenario for ClearCorrect would simply be the exclusion of computer data prepared by ClearCorrect Pakistan. Because ClearCorrect manufactures its aligners in the US, there are no aligner imports for the ITC to block. Though only last month Align boasted "ClearCorrect [would] be excluded from the domestic market," the reality is ClearCorrect is still allowed to service its customers in the US and will continue to do so. The preliminary decision thus falls squarely in line with Align's other failed efforts to prevent competition through litigation. Align's highly-publicized case against Ormco Corporation resulted in the invalidation of Align's patent claims and a settlement that paid Ormco tens of millions of dollars, including 10% of Align's stock. Align's first ITC case against ClearCorrect resulted in complete victory for ClearCorrect. And now Align's second ITC case has failed to prevent ClearCorrect from competing in the US market.

"ClearCorrect fully intends to press the investigation further and ask the Commission to find that Align's patents are invalid because of the vast amount of prior art," said Mike Myers, ClearCorrect's legal counsel. "ClearCorrect has always held that orthodontists taught Align about clear aligners, not the other way around, and, if necessary, 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."

PDF
Notice Regarding Initial Determination on Violation of Section 337 and Recommended Determination on Remedy and Bond

So you've been accused of IP infringement...

As we've experienced firsthand, it's pretty lousy to be accused of IP infringement when it's not true. OXO, the New York-based consumer product design company best known for its popular kitchen utensils, provides a master class in how to respond to such accusations the right way: http://www.oxo.com/quirkyresponse.aspx.

(via: Jason Fried, 37signals)

ITC terminates Invisalign's enforcement case against ClearCorrect

ClearCorrect, LLC, announced today it received notice that the US International Trade Commission (ITC) has terminated an investigation brought by Invisalign maker Align Technology, Inc.

On January 4, 2013, the Commission issued notice that it had terminated the March 2012 enforcement complaint filed by Align against ClearCorrect Operating, LLC, (“ClearCorrect USA”) and ClearCorrect Pakistan (Private), Ltd., (“ClearCorrect Pakistan”). Align’s enforcement complaint sought to bind ClearCorrect USA and ClearCorrect Pakistan to the terms of a 2006 Consent Order between Align and former competitor OrthoClear, because certain employees of ClearCorrect Pakistan once worked for OrthoClear. The ITC, however, found that there has been “no violation of the consent order” by ClearCorrect USA or ClearCorrect Pakistan and terminated the case.

“We’re very happy with this decision from the ITC,” said Jarrett Pumphrey, ClearCorrect’s CEO. “We think the decision validates what we’ve been saying all along: we’re not OrthoClear.”

Still on the table is the patent infringement complaint Align also filed with the ITC. Bolstered by its victory in the enforcement case, ClearCorrect is as confident as ever that it does not infringe any valid intellectual property, and in fact, looks forward to invalidating the overly-broad patent claims Align has served up.

“ClearCorrect's recent victory does not end its pursuit of judicial findings that Align's patent claims are invalid because they merely claim what orthodontists have been doing for decades,” said Mike Myers, ClearCorrect’s legal counsel. “The validity of Align's patent claims was last tested in its litigation against Ormco Corporation when the United States Court of Appeals for the Federal Circuit invalidated every Align patent claim it reviewed.“

ITC Notice
Notice of Commission Determination to Review and Reverse an Initial Determination of the Presiding Administrative Law Judge; Termination of the Enforcement Proceeding (PDF)

Beware of telemarketing scams

Some doctors have told us that they've been contacted by a company called Yodle, who claims to be affiliated with ClearCorrect.

Yodle's claims are not true. We have no affiliation with Yodle.

We had never heard of them before we started getting these complaints. We did not share your personal information with them, and we did not authorize them to contact any of our providers. 

In fact, we have repeatedly asked Yodle to stop misrepresenting themselves this way, but we continue to hear other reports of this behavior. 

We are currently in talks with our legal counsel to resolve this issue. In the meantime, if you are contacted by Yodle, or any company who claims to be affiliated with ClearCorrect, please contact us immediately at (888) 331-3323.

Align's lawsuit against ClearCorrect stayed indefinitely

It’s been a while since I’ve updated you on the legal proceedings between us and Align. Don’t let the lack of updates fool you—all is progressing well. In fact, I’m very happy to say I’ve got some great news to share with you.

First, a refresher: Align sued us in February, 2011, alleging we infringed several of their patents. We’ve said all along that we don’t infringe any of their valid intellectual property and countersued them in May, 2011, asking the Court to declare the claims in their patents invalid.

Now, fast-forward a year. Just this past May, our legal team filed a motion with the US District Court to stay the case when Align filed overlapping complaints with the International Trade Commission (ITC), the agency responsible for regulating the trade of international goods. Despite Align’s objections, the Court recently ruled in our favor and granted the motion, effectively stopping the case indefinitely and virtually guaranteeing we can continue operating our US-based manufacturing facility without restriction for the foreseeable future.

Needless to say, this is a big win for us. We can now take attention off the federal case and put it on what really matters to us—servicing our providers and helping others where we can.

Next up for our legal team is making our case to the ITC. Bolstered by this win in the US District Court, we’re as confident as ever that we’ll see similar success in the international arena. We'll, of course, keep you posted as that case proceeds. 

Thank you so much for your continued support. I can't possibly express what a difference it's made.

If you have any questions at all, please feel free to ask. I’m happy to answer them.