Invisalign hopes third time’s the charm at beating ClearCorrect in the courts rather than the free market

ClearCorrect, LLC, a manufacturer of clear aligners, received notice that Align Technology, Inc., (the maker of Invisalign®) has filed another round of lawsuits alleging patent infringement, this time in two complaints to the US International Trade Commission (ITC).

The first complaint alleges ClearCorrect is infringing seven patents related to methods of planning and implementing orthodontic treatment with aligners. Several of the patents-in-issue overlap patents from Align's federal suit against ClearCorrect filed just last year. Though filing complaints with the ITC is a clear favorite from Align's "how to beat your competition" playbook, ClearCorrect remains unfazed.

"We're certain we don't infringe any valid patents," said Jarrett Pumphrey, ClearCorrect CEO. "It doesn't matter how many times they sue us or where they sue us -- that won't change. The only thing this changes is who we'll be proving that to."

In fact, according to ClearCorrect's legal counsel, Mike Myers, ClearCorrect welcomes the ITC action, "The ITC process is generally faster, so ClearCorrect can makes its case sooner rather than later. ClearCorrect has always maintained that orthodontists taught Align how to straighten teeth, not the other way around. In its first two cases, Align was never able to show that ClearCorrect does anything other than practice the vast prior art developed by orthodontists over the last 70 years, which ClearCorrect is free to do. The new filings should allow ClearCorrect to promptly demonstrate the scope of its work and thereby continue to focus on servicing its customers distraction-free."

The second complaint seeks enforcement of a Consent Order granted in 2006 from an ITC action between Align and OrthoClear. Though ClearCorrect is not OrthoClear, Align is apparently asking the ITC to recognize them as the same company and enforce a Consent Order that would otherwise not apply.

Per Align, certain employees of ClearCorrect Pakistan (Private) Ltd., a company started in Lahore, Pakistan, to support the domestic and international growth of ClearCorrect, are in violation of the Consent Order. Align contends that those employees previously worked for OrthoClear and are now engaging in alleged "infringing activities." The employees of ClearCorrect Pakistan use the process developed in the US by ClearCorrect, which does not infringe any of Align's valid patents. This is simply another way Align is attempting to use the courts to scare doctors and disrupt fair and legitimate competition.

"Align has been trying to convince doctors that we're OrthoClear for years. This is just more of the same," said Pumphrey. "The truth is, as we've planned and positioned for international growth, we found a motivated and passionate workforce in Pakistan to support it -- just like Align did, once upon a time. But that doesn't make us OrthoClear or Align. We're ClearCorrect."

ClearCorrect countersues Align: 10 patents, 408 claims, all invalid

Yesterday, we filed our response to Align Technology’s patent infringement suit. In our response, we’re countersuing Align and asking the Court to declare all 408 claims in 10 of their patents invalid.

We’re posting the entirety of the 246-page response here, along with the text of Align’s original suit against us.

You’ll find in the response, among other things, much of the evidence raised in Align’s previous patent case against Ormco, which resulted in a federal court ruling that 11 of Align’s patent claims were invalid.

We want to hear what you think. Share your thoughts in the comments.

The free market

Seth Godin on the free market:

There's no question that an unfettered authoritarian corporate regime is more efficient and effective—in the short run. In the long run, though, the free market triumphs, as long as it isn't destroyed by those that get to play first.

The free market is a great idea, which is why we need to be careful when market incumbents lobby to make it un-free.

Amen.

No wonder they think we don’t charge enough…

Another thing we value here is economy, doing more with less. It’s a value consistent with our goal of making clear aligners more affordable. We apply it wherever we can: Economy in our thinking, in our treatment protocols, in the design of our products, in our manufacturing processes—in our payroll.

Case in point—the average total annual compensation of Align Technology’s CEO is more than we paid our entire executive structure last year:

The other guysvs.     ClearCorrect
President/CEO   President/CEO
    Chief Financial Officer
    Chief Administration Officer
    Chief Operations Officer
    Chief Public Officer
    Chief Clinical Officer
    Chief Technical Officer
    Chief Systems Officer
    Chief Information Officer
    VP Establishment
    VP Systems and Infrastructure
    VP Sales and Marketing
    VP Finance
    VP Production
    VP Quality Assurance
    VP Public Contact
    VP Public Sales
    HR Director
    IT Director
    Creative Director
    Account Services Director
    Disbursements Director
    Tech Services Director
    Diagnostics Director
    Manufacturing Director
    Personnel Enhancement Director
    Public Sales Director
    Public Services Director
    Public Relations Director
It’s no wonder our aligners are more affordable than theirs.

Align’s lawsuits against ClearCorrect

Here at ClearCorrect, we strongly value openness and transparency. It’s important to us that the people who work with us know what we’re all about. It keeps us focused. It keeps us motivated. And it keeps us honest. 

In that spirit of openness, I’m writing to let you know about some recent news. On February 28, 2011, we learned that Align Technology, Inc. (maker of Invisalign®) has filed two lawsuits against us, claiming that: 1) our prices are too low, and 2) we’re infringing their patents.

In their first filing, Align is suing us under California’s Unfair Practices Act, alleging that we sell our products for a price below our average production cost, with the purpose of "destroying competition in the market for clear aligner systems." Apparently, we’ve made aligners too affordable for Align to bear. 

The truth is, we’re profitable. Our lab fees are lower than Align’s because we’ve always made affordability a priority. We constantly refine our manufacturing processes to improve quality and drive down costs. Working with our providers, we’ve created a business model that works, fair and square. It’s that simple.

Align’s second filing alleges patent infringement. I assure you we respect all valid intellectual property—we always have. In fact, we’re so confident that we don’t infringe any of Align’s valid patents, we filed a declaratory judgment against Align back in 2009. We wanted a judge to resolve this matter up front, so we could build our business without distractions. After Align said that they had no intent to sue us for patent infringement and would not engage in any “scare the customer” tactics, we voluntarily dismissed the lawsuit and moved on. As you can imagine, we were quite surprised when we found out they’ve decided to sue us anyway.

We’re as prepared now as we were two years ago to defend our position. And since Align is giving us the opportunity, we’re also going on the offensive. In another recent lawsuit, Ormco (maker of Red, White and Blue®) invalidated several of Align’s patent claims. We believe that many of the claims in the patents we’re accused of infringing are just as invalid. We’re taking up the battle right where Ormco left off, and we’re ready to go for years if we have to—we have the resources and backing to take it all the way.

We plan to be as open and transparent about this process as we can. I’m pleased to announce that you can follow along and share your thoughts on our new blog, Clearly. In the weeks to come, we plan to share a lot of new information here, such as our philosophy and approach to business, behind-the-scenes looks at how we do things, updates on the lawsuits, and previews of exciting things in the works.

Thanks for your support as we fight to defend your right to an affordable, doctor-friendly choice in clear aligners. We’re in this for the long haul, and we intend to win.

Regards,

Jarrett Pumphrey
CEO, ClearCorrect