ClearCorrect announced today that the Company and Align Technology, Inc. ("Align") have agreed to resolve the pending Remanded Enforcement Proceeding (Inv. No. 337-TA-562 or the "'562") before the International Trade Commission (ITC). The parties to this agreement (the "Termination Agreement") are Align, ClearCorrect US, ClearCorrect Pakistan (Private), Ltd., Mudassar Rathore; Waqas Wahab; Asim Waheed; and Nadeem Arif (collectively, "the Parties"). The resolution will be dependent on the outcome of the pending appeal before the Federal Circuit in the Infringement Action (Inv. No. 337-TA-833 or the "'833").
The Termination Agreement includes the following terms:
- In the event of a Final Finding in favor of ClearCorrect in the Infringement Action, ClearCorrect US, ClearCorrect Pakistan (Private), Ltd.; Mudassar Rathore; Waqas Wahab; Asim Waheed; and Nadeem Arif would have no obligations and the Remanded Enforcement Action would remain resolved and terminated.
- In the event of a Final Finding in the Infringement Action in favor of Align, ClearCorrect US will make two payments of $200,000 (US) to Align within 30 days and 180 days of such Final Finding.
- Beginning 30 days after any Final Finding in the Infringement Action in favor of Align until the expiration of Align's asserted patents, ClearCorrect US will not employ, engage, contract with, or otherwise utilize any former Align or Orthoclear employees for the design of its aligner products for use in the United States.
- "Final Finding in Favor of Align" means any final, non-appealable decision from the International Trade Commission, Court of Appeals for the Federal Circuit, or U.S. Supreme Court in the '833 Appeals, including after remand, that (i) ClearCorrect US directly infringes at least one of the '562 Remand Action Asserted Claims; (ii) ClearCorrect Pakistan (Private), Ltd., contributorily infringes that claim; (iii) that the infringed claim is valid, enforceable, and not subject to an allowed use (e.g. covenant not to sue) and (iv) there is a corresponding violation of Section 337 of the Tariff Act of 1930 with regard to such infringement.
The resolution allows the Parties to avoid the cost of the Remanded Enforcement Action hearing and potential further proceedings, to avoid the uncertainty of the outcome of the Remanded Enforcement Action and to agree, in advance, to a resolution of the Remanded Enforcement Action contingent on the outcome of the Infringement Action appellate proceedings, given that many issues raised in the Remanded Enforcement Action will ultimately be resolved as part of the appellate process in the Infringement Action. The Parties expect the Federal Circuit oral argument in the Infringement Action to take place in July 2015, with a decision by the Federal Circuit six to nine months later. The resolution of the Remanded Enforcement Action does not impact the positions taken by the parties and the decisions already issued and on appeal in Infringement Action or the stayed patent infringement action in federal district court in Houston.
Check out the full press release here.