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."

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

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