Align Technology Provides Update on Enforcement Complaint Filed Against ClearCorrect With the US International Trade Commission (ITC)

Mon Jan 7, 2013 8:30am EST

* Reuters is not responsible for the content in this press release.

SAN JOSE, CA, Jan 07 (Marketwire) -- 


--  Commission reverses earlier ruling by the presiding Administrative Law
    Judge and terminates the Enforcement Proceeding
--  Commission determines 2006 Consent Order entered in the prior
    OrthoClear ITC proceeding could not be enforced against ClearCorrect
    based on contractual interpretation of Consent Order
--  Ruling is unrelated to the merits of the Patent Infringement Complaint
    against ClearCorrect scheduled for trial in February 2013

    

Align Technology, Inc. (NASDAQ: ALGN) today provided an update on
its Enforcement Complaint, one of two complaints filed against
ClearCorrect Operating LLC, based in Houston, TX, and ClearCorrect
Pakistan (Private) Ltd. (ClearCorrect Pakistan), based in Lahore,
Pakistan with the United States International Trade Commission (ITC) in
March 2012. The Enforcement Complaint sought enforcement against
ClearCorrect of a prior Consent Order entered by the ITC on October 27,
2006 in the OrthoClear ITC action. The Consent Order prevented OrthoClear
from importing its dental aligner products into the U.S., either directly
or through third parties, such as ClearCorrect Operating, ClearCorrect
Pakistan, and certain former OrthoClear employees who now own, manage,
and are employed by ClearCorrect Pakistan in Lahore, Pakistan. 

    On January 4, 2013, the Commission reversed an earlier ruling by the
presiding Administrative Law Judge and terminated the Enforcement
Proceeding instituted by the Commission on April 25, 2012, which sought
enforcement of the 2006 OrthoClear Consent Order against ClearCorrect
Operating, ClearCorrect Pakistan, and four officers of ClearCorrect
Pakistan. In the Notice issued January 4, the Commission determined that
the 2006 OrthoClear Consent Order could not be enforced against
ClearCorrect and its former OrthoClear employees. 

    The Commission's decision is limited to the contractual issue of whether
the Consent Order could be applied against ClearCorrect's current method
of operation. While the Consent Order expressly prohibits the importation
of physical dental aligner products and generally prohibits the
importation of any other products that infringe Align's patents, the
Commission nevertheless found it dispositive that the Consent Order does
not contain a specific, express prohibition of the transmission of
digital treatment data, such as the digital data imported from Pakistan
by ClearCorrect to manufacture its aligners. 

    In an effort to avoid the prohibitions of the Consent Order, ClearCorrect
structured its relationship with the former OrthoClear operation in
Pakistan to rely on the transmission of digital treatment data, with the
aligners themselves being manufactured in Houston, Texas. In the
presiding Administrative Law Judge's Order issued November 28, 2012,
Administrative Law Judge Robert K. Rogers found that digital transmission
of data was within the general provisions of the Consent Order
prohibitions and thus covered by the terms of the 2006 Consent Order. The
Office of Unfair Import Investigation also supported Align's position on
the issue. 

    The Commission's decision regarding the Enforcement Proceeding does not
impact the Patent Infringement Proceeding instituted by the Commission on
April 1, 2012 against ClearCorrect Operating and ClearCorrect Pakistan.

    "While we are disappointed that the Commission decided that it could not
enforce its own Consent Order against obvious acts of infringement, we
are pleased by Judge Rogers' rulings detailing the intertwined
relationship between ClearCorrect Operating and ClearCorrect Pakistan,
ClearCorrect's attempts to conceal that relationship (which Judge Rogers'
Order termed a 'sham') and his ultimate finding that the two entities
must be considered a single entity in the Enforcement Proceeding," said
Roger E. George, Align Technology vice president and general counsel.
"ClearCorrect Pakistan is merely a successor to OrthoClear Pakistan and
thus should be bound by the OrthoClear Consent Order, regardless of how
they reconfigure the importation process to avoid the Consent Order's
prohibitions. This is the first step in a very protracted litigation
process and we look forward to commencing our patent infringement trial
against these same entities in a few weeks and are very confident that
our intellectual property rights will ultimately be vindicated again
against this persistent foreign infringement."

    Align's federal court patent infringement case in Houston against
ClearCorrect Operating remains stayed pending the ITC process and remains
an available remedy to Align should ClearCorrect attempt to use domestic
technicians to provide its digital treatment services.

    About Align Technology, Inc.
 Align Technology designs, manufactures and
markets Invisalign, a proprietary method for treating malocclusion, or
the misalignment of teeth. Invisalign corrects malocclusion using a
series of clear, nearly invisible, removable appliances that gently move
teeth to a desired final position. Because it does not rely on the use of
metal or ceramic brackets and wires, Invisalign significantly reduces the
aesthetic and other limitations associated with braces. Invisalign is
appropriate for treating adults and teens. Align Technology was founded
in March 1997 and received FDA clearance to market Invisalign in 1998.
The Invisalign product family includes Invisalign, Invisalign Teen,
Invisalign Assist, Invisalign Express 10, Invisalign Express 5,
Invisalign Lite, and Vivera Retainers. To learn more about Invisalign or
to find an Invisalign trained doctor in your area, please visit
www.invisalign.com.

    Cadent Holdings, Inc. is a subsidiary of Align Technology and is a
leading provider of 3D digital scanning solutions for orthodontics and
dentistry. The Cadent family of products includes the iTero intra-oral
scanning systems, OrthoCAD iCast and OrthoCAD iRecord. For additional
information, please visit www.cadentinc.com.

    

Investor Relations Contact 
Shirley Stacy 
Align Technology, Inc. 
(408) 470-1150 
sstacy@aligntech.com 

Press Contact 
Shannon Mangum Henderson
Ethos Communication, Inc.
(678) 261-7803
align@ethoscommunication.com 

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