Align Technology Inc. and ClearCorrect Inc. have settled long-running patent litigation that took them around the world and through multiple U.S. tribunals, including a few stops at the U.S. Court of Appeals for the Federal Circuit.
For some 14 years, the competitors have been thrashing out claims and counterclaims over Align’s patented appliances, methods and treatment plans for incrementally straightening teeth. Most famously, the Federal Circuit ruled in 2015 that the International Trade Commission’s authority to exclude infringing “articles” of commerce did not include information flowing across the internet—specifically, electronic blueprints of orthodontic appliances that ClearCorrect imported from Pakistan to avoid infringing Align patents. Align did win a Federal Circuit ruling last year throwing out a Patent Trial and Appeal Board decision invalidating some of Align’s patent claims.
The parties were about to go to trial in a Southern District of Texas case originally filed in 2011. Thursday’s settlement calls off that trial and ends patent litigation in the U.K. and Brazil.
Align pronounced itself satisfied with the resolution, which includes a $35 million payment to Align and a five-year agreement with the Straumann Group, which acquired ClearCorrect in 2017, to integrate Align’s scanners into Straumann’s network. If the parties cannot work out the agreement in the next 90 days, Align receives an additional $16 million.
Align’s stock price climbed 5 percent on the news Friday as financial analysts reacted positively to the news.
“We can now turn our attention to the potential of an exciting new channel for iTero scanners and a digital integration partner in Straumann, recognized as a world leader in digital dentistry,” Roger George, Align Technology senior vice president and general counsel, said in a written statement.
Paul Hastings partner Tom Counts is Align’s lead attorney on the patent litigation. Team members also included partner Elizabeth Brann and associates Jeff Comeau, Danielle Decker, Ariell Bratton, Grant Margeson, Saya Wallace, Gavin Murphy, Cole Malmberg and Matt Lind.
Counts said the litigation originally began as a 2005 collection action against the person who went on to found ClearCorrect. Along with the district court and ITC proceedings, the parties litigated more than 15 re-examinations of Align patents at the USPTO. “It’s not often you work on the same case for 14 years,” Counts said Monday. “Despite the ups and downs of this exercise, Align has stayed committed to its intellectual property, and that finally ended in this strong result.”
Straumann stated that it had largely accounted for the settlement amount as part of its ClearCorrect acquisition. “We are very pleased that ClearCorrect has finally been able to settle its dispute and can look forward to growing its international clear-aligner business,” said Andreas Meier, general counsel of the Straumann Group, in a written statement.
Strauman was represented by Haltom & Doan; Susman Godfrey; McClanahan Myers Espey; and Orrick Herrington & Sutcliffe.