Appeals court declines en banc hearing in Align Tech-ClearCorrect spat

Align Technology‘s (NSDQ:ALGN) plea for an en banc rehearing of a case against ClearCorrect over clear orthodontic liners was denied by the U.S. Court of Appeals for the Federal Circuit.

While ClearCorrect celebrated the ruling as a victory supporting the compliance of its clear aligner product with legal standards, Align Technologies said the decision was solely about the International Trade Commission’s jurisdiction on digitally transmitted data.

The ruling is the most recent event in a long-running spat over orthodontic liners.

“This is not a decision against Align and it is not a decision about the substance or compelling evidence of ClearCorrect’s patent infringement – this decision remains solely about the ITC’s jurisdiction. The panel’s decision today has no bearing on Align’s patents or position against ClearCorrect. As Judge Newman’s dissenting opinion today noted, ‘it is not disputed that the digital data sets and digital models for teeth alignment, produced in Pakistan and imported into the United States, infringe the patents of Align Technology’,” Align Technology veep and GC Roger George said in prepared remarks.

In November, the U.S. Court of Appeals for the Federal Circuit ruled that the International Trade Commission has no jurisdiction in ruling on Align’s patent spat with ClearCorrect.

ClearCorrect’s aligners are created using digitally transmitted data and treatment plans imported from Pakistan, San Jose, Calif.-based Align Technology claims.

A 3-judge panel ruled that the ITC has no jurisdiction over the transmission of digital data over the internet, and only over the importation of “tangible goods,” according to Align Technology.

ClearCorrect said that while the ITC or Align Technology could request a U.S. Supreme Court review of the case that “such a review is unlikely to occur under the present circumstances.”

“Denial of these petitions solidifies our victory in both actions we faced in the ITC. Based on the Federal Circuit’s ruling last November, we expected today’s outcome and are pleased that we will have no liability from either of these cases,” ClearCorrect CEO Jarrett Pumphrey said in a press release.

Last December, ClearCorrect said it filed an Inter Partes Review with the United States Patent and Trademark Office. The IPR must be decided within 12 months, ClearCorrect said, and stands independent from the company’s other ongoing USPTO patent challenges.

The IPR was requested for only 1 of the 14 patents asserted in Align’s federal district court action against SmileCareClub LLC in California, Align Technology said, and is not among the patents the International Trade commission ruled on in Align’s favor in May, 2013.

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