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US Court of Appeals rules that the ITC cannot regulate electronic transmissions: The latest in the ClearCorrect and Align Technology patent dispute

Nov. 12, 2015
The ruling addresses the ITC's jurisdiction and does not resolve patent lawsuits brought by Align Technology against ClearCorrect.

In an International Trade Commission (ITC) investigation of ClearCorrect initiated by Align Technology, the United States Court of Appeals for the Federal Circuit has ruled that ITC does not have jurisdiction over electronic transmissions.

In the court’s opinion, Chief Justice Sharon Prost wrote that “the [ITC’s] decision to expand the scope of its jurisdiction to include electronic transmissions of digital data runs counter to the ‘unambiguously expressed intent of Congress.’ (1) An administrative law judge at the ITC had originally “recommended that the Commission issue a cease and desist order to prohibit the importation of digital models.” (1)

At the heart of the Court of Appeals case was ClearCorrect’s production process for its aligners. Scans of the patient’s teeth are taken in the United States and then transmitted to ClearCorrect Pakistan, “where the position of each tooth is manipulated to create a final tooth position.” (1)Once complete, the digital model is transmitted back to the United States, where the aligner is manufactured.

In an April 3, 2014, order, the ITC found that “ClearCorrect US directly infringed… [Align Technology] patents and ClearCorrect Pakistan contributed to that infringement." (1) A subsequent cease-and-desist order was stayed after ClearCorrect appealed the decision to the Federal Circuit.

In a press release, Align Technology vice president and general counsel Roger E. George stated that “this is not a decision against Align and it is not a decision about patent infringement—it's about jurisdiction. And if it is determined that the ITC cannot enforce the previously determined finding of infringement of Align's patents then we will pursue relief in a venue that can. The panel's opinion and the ITC jurisdictional issue have no bearing on Align's stayed litigation against ClearCorrect in Texas, which Align will continue to pursue.” (2)

In ClearCorrect press release, Scott A. McKeown, a partner with the Washington, DC, law firm Oblon, McClelland, Maier & Neustadt, countered that “while the ITC has no authority or jurisdiction to judge the validity of these patents, the USPTO certainly does, and it has found substantial questions exist in all of the Align patents that it has reviewed thus far despite Align’s oral arguments and written responses to the contrary. The input of this expert agency reinforces the strength of ClearCorrect’s insistence that we do not infringe any valid patent rights.” (3)

The Texas litigation has been stayed since 2012, pending the resolution of the ITC’s cease-and-desist order.

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1. ClearCorrect Operating, LLC, ClearCorrect Pakistan (Private), Ltd. v International Trade Comission, Align Technology Inc. Published November 10, 2015. Accessed November 12, 2015.
2. Align Technology Provides Update on Federal Circuits Review of ITC’s Jurisdiction. Align Technology website. Published November 10, 2015. Accessed November 12, 2015.
3. ClearCorrect Eliminates Three Align Technology Lawsuits. Clearly: The ClearCorrect Blog. Published November 12, 2015. Accessed November 12, 2015.