legalThe US International Trade Commission (ITC) has temporarily stayed enforcement of the cease and desist orders it originally issued on April 3, 2014, against ClearCorrect entities, including ClearCorrect Operating LLC, based in Houston, and ClearCorrect Pakistan Ltd, based in Lahore, Pakistan. The cease and desist orders bar ClearCorrect from importing, selling, advertising, or distributing digital data and treatment plans that infringe five Align Technology Inc patents. ClearCorrect had moved for a stay of the cease and desist orders pending their appeal to the Federal Circuit, noting the “potentially catastrophic consequences” of the orders, including the ruin of ClearCorrect Pakistan’s business and the disruption of ClearCorrect Operating’s manufacturing operations.

In March 2012, Align filed an ITC complaint against ClearCorrect asserting that ClearCorrect’s aligners are made using digital data and treatment plans imported from Pakistan that infringe Align’s patients.

The ITC issued the stay on June 2, 2014, on procedural grounds pending a determination on ClearCorrect’s appeal of the Commission’s decisions to the Federal Circuit. However, in its June 2 order, the ITC stated that it continues to hold its Final Determination to be entirely correct. The ITC also noted that the decision to temporarily stay enforcement of the cease and desist orders was not recognition of ClearCorrect’s likelihood of success on the merits of its case, in part because the Commission agreed with Align that the Federal Circuit is generally required to defer to the ITC’s decisions regarding the scope of the ITC’s jurisdiction.

“While we are disappointed with the Commission’s decision to delay enforcement of its cease and desist orders, we understand that this is only a temporary procedural delay and the Commission’s order in no way impacts its substantive rulings on the scope of the ITC’s jurisdiction or the Commission’s prior determination that all of Align’s asserted patent claims are valid, and that ClearCorrect infringes 18 of those claims,” said Roger E. George, Align Technology vice president and general counsel, in a release from the company. “We are confident this ruling will only temporarily postpone our ability to hold ClearCorrect accountable for its infringement of Align’s patented process through an arrangement dubbed a ‘sham’ by the ITC Administrative Law Judge. We are confident that the Federal Circuit will agree with Align and the host of other patent law experts, including the ITC Staff, the ITC Administrative Law Judge and the Commission itself, in finding that Align’s patent claims are valid and infringed by ClearCorrect. We look forward to exercising our right recognized by the Commission to seek damages in the district court action in Houston from ClearCorrect for damages for past infringement, including those incurred during these proceedings as well as during this delay.”

In a separate release from ClearCorrect, the company’s legal counsel Mike Myers commented, “We’re excited that the ITC granted our request and that we now have the opportunity to prove our case to the US Court of Appeals for the Federal Circuit, which is the same court that invalidated other Align patents in their protracted litigation with Ormco.”

Following the ITC’s stay, ClearCorrect also filed an appeal with the Federal Circuit on the ITC’s final determination that Align’s patents are valid and infringed by ClearCorrect as well as the resulting cease and desist orders. In anticipation of ClearCorrect’s appeal, Align filed an appeal with the Federal Circuit on the few peripheral issues that the Commission decided adversely to Align.

Align also has a patent infringement action pending against ClearCorrect in the US District Court for the Southern District of Texas alleging infringement of nine Align patents, including four additional patents not included in the ITC litigation.