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Align Technology Receives Negative Verdict On Patent Lawsuit By Ormco

Align Technology, Inc. (Align Technology) has receicved the verdict regarding patent lawsuit brought by Ormco Corporation (Ormco) in the US District Court for the Central District of California, which was tried by jury June 9, 2009 through June 25, 2009. On June 26, 2009, the jury delivered a verdict against Align Technology. Ormco alleged that Align infringed claims of Ormco's patent. Align claimed non-infringement, invalidity, as well as unenforceability of the patent and equitable defenses.

The jury found the claims asserted by Ormco in the 6,616,444 patent to be infringed and valid. The jury also issued an advisory verdict that Ormco did not engage in prosecution laches or unclean hands, equitable defenses raised by Align. The jury only determined liability. Any monetary damages will be determined in a later trial, which has not been schedule, but would likely occur in early 2010. The jury verdict does not preclude Align from selling its Invisalign System. Align Technology not accrued any liability for the judgment related to the Ormco litigation as such amounts are not reasonably estimable at this time. This is due to a number of factors, including: that the Court has not yet entered judgment; that discovery regarding possible damages is a lengthy and time consuming process involving testimony of experts and has not yet begun; and that determining a reasonable royalty rate is highly fact specific and there are many complicated factors to consider in this case.

 

The Court requested and has received briefing on the equitable defenses raised by Align Technology and is expected to rule on the equitable defenses later this week. Align believes the facts and the law do not support the jury’s findings of infringement and validity and therefore has filed a motion for judgment as a matter of law on all issues seeking to set aside the jury’s verdict of liability. The Court has set a hearing on Align Technology motion for August 3, 2009, after which the Court is expected to enter judgment. Depending on the judgment entered by the Court, Align Technology may file various post-trial motions and if unsuccessful, we intend to appeal the liability decision and request a stay of the damages phase of the case pending appeal.

 

Align Technology is a California-based medical device company engaged in the orthodontics market.