Align Tech., Inc. v. Int'l Trade Comm'n, s. 2013–1240
| Decision Date | 18 July 2014 |
| Docket Number | Nos. 2013–1240,2013–1363.,s. 2013–1240 |
| Citation | 771 F.3d 1317 |
| Parties | ALIGN TECHNOLOGY, INC., Appellant, v. INTERNATIONAL TRADE COMMISSION, Appellee, and Clearcorrect Operating, LLC, Intervenor, and Clearcorrect Pakistan (Private), Ltd., Mr. Mudassar Rathore, Dr. Waqas Wahab, Dr. Nadeem Arif, and Dr. Asim Waheed, Intervenors. |
| Court | U.S. Court of Appeals — Federal Circuit |
Igor V. Timofeyev, Paul Hastings LLP, of Washington, DC, argued for appellant. With him on the brief were Stephen B. Kinnaird, and Thomas A. Counts, of San Francisco, California.
James A. Worth, Attorney, Office of General Counsel, United States International Trade Commission, of Washington, DC, argued for appellee. With him on the brief were Dominic L. Bianchi, General Counsel, and Wayne W. Herrington, Assistant General Counsel.
Michael D. Myers, McClanahan Myers Espey, LLP, of Houston, Texas, argued for intervenors. With him on the brief for ClearCorrect Operating, LLC were Randy McClanahan and Robert H. Espey, II. Of counsel on the brief was Gary M. Hnath, Mayer Brown LLP, of Washington, DC. On the brief for ClearCorrect Pakistan (Private), Ltd., et al, were Lei Mei and Reece Nienstadt, Mei & Mark LLP, of Washington, DC.
Before PROST, Chief Judge, and CHEN, Circuit Judge.*
The International Trade Commission's regulations authorize the Commission to review a decision of an administrative law judge (ALJ) when that decision is designated as an “initial determination.” Other ALJ decisions, such as an “order,” are not reviewable. Here, the ALJ denied a motion via an order. This case requires us to consider whether the Commission's review of that order was procedurally sound. For the reasons set forth below, we hold that it was not.
This case arises out of a proceeding before the Commission to enforce a Consent Order entered into by Align Technology, Inc. (Align), the complainant of an original, underlying investigation, and respondents to that investigation, OrthoClear, Inc., OrthoClear Holdings, Inc., and OrthoClear Pakistan Pvt, Ltd. (collectively, OrthoClear).
Align develops, manufactures, and markets clear aligners to treat malocclusion
—i.e., teeth misalignment. Conventionally, dental professionals treated misalignment with metal archwires and brackets, commonly known as braces. Braces, however, have a number of disadvantages, including tooth discoloration, oral discomfort, and, for some, embarrassment.
To overcome these problems, Align conceived of and developed its clear aligners, marketed as the Invisalign System. The Invisalign System, which is based on Align's patented technology, uses a series of clear dental aligners—“incremental positioning adjustment appliances”—that are worn sequentially over a fixed time period to adjust the position of a patient's teeth. Because each patient's teeth are unique, the aligners must be custom-designed. To design these aligners, dental professionals generate and obtain data to determine the positioning of a patient's teeth and create complex three-dimensional digital models of each incremental configuration for each aligner. The three-dimensional digital model of each configuration is manipulated to create a “digital data set,” which is used to manufacture a series of successive aligners to be worn by a patient that incrementally move the teeth to the desired alignment. In general, Align's asserted patents are directed to various methods and orthodontic treatment plans using these digital data sets.
In 2005, Align's founder and former Chief Executive Officer, Muhammad Chisti, founded OrthoClear and used former Align employees in Pakistan and the United States to manufacture and sell dental aligners. Believing OrthoClear to be infringing its patents and using its trade secrets, Align filed a complaint with the Commission in 2006 (hereinafter, the underlying investigation).
Align's complaint alleged that OrthoClear violated 19 U.S.C. § 1337 by importing, selling for importation, or selling within the United States after importation aligners that infringe Align's asserted patents,1 and also by misappropriating Align's trade secrets. Notice of Investigation, 71 Fed.Reg. 7995, 7995–96 (Feb. 15, 2006).
In August 2006, OrthoClear negotiated a global settlement with Align that required OrthoClear to assign its entire intellectual property portfolio to Align, to agree to entry of the Consent Order, and to file a joint motion to terminate the investigation. The ALJ granted the joint motion, and the Commission entered the Consent Order and terminated the underlying investigation. See Certain Incremental Dental Positioning Adjustment Appliances and Methods of Producing Same, Inv. No. 337–TA–562, 2006 WL 3462199 (U.S.I.T.C. Nov. 13, 2006).
The Consent Order provided, in relevant part:
The incremental dental positioning adjustment appliances manufactured by or for OrthoClear referenced in the complaint and any other articles manufactured in violation of the patents or trade secrets described therein (the “Articles”) are hereby prohibited from importation into the United States until the expiration of the last to expire of the following patents ... U.S. Patent No. 6,722,880 (“the '880 patent”) [and] U.S. Patent No. 6,471,511 (“the '511 patent”)..., except under license of the patent owner or as provided by law.
J.A. 69; id. at 7974–75 ¶ 2. The Consent Order also included successor and aiding-and-abetting provisions that extended the importation prohibition beyond OrthoClear. See J.A. 7675 ¶ 2 (); id. ¶ 3 ().
After suspecting that OrthoClear and others were violating the Consent Order, Align filed a new complaint, this time for an enforcement proceeding under 19 C.F.R. § 210.75 ().2 The Commission then instituted an investigation against six respondents (hereinafter, Intervenors): ClearCorrect Operating, LLC (hereinafter, ClearCorrect USA), ClearCorrect Pakistan (Private), Ltd. (hereinafter, ClearCorrect Pakistan), Mudassar Rathore, Waqas Wahab, Nadeem Arif, and Asim Waheed. 77 Fed.Reg. 25747 (May 1, 2012).
ClearCorrect USA is the successor of ClearCorrect Systems, LLC—a company formed by one of OrthoClear's customers shortly after OrthoClear ceased its operations and transferred its intellectual property and customers' patients to Align. The new complaint alleged that ClearCorrect USA works with ClearCorrect Pakistan to provide infringing dental aligners: specifically, that ClearCorrect Pakistan creates in Pakistan the digital data sets used to create the molds on which the aligners are formed, while ClearCorrect USA manufactures and sells aligners in the United States. The complaint also alleged that ClearCorrect Pakistan imports the digital data sets by electronic transmission to ClearCorrect USA. J.A. 7699 ¶¶ 94–95.3
According to Align, Intervenors had violated the Consent Order by importing into the United States, offering for sale, or selling for importation digital data sets used to manufacture dental aligners in the United States, and that those acts (1) used Align's trade secrets and (2) induced or contributed to the infringement of certain claims of Align's patents.4 Id. at 7698–99 ¶¶ 90–91. Align also alleged that Intervenors should be liable for aiding and abetting the same acts, id. at 7700–01 ¶ 102, and that ClearCorrect USA and ClearCorrect Pakistan were each a “successor, assign, or agent” of the original OrthoClear respondents, id. at 7686 ¶ 24, 7687 ¶ 31. The named individuals were allegedly “former ‘officers, directors, agents, servants, [or] employees' of various OrthoClear entities.” Id. at 7684.
The Commission instituted the investigation and, in its Notice of Institution (Notice), recommended that the ALJ “may wish to consider” a threshold issue:
“whether the accused digital datasets identified in the enforcement complaint ... are within the scope of the articles covered by the consent order.” Certain Incremental Dental Positioning Adjustment Appliances and Methods of Producing Same (“Dental Appliances ”), Inv. No. 337–TA–562, 77 Fed.Reg. 25747 (May 1, 2012). The Notice also stated that the ALJ's decision “should be issued in the form of an initial determination (‘ID’) under Commission Rule 210.42(c), 19 C.F.R. § 210.42(c).” Id. Following the Commission's Notice, the ALJ ordered initial briefing of the issue identified by the Commission. J.A. 16173.
In response to the ALJ's order, Intervenors filed a motion to terminate the enforcement proceeding, arguing that the accused conduct did not fall within the scope of the Consent Order. Align and the Commission's investigative attorney each filed briefs disagreeing with Intervenors' position.
Rather than issuing an “initial determination,” the ALJ issued Order No. 57, finding that “[t]he accused digital datasets identified in the enforcement complaint are ... within the scope of the term ‘articles manufactured’ as that term appears in the Consent Order.” J.A. 27024; id. at 66. The ALJ therefore denied Intervenors' motion to terminate and scheduled the trial to begin on January 7, 2013. Id. at 28575.
Intervenors sought the Commission's review of Order No. 57, and Align and the Office of Unfair Import Investigations (“OUII”) Staff opposed the petition for review. Id. at 66. Both Align and OUII Staff argued that the ALJ correctly interpreted the Consent Order. Id. at 27280–87, 27538. But, in addition, Align argued that the Commission...
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