By Eric Schweibenz
On January 22, 2013, ALJ Robert K. Rogers, Jr. issued the public version of Order No. 17 (dated January 2, 2013) granting Complainant Align Technology, Inc.’s (“Align”) motion to strike the inequitable conduct defense put forth by Respondents ClearCorrect Operating, LLC and ClearCorrect Pakistan Private, Ltd. (collectively, “ClearCorrect”) in Certain Digital Models, Digital Data, and Treatment Plans for use in Making Incremental Dental Positioning Adjustment Appliances, the Appliances Made Therefrom, and Methods of Making the Same (Inv. No. 337-TA-833).

By way of background, the investigation is based on a complaint filed by Align alleging violation of Section 337 in the importation into the U.S. and sale of certain digital models, digital data, or treatment plans for use in making incremental dental positioning adjustment appliances that infringe one or more claims of U.S. Patent Nos. 6,217,325, 6,705,863, 6,626,666, 8,070,487, 6,471,511, 6,722,880, and 7,134,874.  See our April 6, 2012 post for more details on this investigation.

According to the Order, Align argued that ClearCorrect’s inequitable conduct defense is inadequate under the standards established by legal precedent and Federal Rule of Civil Procedure 9(b) by failing to allege sufficient facts to establish “the basic questions of the ‘who, what when, where, and how’ of the alleged misconduct giving rise to the assertion of inequitable conduct.”  Align also asserted that ClearCorrect omitted “key details” and contradicted the material quoted at times.  In response to the first allegation of inequitable conduct, relating to alleged failure to disclose U.S. Patent No. 5,242,304 to the U.S. Patent & Trademark Office (“PTO”), Align stated that ClearCorrect provided no proof that any attorneys at their prosecution firm knew of the patent, failed to identify any persons by name, and failed to identify with specificity the claims and limitations to which the allegedly withheld reference is materially relevant.  Align argued similarly in response to the second inequitable conduct allegation, based on purportedly withholding U.S. Patent No. 5,820,368, and specifically noted that ClearCorrect provided no evidence in support of its allegation.  Regarding the third allegation, based on an expert report prepared for Align in a different litigation, Align argued that ClearCorrect failed “to allege any facts to show that anyone at Align or any prosecuting attorney knew of the alleged materiality of the [expert] report and intended to deceive the PTO” in addition to a failure to identify any accused persons or the relevance of the report with specificity.

In opposition, ClearCorrect argued that they provided adequate notice of the inequitable conduct defense.  ClearCorrect also argued that, in relation to U.S. Patent No. 5,820,368, “Align has withheld discovery of the evidence necessary to prove the defense.”  ClearCorrect also maintained that it has adequately identified the persons “involved in Align’s ‘efforts to mislead the PTO.’”

The Commission Investigative Staff (“OUII”) filed a response arguing that the request to strike should be denied, but that an order should issue requiring ClearCorrect to supplement its pleadings.  OUII noted that motions to strike affirmative defenses such as inequitable conduct are generally disfavored, but agreed that “the materiality of [U.S. Patent No. 5,242,304] is inadequately pled, because Respondents do not sufficiently plead how the nondisclosed reference was but-for material, or how the nondisclosed information would have been used by the examiner to find the claim unpatentable.”  OUII also agreed that the pleadings in relation to U.S. Patent No. 5,820,368 and the expert report were inadequate, noting, inter alia, that the pleading “does not adequately plead specific intent to deceive the PTO.”

ALJ Rogers began by summarizing the pleading requirements for affirmative defenses, noting that the Federal Circuit “recently clarified that ‘…the materiality required to establish inequitable conduct is but-for materiality,’” citing Therasense, Inc. v. Becton, Dickinson & Co., 649 F.3d 1276, 1291 (Fed. Cir. 2011).  With that in mind, ALJ Rogers analyzed the arguments for each of the three allegations of inequitable conduct.  The ALJ found that the pleadings for each document failed to adequately plead the materiality portion of the defense.  Furthermore, in each instance the ALJ also concluded that, assuming arguendo that ClearCorrect had adequately plead the materiality portion, they failed to describe how “a specific individual knowingly withheld the alleged prior art…with an intent to deceive the PTO.”

Therefore, ALJ Rogers concluded that ClearCorrect’s ninth affirmative defense alleging inequitable conduct was inadequately pled, and the motion to strike the defense was granted.