Pakistani-American's Invisalign Technology Revolutionized Orthodontics
|Zia Chishti and Kelsey Wirth
A background in computer science gave Chishti the insight that it was possible to design and manufacture an entire series of clear orthodontic devices similar to the retainer he wore, using 3- D computer graphics technology to straighten teeth. He and his co-founder Kelsey Wirth started Align Technology in 1997 to realize this vision. The process has now evolved to make extensive use of 3D printing for creating a series of braces to apply gentle pressure to straighten teeth over several months. In 2012 alone, the company printed 17 million transparent dental braces for patients.
Align Technology went public in 2001 raising $130 million by selling 10 million shares at $13 each. The company's 2013 revenue was $660 million and net income was $65 million.
Chishti also started The Resource Group (TRG) in Pakistan in 1999. TRG Pakistan claims to be "the country’s largest provider of BPO services with 4 locations in Karachi and Lahore – Pakistan’s largest cities and financial centers". A 2005 Washington Post story introduced what TRG does in these words: "In a chic downtown lobby across the street from the Old Executive Office Building (in Washington DC), Saadia Musa answers phones, orders sandwiches and lets in the FedEx guy....And she does it all from Karachi, Pakistan".
Chishti also founded OrthoClear in 2005 along with several other former Align employees to compete with Align. OrthoClear received $10 million in VC funding from London-based 3i Group and set up its production facilities in Lahore, Pakistan. Soon after, Align Technology slapped OrthoClear with a lawsuit for patent infringement and filed a parallel petition with the US International Trade Commission for unfair competition.
Align claimed that OrthoClear utilizes Align's trade secrets and infringes twelve Align patents, comprising more than 200 patent claims, in the production of the OrthoClear aligners at a facility in Lahore, Pakistan. The complaint requested the ITC institute an immediate investigation and ultimately issue an exclusionary order, enforced by U.S. Customs and Border Protection, excluding OrthoClear aligners from importation into the United States.
OrthoClear Inc. and Align Technology Inc. settled their litigation in a Consent Decree with a promise by OrthoClear to stop accepting cases in the United States and a payment of about $20 million from Align for OrthoClear's intellectual property.
After the Align settlement, some of OrthoClear employees left OrthoClear and joined ClearCorrect in Lahore, Pakistan. ClearCorrect argued and the International Trade Commission (ITC) agreed that ClearCorrect and its former OrthoClear employees did not violate the Consent Order when they imported digital dental data from Pakistan to make ClearCorrect aligners. However, a Federal Circuit said last week that such rulings are not reviewable by the ITC under the ITC's own rules until after the completion of the investigation, and that the ITC never waived its rule.
The Court ruled that the language used by the parties in the 2006 Consent Order was adequate to prohibit importation by electronic transmission, and remanded the case to the ITC to determine at trial whether the former OrthoClear (now ClearCorrect) employees violated the Consent Order by transmitting digital dental data to ClearCorrect.
The Court did not reach the question of whether section 337 gives the ITC jurisdiction over electronic articles (an issue Align won with both the Administrative Law Judge (ALJ) and the ITC and now the subject of a separate ClearCorrect appeal). The case will now be remanded back to the ITC, which will presumably assign a new ALJ to handle the case going forward. So the litigation goes on while the consumers continue to pay the high price for use of clear braces.
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