ITC’s review of an ALJ’s order was not procedurally sound
By Mengyi Wang – Edited by Sarah O’Loughlin
Align Technology, Inc. v. International Trade Commission, No. 2013-1240, -1363 (Fed. Cir. July 18, 2014)
The United States Court of Appeals for the Federal Circuit unanimously vacated and remanded a decision of the International Trade Commission (“ITC”), finding that the ITC exceeded its authority in reviewing an administrative law judge’s (“ALJ”) order denying a motion for termination. Slip op. at 2. In so holding, the Court rejected the ITC’s attempt to characterize the ALJ’s decision as an initial determination, which would be subject to review. Id. at 12.
The case arises out of two related proceedings. Align Technology, Inc. (“Align”) conceived of, developed, and marketed Invisalign System – dental aligners that treat teeth misalignment. Id. at 3. It owns patents that cover various methods and orthodontic treatment plans using digital data sets to create custom-designed aligners. Id. Align’s founder and former Chief Executive Office left the company and founded OrthoClear, Inc., OrthoClear Holdings, Inc., and OrthoClear Pakistan Pvt, Ltd. (collectively, “OrthoClear”) that manufactured and sold dental aligners. Id. at 3-4. Align then complained to the ITC that OrthoClear violated 19 U.S.C. § 1337 by “importing, selling for importation, or selling within the United States after importation aligners” that misappropriated Align’s trade secrets and infringed twelve of Align’s patents. Id. at 4. In August 2006, the parties reached a settlement, and the ITC entered a Consent Order that banned the importation of the infringing products and those “in violation” of the trade secrets. Id.
In 2012, Align accused OrthoClear and its affiliated parties (“Intervenors”) of violating the Consent Order and filed a new complaint with the ITC for an enforcement proceeding under 19 C.F.R. § 210.75 (“the enforcement proceeding”). Id. at 5-6. The ITC issued a Notice of Institution (“the Notice”) that recommended the ALJ to consider whether the Consent Order extended to the accused products and to issue that decision using an initial determination. Id. at 7. Intervenors motioned to terminate the enforcement proceeding, contending that the Consent Order did not encompass the accused conduct. Id. The ALJ disagreed and denied the motion through an order, instead of the recommended initial determination. Id. at 8. Upon Intervenors’s request, the ITC determined that the order was in fact an “initial determination”—thus reviewable—pursuant to its Notice and ultimately reversed the ALJ’s finding. Id. at 9. (more…)