On Monday in the Northern District of California, an individual filed a class-action complaint against Align Technology Inc. over allegations that the company operated an anticompetitive scheme to hold a monopoly on the dental aligner market with its Invisalign and iTero products.
Lead plaintiff Misty Snow alleged that Align implemented its scheme for fear of competition entering the market once its intellectual property — constituted by hundreds of patents — expired. Using the intertwined nature of aligners and “hand-held digital intraoral scanners,” Align was able to foreclose the market for aligners, keeping competitors out and prices high, the plaintiff claimed.
According to the complaint, Align allegedly accomplished this through the exclusive interdependency of its scanner product, iTero, on Invisalign. The complaint noted that such scanner products are used by dental offices to take images of patients’ jaws, teeth, and bite that are then sent to aligner manufacturers to create personalized aligners. Reportedly, company 3Shape’s Trio product, iTero’s biggest competitor, employs an open system, whereby dental offices that use Trio can order aligners from various manufacturers; Align’s iTero, on the other hand, employs a closed system, which “imposes substantial costs” on practices that use iTero and then attempt to order anything other than Invisalign.
“As a result of this distinction, the spread of iTero’s closed-system scanner across dentists drives sales towards Invisalign and excludes rival Aligner manufacturers,” the complaint claimed. “Align’s anticompetitive scheme was designed to monopolize the Scanner and Aligner markets, creating a self-reinforcing cycle where Align’s dominance of the Scanner market ensured continued dominance of the Aligner market.”
The plaintiff noted the high cost of Invisalign aligners and their full courses of treatment for dental offices: up to $8,000. Additionally, insurance generally does not offset the expense for consumers by much, if at all, the complaint claimed.
“Dental insurance, if it is available, generally only covers a minority portion of the overall Invisalign Aligner treatment, generally capping benefits at 25-50% of the overall cost of the Invisalign Aligner treatment,” according to the complaint. “Therefore, Plaintiff consumer purchasers pay much or all of the cost of Invisalign Aligners out-of-pocket.”
The formal causes of action against the defendant are for monopolization of the aligner market, monopolization of the scanner market, violations of California Business and Professions Code provisions, and violations of state antitrust and trade restraint laws.
The complaint proposed the class to include any person or entity who “purchased, paid and/or provided reimbursement” for the cost of Invisalign in any of 25 indirect purchaser states noted in the complaint, plus Washington, D.C., beginning March 15, 2015, until the alleged anticompetitive conduct has ceased.
In addition to class certification, the plaintiff requests an enjoinment of the defendant from continuing its alleged conduct and monetary damages, among other relief.
Hagens Berman Sobol Shapiro LLP represents the plaintiff and proposed class.