Align Technology, a global medical device company known for its Invisalign System of clear aligners, has emerged victorious in a significant arbitration case against SmileDirectClub (SDC) in a California state court. The court ruled in favor of Align, awarding them $63 million in damages.
The dispute stemmed from a Supply Agreement signed by Align and SDC back in 2016. Align alleged that SDC had breached the terms of the agreement, resulting in significant damages. In response, SDC filed counterclaims against Align, alleging breaches of the Supply Agreement. However, the court found that Align did not breach the agreement and that SDC was at fault.
The arbitration proceedings commenced in August 2020 and lasted for several months. The arbitrator issued an interim award in October 2022, ruling that SDC had indeed breached the Supply Agreement. The arbitrator awarded Align the maximum amount of $63 million as per the agreement’s liability cap.
Align filed a petition to confirm the arbitrator’s interim award in March 2023, and the court upheld it. The arbitration process continued with a hearing on SDC’s counterclaim in February 2023, and the arbitrator issued a final award in May 2023, stating that Align did not breach the Supply Agreement.
Align subsequently filed a petition to confirm the final award, while SDC filed a petition to vacate it. However, on August 21, 2023, the California state court confirmed the arbitration award in Align’s favor and denied SDC’s petition to vacate it.
While SDC has the option to appeal the decision, doing so would require them to obtain a bond of over $94 million. If SDC’s appeal fails, they will be obligated to pay Align the judgment amount plus interest, which accumulates at a rate of 10% per annum, amounting to approximately $17,000 per day.
Align Technology is now expected to recognize the award amount in its financial statements once it is determined to be realizable.
Align Technology, Inc. is well-known for designing and manufacturing the Invisalign System, a state-of-the-art clear aligner system used in orthodontics. The company also offers iTero intraoral scanners and exocad CAD/CAM software, which enable digital orthodontic and restorative workflows. With 247 thousand doctor customers worldwide, Align Technology holds a significant position in the global market, catering to a consumer base of 500 million individuals.
Overall, the outcome of this arbitration case highlights Align Technology’s commitment to protecting its interests and upholding the terms of its agreements. With the arbitration award confirmed, Align Technology can move forward and continue to provide its innovative solutions to patients and healthcare professionals alike.
Please note: The information provided in this article is based on publicly available information from Align Technology’s press release. The article does not reflect any additional information or viewpoints beyond what has been officially disclosed.
