A Medical Device Daily

OrthoClear (San Francisco) last week reported the upcoming release of its OrthoClear System, a series of clear plastic aligners designed to straighten teeth. At the same time, it responded to a patent infringement lawsuit recently filed against it by Align Technology (Santa Clara, California), maker of the first orthodontic system of this type (Medical Device Daily, Feb. 4, 2005).

Peter Riepenhausen, chairman of OrthoClear, said that Align's lawsuit is an attempt “to impede healthy competition by threatening young companies with legal action. This lawsuit is baseless and without merit and we fully intend to protect OrthoClear, our employees and our products from all unfair suits and actions . . . Lawsuits like this can harm the consumer by making healthy dental care unaffordable for many and not allowing the consumer to benefit from improved healthcare technology.“

Riepenhausen added that Align's lawsuit is intended “to undermine OrthoClear's ability to operate. But we will not be intimidated.“

The company said it expects the OrthoClear System in orthodontists' offices by the spring.

It said that using “state-of-the-art technology, OrthoClear will allow doctors to treat malocclusions with unprecedented precision.“ Chief Technology Officer Charlie Wen said, “We firmly believe in bringing advanced healthcare alternatives to clinicians and consumers,“ and called the OrthoClear System “a breakthrough product . . . Through the use of advanced technology we have developed a product with unique oral health and aesthetic benefits, while significantly lowering the cost of care.“

OrthoClear, to date, reports having filed for 20 patents.

In other legalities, in the ongoing trial of Richard Scrushy, founder and former CEO of HealthSouth (Birmingham, Alabama), prosecution witness William Owens testified on Friday that Scrushy had promised to take care of Owens' family if Owens “took the fall“ for Scrushy and the company's alleged accounting conspiracy, according to a Reuters report.

Owens, a former controller and former CFO of the company, is a key to the government's first prosecution under the Sarbanes-Oxley corporate law intended to punish executives who knowingly sign off on false financial reports. Passage of that law apparently was one reason for the refusal by some HealthSouth financial officers to continue the fraud that the government said was begun as far back as 1996.

Owens said that Weston Smith in 2002, then company CFO, told him he was leaving the firm because he was unable to continue his participation in filing the false accounting reports. Owens said that he and Scrushy then devised a plan to spin off the company's surgical center operation — a unit of the company not involved in the fraud — and put Smith at its head to prevent his leaving. That spin-off never happened.

Both Owens and Smith have pled guilty to charges of fraud related to the case.

Owens continued his testimony on Monday.

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