Company: ALGN
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001097149-25-000064
Chunk: 79

Company: ALIGN TECHNOLOGY INC
Filing Date: 2025-08-06
Form: 10-Q
Item: Item 4
Chunk 79
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 proposed new and evolving regulations related to the use of AI and machine learning technologies. In Europe, the EU AI Act entered into force on August 1, 2024 which will become fully effective on August 2, 2026, with some provisions effective in February 2025. Other jurisdictions are considering similarly focused legislation. Although we do not engage in developing or providing AI systems for which their placement on the market, putting into service, or use would qualify as “prohibited AI practices,” restrictions and obligations under this regulation, to the extent applicable to us, could have a negative impact on our business, global systems, financial condition and results of operations. Additionally, other jurisdictions have proposed, and in certain cases enacted, laws and regulations addressing aspects of the use and development of AI. The evolving AI regulatory environment may, among other impacts, result in:

•inconsistencies among AI regulations and frameworks across jurisdictions; 

•onerous compliance, governance, research and development obligations that may require us to rework or reevaluate improvements to be compliant or result in the development of products that are unacceptable under new or revised regulatory frameworks; 

•increased risk of regulatory enforcement and litigation related to our AI models; 

•increased liability related to the use of AI by our customers, consumers or suppliers that are beyond our control; 

•delays in the deployment of new products and services; 

•competitive and reputational harm; and 

•increased cybersecurity risks. 

The input of confidential information or trade secrets into AI systems may result in the loss of intellectual property, proprietary rights or attorney-client privilege in such information or trade secrets. The use of AI technologies for developing products or services may adversely affect or preclude our intellectual property rights in such products or services, or may expose us to liability related to the infringement, misappropriation or other violation of third-party intellectual property. Further, particularly given the nascent stage of the technology, the use of AI can lead to unintended consequences, including the generation of outputs that appear correct but are factually inaccurate, misleading, or that result in unintended biases and discriminatory outcomes, or are otherwise flawed, which could harm our reputation and business and expose us to risks related to such inaccuracies or errors in these outputs.

Intellectual Property Risks

Our success depends in part on our proprietary technology, and if we fail to successfully obtain or enforce our IP rights, our competitive position may be harmed. 

Our success depends in part on our ability to maintain existing IP rights and obtain, maintain and