Aug 30 (Reuters) - Align Technology ( ALGN ), the maker

of Invisalign clear teeth aligners, agreed to pay $27.5 million

to settle a lawsuit claiming it entered an illegal antitrust

conspiracy that drove up prices of aligners made by rival

SmileDirectClub ( SDCCQ ).

The settlement would cover nearly 1.45 million purchasers of

SmileDirectClub ( SDCCQ ) aligners between Oct. 22, 2017, and Aug. 18,

2022. Align would also offer each class member a $300 coupon for

Invisalign treatment.

A preliminary settlement of the proposed class action was

filed on Thursday night in federal court in San Francisco, and

requires approval by U.S. District Judge Vince Chhabria.

Align denied wrongdoing but settled to avoid the cost and

distraction of litigation, court papers show.

The case arose from an alleged 2016 agreement between Align

and SmileDirectClub ( SDCCQ ), which had been founded two years earlier,

to "allocate" the market for clear teeth aligners.

Align had been selling its aligners through dental offices,

while SmileDirectClub ( SDCCQ ) sold its aligners directly to consumers.

The plaintiffs said Align violated the Sherman federal

antitrust law by agreeing not to enter the direct-to-consumer

market, freeing SmileDirectClub ( SDCCQ ) to charge more, in exchange for

a minority stake in SmileDirectClub ( SDCCQ ) and a share of its profits.

SmileDirectClub ( SDCCQ ) shut down last December, fewer than three

months after filing for Chapter 11 bankruptcy protection.

Hagens Berman Sobol Shapiro, the plaintiffs' law firm, said

the settlement will improve treatment for patients affected by

SmileDirectClub's ( SDCCQ ) closure, or who want more comprehensive teeth

straightening than SmileDirectClub's ( SDCCQ ) aligners provided.

The law firm said it plans to seek legal fees of up to

$6.875 million plus 25% of the value of reimbursed coupons, with

total fees capped at $8.25 million.

Align is based in San Jose, California. It did not

immediately respond on Friday to requests for comment.

The case is Snow v Align Technology Inc ( ALGN ), U.S. District

Court, Northern District of California, No. 21-03269.