Guardant Health, Inc. V. Natera, Inc.

Case Background

On May 27, 2022, Plaintiff Guardant Health, Inc. filed a false advertising lawsuit in the United States District Court, Northern District of California (Case number: 3:21cv4062). This case was assigned to Judge Edward M. Chen and referred to Magistrate Judge Sallie Kim.

Cause

Guardant Health filed a lawsuit against Natera, Inc. over false advertising claims regarding cancer diagnostic tests. The dispute centered on liquid biopsy tests for detecting colorectal cancer (CRC) recurrence – Guardant’s Reveal test versus Natera’s Signatera test. Natera launched an advertising campaign that made false comparisons between the two tests, claiming that Signatera was superior in sensitivity, failure rate, and negative predictive value. The campaign coincided with Reveal’s launch and targeted oncologists, physicians, researchers, healthcare institutions, and laboratories. Natera’s comparisons relied on incomparable studies with different protocols and patient populations. They misrepresented data and ignored Reveal’s advantages, such as faster turnaround time and the ability to work without tumor tissue samples.

Injuries

Natera’s false advertising campaign caused immediate and ongoing harm to Guardant’s business and reputation in the cancer diagnostics market. The misleading claims deterred doctors from using Reveal, causing patients to miss out on its validated benefits. This damaged Guardant’s market position and relationships with healthcare providers. The campaign created confusion about Reveal’s capabilities and effectiveness, harming Guardant’s credibility in the competitive molecular diagnostics industry.

Damages

Guardant sought monetary damages to compensate for lost sales and market share, including actual and consequential damages under the Lanham Act. They requested triple damages due to Natera’s willful conduct, along with disgorgement of Natera’s profits from the false advertising. The company also sought punitive damages under California law, citing Natera’s malicious and fraudulent behavior. Additionally, Guardant requested attorney fees and costs as an exceptional case under the Lanham Act.

Key Arguments and Proceedings

Legal representation

  • Plaintiff(s): Guardant Health, Inc.
    • Counsel for Plaintiff: Chase A. Scolnick | Jennifer Lynn Keller | Andre Hanson | Christopher Lloyd LaVigne | Craig Anthony Harbaugh | Gregory M. Sergi | Katharyn Ann Albright Grant |Michael C. Hendershot | Olin Ray Hebert, III | Saul H. Perloff
  • Defendant(s): Natera, Inc.
    • Counsel for Defendants: Kevin P.B. Johnson | Andrew Jonathan Bramhall | Andrew Edward Naravage | Anne S. Toker | Brian Paul Biddinger | Brian C. Cannon | Catlin Williams | Chase J. Cooper | David Leon Bilsker | Derek Lawrence Shaffer | Elle Xuemeng Wang | Jocelyn Ma | John C.C. Sanders, Jr. | Kaitlin Elizabeth Keohane | Margaret H. Shyr | Ryan Hudash | Ryan Sadler Landes | Tara Srinivasan | Thomas M. Melsheimer | Valerie Anne Lozano | Victoria F. Maroulis | Victoria Blohm Parker

Claims

Guardant filed four main claims:

  • False advertising under the Lanham Act, citing Natera’s literally false and misleading statements about Reveal’s performance;
  • False advertising under California Business & Professions Code §17500, based on untrue statements made to California consumers;
  • Unlawful trade practices under California Business & Professions Code §17200, covering unfair competition and deceptive advertising; and
  • Common law unfair competition, addressing Natera’s deceptive conduct and misrepresentations about diagnostic test performance.

The claims sought both monetary relief and injunctive action to stop the false advertising.

Defense

Natera argued that their comparative advertising claims about Signatera and Reveal were truthful and backed by published scientific studies. They asserted that the performance comparisons were based on legitimate data from the Parikh et al. and Reinert et al. studies. Natera defended their claim of analyzing over 2,000 patients, including those across multiple cancer types, where their test demonstrated utility. Regarding test sensitivity, they contended that their pre-surgical sensitivity claims of 89-94% versus Reveal’s 47% were accurate based on available data. On the technical specifications, they maintained that their statement about blood tube requirements accurately reflected actual testing protocols. Natera also argued that their marketing materials accurately represented the clinical performance differences between tumor-informed (Signatera) and tumor-naive (Reveal) approaches to ctDNA testing. Furthermore, they defended their claims about superior Hazard Ratio and failure rates, asserting that these were based on valid statistical analysis of published results.

Jury Verdict

On November 25, 2024, the jury awarded Guardant Health $292.5 million, including $175.5 million in punitive damages, marking one of the largest false advertising verdicts in history. The jury found in favor of Guardant Health on all claims, unanimously rejecting all counterclaims presented by Natera in a False Advertising Case.

John Saia, Chief Legal Officer at Guardant Health, in a statement made to Jurimatic, noted:

Today’s unanimous verdict holding Natera responsible for engaging in illegal and anticompetitive conduct represents a major victory for CRC patients who could benefit from our groundbreaking Reveal test, and we thank the jury and the Court for their careful consideration of our claims. Every company in the cancer diagnostics space has a duty to prioritize patients above all else. In keeping with our mission to help cancer patients lead longer and healthier lives, we strongly believe it is vital that clinicians receive accurate, complete, and truthful information to inform their decisions about potentially life-saving patient treatments.


Court Documents:

Available for Purchase Upon Request