A jury in California has determined that in a case pitting rival makers of cancer tests against one another, one company engaged in false advertising and unfair competition in an effort to gain a competitive edge.
Guardant Health and Natera had lodged false advertising claims against each other, with Guardant filing suit first in May 2021 and Natera following with counterclaims in June 2021. The jury, which was seated Nov. 4 and heard 10 days of testimony before returning a verdict Monday, awarded Guardant $75 million in damages for corrective advertising, about $41.5 million for disgorgement of Natera’s profits and $175.5 million in punitive damages.
The jury deliberated for about six hours before deciding Natera had misled oncologists about Guardant Reveal, Guardant’s test for colorectal cancer, while promoting its own test, Signatera, via false and misleading advertising.
A team of A&O Shearman litigators from Austin and New York represented Guardant, and the lead attorneys told The Texas Lawbook in an interview Tuesday they hope the verdict will have broader implications within the medical testing market as a whole about the dangers of “false and misleading advertising campaigns against a competitor.”
“It is absolutely our hope, and the hope of our client, that this award in particular sends a strong message about the vital importance of truth in advertising when it comes to lifesaving technology,” said Saul Perloff, a partner with A&O Shearman in Austin. “Every false advertising case is important. There’s no doubt about that. But when you are talking about lifesaving technology, medicine, cancer tests, I think it’s that much more important.”
Natera issued a statement Monday that it disagrees with the jury’s verdict “and will ask the court to overturn it.”
“The jury was asked to evaluate comparative advertisements that ran for a brief period in 2021 related to the performance of Guardant’s Reveal test,” the statement reads. “This case had nothing to do with the validity or utility of Signatera, and certain key pieces of evidence supporting Natera’s case were not included in this trial.”
“Although Guardant has blamed Natera’s advertisements from three years ago for Reveal’s performance in the market, we believe oncologists make their decisions based on the published evidence and their own experience with the tests.”
Christopher LaVigne, an A&O Shearman partner in New York who also represents Guardant, said one of the biggest challenges in the case was explaining to the jury in a digestible way the science behind the cancer tests and their differences while sticking to the tight trial schedule U.S. District Judge Edward M. Chen, of the Northern District of California, had set for the parties.
“One of our approaches that worked and resonated with the jury was to simply focus on the defendants’ own words, own emails, own actions, and at the end of the day demonstrate that the real goal of this campaign was to destroy Reveal, which was a groundbreaking piece of technology,” he said.
“It was a case that was challenging because of the complexity, but we had facts on our side and truth on our side.”
Many filings in the docket remained under seal Tuesday. Counsel for Natera did not respond to a message seeking comment Tuesday.
Guardant Health is also represented by Katharyn Grant, Andre Hanson and Olin “Trey” Hebert of A&O Shearman and Jennifer Keller and Chase Scolnick of Keller/Anderle.
Natera is represented by Kevin Johnson, Andrew Bramhall, Margaret Shyr, Brian Cannon, Valerie Lozano and Victoria Maroulis of Quinn Emanuel Urquhart & Sullivan.
The case number is 3:21-cv-04062.