Guardant Health, Inc. v. Natera, Inc.

Background

Guardant sued Natera over alleged false and misleading advertising concerning Guardant’s Reveal liquid-biopsy assay for early-stage colorectal cancer. Natera later filed amended counterclaims alleging that Guardant made false and misleading commercial statements about Reveal’s performance. Natera asserted four claims in Counts I–IV: a federal false-advertising claim under the Lanham Act, California false-advertising and unlawful-trade-practices claims, and common-law unfair competition.

Natera challenged statements about Reveal’s sensitivity and specificity in a so-called “surveillance” setting, comparisons with carcinoembryonic antigen tests, claims about detecting recurrence earlier, and claims about benefits for early-stage patients. It also alleged that the peer-reviewed Parikh Study supporting Guardant’s marketing had fraudulent or misleading methods, including allegedly undisclosed handling of patient samples, use of unblinded clinical information, and post hoc changes to the analysis.

Legal standards

Guardant moved under Federal Rule of Civil Procedure 12(b)(6), which asks whether the pleaded facts plausibly state a claim, and Rule 12(f), which permits a court to strike insufficient, redundant, immaterial, impertinent, or scandalous material. At the motion-to-dismiss stage, the court treated Natera’s factual allegations as true and drew reasonable inferences in Natera’s favor. Because Natera’s claims alleged knowing or intentional deception, the court also applied the heightened fraud-pleading standard in Rule 9(b), which requires allegations describing the who, what, when, where, and how of the alleged fraud.

The court considered standards concerning scientific studies and false advertising. It concluded that Natera plausibly alleged both that some Guardant marketing statements were unsupported by the Parikh Study and that the study itself may have misrepresented its data or methodology. The court emphasized that factual disputes about the study and the meaning of the advertising could not be resolved on this motion.

Counts I–IV

The court denied Guardant’s motion to dismiss Count I under the Lanham Act. Natera plausibly alleged that Guardant’s statement that sensitivity improved to 91% through longitudinal surveillance samples did not accurately describe the study, which reported 69% sensitivity for the longitudinal analysis and 91% for a narrower surveillance analysis involving samples drawn within four months of recurrence.

Natera also plausibly alleged that Guardant’s claims of 100% surveillance specificity and comparisons between Reveal and carcinoembryonic antigen tests were misleading because the Parikh Study did not report surveillance specificity or provide the asserted comparison data for that group. The court found factual disputes about how the term “surveillance” was used and understood.

The court further found plausible Natera’s allegations concerning claims that Reveal detected recurrence earlier than carcinoembryonic antigen tests and benefited early-stage patients. The study did not provide statistically significant data establishing the claimed lead time over those tests, and it included some late-stage patients rather than conclusions limited to early-stage patients.

Natera also adequately pleaded that the Parikh Study may have fraudulently described its methodology. The court found plausible allegations that the study applied its four-month surveillance cutoff selectively, misrepresented the source of that methodology, described the analysis as blinded even though Guardant allegedly had access to clinical information, and described the study as prospective despite alleged post hoc manipulation of methods and data. These allegations were sufficient at the pleading stage, even though Guardant disputed them.

Because Natera’s California false-advertising, unlawful-trade-practices, and common-law unfair-competition claims were substantially congruent with its Lanham Act claim, the court also denied Guardant’s motion to dismiss Counts II–IV.

Counts V–VIII

Counts V–VIII were declaratory-judgment counterclaims asserting that Natera did not violate the Lanham Act or the corresponding California laws. Natera did not dispute that these counterclaims duplicated Guardant’s affirmative claims. The court concluded that the counterclaims had no apparent useful purpose at that stage and granted Guardant’s motion to strike them without prejudice. The conclusion also described the ruling as granting Guardant’s motion to dismiss or strike Counts V–VIII without prejudice.

Disposition

The court denied Guardant’s motion to dismiss Natera’s Counts I–IV. It granted Guardant’s motion to dismiss or strike Natera’s Counts V–VIII without prejudice and stated that the order disposed of Docket No. 95.