One may quote and quote and be a false advertiser: accurate quotation isn’t enough if the use is misleading

CareDx, Inc. v. Natera, Inc., 2020 WL 401773, No.
19-662-CFC-CJB (D. Del. Jan. 24, 2020)
opinion by magistrate
; the district court agrees that statutory Lanham Act
standing exists when future harm is likely and that CareDx successfully pled
falsity by challenging the quality and relevance of Natera’s study while not
challenging the accuracy of its quotations from the study.
Reminder: The language of the Lanham Act “expressly
authorizes suit by a plaintiff ‘who believes that he or she is or is likely to
be damaged by’ a defendant’s false advertising.”
Natera also argued that the complaint didn’t allege that
Natera “misquoted or misrepresented any of the figures set forth in the
relevant studies, or that Natera failed to correctly cite the publicly
available scientific studies.” The district court correctly recognized a “red
herring.” The complaint turns on CareDx’s allegation that Natera falsely and
misleadingly suggested that those studies proved superiority to CareDx’s
product, when “(1) the studies are not head-to-head studies that would support
comparisons of the two competing products and (2) the Natera study is flawed
and unreliable.” Neither of those bases of falsity requires misquoting. Rather
than taking issue with any particular statement in the Natera Study (or any
other study), CareDx alleged that the Natera study was flawed and that, “[e]ven
putting aside” the question of its validity, the study’s “methodology …
differs so significantly [from the methodology employed by the CareDx study]
that it is entirely improper to draw meaningful or reliable comparisons between
the performance of the two products” that were tested respectively in the two
Natera then argued that it hadn’t suggested that there was a
head-to-head study, but, for example, the complaint alleged that a Natera press
release stated that “the performance data” from the study of Natera’s product
“compares favorably against the competition [citation to the CareDx Study].”
That was an explicit comparison. This was not just “a disagreement in how the
science was conducted.” It was the use of the science—to draw superiority
conclusions—that was at issue.  A very
clear distinction, well stated.  [And clearly a (correct) response to arguments based on the Second Circuit’s decision in ONY, Inc. v. Cornerstone Therapeutics, Inc., 720 F.3d 490 (2d Cir. 2013), though that case is not mentioned by name in the judge’s opinion.]

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