Background
CareDx and Natera are competitors in the market for donor-derived cell-free DNA (dd-cfDNA) blood tests used to detect kidney transplant rejection. CareDx sells AlloSure Kidney; Natera sells Prospera. In 2019, CareDx sued Natera under the Lanham Act in the District of Delaware, alleging that Natera ran a comparative advertising campaign — based on the so-called “Sigdel Study” — falsely claiming Prospera was more sensitive, more specific, and had “unparalleled precision” compared to AlloSure.
A jury in March 2022 found nine of Natera’s advertising claims to be literally false and awarded CareDx approximately $44.9 million in damages ($21.2 million actual, $23.7 million punitive). Judge Connolly then granted Natera’s post-trial motion for judgment as a matter of law, erasing the damages verdict on the ground that CareDx had not independently proven that consumers were actually deceived by the false ads. However, he entered a permanent injunction barring Natera from continuing to make the false superiority claims.
The Third Circuit affirmed in August 2025. Writing for the panel, Judge Shwartz held that while the advertising was indeed literally false, CareDx could not recover damages without independent proof of actual consumer reliance and deception. The permanent injunction remained in place.
The Court’s Holding
On June 1, 2026, the Supreme Court denied certiorari without comment.
The question presented was: “Whether a jury may infer consumer deception and reliance upon finding that an advertising campaign was deliberately false.”
CareDx argued that the Third Circuit stands alone in refusing to allow such an inference, creating a circuit split. Under the law of other circuits, CareDx contended, a finding of literal falsity coupled with evidence of deliberate deception entitles a plaintiff to a presumption (or at least a permissible inference) that consumers were actually deceived — which should be sufficient to support a damages award. Natera countered that the claimed circuit split was “imagined” and that CareDx mischaracterized other circuits’ holdings on the relationship between literal falsity and damages.
By denying cert, the Court leaves the Third Circuit’s ruling in place: in the Third Circuit, a Lanham Act plaintiff must produce independent evidence of actual consumer deception to recover money damages, even if the defendant’s advertising is proven deliberately and literally false. A permanent injunction can still issue based on literal falsity alone, but the monetary remedy requires a higher evidentiary showing.
Key Takeaways
- In the Third Circuit, proving that a competitor’s advertising is literally and deliberately false is enough to win an injunction but not enough to win damages — you must also independently prove actual consumer deception and reliance.
- The cert denial leaves a potential circuit split unresolved. Plaintiffs in other circuits may still argue for a presumption of deception from literal falsity, but Third Circuit plaintiffs face a stricter standard.
- For companies in competitive markets like medical diagnostics, the ruling means that even a clear-cut case of false comparative advertising may not yield monetary recovery unless the plaintiff can marshal evidence showing that specific customers were actually misled — surveys, lost-customer testimony, or market-share data tying losses to the false claims.
- The permanent injunction remedy remains robust: courts can and will order competitors to stop making literally false claims regardless of whether damages are proven.
Why It Matters
This case sits at the intersection of advertising law and the life sciences industry, where competing diagnostic companies frequently make comparative claims about test sensitivity and accuracy. The Supreme Court’s refusal to take the case means that the standard for recovering Lanham Act damages will continue to vary by circuit. Companies planning enforcement actions should consider where they file: in some circuits, literal falsity alone can support damages, while in the Third Circuit, they will need to build an independent evidentiary record of actual consumer deception. For defendants, the ruling provides a powerful post-trial tool — even after a jury finds advertising literally false, a JMOL motion can erase the damages if the plaintiff’s proof of consumer deception is thin. The decision underscores the growing judicial insistence on rigorous proof of causation in false advertising cases.