Adds Natera comment in paragraph 3

By Blake Brittain

WASHINGTON, June 1 (Reuters) - The U.S. Supreme Court on Monday declined to take up genetic testing company CareDx's CDNA.O request to hear a false-advertising dispute over statements made by rival Natera NTRA.O about its kidney-transplant tests.

The high court said it would not reconsider whether Natera owed damages for making allegedly misleading advertisements about the effectiveness of Natera's Prospera tests in comparison to CareDx's competing product. As is its custom, the court did not outline its reasons for rejecting the appeal.

A Natera spokesperson said the company was "pleased with the outcome in this case." Spokespeople and attorneys for CareDx did not immediately respond to a request for comment.

U.S. District Judge Colm Connolly in Delaware threw out a $45 million jury verdict for CareDx in 2023 after finding no evidence that Natera's statements actually misled customers. CareDx told the justices that courts should presume that the ads deceived consumers because they were "deliberately false."

CareDx alleged in 2019 that Natera used the results of a flawed clinical trial to make misleading statements in ads directed to organ-transplant doctors about the effectiveness of Prospera, a test used to assess the risk that a person's body will reject a kidney transplant. CareDx said Natera misused the results to falsely advertise that Prospera was more effective than CareDx's competing AlloSure test.

The companies are also involved in a separate patent dispute over their technologies.

A jury awarded CareDx $44.9 million in damages on its false advertising and unfair competition claims in 2022. Connolly said in 2023 that the damages evidence presented at the trial was insufficient, although he upheld the jury's determination that Natera was liable for false advertising.

Connolly also rejected CareDx's argument that the court should presume customers were deceived and said that "evidence of an intent to mislead does not warrant a presumption of actual deception." Actual deception is a requirement for damages in federal false-advertising cases.

The 3rd U.S. Circuit Court of Appeals upheld Connolly's ruling last year. CareDx told the high court that the ruling contradicts six other circuits that have held that juries can presume consumers were deceived if an ad campaign is deliberately false.

CareDx said that presumption has "widespread practical value to remedy and deter false advertising campaigns," and that proving consumer deception otherwise is "notoriously difficult."

Natera responded that there was "no error in the Third Circuit’s application of fact to the specific instructions CareDx agreed would govern its case."

The case is CareDx Inc v. Natera Inc, U.S. Supreme Court, No. 25-959.

For CareDx: Edward Reines of Jones Day

For Natera: Robert Smith of Katten Muchin Rosenman

Read more:

CareDx wins $45 mln verdict against Natera for false advertising

US judge rejects $45 mln award to CareDx in Natera false ads case