District Of Delaware Grants Defendant’s Motion To Exclude Plaintiff Damages Expert’s Testimony In False Advertising Action Under The Lanham Act

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By Memorandum Opinion entered by The Honorable Colm F. Connolly in CareDx, Inc. v. Natera, Inc., Civil Action No. 19-662-CFC-CJB (D.Del. May 7, 2021), the Court granted Natera’s motion to exclude at trial the opinions of CareDx’s damages expert relating to “corrective advertising damages.”  CareDx sought to offer the damages expert’s testimony at trial in support of its claims for damages against Natera under § 1117(a)(2) of the Lanham Act.  Id. at *1.  CareDx’s Lanham Act claims were based on allegations that Natera falsely represented that Natera’s Prospera kidney transplant test is superior to CareDx’s Allosure Kidney test.  Id.

“According to CareDx, ‘[u]nder 15 U.S.C. § 1117(a)(2), a successful false advertising plaintiff can recover the costs of any completed advertising that actually and reasonably responds to the defendant’s offending ads.’”  Id.  CareDx wanted to offer the expert’s testimony at trial to establish the actual cost of the corrective advertising efforts it took in 2019 and the first half of 2020 and the projected cost of its corrective advertising efforts for the second half of 2020 and 2021.  Id. at *3.  The problem, however, was that CareDx’s damages expert relied solely on the deposition testimony of CareDx’s Chief Executive Officer about what the company’s total spend on marketing, sales and investor relations was in 2019 and what percentage of that total spend was directed, in some form or fashion, to defending against Natera’s alleged claims about Allosure.  Id. at *3-5.  CareDx’s damages expert did nothing independently, let alone scientific, to verify the CEO’s cost estimates.  Id. at *6.

Natera moved to exclude CareDx damages expert’s testimony on corrective advertising damages under Rules 702 and 403 of the Federal Rules of Evidence.  Upon review and evaluation of the opinions of the CareDx damages expert on corrective advertising damages, the Court concluded that the opinions were nothing more than simple math calculations and did not contain specialized knowledge outside of a juror’s common understanding.  Id. at *5.  Thus, the opinions were inadmissible because, among other things, they failed to meet the “qualification” and “fit” requirements of Rule 702 and their probative value was substantially outweighed by the danger of misleading the jury in violation of Rule 403.  Id. at *5-7.

A copy of the Memorandum Opinion is attached.

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