The SHSMD annual conference continues with a great health brand communications presentation by Joel English, Managing Partner of BVK.  Joel succinctly shared the most important thing that every health marketer should know:

The valuation of a healthcare system’s brand is the highest asset on its balance sheet.

Here are some things to remember in protecting the integrity of your healthcare brand:

Health brands are goodwill.  Your health brand is an intangible asset. In the healthcare context, a brand includes health system and facility names, marketing campaign names, slogans, and logos.  It also includes marketing copy, images, and proprietary research, products and services.  A healthy brand is the result of cumulative goodwill cultivated at great cost and expense to an organization.

Health brands can be injured.   Healthcare brands, like other brands, are not immune to damage.  In the health marketing context, this often is the result of failure to follow HIPAA marketing rules, trademark and copyright clearance, or making unsubstantiated advertising claims.  So damage to a health brand is not just about attorney’s fees and monetary damages; it is about potential injury to your reputation.

Brand Health is your responsibility.   According to Joel, a brand is the responsibility of all members of the healthcare organization; including their outside agencies, and everyone who has contact or who influences an organization’s customers and communities.  Brand is the unified theory of everything; the context of how we act and communicate.

Editor’s Note:  Healthcare brands spends millions of dollars per year on marketing and advertising.  The overall goal of such efforts is to strengthen and differentiate the brand among relevant consumers.  Done right, health brand marketing can result in greater revenue and improved brand equity.  But if healthcare organizations fail to clear brand names or implement HIPAA marketing and related compliance training, their brand equity could quickly suffer from injury to brand reputation.  This is in addition to potential six-or seven figure monetary damages and attorney’s fees that could result from unaddressed marketing risks.

SHSMD 2018 continues with David Marlowe, CEO of Strategic Marketing Concepts, who provided an excellent presentation entitled Healthcare Marketing Plans That Work.

As a former President of SHSMD and health marketing expert and author, he provides practical insight. According to David, a good health marketing plan should include the following elements:

  • Executive Summary.   This is an overview of strategic plan priorities and goals.
  • Market Audit.   These are the key factors that influence the marketing situation facing the healthcare organization, service, or program.  It’s not just about data – its about good information.
  • Market Position.  Who you are and what differentiates your brand from your competitors.
  • Market Strategies.  Proposed strategies and initiatives for next 1-2 years.
  • Market Objectives.  An explanation of what you are trying to achieve as an organization.
  • Market Actions. The specific things you are going to do in the next year.

Here are some of David’s additional observations:

Does your organization have health marketing function policies in place and are they enforced?

  • Marketing is strategy.   Health marketing goals must be integrated into the business plan.  Yet, many healthcare systems and providers do not even include specific marketing goals as part of their formal strategy.
  • Content is what counts.  A health marketing plan needs to involve the entire organization.  The most effective plans are broad and holistic, including operations, management, and financial.   Involve every key internal client when planning.
  • Marketing must be measurable.   The days of wanting to improve brand reputation and visibility are past.  Looking at what is coming and how to prepare for it is one of the purposes of a good marketing plan.

An effective health marketing plan should include marketing compliance employee and vendor training.

Editor’s Note:  The David Marlowe publication, Healthcare Marketing Plans that Work, is now available for purchase at the SHMD Conference or on the SHMD website.

SHSMD 2018 is now under way in Seattle, Washington.

The Society for Healthcare Strategy & Market Development (SHSMD),  is a professional membership group of the American Hospital Association.   The annual conference brings together health marketing and strategic leaders from healthcare systems, providers, and consulting companies nationwide.

This morning’s Healthcare Marketing Credentials session features faculty member Rob Klein of Klein & Partners.  Rob’s company provides health marketing research and customer insight to help his clients make informed marketing decisions.  Two of Rob’s insights emphasized the importance of health marketing compliance in marketing and strategy management:

I care about the health of the brand.  If you make a bad marketing decision, you can lose your job.

Here’s some of our own observations on Rob’s thoughts:

Brand health is legal health.  Great marketing plans do not begin with great ideas alone.  Why?  Because great ideas sometimes put your health marketing efforts at great legal risk.  What do we mean by risk?   Things like:

  • Copyright infringement.  Failure to secure rights to images, or distributing copies of proprietary research or publications without a proper license.
  • Trademark infringement.  Commencing a health marketing campaign with a new brand name or slogan without a proper trademark search, clearance, or registration.
  • Consumer Class actions.   Certain law firms seek-out health marketing violations that are ripe for class action lawsuits.  Marketing violations that can quickly escalate into major law suits include violations of the Telephone Consumer Protection Act (TCPA); HIPAA Marketing Laws; and CAN-SPAM Act.

Take an ounce of [legal] prevention.  The median hospital marketing department annual budget is $3.1 million, according to a survey by Klein & Partners and Greystone.net.  Yet our own observations of marketing compliance practices indicates that very few marketers invest part of their overall budget in brand marketing clearance, protection, and risk-mitigation.  This is despite the fact that failure to properly implement marketing compliance training and programs could result in losses that are equal to or greater than a hospital’s annual marketing budget.   An exaggeration?  Hardly.   Many health care marketers have unfortunately realized such losses through a combination of attorney’s fees, monetary damages, corrective advertising, and injury brand reputation.

Thanks to SHSMD and speakers like Rob Klein for running a great conference.

Marketing Compliance Advisory.   Health marketing compliance training and guidelines should be part of every healthcare marketing plan.  To discuss how to implement one in your organization, contact James Hastings, Editor.

Dietary supplement compliance is a complex matter, requiring broad vetting of not only packaging but also all advertising and marketing materials. Unfortunately, many manufacturers and distributors still leave themselves open to legal risk. All too often, they focus on Food and Drug Administration (FDA) requirements and miss a crucial step in dietary supplement compliance, namely adhering to Federal Trade Commission (FTC) requirements.

FDA vs FTC.  While both the FDA and FTC have authority over marketing dietary supplements, they have distinctly different legal responsibilities. The two agencies work together to determine which one or both would pursue government investigation of a dietary supplement that makes dubious or not fully supported claims. The FDA primarily looks at packaging, labeling, content, purity, and safety. Many manufacturers of dietary supplements focus primarily on the required disclaimers for labeling pursuant to the Dietary Supplement Health and Education Act of 1994. One of the well-known disclaimers is: “This statement has not been evaluated by the FDA. This product is not intended to diagnose, treat, cure, or prevent any disease.”

The FTC, however, has authority to go beyond the package and examine the truth and accuracy of all dietary supplements’ advertising and marketing material. Thus, all radio, tv, print, Internet, and social media campaigns must comply with Section 5 of the FTC Act. All claims must be truthful, not misleading, and substantiated. The FTC offers detailed guidance in its document, “Dietary Supplements: An Advertising Guide for Industry.”

Examples of Enforcement Actions.  Using unsubstantiated claims can have dramatic and costly results. In 2014, the FTC ordered Sensa’s marketers to pay more than $26 Million in redress to consumers who bought the supplement. The marketers, according to the FTC, had deceptively advertised that consumers could “sprinkle, eat, and lose weight” simply by using Sensa. In 2016, the FTC settled with the sellers of Supple, a glucosamine and chondroitin liquid settlement. The FTC alleged that the Supple sellers had falsely advertised the products’ ability to provide complete relief from arthritis and fibromyalgia joint pain. Part of the settlement included a $150 Million judgment.

The FTC is not the only player in town. The Council for Responsible Nutrition works collaboratively with the National Advertising Division of the Better Business Bureau (NAD) to ensure dietary supplement compliance with Section 5 standards. The NAD has investigated supplements over and over, recommending that sellers revise their advertising claims if they do not have sufficient clinical evidence. If a dietary supplement marketer does not comply with the NAD’s guidance, the NAD is likely to turn the matter over to the FTC.

Legal Vetting Best Practices.  Health marketers should be aware of the following dietary supplement compliance considerations:

* When creating marketing and advertising for a dietary supplement, let qualified legal counsel vet your materials for FTC and FDA compliance.

* Remember that both implied and express claims must meet the legal standards for commercial speech.

* Your clinical evidence requires careful legal analysis based on the advertising claims. It may not be sufficient to support your marketing claims if it does not match typical consumer experience or does not follow certain scientific standards.

* The FTC also often finds problems with consumer testimonials and expert or celebrity endorsements. Your marketers should ensure they fully understand the FTC’s requirements in these areas.

If you are a manufacturer, distributor, or marketer of dietary supplements and want to know more about legal requirements for advertising and selling these products, please contact Kyle-Beth Hilfer, Esq. 

Many healthcare companies believe that their U.S. trademark registrations are safe from trademark cancellation.  This can be a fatal mistake if you are not well-versed in trademark compliance law.

Trademark cancellation rules.  In the United States, trademark registrations enjoy a ten-year term, which can be renewed for additional ten (10) year periods upon a showing of use.  That being said, trademark registrations are subject to cancellation under the following conditions:

  1.  Administrative cancellation by the USPTO.   There are two times during the ten-year term that trademark owners must establish proof of either continuous use in commerce or excusable non-use.  These are between the fifth and sixth year post-registration and between the ninth and tenth year-post registration.  The failure to establish proof of use during these two statutory periods will result in your trademark registration being administratively cancelled by the U.S. Patent and Trademark Office.
  2.  Trademark cancellation by a third-party.   Any third-party who believes that it may be damaged by the continued registration of a trademark may seek to cancel the registration.  This is done by filing a petition for cancellation with the U.S. Trademark Trial and Appeal Board (“TTAB”).

How a cancellation proceeding works.   A trademark cancellation is a civil lawsuit filed before the U.S. Trademark Trial and Appeal Board (“TTAB”), the administrative body of the USPTO tasked with, among other things, adjudicating registration disputes between litigants.   Like other civil cases, trademark cancellation proceedings consist of three primary stages:  pleadings (which may include the petition for cancellation, answer, affirmative defenses, or counterclaims); discovery (which consists of interrogatories, requests for production of documents, admissions, and depositions); and trial.  Note that the TTAB’s jurisdiction applies to issues of registration only; it cannot order a party to cease using its trademark in commerce.  Nor can it award attorney’s fees and expenses.

Grounds for petition for cancellation.    A petition for cancellation of another party’s trademark registration may be filed on several grounds, including:

  • a likelihood of confusion with the Petitioner’s trademark;
  • abandonment of the trademark by the trademark owner through non-use;
  • that the Registrant’s mark is merely descriptive or has become generic
  • Registrant is not the rightful owner of the trademark
  • Registrant’s mark would dilute the distinctive quality of the Petitioner’s mark
  • Fraud on the USPTO

There are additional grounds for cancellation of a trademark registration.   One tactic that is being used more frequently by competitors is a petition for partial cancellation.  This is where the petitioner seeks to cancel entire classes of goods or services or specific goods and services from the trademark owner’s registration.

Trademark Cancellation Risk Compliance   To avoid your health trademark registrations from being cancelled, it is important to routinely file mandatory proof of continuous use with the USPTO.   This includes making sure that your company’s trademarks are still being used on all of the goods and services set forth in your trademark registrations.    

Responsible health marketing compliance starts with proper employee training.

Who needs training.   If you and your company are a provider of health and wellness products and services, you are obligated to comply with various health marketing laws.  This includes health systems, hospitals, clinics, and physician practices.  It also applies to the marketing of health products and solutions to the general public, such as medical and long-term care insurance, nutritional supplements, fitness products, and natural remedies and personal care.

Applicable laws and regulations.  There are several federal laws and regulations regarding the proper advertising and marketing of healthcare solutions.  Some help protect your own brand and marketing efforts, while others help you mitigate the risk of infringing the rights of third-parties, including patients and competitors.  These include:

  1.  HIPAA Marketing rules.  The HIPAA Marketing Rules are promulgated by the U.S. Department of Health and Human Services.  The Rules give patients and consumers important controls over whether and how their protected health information (PHI) is used and disclosed for marketing purposes.  The rule generally requires covered entities to obtain permission to use PHI for marketing purposes, subject to certain exceptions.
  2.  Stark Law.  The Stark Law governs physician referrals.  Under the law, physicians are prohibited from referring patients to receive “designated health services” payable my Medicare or Medicaid to entities which the physician or immediate family member has a financial relationship.  Certain exceptions may apply.
  3. Lanham Act.  The Lanham Act governs the laws of trademark and unfair competition.  Prior to adopting a new brand name, slogan, or logo design, health providers need to properly clear the trademark to ensure that it is available for use and registration.   After a clearance search and opinion is provided and approved, it is recommended that the entity file a trademark application with the United States Patent and Trademark Office.
  4.  Copyright Act.   The most common, and potentially costly area of compliance if not followed, is copyright law.  Under the U.S. Copyright Act, copyrightable subject matter such as stock photos,  images, illustrations, and marketing copy and brochures are protected from unauthorized use.  The law also applies to the unauthorized distribution of copyrighted materials to fellow employees or colleagues, such as medical journals, articles, or other content for which your company has no subscription or license.
  5. FTC Regulations.   The U.S. Federal Trade Commission is the primary agency that enforces advertising laws and regulations.  The Federal Trademark Commission Act (FTCA) prohibits false and deceptive advertising, and other unfair trade practices.   Companies that offer and market healthcare solutions are obligated to substantiate all the material health and other claims made in their marketing and advertising.

Penalties for non-compliance.   The penalties for violations of law due to not having a health marketing compliance program can be severe.  Examples include injunctions, destruction of marketing collateral, monetary damages, and in some cases, treble damages and an award of attorney’s fees to the prevailing party for intentional acts.  This is separate and apart from the costly legal fees and disruption to business and reputation that may result from non-compliance.

Editor’s Note:  If you are a healthcare provider or marketer of health and wellness products, setting up a proper health marketing compliance program need not be complicated.  To discuss your compliance program education and monitoring needs, please contact James Hastings.

This is part of a continuing series on health trademark compliance and training.  This installment reviews trademark basics and clearance considerations.

Many healthcare systems and providers still lack a basic understanding of how health trademarks are cleared, approved, and registered.  The root cause if often the failure of employee education and compliance training.   When health providers fail to properly clear the use or registration of a trademark before commencing such use, the risk to the organization almost always increases.  Here are some important things to remember.

Trademark Definitions.  A trademark is any word or symbol used to distinguish the goods or services of one party from those of another party.  A “service mark” is a trademark that is used exclusively in connection with services.  For example, CVS HEALTH may be a service mark for health and wellness education and a trademark for contact lens solution. Examples of trademarks that are eligible for protection include:

  1.   Word marks.  Word marks (without any logo or design element) often provide the broadest trademark protection.  This is because word marks can be used together with various logo or font variations at the brand owner’s discretion.  Examples include Anthem, Cleveland Clinic, Cardinal Health, and Johnson & Johnson.  When launching a new health product or service, it is often advisable to seek registration of the word mark alone in addition the word mark and combined design logo.
  2.   Logos.  Design marks are commonly referred to as logos.  These can be registered either alone (without any words) or in combination with the brand name to which it is associated.  Trademarks that incorporate logos can either be filed in black and white or in color.  Of the two, black and white affords the broadest trademark protection.
  3.   Slogans. Taglines and slogans are considered to be trademarks.  Like other forms of trademarks, taglines and slogans may be registered so long as they are not merely descriptive, generic, or cannot function as a trademark.

Trademark Search Advisory.  Prior to adopting a trademark for any goods, services, or marketing campaign, it is advisable to conduct a full search of the U.S. Patent and Trademark Office records and common law listings to determine the availability of the trademark for registration and use.  Once the trademark search is performed, it should be reviewed by a qualified health trademark attorney.  The attorney should provide a written opinion as to whether the proposed trademark is available for use and registration.   If the search results indicate a potential likelihood of confusion with a third-party trademark, then alternatives should be suggested on how to best mitigate any additional risks.

An effective trademark compliance policy may be good for your health.

Each year, healthcare providers are named unwitting defendants in trademark infringement suits in the U.S. district courts.  The same holds true for trademark opposition and cancellation proceedings brought before the U.S. Trademark Trial and Appeal Board.  So what is the good news?  Many lawsuits can be avoided through proper education and trademark compliance training.

By way of example, the National Institute of Health (NIH) has written trademark compliance policies and guidelines for its employees.  This U.S. government agency knows the importance of trademark rights and how to protect its vast array of brand names used in connection with its various services.  Equally important is its awareness of the risks that trademark infringement can bring, including disruption to public marketing and promotional initiatives.

So if you’re a health system or other healthcare provider, it’s a good idea to implement a trademark education and compliance program for employees.  General areas that should be included in a trademark compliance program are:

  • trademark definitions and concepts
  • explanation of the trademark clearance process
  • how to search, clear, and apply to register trademarks
  • trademark use guidelines
  • what is trademark fair use and what is not
  • employee roles, responsibilities, and procedure
  • creative and marketing vendor responsibilities and procedures
  • trademark usage in digital marketing, including paid search

In addition to the above, annual risk and compliance training should take place with all employees and key vendors that have responsibility for brand assets, marketing, and promotions.  Health systems literally spend millions of dollars a year in brand marketing and promotional efforts.  Making brand compliance an integral part of your compliance and risk strategy can help protect your valuable brand investments and mitigate your risks.

An ounce of prevention is indeed worth a pound of cure.

Editor’s Note:   To discuss your trademark compliance policy or how to design and implement one, please contact us.  

Over 3,000 trademark oppositions are filed every year with the US Trademark Trial and Appeal Board.  Many of these oppositions involve applications for health trademark products and services.  Knowing how the trademark application process works can help healthcare providers determine how to best ensure that their selected trademark will be available for use and registration.

Trademark Examination Basics.   All trademark applications filed with the United States Patent and Trademark Office (USPTO) are assigned to a Trademark Examining Attorney.  The Examiner will review the application for procedural and substantive requirements.  As part of the examination process, the Examiner will also conduct a search of the USPTO records to determine if there are any existing trademark registrations that may be deemed to be confusingly similar to the applicant’s mark.   Assuming the application has met all filing criteria and there are no problematic registrations of record, the Examiner will approve the application for publication.  Once published, any third-party who believes that it could be injured by issuance of the registration can oppose the trademark application.

Trademark Opposition Rules.   Trademark Oppositions are heard before the US Trademark Trial and Appeal Board (TTAB) the adjudicative body of the USPTO.   The various stages of a trademark opposition proceeding consist of the following:

  1. Notice of Opposition.   An opposition proceeding is commenced by filing a Notice of Opposition that sets forth the grounds for the opposition.  In cases where a likelihood of confusion is alleged, the Opposer must establish that it has standing and priority rights.
  2.  Answer.   Within 40 days of being served with the Notice of Opposition, the Applicant must file an answer.  The answer generally denies all relevant allegations contained in the notice of opposition and often included affirmative defenses.
  3.  Discovery.   After the answer is filed, the discovery phase of the proceeding commences.  This may include interrogatories, request for production of documents, and depositions.  The goal of discovery is for the parties’ to gather information and documents that would support their claims and defenses.  An effective discovery strategy can narrow the issues for trial and possibly lead to a motion for summary judgment should there be no genuine issues of material fact for the Trademark Board to consider.
  4.  Trial.   TTAB trials are conducted via written submissions, although either party has the right to request oral argument.   Submissions include a Notice of Reliance, Testimony (by way of depositions or declarations), and trial briefs.  The Board will thereafter render a written decision either granting the opposition or dismissing it.  If an opposition is upheld, then the Applicant will be refused registration.

Health Marketer Tips:  Trademark oppositions are very expensive and may present a high risk to your brand. To avoid the risk of a trademark opposition, it is highly advisable to have a trademark attorney conduct a full trademark search prior to launching a new healthcare product or service.

Health trademarks are of vital importance to the value of healthcare brands.  A recent study by Healthcare Global revealed that CVS Health was ranked the top healthcare brand in the United States based on revenue, with annual sales of $139.4 billion. Yet the availability of a health trademark for registration and use is never guaranteed.  It is therefore surprising that numerous U.S. health and wellness providers fail to properly conduct a trademark clearance search prior to launching a new product or service that could be worth millions of dollars in revenue.

The United States Patent and Trademark Office recommends conducting a trademark search of existing trademarks prior to filing a trademark application.

This is how the trademark application search and application process generally works.

  1.   Trademark search.   A trademark search of the USPTO database is the first-step to determine whether a mark is available for registration and use.  The search should consist of existing federal trademark applications and registrations as well as common law listings of unregistered marks that are not contained in the USPTO records.
  2.  Trademark clearance letter.   After the search is conducted, a qualified trademark attorney should review the search results for, among other things, whether the desired trademark is confusingly similar to any preexisting registrations or third-party uses.   The attorney should then create a written opinion setting forth whether the proposed trademark is available for use and registration.  The opinion should make recommendations on the business risk of proceeding or not proceeding.  If the risk is too great, then an alternative trademark should be considered.
  3.   Prepare and file application.   Once trademark clearance is performed, the trademark application should be prepared and filed with the USPTO.  Applications may be based on either use of the trademark in commerce, or if is not yet being used, an intent to use the mark.  The application must comply with all other requirements, including a statement that the applicant is the rightful owner of the mark and that it does not believe that any other party has the right to use the proposed trademark.
  4.  Trademark examination process.   Every trademark application is assigned to an Examining Attorney in the USPTO.  The Examiner will conduct a search of prior applications and registrations contained in the USPTO database.  The Examiner will also review the application for additional procedural and substantive requirements, and may initially refuse the application based on a likelihood of confusion with a preexisting trademark application or registration.
  5.   Additional requirements.   If the Examiner initially refuses the application, the trademark attorney can submit arguments against the grounds for refusal and request that the registration issue.  If the application is not refused and all other requirements are fulfilled, then the trademark will issue in due course.  Each trademark registration has a term of ten years, with subsequent ten year renewal periods should all statutory requirements be met.  In addition, the trademark owner will be required to file an affidavit showing continued use of the trademark in commerce between the fifth and sixth year post-registration.

Editor’s Note:  A full trademark search and clearance opinion letter should be part of an overall health brand risk and compliance program. To discuss how to develop a plan, or to conduct a health trademark search, please contact the author.