A trademark infringement case was filed this week that involves a dispute between two home healthcare agencies.

The case, Acaria Inc. v. Acaria Home Health LLC, et al., is currently pending in federal district court in Colorado.  The plaintiff, Acaria, Inc., doing business as Acaria Homecare, is a home care agency located in Lakewood, Colorado.   Acaria is the owner of U.S. Trademark Reg. No. 4524982 of ACARIA HOMECARE for “home visiting nurse care; nursing care; and nursing services” in International Class 044.   The plaintiff alleges that it has been using the ACARIA HOMECARE mark in commerce since 2005.   It conducts business in the greater Denver area. The defendants conduct business under the names Acaria Healthcare and Acaria Hospice.   Acaria Healthcare describes itself as ” a leading provider in Home Health, Hospice, and Palliative care.”  The defendants’ service area covers Maricopa County, Arizona.

The parties’ respective websites are here:  http://www.acariainc.com (plaintiff) and http://www.acariahc.com (defendants).  If the Acaria plaintiff is successful, it could be entitled to a permanent injunction, monetary damages, and an award of attorney’s fees.

If you are a home healthcare agency that is adopting a new name (or currently using one), you should remember the following principles:

  1.   Conduct a trademark search.  A properly qualified trademark attorney should conduct a search of the U.S. Patent and Trademark Office records, state records, and common law listings (of unregistered trademarks that are in use in commerce).   By conducting and analyzing the search results, the attorney will be able to determine if the proposed trademark is available for registration and use.  To make such a determination, the Trademark Office looks to thirteen different factors in assessing whether a junior user’s mark is confusingly similar to an existing senior registration so as to refuse registration.
  2.   Prepare and file a trademark application.  If a trademark attorney believes that your proposed trademark is preliminarily available, she should prepare and file a trademark application with the U.S. Patent and Trademark Office.   The Examining Attorney in the USPTO assigned to review your application will conduct his own search to determine whether there are any preexisting registrations that may pose a bar to registration of your mark.  He will also determine if your application meets all other procedural and substantive requirements for registration.
  3.  Train your staff and employees.    Health marketing compliance mistakes can be costly to a healthcare company and its reputation.  Your staff should be made aware of the main areas of brand protection and risk, including HIPAA Marketing compliance principles, trademark and copyright use and misuse, and social media risks.

By implementing proactive policies and training, you will be able to effectively mitigate the risks that your  healthcare organization faces as it relates to the advertising, marketing, and promotion of your professional staff and services.

A relatively simple health marketing mistake could be costly to your and your brand.

This past week we were looking at a couple of health marketing agencies that were touting the success of their clients’ recent marketing campaigns.  One campaign for a regional hospital caught our attention.  It is an example of great marketing that could quickly go bad.

The Marketing Campaign.   The centerpiece of the hospital’s marketing campaign was a new tagline.  The tagline was meant to illustrate the innovation of the hospital’s various technologies.  The slogan was used across various marketing channels, including print, web, social, and a Super Bowl spot that aired on regional TV.   Based on some back of napkin calculations, it is estimated that total marketing spending for the entire campaign was easily in the high-six to low-seven figures.

The Diagnosis.   The tagline was never cleared nor was a trademark application filed with the U.S. Patent and Trademark Office.

Risk Factors.    The failure to conduct a trademark search could result in a third-party’s claim of trademark infringement.  If found liable, the hospital could be enjoined from using the tagline, and also be ordered to pay up to triple damages (if the infringement was willful) and potentially the plaintiff’s attorney’s fees.  In addition, the hospital could be ordered to change its marketing campaign name.  This is in addition to having to be forced to expend additional sums of money in either corrective advertising or adopting a new name and campaign.

The cost of prevention.  A full trademark search, opinion letter, and filing of the trademark with the USPTO would have been approximately $2,500.00.   If the total health marketing campaign spend was $500,000, this would have been approximately .5% of the overall budget.

The Lesson.   Healthcare brands are under increasing competition, particularly among local hospitals and clinics.  That is why marketing compliance training is becoming more and more important.   Before you or your team adopt a new name for a health marketing campaign, hospital name, or branded community outreach effort, it is advisable to conduct a full trademark search.

To discuss your healthcare branding needs, feel free to contact the author to discuss your options for prevention and protection.

The role of health marcom compliance continues to grow in importance in 2019.

The American Marketing Association defines Marcom (or Marketing Communications) as follows:

Marketing communications, or “marcom,” is an all-encompassing term, as it covers marketing practices and tactics including advertising, branding, graphic design, promotion, publicity, public relations and more.

A trend fueling the rising interest in health legal compliance and training?  The risk of lawsuits.

Health Marketing Lawsuits.   Lawsuits involving the offering of health and wellness goods and services continue unabated.   Some areas of concern to health marcom professionals include:

  • Copyright Infringement.  Health marketers often neglect to conduct proper clearance of images, articles, or copy that is owned by third-parties.  The result is often a strict liability situation. The damage?  Even non-willful infringers can be liable for statutory damages of between $750 and $30,000 per infringing copy.
  • Trademark Oppositions.  Trademark Oppositions are contested proceedings before the U.S. Trademark Trial and Appeal Board.  A trademark opposition is typically filed because an applicant did not conduct a proper trademark search and clearance prior to launching its brand or advertising campaign.   A contested trademark opposition proceeding can cost upwards of $80,000 or more in U.S. attorney’s fees.
  • Trademark Infringement.  Unlike trademark oppositions that deal with issues of registration only, actions for trademark infringement are adjudicated before the U.S. federal and state courts.  If a defendant if found liable for infringement, it can be liable for treble damages in exceptional cases as well as attorney’s fees.
  • HIPAA Marketing violations.  The HIPAA Marketing Privacy Rule addresses the use and disclosure of protected health information for marketing purposes.  It does so by defining what is “marketing” under the Rule, as well as requiring individual authorization for all uses or disclosures of PHI for marketing purposes.  There are certain exceptions.   The privacy rule also prohibits covered healthcare providers from selling protected health information to third parties for the third party’s own marketing activities, without authorization.
  • Stark Law violations.  The Stark Law prohibits physicians from making referrals for certain designated health services (DHS) payable by Medicare to an entity to which she or a family member has a financial relationship.  There are numerous DHS examples that apply to this law, including clinical lab services, physical therapy, radiology, and home health services.  Penalties include civil monetary fines of up to $15,000 per service as well as higher penalties for circumvention schemes. In addition, physicians and other entities that are in contravention of the law can forfeit their right to participate in Medicare and Medicaid provider programs.

In 2019 and beyond, health marketers will continue to utilize digital and offline technologies to grow market share.  Implementing health marcom compliance training will help to mitigate risks associated with promoting healthcare goods and services.

Joel English, Managing Partner at BVK, presented further insight on health brand architecture at the SHSMD annual conference last week in Seattle.

Brand architecture defined.  Brand architecture is how all the pieces of a brand and its value promise fits together.  Healthcare brands can include many brands components.  Joel provided the following example of a fictitious health brand ecosystem:

  • Driver Brands:  Anchor University Hospital – part of True Health
  • Strategic Brands: Anchor Medical Group
  • Endorser Role: True Health
  • Silver Bullet:  Anchor Burn Care
  • Sub Brands:  Anchor Health Plan;  Anchor Visiting Nurses

Types of brand architecture.

  • Branded House.  The main, driver brand that drives other brand business units.  An example is Virgin and Virgin Mobile.
  • Hybrid Brands.   Both the main (endorser) brand and the sub brand play a driver role.  An example is Marriott, which has Residence Inn (by Marriott) and Courtyard (by Marriott).
  • House of Brands.   A house of brands is where there is an umbrella brand that owns several subordinate, individual brands.  An example is Unilever and all of its various consumer brands.

No matter what brand architecture is selected, it is advisable for health care systems and providers to take the following steps as an integral part of its naming taxonomy.

Trademark clearance.   For all names, slogans, and logos that will be used, a full trademark search should be conducted.  A proper search includes a search of the USPTO records as well as common law, unregistered third-party uses.  Why?  Because under U.S. law, trademark rights vest at use, not registration.  Therefore, a competitor could sue you for trademark infringement based on a federal registration or its own unregistered trademark use.

Apply for registration.   A determination should be made whether the trademarks to be adopted or used constitute protectable trademark matter.  If a qualified trademark attorney determines this is the case and that the search revealed no problematic third-party trademarks, then a federal trademark application should be prepared and filed.   Note that U.S. applications may be based on either existing use or a bona-fide intention to use in situations where the trademark and associated goods or services are still in development. 

Develop Brand Usage Guidelines.   Proper brand usage guidelines serve two purposes:  brand uniformity and legal protection and compliance.   Both are equally important to the well-being of a healthcare brand.

Editor’s Note:  To discuss brand clearance and protection for your health care brands, you may contact James Hastings at Collen.

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.