Hospital marketing budgets are tight as a result of COVID-19 disruptions.   Margins are thin.  So healthcare executives continue to explore new ways to capture lost revenue streams.  While there are no easy answers, creating a hospital brand licensing program can help achieve several financial goals.

Why License?  According to the American Hospital Association (AHA), hospital and health systems losses due to COVID-19 totaled $202.6 billion.  Even strong health system brands have not been immune.  When the Mayo Clinic had to stop all non-emergency procedures last March, it resulted in millions of dollars of revenue losses each day.   Lesser know healthcare brands such as regional health systems and hospitals face an even greater hurdle in returning to pre-pandemic profitability levels.   That is why licensing has an appeal to healthcare strategists.

What is hospital brand licensing?   Brand licensing is a means to leverage the cumulative goodwill that is built-up in your hospital’s reputation over the years.  Specifically, brand licensing is when you lease or rent your intangible assets (your brand names and other marketing collateral) to third-parties.   This includes your reputation for excellence among the relevant consuming public.  For healthcare systems, brand licensing is an attractive alternative to system-owned clinics or physician practices that require a substantial capital investment.

The elements of a brand licensing program include:

A.   Identify your brand assets.   A hospital’s brand assets, otherwise known as intellectual property, are extremely valuable.  These include brand names, logos, images, marketing content, service line campaigns, and patient and employee testimonials.   A brand licensing program starts with identifying all of the elements of your brand portfolio that can be legally protected and help to differentiate you from your competitors.

B.   Establish rights ownership.   Most hospitals hire outside agencies to create and manage their branding assets and marketing campaigns.   Yet a majority of health organizations do not own their own creative assets.  This is true, even though they paid handsomely for the work.   Why?  Because by default of law,  the outside agency is the owner unless a work for hire agreement or assignment of such rights is put in place.  Similarly, you should also identify those elements of your brand and marketing campaigns that are not your own and you did not hire someone to create.  Use of this category of creative assets generally require permission from the rights owner in the form of  authorization or license.

C.   Implement a brand assets registration program.   Healthcare organizations often make the grave mistake of not registering their major branding assets with the U.S. Patent and Trademark Office and U.S. Copyright Office.  The failure to do so not only may result in diminished book value, but result in potential theft from competitors.   To begin, identify your major branding assets based on contribution to  your organization’s identity, reputation, and goodwill.   Second, identify assets that have been created specifically for individual service line campaigns.   Once this is done, a branding assets registration program can be implemented and assets captured on an on-going basis.  Additional tips may be found here.

In our next article, we will discuss the benefits of brand licensing for healthcare systems and how to seek the right partners in your regional community.   While your hospital marketing budget remains a challenge, now is the time to start leveraging the power of your brand.

Note:  To find our more about how you can establish a brand protection and licensing program for your healthcare organization, contact us.

Healthcare brand valuation remains a high priority to healthcare organizations during COVID-19.   The first step is to understand the inherent value of the intellectual assets that comprise your brand.

Brand assets defined.   Brand assets consist of a healthcare organization’s creative output, each component of which holds economic value.  Just like real estate, automobiles, jewelry, or other forms of tangible property, healthcare brands are valued assets as well.  Specifically, healthcare brands are categorized as intangible assets.  Unlike real property assets, brands cannot be touched or seen.  Yet similar to real property,  brands can be created, increase in value,  licensed, bought, and sold.  Brands can also be used as collateral for loans.  So why not seek to leverage the equity that lays untapped in your healthcare brands?  This is what several companies have already done in non-healthcare sectors.  Leading healthcare organizations are doing the same.

Brand assets elements.   Your healthcare brand is the sum of all of its intangible parts.  This includes:

  • brand names
  • marketing collateral
  • website content, including copy
  • logos and images
  • digital images, including photos
  • customer lists
  • patient and employee testimonials
  • blog content
  • articles and white papers
  • professional and consumer presentations
  • wellness publications and workshops
  • proprietary software

Most valuable of all?  The aggregate consumer trust and goodwill associated with your branding efforts.

What’s your brand’s value?   Healthcare brand valuation beings with assets identification and capture.  Several studies have shown that the value of a company’s intangible assets are valued higher that its real property holdings, including buildings and inventory.   Why?  Because a brand’s value includes its associated goodwill among the relevant consuming public.  Think of it!  Your balance sheet may be holding more assets than you ever thought possible.  Now is the time to identify, protect, and extract your health brand’s value.

In the celebrated book, Rembrandts in the Attic, the authors illustrated how IBM and other companies leveraged the value of overlooked intellectual assets to create incremental revenue streams.  This strategy is also effective to maintain competitive advantage.  To do so, healthcare organizations must first identify what they own that is eligible for intellectual property protection.  Second, they must institute a program to protect it.  Creating a dedicated team is a good place to start.

Brand Assets Group.   A Brand Assets Group (BAG) is a cross-departmental team tasked with four major responsibilities, namely to:

  1.  implement a system to identify and capture your major brand assets;
  2.  create a process to secure ownership or permissions to use third-party owned assets;
  3.  monitor and mitigate the risks associated with brand use; and
  4.  seek opportunities to monetize the value of your brand assets  within your relevant geographic market

Your BAG should be comprised of people in various departments who are responsible for various components of your brand.   These typically include representatives from various internal and external stakeholder groups:  Each BAG member should be trained on how to identify, capture, and monetize your branding assets.  They should also know which components of your overall brand’s health they are responsible for, and how they fit into your holistic brand protection, risk, and monetization continuum.

Conclusion:  Just like other financial assets, the management of branding assets require a cross-departmental team that works together.  The goal is to safeguard and maximize the attributes of these assets for the benefit of the healthcare organization.   Creating a Brand Assets Group can help achieve your strategic and financial goals.

Editor’s Note Brand assets protections for hospitals is the subject of one of our previous articles found here.  To discuss how to design and implement a Brand Assets Group for your team, contact us.

A recent trademark opposition case shows that a trademark disclaimer can make a difference.

In Foundation Medicine, Inc. v. Alfred F. Czap, the Applicant sought registration of the trademark FOUNDATIONAL MEDICINE REVIEW for journals in the field of medicine.    Foundation Medicine, Inc. opposed the application.  In doing so, it relied on two prior registrations of FOUNDATION MEDICINE.  One was for the word mark and the other was with a design logo.    The services identified in the word mark registration included the electronic storage of medical data and healthcare information for healthcare professionals.  The services in the design logo registration were for an online portal featuring links to medical and scientific research in the field of cancer treatment and diagnosis.

Trademark disclaimer rule.  The Applicant had to disclaim exclusive rights to the term “medicine review.”   The Opposer, in both of its pleaded registrations, had to disclaim the term “medicine.”  When a party disclaims certain words in a trademark, it means that it does not seek to claim exclusive rights to the word.  This is for public policy purposes.  Disclaimers recognize the need for competitors to use common words to describe their goods or services.    Disclaimers are often required when an applicant seeks registration for a compound mark that contains descriptive words.

Likelihood of confusion analysis.  For purposes of providing a likelihood of confusion between trademarks, the Board looks at the protected elements of each parties’ mark.  In the case of a disclaimer, what is compared are the remaining non-disclaimed elements.  Here, the dominant portion of Foundation Medicine’s pleaded registrations was the word “FOUNDATION.”   Since the Applicant had to disclaim exclusive rights in “medicine review,” the  protectable portion of its mark was the word “FOUNDATIONAL.”

Conclusion. In any likelihood of confusion case, two of the most important factors are the similarity of the marks and similarity of the services.  The Board concluded that Applicant’s services and Opposer’s services overlap.  Specifically, Opposer’s pleaded trademarks included providing “medical data/information to healthcare professionals.”  Applicant’s services included “providing on-line, non-downloadable articles in the field of medicine and healthcare.”  Since the dominant portions of the parties’ respective marks were “Foundation” and “Foundational” and the goods and services overlapped, this was sufficient for the Board to rule in favor of Foundation Medicine, Inc.  Judgment entered in its favor and the opposition was sustained.

Editor’s Note.   Brand protection is vital for healthcare organizations.   For further health trademark protection tips, please refer to this article.

Your hospital branding assets are the most valued asset on your balance sheet.

Consumer companies have long known the advantages of having a strong brand.  Healthcare systems are starting to appreciate this too.  Creating and building a strong healthcare brand generally has three major economic benefits:

  •  Lower customer acquisition costs
  •  Higher customer retention and loyalty; and
  •  Greater referrals from existing patients and professional colleagues

With health systems facing increasing competition and lower margins, it is essential to identify and capture all of your hospital branding assets.  By doing so, you can convert some of your marketing expenditures into value.  Brand

Where to start.   To identify and capture more of your hospital branding assets, first take an inventory of all your brand identity and marketing output.   Assets and materials eligible for protection can include:

  1.  Eligible trademarks.   A trademark is more than just your health system name.  Trademarks are any name or symbol used to differentiate your products or services from those of another company.  Trademarks can include names, design logos, slogans, sub-brand names, marketing campaign names or any other indicator of source.
  2.  Eligible copyrightable materials.   U.S. copyright protection extends to any original expressions of an idea.   There is a wealth of marketing subject matter that is eligible for copyright registration.  This includes marketing copy, images, design logos, white papers, training content, academic papers, webinars, brochures, and many other branding and marketing assets.

Process.   Be sure that you own your intellectual assets and not your vendors.   Of equal importance is to make sure that you are not infringing the intellectual property rights of others when instituting marketing campaigns.

  1. Review key vendor agreements.  Does your hospital use outside creative agencies to help develop brand collateral and marketing campaigns?  If so, it is important to make sure that you own all underlying intellectual property rights in the subject matter that they create.  Unless your vendor agreements indicate that the vendor’s work is a work for hire, then all intellectual property rights in and to the underlying creative output remains in the property of the vendor.  Yes, it is likely that your vendors own your key creative assets, even if you paid for them!
  2. Review all third-party content.   If you or your vendor are creating a campaign that uses photos, images, icons, or any other design elements that you did not create, you must determine if you have permission or rights to use such materials.  If you do not, it is quite possible that you could receive.a cease and desist letter for copyright infringement.  Under U.S. law, owners of copyrighted materials are eligible to be awarded statutory damages in the amount of $750.00 to $30,000 per infringing copy, at the discretion of the court.
  3. Train key hospital personnel.   Your brand’s health is everyone’s responsibility – not just your marketing department.   Therefore, it is important to have annual education and training of all internal stakeholders and agencies that are responsible for your brand activities and reputation.  Departments that should be included in training include marketing, communications, information technology,  financial, and public relations.  It is also advisable to have all brand ambassadors be part of your education and training efforts.

Conclusion.  The key to a strong hospital brand starts with proper brand identification and protection procedures.  Making sure that your hospital has a brand protection program in place can make the difference.

Hospital marketing lawsuits can often be avoided.  But many hospitals do not have adequate brand and marketing risk management because they think they either don’t need it or cannot afford it.  Not having proper risk prevention training and policies can be costly to you and your health care organization.

Here are some recent cases where hospitals were involved in lawsuits regarding their branding and marketing activities:

Case #1.  A Florida health system was sued for deceptive advertising as part of a medical negligence action that resulted in the death of a patient from bariatric surgery.  The hospital had advertised in its marketing materials that it was awarded the American Society Bariatric Surgery Seal of Excellence.  To be eligible to receive the certification, doctors must have performed 50 bariatric surgeries and completed 20 hours of continuing education.  The physician who performed the surgery that resulted in the patient’s death had only performed 21 bariatric surgical procedures.

Case #2.   A Midwestern health system was sued for trademark infringement by a national healthcare insurance company for using a specific color in its geometric-shaped logo.  The total cost (aside from attorney’s fees) to change all signage and other branding and marketing collateral was estimated at $2-3 MM. This very same insurance company routinely sends cease and desist letters to other healthcare providers across the country threatening further legal action if the claimed color is not removed from their logo and other marketing collateral.

Case #3.   A medical billing and electronic health records software company in Georgia successfully opposed a trademark application of a primary care and mental health care provider in Florida that was using the same name, albeit for different healthcare related services.   The case, which went to trial, was heard before the U.S. Trademark Trial and Appeal Board.  The cost?  According to recent statistics, the average attorney’s fees of a fully contested trademark opposition proceeding is $ 125,000 or more.

Case #4.   One of the largest healthcare software companies in the world brought an action for copyright infringement against a Tennessee healthcare system.  The software provider had granted the 126-hospital system a bundle of paid licenses for the use of its software. Pursuant to the terms of the license agreement, the licensee was prohibited from distributing or sublicensing any of the software. As part of its divesture of various hospitals, the defendant continued to facilitate the use of the licensed software by the sold hospitals.   When the software company sought to conduct an independent audit of the licenses, the healthcare system did not fully cooperate with the accounting, leading in part to the lawsuit.

Case #5.   A Wisconsin children’s hospital received a cease and desist letter from a pediatric practice that was using a similar, geographic trademark.   This resulted in a U.S. district court lawsuit as well as a trademark opposition before the U.S. Trademark Trial and Appeal Board.

Hospital Marketing Advisory.   To help mitigate your hospital marketing lawsuits risks, it is recommended that you conduct a health marketing checkup of all of your branding and marketing assets every year.  

The name ALLERGY CARE was recently found to be a generic trademark and refused registration by the U.S. Patent and Trademark Office.

The applicant, James Haden M.D, sought registration of ALLERGY CARE on the Supplemental Register for “medical and healthcare services, namely medical treatment of allergies, asthma, immune disorders, and shortness of breath” in International Class 41.

The Examining Attorney had initially refused registration on the Principal Register on the grounds that the mark was merely descriptive of the services.   A merely descriptive trademark is one that immediately and directly conveys some information about the applied for services.  Since merely descriptive marks are not inherently distinctive, they are not eligible for registration on the Principal Register.

After the application was refused, the Applicant sought to amend the mark to the Supplemental Register.  Trademarks are eligible for registration on the Supplemental Register if they are capable of distinguishing an applicant’s goods from those of others.  This includes merely descriptive marks.  When an Applicant seeks to amend its application from the principal to supplemental register, however, the Examining Attorney conducts a further examination to determine registrability.   Here, the Examiner concluded that the mark ALLERGY CARE was in fact generic of medical and healthcare services that included the treatment of allergies.  A generic trademark can never be registered, either on the Principal or Supplemental Register, as such terms fail to function as a source identifier.

A generic term refers to the name of a class or category of particular goods or services.  A determination of genericness depends on its primary significance to the relevant consumer.  This involves a two-step process:   First, what is the genus of the goods or services at issue?  Second, is the term sought to be registered understood by the relevant public primarily to refer to the genus as a whole?

Here, the Examining Attorney presented over 40 excerpts from internet web pages in which medical professionals used the  term “allergy care” to refer to their medical and healthcare services.   The Examiner also introduced evidence of the common dictionary definitions of “allergy” and “care” that evidenced that the Applicant’s services described the name of the common goods and services.   Based on a totality of the evidence, the Board ruled that the mark ALLERGY CARE is generic and denied registration.

Health Marketer Alert.    Before seeking to adopt or register a name for a new service line or campaign, make sure that is has sufficient distinctiveness to make it eligible for trademark protection.  Regardless of whether you seek to register it or not, a trademark clearance search should first be conducted to mitigate the risk of infringing a third-party’s trademark rights.

Leveraging your healthcare branding was the topic of a recent health marketing presentation in Nashville, Tennessee.  The speakers were Janell Moerer, SVP & CMO Centura Health; Kristen Wevers, SVP & CMO UC Health; Philip Guillano of Brand Active; and David Perry, Perry IQ.

Here are some great observations from the panel:

Why healthcare branding matters.   Healthcare providers are viewed by consumers and patients as commodities.  Therefore differentiation becomes key. What healthcare brands stand for and why it matters is a key differentiator between competitors.  Brand is much more than the name of your hospital.  Your name alone is just one component of your brand.  The power of your brand includes identity, recognition, and goodwill.  Not just among consumers, but your employees.

The power of your hospital branding.   Without a brand that is clearly definable, you cannot properly clarify your brand attributes and benefits to your consumer market.   Marketing is a valuable, strategic asset that has a major role at your organization’s table.  The challenge is for your marketing team to being perceived as a strategic value asset  — not just  order-takers for brochures or billboards.

Brand building in healthcare.   Brand building starts from the inside-out.  Hospital leaders must know the importance of branding and embrace it as a strategic, not just marketing, initiative. To a great degree, healthcare brand building is still in its infancy.  You and your team can play a vital role in educating consumers and your internal team on the value of your brand.  A healthy brand can translate into greater patient loyalty, more referrals, and increased revenue.

Branding Clearance.   Sometimes brand identity and roll-out hits roadblocks.  One healthcare system realized late in the process that it had potential legal troubles with its rebranding.  The result?  Wasted time and costs.  That is why the brand and marketing teams should align with experienced trademark counsel early in the branding process to avoid surprises.

Branding consultant partners.  The importance of good branding consulting partners cannot be underestimated.  Great partners help drive the execution of the strategic plan.  Chief Marketing Offers do not have time to be an expert in all branding niches.  This includes the specialties of brand protection and brand risk awareness training.  Many CMOs are now big fans of shared learning.  This is peer-to-peer education and training that can increase your team’s knowledge and skill sets.  Trainers can be resourced either internally or through outside consultants.

The takeaway.  Your healthcare brand is your number one asset.  Used correctly, it can increase customer awareness, differentiate you from competitors, and drive economic results.   Start making your hospital branding stronger today through effective risk management and value capture solutions.

Hospital brand ambassador programs are growing popularity.   This was the subject of a compelling presentation by Kristen Bowser, Director of Communications and Kelly Kavanaugh, VP and Chief Strategy Officer of Dayton Children’s Hospital.

The presentation covered the following areas:

  •  how to implement a brand ambassador’s program
  •  leverage a team of employees to implement and communicate significant changes impacting culture
  •  sustain your brand ambassador program and measure its success

The Challenge.  Brand has become of primary importance to Dayton Children’s Hospital due to competition becoming more fierce in the region.  Dayton Children’s Hospital recognized the following problems with their brand:

  • brand position not aligned to brand aspiration among fierce competition
  • brand attributes not clearly perceived
  • brand identity (no controls over brand standards and multiple sub-brands and logos)

Any change with brand identity includes investment in brand and change management.  This included identifying outdated materials, creating new branded employee uniforms and merchandise, and to promote the new brand identity internally.  There are typical problems with employees when discussing brand:

  • negativity about new brand initiatives
  • lack of understanding about the new brand identity and the purpose of it
  • reluctance to embrace change

Why a Hospital Brand Ambassador program?   There are several reasons to implement a brand ambassador program.   One is to align employees around the big “B” and little “b” of your brand.  Brand ambassadors are in every department and will be your biggest advocates.  Brand ambassador programs begin with:

  • senior leadership and buy-in.
  • CEO asks directors to nominate staff for brand ambassadors from each unit
  • job description given to leadership and candidate employees

Brand ambassadors are your identity communication advocates.  They are empowered to:

  • be called-in in moments of brand reputation crisis
  • help to communicate and educate employees how to be promoters of the brand
  • raise awareness and pride in your mission

Additional learnings.

  • brand is bottom to top: employees, physicians, and consumers.
  • every interaction impacts your brand, your brand is always changing.
  • your brand starts with your employees

Your health of your hospital’s brand can be positively influenced through implementing a brand ambassador program.  Benefits of an effective program include greater brand equity, positive shift in brand perception, and greater competitive advantage.

The U.S. Department of Health and Human Services (HHS) has a helpful guide for its employees on trademark clearance and protection.  It provides useful guidance to public sector healthcare concerns and well as private healthcare systems and providers.

The HHS Guide discusses four important areas and benefits of trademark protection:

What is a trademark.   A trademark (also known as a brand name) is any name, word, or symbol used in connection with the marketing of goods or services.  Trademarks are intangible assets and act as a source indicator.  There are four types of trademarks:  marks for goods; marks for services; collective marks that recognize the provider as a member of a select group; and certification marks.

The value of trademarks.   Trademarks are among the most valuable assets of a business.  The more distinctive and well-know a mark is, the greater value it has to potential consumers.  A strong trademark can result in greater competitive advantage.  Hospital trademarks and its service lines are particularly valuable.

Benefits of trademark registration.   Federal registration has many benefits.  These include notice of a claim of ownership; a legal presumption of nationwide ownership; and the exclusive right to use the trademark in connection with the protected goods or services.  Healthcare providers may encounter several situations where having a federal trademark registration would be beneficial.  Trademarks are not just appropriate for hospital names or physician practices.   Examples of  healthcare sector trademarks include brand names for service lines, educational programs, and community volunteer programs.

Trademark clearance.   If you are a hospital or healthcare provider, you should set-up a system to document all of your existing trademarks, slogans, and logos.   Determine if these naming assets are federally registered.  If not, consider doing so with the help of an experienced brand protection attorney.   If you are considering new brand names, a trademark clearance search should be conducted prior to adopting the name for use or possible registration.  Finally, consider implementing a trademark compliance policy to mitigate risks of trademark infringement.

A pharmaceutical company named after the Lupine flower was successful in a recent trademark opposition before the U.S. Trademark Trial and Appeal Board.

Background.  In Lupin Pharmaceuticals, Inc. v. Ampel, LLC, the Applicant had filed for registration of the mark LuPPiN (in stylized characters) for education services and support groups pertaining to medical treatments for lupus in Classes 41 and 45.  Lupin Pharmaceuticals opposed the application, relying on its prior registrations of LUPIN and LUPIN and Design for a wide variety of pharmaceutical preparations and goods in International Class 05.  Although Applicant raised certain affirmative defenses it did not file any counterclaims to cancel Opposer’s registrations in whole or in part.  The Opposer had the burden of establishing standing, priority, and a likelihood of confusion on its claim.

Analysis.  Opposer successfully established its standing and priority by introducing its LUPIN registrations that were pre-dated Ampel’s application.  With regard to a likelihood of confusion, the Board analyzed the du Pont factors used to determined whether a likelihood of confusion exists between two trademarks.  Although the du Pont factors include thirteen different criteria, the Board often focuses on two primary factors, as it did here.  These are similarity of the parties’ trademarks and the similarity of the parties’ goods and services.  The Board also referenced three-other factors of interest:  similarity of the parties’ trade channels; the conditions under which sales are made; and the fame of the Opposer’s pleaded trademarks.

The Board found that the parties’ marks were similar in sight, sound, and meaning.  This factor weighed in Opposer’s favor.  It also found that the parties’ respective goods and services were related as pharmaceutical companies often provide education and support group services to affected patients and their families.  Here, it did not matter that Opposer did not presently engage in such services.  The issue is what relevant consumers would be likely to think based on common industry practice.  The Board also ruled that the parties’ trade channels were sufficiently similar based on the parties’ respective identification of goods and services as written.  Finally, with regard to the sophistication of purchasers, the Board held that this factor favored Applicant.  This is because consumers of pharmaceutical products are likely to exercise greater care in their purchasing decisions.

Result:  The totality of relevant likelihood of confusion factors resulted in judgment if favor of Opposer.