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.