health marketing compliance

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.

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.