The time for SNFs to become more vigilant about self-auditing is now, according to the Report on Medicare Compliance.  Skilled Nursing Facilities (SNFs) should have began receiving the first round of PEPPER at the end of August.  “PEPPER” stands for Program for Evaluating Payment Patterns Electronic Reports.  These reports, which are a free compliance…

Healthcare is a highly competitive market.  Healthcare companies are hiring marketing teams to lure customers to their facility.  This will invariably require making statements regarding the quality of your services and how your services are better than your competitors.  Problems will arise if these ads cause patients or their families to expect more than what is or even can be offered. There are many scenarios that could result in claims of false advertising, but today we will be looking at “puffery.”

Puffery is generally a subjective exaggeration, even blustering or boasting, upon which no reasonable consumer would rely – “Our hamburgers are the best in the world!”  Puffery often uses exaggerations so excessive that they become comical – “Our hamburgers are so good they will bring you to tears!”

Thus, non-actionable puffery will generally involve vague, highly subjective claims regarding the superiority of the service or products being sold.  However, clarifying what may be found to be mere puffery rather than an actionable false claim can be a difficult task. The result will often turn on the totality of the advertisement or even the entire advertising campaign. Ultimately, a court will focus on whether a reasonable consumer of the services would view the accused claim as stating a verifiable fact – “We have the healthiest meals anywhere!” or whether a reasonable consumer would view the comment as expressing an unverifiable opinion – “We serve our patients the tastiest meals in the city!” The first statement can perhaps be factually verified and if not true could be an actionable false claim, whereas the second claim regarding tastiness is more a matter of opinion and is more likely to be considered puffery.

In one of our first posts,  we discussed the five categories of trademarks (Generic – Descriptive – Suggestive – Arbitrary – Fanciful) and how a mark becomes more protectable as it moves across the spectrum.  Laudatory trademarks are often included in this list as “descriptive marks,” requiring a showing of secondary meaning to be protectable. However, it has been recognized that many laudatory marks do not actually describe any feature of the product it is used with; rather, they tend to suggest that the product is of high quality or “better” quality than other similar products.

Laudatory terms that may be considered suggestive include, for example, “Select,” “Plus,” “Super,” “Deluxe,” or “Gold Medal.”  These terms are not descriptive, in that they do not provide direct information regarding the product itself.  Rather, these terms are suggestive as they require the consumer to use imagination, thought and perception to connect the mark to the goods. And even then, the connection may be unclear.  Does “Deluxe” imply that the product is bigger, that it works better or is somehow more luxurious?  Perhaps the product includes additional features not present in the competitors’ products?  While the exact meaning is not clear, the mark does connote that the product named “DELUXE” is somehow superior.

However, even if suggestive, laudatory trademarks are rarely found to be protectable without a showing of secondary meaning.  Further, it is often held that, as with descriptive marks, users of suggestive laudatory marks may not be able to monopolize the right to label or name its product in such a way that suggests or implies that it is the finest product on the market. Thus, laudatory terms do not fit neatly into the usual trademark framework, leading to uncertainty regarding the protectability of laudatory marks.

Adoption of EHR technologies has greatly increased as the result of the EHR Incentive Program. Touted as one of the necessary building blocks for creating integrated delivery systems, EHR is considered vital to improve health quality, efficiency and patient safety.  The EHR Incentive Program has been very successful and CMS has awarded over $10…

On August 20, the Fifth Circuit Court of Appeals rejected a whistleblower claim by a former employee of Cardinal Health, Inc., affirming dismissal of the former employee’s complaint, which alleged that Cardinal Health sold hospitals run by the U.S. Department of Veterans Affairs defective medical equipment, in violation of the False Claims Act (FCA).

Before her termination from Cardinal Health, the plaintiff marketed Cardinal Health’s “Signature pump”—an electronic device that regulates the rate at which intravenous fluids flow into patients—to various hospitals, including hospitals run by the VA.  The plaintiff alleged that the Signature pump had a dangerous defect, causing air bubbles to accumulate and be released into a patient’s intravenous fluids flow, potentially resulting in serious injury or death.

The plaintiff claimed that she became aware of the defect in late 2000 and discussed it with a Cardinal Health area manager in early 2001.  In mid-2001, Cardinal Health suspended shipment of the Signature pump for three months and undertook a review of the possible defect.  Cardinal Health terminated the plaintiff at the end of the three-month review period.  Cardinal Health suspended production and sale of the Signature pump for independent reasons in 2006.

“Implied False Certification” Theory of FCA Product Liability

The crux of the plaintiff’s FCA claim was that Cardinal Health falsely certified to the VA that the Signature pump was in compliance with the warranty of merchantability in the parties’ contract each time it requested payment from the VA for the pumps—a so-called “implied false certification” theory.

Marketing Involving PHI

The HIPAA Omnibus Rule made changes to the rules related to marketing involving PHI.  A marketing communication, as defined by HIPAA, is a communication about a product or service that encourages the recipient to purchase that product or service.  Previously, PHI could not be used or disclosed for a marketing communication without authorization unless…

During the recently concluded 2013 regular session, the Texas Legislature enacted Senate Bill 1191, which established new requirements for hospitals treating victims of sexual assault. The bill is primarily aimed at improving access to forensic examinations for survivors of sexual assault by ensuring that every Texas hospital with an emergency department has personnel who have basic training in forensic examinations. The changes are effective beginning Sept. 1, 2013.

SB 1191 sets out three new requirements for hospitals:

1. Any person who performs a forensic examination on a sexual assault survivor must have basic sexual assault forensic evidence collection training. Training approved or recognized by the appropriate licensing board satisfies this requirement.

2. Texas hospitals that have emergency departments, but which are not designated by a communitywide plan as the primary healthcare facility in the community for treating sexual assault providers, must:

a. Inform sexual assault survivors that the hospital is not a designated facility.

b. Provide sexual assault survivors with the name and location of a designated facility.

c. Inform survivors that they may choose to be transferred to a designated facility for care or receive care at the nondesignated facility.

d. If survivors choose to be transferred to the designated facility for care, stabilize and transfer the survivors to the designated facility after obtaining written, signed consent to do so.

This week we are discussing ways you can use a third party’s mark to identify the third party’s goods or services while advertising your own.  For example, a dental office wants to let potential patients know that it uses a specific brand of dental veneers.  The law allows XYZ Dental to factually state “XYZ Dental specializes in the fitting and application of ABC® brand veneers.”  This type of use is known as nominative fair use and as with comparative advertising and descriptive fair use, there are rules that need to be followed.

To qualify as proper nominative fair use, the use must not create a likelihood of confusion and the use cannot imply sponsorship or endorsement by the trademark owner where none exists.

The courts have set out a three part test to determine if a use is likely to fall within the rubric of nominative fair use.

  1. The trademark owner’s product or service must not be readily identifiable without use of the trademark.  It is recognized that there are times when it is necessary for a company to refer to a third-party product or service by its trademark.  In those circumstances the law does not require individuals or companies to use “absurd turns of phrase” simply to avoid trademark liability.  XYZ Dental does not need to state that it fits and applies the dental veneers identified by the first three letters of the alphabet.  It can simply factually state it fits and applies ABC dental veneers.

We are proud to announce that Diane J. Romza-Kutz has joined our Chicago office where she will focus on assisting Life Sciences and Pharmaceutical industry clients with federal and state regulatory matters, licensing and Intellectual Property matters.  Diane brings substantial experience handling federal food and drug matters, Federal Trade Commission matters and U.S. Department of

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Last week we discussed ways that you can use a competitor’s mark in comparative advertising.  This week we are discussing ways you can use a competitor’s mark in a descriptive manner under the doctrine of Descriptive Fair Use.   In this type of use, the mark is not being used as a trademark, which greatly reduces or eliminates the possibility of the use being found to be trademark infringement.

Under the doctrine of Descriptive Fair Use, a party, even a direct competitor, may use another party’s descriptive trademark to describe their own product or services.  Descriptive Fair Use requires:

  1. That the mark being used actually describes a person, place or attribute of goods or services; and
  2. The mark must also be used in the normal course of language.

In addition, the mark must be used in the text portions of an ad and not as a banner or in any other manner that sets it apart from the other words in the sentence or paragraph in which it is used.