How Health Care Providers Can Avoid Common Intellectual Property Mistakes

Contributed by Kristin A. Biedinger

Intellectual property can be some of the most valuable assets any business, including a health care provider (“Provider”) has. Adequately protecting this intellectual property can increase the value of the Provider’s business and provide them with a competitive advantage. This article provides an overview of intellectual property and some practical advice for avoiding common mistakes.

Patents

Patents give their owners exclusive rights to make, use, sell, offer for sale, and import their invention into the United States . To secure a patent, an invention must meet a number of different requirements. First, the invention must comprise patentable subject matter. Categories of patentable subject matter include machines, processes, manufacturers, and compositions of matter . The invention also must not fall into one of the judicially created exceptions to patentable subject matter – abstract idea, natural phenomena, or a law of nature. In addition to being patentable subject matter, an invention must also be new, useful, and non-obvious .

One common mistake Providers make is not fully vetting the ownership of patented technology employees may bring with them when they join a practice. Due to the collaborative nature of the medical community, it is not uncommon for a patent to have inventors from more than one organization. While this collaboration may be effective in moving innovation forward, it also raises issues with respect to patent ownership.

The default rule is that ownership of a patent arises with the inventors. Joint inventors will jointly own the patent and each owner can use the entire patent without accounting to the others. However, ownership of a patent is often transferred from the inventors to their employer or other organization by way of an agreement (an “assignment”). Universities and research hospitals will also have policies in place that govern which entity will own a patent that results from collaborative research. Therefore, in most cases an inventor will not ultimately be the owner of a patent and will be prevented from further using the patented technology.

If a Provider is considering utilizing patented technology developed by a new employee, they need to carefully assess any potential ownership issues. If the employee/inventor has assigned their ownership rights, then the Provider must negotiate a license to use the technology from the patent owner to avoid potential infringement claims.

Trademarks and Service Marks

Trademarks and service marks (“trademarks”) identify the source of a good or service and are designed to prevent consumer confusion. Trademarks are valuable to a Provider from a branding and marketing perspective and allow Providers to distinguish themselves from other providers in the marketplace.

In the United States, trademark rights are associated with use and may be registered at both the federal and state levels. Rights may also be acquired by use under the common law of most states (without registration), but these rights will be limited to only the geographic area the trademark was actually used.

Strong trademarks are unique and not merely descriptive or generic. One common mistake Providers make is using trademarks that are merely descriptive of the services provided or the geographic location they operate in. To increase the value of the Provider’s brand, they should move towards using more unique marks. If a Provider wants to convey the type of services they provide or their geographic location, this can be used as a secondary “tag line” in conjunction with the more unique mark.

Providers should also use the appropriate identifier with each trademark – the “®” symbol for those trademarks that are federally registered and the “™” symbol for those trademarks that registered at the state level or for rights acquired under the common law.

Copyrights

Copyrights protect original works of authorship which are fixed in a tangible means of expression . The owner of a copyright has the exclusive right to copy, distribute, display, and perform the work, and to create derivative works . Works of authorship may manuals or articles prepared and distributed by a Provider. While copyright protection exists upon creation, copyrights need to be registered with the United States Copyright Office before they can be enforced .

One common mistake Providers make is not registering their copyrights. Failure to register can have a significant impact on a Provider’s ability to recover damages for copyright infringement. If registration is made within three months of the first publication, the copyright owner can recover statutory damages and attorneys fees in an infringement action. Without prior registration, a copyright owner is limited to recovering only actual damages .

Copyrighted works should be marked with a copyright notice including the “©” symbol along with the name of the copyright owner and the year of first publication. Although not required, copyright notices provide certain benefits including putting the public on notice that the work is copyrighted and preventing claims of innocent infringement.

Trade Secrets

The Uniform Trade Secrets Act, adhered to by a majority of states, defines trade secrets as information that derives independent business value from the fact that the information is not generally known and is subject to reasonable efforts to maintain its secrecy. Trade secrets can comprise a wide variety of information including sales data, customer lists, market research, research data, and any other information that gives a Provider a competitive advantage.

While Providers are careful to secure protected health information, they often overlook protecting other types of valuable information. Providers should carefully review potential trade secret information and implement security measures to prevent inadvertent disclosures. For example, Providers should mark trade secret information as “confidential” and “proprietary” and educate their employees about what information is a trade secret and what their duties of confidentiality are with respect to that information.

[1] 35 U.S.C. § 154

[2] 35 U.S.C. § 101

[3] 35 U.S.C. §102 and 35 U.S.C.§103.

[4] 17 U.S.C. § 102

[5] 17 U.S.C. § 106

[6] 17 U.S.C. § 412

[7] 17 U.S.C. §412