Intellectual property issues for dermatology practices

By Ben Tesdahl, JD, LL.M, Fernando Montoya, JD, and Robert M. Portman, JD, MPP, January 1, 2023

DermWorld covers legal issues in “Legally Speaking.” This month’s authors are health care attorneys with Powers Pyles Sutter & Verville in Washington, D.C. Portman is also general counsel for the AAD and AADA.

Physicians might assume that intellectual property issues, such as copyright and trademark ownership and infringement issues, have little to do with running a medical practice. However, understanding the basics of copyright and trademark law can be invaluable in enabling you to better protect any intellectual property your medical practice may have created and also help you avoid infringing on the intellectual property rights of others. Note: While many physicians may also be interested in patenting or licensing medical-related inventions or procedures, those issues are beyond the scope of this article.

Copyright basics

Copyright protection is afforded to any “original works of authorship” fixed in any tangible medium of expression. Under common law, a copyright is automatically created when an original work is fixed in a tangible form for the first time. The owner may place a copyright notice on the work, and it is certainly good practice to do so, but the owner is not required to have a copyright notice in order to own the copyright. Instead, copyright ownership automatically attaches the instant the work is created.

In a private dermatology practice, some of the most common materials to which copyright ownership applies include the entire content of the practice website, any patient information brochures or videos created by the practice, and to some extent the content of any social media pages about the practice that have been created, although in this latter case, the company owning the social media platform likely has given itself permission to also use and license your content.

Consequently, if a medical practice has spent time, effort and/or money developing its website pages, authoring patient brochures, and creating other unique and valuable written or video content, it would be prudent to protect those works from being plagiarized by others. But exactly how do you give your works the maximum protection?

As noted above, one good practice is to put a copyright notice on your materials to put the world on notice as to who the owner is and to let readers know that the materials are not intended to be put in the public domain for others to freely use or repurpose. This is especially important for the practice website, since many laypeople wrongly believe that anything posted on the internet is in the public domain. A typical copyright notice includes the year the work was first created and the name of the owner; for example, “Copyright 2022 by the ABC Dermatology Practice. All rights reserved.”

However, a copyright notice does not give the owner the benefits and protections afforded by the U.S. Copyright Act. To obtain federal protection of a copyright, an owner must register the work with the U.S. Copyright Office. A copyright owner should register a work with the federal government in a timely manner for three reasons:

1. The United States copyright registration is a prerequisite for bringing a copyright infringement lawsuit.

2. The copyright owner will be eligible to receive “statutory damages” (discussed below) and legal costs and attorneys’ fees from a copyright infringer.

3. The Certificate of Registration serves as prima facie evidence that the work is original and is owned by the registrant of the copyrighted work.

As noted above, copyright registration is a prerequisite to filing an infringement action. The effective date of copyright registration is the date when the Copyright Office receives the complete registration application that consists of the application, fee, and deposit copies. Therefore, if copyright infringement occurs prior to the effective date of copyright registration, the copyright owner will not be entitled to receive statutory damages, legal costs, and attorneys’ fees, although the owner can still obtain actual damages that it can prove, as well as the infringing party’s profits.

The significance of “statutory damages” is that it permits an award of special damages in a successful infringement lawsuit and negates the duty of the copyright owner to prove actual damages. A copyright owner may elect to receive statutory damages rather than actual damages because, in many instances, proving actual damages is very difficult and the profits of the infringer may be very small. The statutory damages awarded are discretionary and depend upon how willful and harmful the infringement may have been. For infringements that cannot be proven as either innocent or willful, statutory damages may range from $750 to $30,000 per infringement, depending on the seriousness of the infringement and the financial worth of the infringer. By contrast, a clearly innocent infringer may pay as little as $200, and an intentional infringer may have to pay as much as $150,000 for a single infringement.

Furthermore, the legal costs in any copyright infringement lawsuit, particularly attorneys’ fees, are extremely expensive. By registering the work in a timely manner, the court has the discretion to award attorneys’ fees and legal costs to the copyright owner, whereas these methods of recovery are not available if the copyright has not been registered.

Having a Certificate of Registration from the U.S. Copyright Office to serve as prima facie evidence that the work is original and is owned by the registrant of the copyrighted work is especially important if it becomes necessary for the copyright owner to obtain a preliminary injunction against a copyright infringer, such as asking a court to order the immediate cessation of the distribution of the work by the infringing party.

Trademark basics

A trademark is any word, phrase, symbol, or design, or a combination of these elements, that identifies and distinguishes an entity as the source of its products and services. Typical trademarks that a private dermatology practice would have include the business name, any logo, and any unique advertising slogans or taglines.

While common law provides legal protections to trademark owners as soon as they start using the mark in a public manner, there are several benefits to having a federally registered trademark with the United States Patent and Trademark Office (USPTO). First and foremost, federal registration gives constructive notice to the public nationwide of the ownership of the trademark, and it also establishes the exact date of first use of the trademark. Registration also allows the owner to file a claim in federal court and obtain attorneys’ fees and statutory damages, even if the owner cannot prove actual damages. Federal registration can also be used as a basis for obtaining registration of the trademark mark in many foreign countries, so it can save some time and expense in those foreign filings.

The trademark registration process is much more complex than filing for a copyright. Certain words or phrases may not qualify for trademark protection because they are too generic, or they merely describe the goods or services without otherwise being unique. Moreover, the party filing a trademark must choose from one or more of 45 different “classes” of goods and services that may apply to the trademark. The more classes in which a trademark is filed, the more protection the trademark has, but each class carries a filing fee and certain other legal requirements. Consequently, trademark filings are best left to legal experts.

Most people assume that once they have a federally registered trademark, nobody else can use that exact word or phrase. However, that is often not the case. It is perfectly permissible for more than one person or entity to own exactly the same trademark or to have trademarks that encompass some or most of the same words. Why does the law allow that? In very simplified terms, two trademarks are deemed to conflict with each other only when they are confusingly similar, and they are used in conjunction with generally similar goods or services. But it is often permissible for the same trademark to be owned by someone offering an entirely different type of goods or services to an entirely different class of consumers who would not be confused as to the source. For example, Walgreens Pharmacy has a federal trademark on a “curly W” design for its logo, while the Washington Nationals Baseball Club was later allowed to have a federal trademark on a very similar curly W logo, since they each offer entirely different goods and services. Consequently, before using any trademark, it is important to have a trademark expert search the USPTO database and other sources for possible conflicting trademarks and advise you on the likelihood of any conflicting trademarks.

If a medical practice has a registered trademark that has been infringed by a third party, the law allows for three possible categories of damages. The first is to make the infringing party disgorge the profits it earned from using the trademarks. Second, a successful plaintiff may seek the actual damages that it has suffered from the infringement, which might be measured by loss of profits, loss of goodwill, or a royalty equal to the licensing fee the infringer should have paid if it had permission to use the trademark. Finally, a successful plaintiff can receive its costs and attorney’s fees in exceptional cases.

Conclusions

Dermatology practices should take a careful inventory of their most important written and video materials, as well as all their advertising trademarks, and consult with a legal expert as to whether all of these items of intellectual property are receiving the maximum legal protection possible. It is also prudent to conduct regular online searches to check for third parties who may be improperly using or selling your intellectual property without permission. Only through continued vigilance can these valuable business assets be protected. Finally, before adopting any new trademarks, dermatology practices should always seek the assistance of a legal expert to ensure that any proposed new trademarks do not unwittingly infringe upon the intellectual property rights of others.

This article is provided for informational and educational purposes and is not intended to provide legal advice and should not be relied upon as such. Readers should consult with their personal attorneys for legal advice regarding the subject matter of this article.

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