by John F Bloss | Aug 6, 2013 | Blog, North Carolina Litigation News
It may seem counterintuitive, but many non-profit hospitals around the country charge their uninsured patients substantially more–often several times as much–for emergency room services as compared to amounts paid by all other categories of patients, including patients with medical insurance and Medicare and Medicaid patients, for the same care. A putative class action lawsuit against the Mission Hospital system in Western North Carolina (which includes the Angel Medical Center, Blue Ridge Regional Hospital, McDowell Hospital, and Transylvania Regional Hospital), which challenges this practice, recently survived the hospital’s motion to dismiss in the North Carolina Business Court.
The lawsuit, Stephen Hefner v. Mission Hospital, Inc., et al., 12 CvS 03088 (Buncombe County, N.C.), alleges that Mission maintains, but does not make publicly available, spreadsheets that list its gross billing charges for each product and service provided. Within the hospital industry, such lists of gross billing charges are called “Chargemasters” or “gross charges.” The lawsuit contends that these Chargemasters, listed on an item-by-item basis, form a reference point for Mission to negotiate with insurance carriers, but are not pricing schedules for which Mission expects payment. According to the lawsuit, hospitals like Mission have every incentive to artificially inflate their Chargemasters so they can maximize the rates they charge to insurers. See “In N.C., Hospitals’ Rack Rate Hits the Uninsured Hard,” RALEIGH NEWS & OBSERVER (Apr. 22, 2012) (“Every incentive is for the hospitals to charge as much as possible for these procedures . . . . Hence the prices are as arbitrary as can be”). In fact, only a small percentage of Mission’s patients actually pay these Chargemaster rates, which, according to the Complaint, are substantially more than any other class of patient is required to pay.
Following media attention on hospitals’ imposition of their highest charges on uninsured and under-insured patients accompanied by aggressive collection actions, not-for-profit hospitals came under increasing congressional and IRS scrutiny. Congress took action to prohibit the practice by not-for-profit hospitals when it enacted the Patient Protection and Affordable Care Act, commonly known as “Obamacare.” The Act instructs that a hospital will not be treated as not-for-profit unless it “prohibits the use of gross charges.” The Complaint alleges that this provision became effective as to Mission on January 1, 2011.
The contract Mr. Hefner signed when he was admitted to the Mission emergency room required him to make payment in accordance with the hospital’s “regular rates and terms,” but failed to identify what the phrase “regular rates and terms” meant, or where any such “regular rates and terms” might be found. Mr. Hefner’s lawsuit, in which he seeks to represent a class of other self-pay Mission emergency room patients, asserts causes of action of (1) breach of contract; (2) breach of the covenant of good faith and fair dealing; (3) constructive trust; (4) declaratory judgment; (5) restitution; and (6) injunction. His lawsuit alleges that the Chargemaster rates at which he and other emergency room patients were billed were not Mission’s “regular payment rates.”
In an opinion dated April 18, 2013, the Honorable Calvin E. Murphy, North Carolina Business Court Judge, denied Mission’s motion to dismiss with respect to each of the causes of action. Judge Murphy ruled that Mr. Hefner’s allegations–that Mission (1) failed to specify what rates it would use in billing for the treatment and services rendered, (2) charged Hefner its Chargemaster rates instead of its regular rates, (3) charged Hefner, as a self-pay emergency care patient, a higher rate than other patients for similar services, and (4) charged Hefner at rates which were unreasonable and unconscionable for the services provided—were sufficient to state claims for which relief could be granted, and allowed the lawsuit to proceed to discovery.
For more information contact John Bloss, co-counsel for Mr. Hefner and the putative class, at (336) 273-1600 or jbloss@greensborolaw.com.
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by Gilbert Andia, Jr. | Aug 6, 2013 | Blog, Intellectual Property, Trademark
By: Bert Andia, Member, Higgins Benjamin, PLLCYou’ve come up with a great new slogan that you want to print on t-shirts, sweatshirts, coffee cups and other products. Now you want to know how to stop others from using that same slogan. You think you remember hearing that Pat Riley had gotten a copyright on the word “THREEPEAT” before his team won the NBA Championship for a third consecutive time? How was that possible?
There are two possible ways you might think about to protect a slogan – copyright and trademark. A copyright protects works of authorship. A trademark is a distinctive word or phrase that is affixed to an article to identify a single source for the goods.
The issue regarding copyright protection for a slogan or word is straightforward – the answer is NO. Federal copyright law and the common law only provide copyright protection to “original” works of authorship. The term “original” is not specifically defined, but is recognized as calling for “independent creation” and not novelty.
Durham Indus., Inc. v. Tomy Corp., 630 F.2d 905, 910 (2d Cir. 1980
); E. Mishan & Sons, Inc. v. Marycana, Inc., 662 F. Supp. 1339 (S.D.N.Y. 1987):
Sheldon v. Metro-Goldwyn Pictures Corp., 81 F.2d 49 (2d Cir.),
cert. denied, 298 U.S. 669, 80 L. Ed. 1392, 56 S. Ct. 835 (1936)(L. Hand, J.).
There are, however, admittedly “independent creations” that are deemed too trivial or insignificant to support copyright protection because they lack a minimal standard of “creativity.” The minimum amount of creativity is illustrated by the Copyright Office Regulations under the 1909 Copyright Act, which provided that “[w]ords and short phrases such as names, titles, and slogans” are not subject to copyright. That regulation continues to the present day. Under that rationale, a word or phrase – no matter how original – cannot be protected by copyright.
A brief review of the trademark database reveals that it is most likely that Pat Riley did not obtain copyright protection, but instead registered a trademark in the word “THREEPEAT.” United States Registration No. 4,051,757 issued on November 8, 2011 to Riles & Company, Inc. for the mark “THREEPEAT” for use on “hats; jackets; [and] shirts.”
Obtaining trademark registration for the word THREEPEAT was not accomplished without some difficulty. The law recognizes that not every word or slogan functions as a trademark. The Trademark Office will refuse to register subject matter that is merely a decorative feature that does not function as a trademark (because it does not distinguish the applicant’s goods). The decorative feature may be words, designs, or slogans. For example, the Trademark Office refused to register “YOU ARE SPECIAL TODAY” as a trademark for ceramic plates and refused to register “DAMN I’M GOOD” as a trademark for bracelets. The slogans were seen as conveying a message rather than indicating the source of the goods. In re Original Red Plate Co., 223 USPQ 836 (TTAB 1984); Damn I’m Good, Inc. v. Sakowitz, Inc., 514 F.Supp. 1357 (S.D.N.Y. 1981). With respect to clothing, the Trademark Office recognized that consumers recognize small designs or discrete wording as trademarks if placed, for example, on the pocket area of a shirt; however, consumers do not typically perceive larger designs or slogans when such matter is displayed, for example, on the upper half of a shirt.
Based on that same rationale, the Trademark Office would not have registered “THREEPEAT”
because the mark was merely a decorative or ornamental feature of the goods.
However, the inquiry does not end there. Usually, the Trademark Office will then inquire as to whether the slogan has been used in commerce and has become distinctive. This is called “secondary meaning”; the question is whether the slogan transcends the literal meaning of the words and is now associated by consumers with the source of the goods. Typically, this can be shown by demonstrating five years of continuous use in commerce or by significant sales and advertising with the slogan.
Pat Riley was able to register his slogan because, in part, he demonstrated that he had been using the slogan as a trademark for over twenty years (note that the application was filed in 2010, and that Coach Riley claims to have coined the phrase after the Los Angeles Laker had won championships in 1987 and 1988).
Thus, protection of a slogan through common law or federal trademark law will largely depend on whether you can demonstrate that the mark has acquired significance in the minds of consumers through either continuous use for more than five years or though significant advertising of the slogan.
For more information on how to protect your copyright and trademarks contact Bert Andia at Higgins Benjamin PLLC (336)273-1600.
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