Pennsylvania Litigation Blog : Pennsylvania Litigation Lawyer & Attorney : Barley Snyder Law Firm : Serving Lancaster, Reading, York, Chambersburg

Section 512 of the Contractors and Subcontractors Payment Act allows for an award of interest, penalties, and attorneys fees to a “substantially prevailing” party. When Owner did not pay him for construction work, Contractor sued Owner, won and obtained an award for the claim, plus interest, penalties and attorneys fees. Owner still didn’t pay. Contractor then filed execution proceedings and, eventually, did recover the amount of the award by attaching Owner’s bank accounts. Contractor then filed to also get interest and penalties from the time of the original award until Contractor eventually was paid, plus contractor’s attorneys fees incurred in the collection and execution process, as well as in the appeals to Superior Court. In a case of first impression, the Superior Court said, “Yup.” The trial court had denied the Contractor’s motion for interest, penalties and fees for the collection effort, but the Superior Court panel unanimously reversed. Zimmerman v. Harrisburg Fudd, PICS No. 09-1762 (Oct. 19, 2009).

The original amount owed by Owner was $10,108.70. After adding the first set of interest, penalties and attorneys fees, that number became $21,673.99. When the execution and appeals were considered, the total of the claim was almost four times the original debt – growing to $41,989.84. As explained by the Superior Court, the statute’s “underlying objective of making an unpaid contractor whole . . . can be gutted, when he is subjected to expensive litigation costs, including those incurred in the collection-of-fees phase.”
 

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Even if you are successful in federally registering your mark, misuse of your mark may result in losing your right to enforce the registration. The term misuse is relative and generally does not lead to a removal from the registry. Rather, your use may affect the ability to enforce rights granted by the registration.

The rights established from a federal registration can last indefinitely, as long as the owner continues active use of the mark on or in connection with the goods and/or services in the registration. Therefore, it is important that you actively use your registration.

Furthermore, when used, the trademark mark should be presented as an adjective. Any presentation of your trademark, as a noun or verb, should be avoided. In fact, use as a noun or verb is a common error that an owner uses the mark as a noun or a verb (i.e. correct use = “Drink YOUR MARK Cola”; incorrect use = “Drink YOUR MARK”). You should also avoid any presentation of the mark in plural or modified possessive form (i.e. incorrect use = “YOUR MARK’s Cola”).

A mark should be adequately distinguished in presentation, especially in regards to the surrounding text and symbols. For instance, your mark can be capitalized, underlined, italicized, placed in quotation marks, or even depicted in boldface type; each typography provides an emphasis on the mark, making it more distinguishable. Since trademarks are used to create distinct commercial impressions in regard to the offered goods and services, your trademark should be distinguishable.

Most importantly, your mark should be affixed to the goods and/or services for which the mark is registered. Meaning, if you received a registration of your mark in association with product X, then use of the mark with product Y is not protected under the registration. Rather, use of the mark with product Y only provides common law rights. It would be recommended to register the mark again, but now in association with a new class of goods and/or services. The mark can be placed on the parcel in which the goods are packaged. Tags or labels may be used as well, which are attached to the product, and provide greater identity of the mark.

It is important to know that certain actions must be taken to maintain your registration, especially if in any changes in use have occurred.
 

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The first person to use a trademark in connection with specific goods or services preserves a common law right to prevent any unauthorized use of that mark with similar goods or services. However, federally registering your mark with the United States Patent & Trademark Office provides more protection than established under common law. In fact, an unregistered mark may only protect use of your mark within a specific geographical area, while a federal registration provides exclusive right to use of that mark nationally.

If your mark lacks federal registration, the ability to enforce your rights through legal proceedings may therefore be limited. In fact, a registration not only provides constructive notice of the mark to infringers, but provides right to sue in federal court with a legal presumption as to ownership of the mark. Additionally, federally registering your mark provides more remedies available against infringing parties. For instance, the registrant may recover up to triple damages and attorney's fees for any willful violations.

The rights established from a federal registration can last indefinitely, as long as the owner continues active use of the mark on or in connection with the goods and/or services in the registration. Therefore, registering your trademark provides a bundle of exclusive rights that are otherwise not available through common law use of the mark.

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Interim Final Regulations published in the Federal Register on August 24, 2009 (74 Fed. Reg 42740) provide a framework for evaluating potential breaches of Protected Health Information (PHI) in order to determine if it is necessary to send a notification letter to the patient. While not all violations of the pre-existing HIPAA privacy regulations will result in a breach requiring notification under the new HITECH regulations, a violation of the privacy rule is a prerequisite to a breach requiring notification. Thus, determining whether or not a violation of the HIPAA regulations has occurred is the first step in evaluating a breach to determine if notification is necessary.

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Employment agreements and assignment provisions may transfer patent rights to the employer. Even in the absence of an express agreement to assign from the employment contract will not preclude the employer as a matter of law from asserting a claim to the employee's invention. See Agawam Co. v. Jordan, 74 U.S. (7 Wall.) 583, 19 L.Ed. 177 (1868).   Even in situations where the employee owns the invention, and a resulting patent, the employer may have a "shop right" to the invention, where the employer will have a license to use the invention without paying the employee any additional compensation as royalties. See, Aetna-Standard Engineering Co. v. Rowland, 343 Pa. Super. 64, 71, 493 A.2d 1375 (1985).  As an implied license, shop rights allow the employer, and its employees, to use the patented invention. This is a limited right, restricted to a proximate use of the patented invention. 

Several factors will be examined in order to determine if a “shop right” exists, including: (1) the extent the employer provided wages, materials, tools, and a work place; (2) the time used (on the clock or off) by the employee for the development of the invention; (3) the existence of contractual relationship (written or unwritten) between the employer and employee; and (4) the employees consent and acceptability that the employer use the invention. In general, the employer will retain a shop right when the employee devises the invention on the employer's time and at the latter's expense, using his materials and facilities, and allows him to use the invention without special compensation. See Dubilier Condenser, supra; Gill v. United States, 160 U.S. 426, 16 S.Ct. 322, 40 L.Ed. 480 (1896).

                In order to clear any uncertainty of patent/invention ownership, employers should require employees to sign written patent assignment agreements.

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Owning a patent protected invention provides the right to exclude others from making, using or selling the invention throughout the United States for life of the patent. However, determining the ownership of those rights may be complicated. Generally, the inventor owns all rights to an invention. But, if the inventor is an employee, an employer may lay claim to the invention under certain circumstances. For instance, if an employee is hired to invent and the employer can demonstrate that this was clearly spelled out for the employee, the employer will be deemed the owner of any invention within the scope of the employee’s employment. In United States v. Dubilier Condenser Corp., 289 U.S. 178, 53 S.Ct. 554, 77 L.Ed. 1114 (1933), however, the Court stated that the mere existence of an employer-employee relationship does not of itself entitle the employer to an assignment of any inventions which the employee devises during the employment.

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The EHB recently issued a decision in TRRAAC v. DEP, et al, EHB Docket No 2008-315-L, addressing the EHB's de novo review of DEP actions. DEP approved a remedial investigation and cleanup plan for a site in Lancaster County. TRRAAC appealed the approval. TRRAAC noted in its pre-hearing memorandum that it intended to call a DEP inspector as a witness at the hearing. The DEP employee was not involved in the review of the action under appeal. Clean up at the site commenced and materials from the site were disposed of at a landfill. The DEP employee he was involved in inspections at the landfill. 

DEP filed a motion in limine seeking to prohibit TRRAAC from calling the DEP landfill inspector. DEP argued that the inspector had no part in review of the remedial investigation and clean up plan, rather his involvement related to implementation of the clean up plan. Issues relating to the implementation of the clean up plan have no bearing on an appeal of DEP's review and approval of that plan.

The EHB held that all evidence up to the time of the hearing is potentially relevant. The EHB cited 35 P.S. Section 7514(c) for the proposition that a DEP action is not final as to the person taking the appeal, until the EHB decides that the action is final. DEP focused on the action under appeal itself, the clean up plan, as the issue and viewed the issues TRRAAC wanted to address as separate compliance issues. The EHB took the position that issues related to the approval might be borne out by subsequent evidence, not before the Department at the time it took action.

The EHB determined that its focus should properly be on the appealed action itself, rather that DEP conduct in completing its review. Details regarding the nature of DEP's review are not as important as whether the decision itself was correct, as such pointing out harmless errors in the review process, is unproductive. The EHB does not conduct a record review, rather it creates its own record. 

The EHB distinguished its decision in this case from CRY v. DER, 639 A.2D 1265 (Pa. Cmwth. 1994). In CRY, the appellant appealed the issuance of a permit for a landfill. The appellant in CRY sought to introduce evidence relative to the fact that the liner was torn during its installation, in an effort to argue the permit should not have been issued. The EHB excluded the evidence. The Court determined that evidence relative to the tear in the liner was irrelevant, it had no bearing on whether the permit should have been issued. 

The EHB provided an example of when evidence obtained after DEP acts, may be relevant to an appeal of that action. If DEP were to approve a dam permit, which approval gets appealed, the dam is later constructed and subsequently fails. Evidence relative to the cause of the failure may be relevant to the appeal of the permit for the dam. The later evidence may go to the propriety of the decision to issue the permit, rather than an unrelated compliance issue as was the case in CRY. Blanket prohibitions of evidence, based on the time the evidence came into existence, are improper. 

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 In Geryville Materials, Inc. v. DEP, Docket No. 152 MD 2009 DEP issued a letter to Geryville Materials indicating that it was going to suspend review of Geryville Material's permit application for a quarry. DEP suspended its review of the permit application based on a letter from the Lehigh Valley Planning Commission ("LVPC") that the proposed quarry was not consistent with the comprehensive plan. Quarry use is a permitted use as a special exception. Geryville Materials is pursuing a special exception. Geryville Materials filed an equity actions in the Commonwealth Court's original jurisdiction seeking an order that required DEP to continue to review its application. The Court in an unreported decision authored by Judge Pellegrini, denied DEP's preliminary objections. The Judge pointed out to DEP that the comprehensive plan is simply a planning document, it was not consistent with the zoning ordinance regarding the proposed use and that DEP misapplied its obligations under Act 67 and Act 68 by suspending its review of the permit application.

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 The new federal stimulus bill, American Recovery and Reinvestment Act of 2009 (ARRA), includes the Health Information Technology for Economic and Clinical Health (HITECH) Act, which contains, among other things, an expansion of HIPAA privacy law requirements for health care providers. The HIPAA provisions go into effect on a rolling schedule over the next several years, and further guidance for compliance will be forthcoming over that time period. Since much is still unknown, hospitals and other health care providers may wish to go about tackling the technical maze of new requirements (and avoiding HIPAA-steria) with an equally graduated, and systematic approach to enforcement. This Alert will focus on the breach notification provision, which is scheduled to go live in September of 2009.

General Rule.  Under HITECH, any hospital or other covered entity which maintains protected health information (PHI) must notify the patient in the event of a breach of the data. Importantly, this provision only applies to data which is “unsecured;” if a breach of “secured” data occurs, no notification is required.

What is a Breach?  A breach is the unauthorized access, use or disclosure of PHI which compromises the security or privacy of the information. There are, however, some important exceptions. For example, a disclosure may not be a breach requiring notification if you would not expect the person to whom the information was disclosed to remember it. This could cover a misdirected fax, depending upon the procedures followed. Also, if an employee acting in good faith, within the scope of his/her job duties, improperly accesses a record, as in the  case of inadvertent or accidental access, this is not reportable so long as there is no further disclosure.

What makes data “secure?”  Per DHHS’ April 27th guidance (74 Fed. Reg. 19006), electronic data is “secure” if encrypted as further specified in the HIPAA Security Rule and in guidelines promulgated by the National Institute of Standards and Technology and available at http://www.csrc.nist.gov/. The encryption method should use a process which transforms data into a form “in which there is a low probability of assigning meaning without the use of a confidential key or process.” As for hard copy records, per the guidance that hard copy PHI is only “secure” if destroyed in a manner which makes it unreadable. 

Form/Timing of Notification.  Notification must be made in writing, by mail or e-mail if that is the patient’s preference. The notification must be made within 60 days of discovery of the breach. If the breach involves disclosure of PHI of 500 or more people, notification also must be made to the media and to DHHS, and the incident will be posted on a DHHS public website.

Further Guidance to Come/Start Date.  On August 24, 2009, DHHS published its final interim rules on breach notification (74 Fed. Reg. 42740). In its April guidance, DHHS asked for public comments, and the final interim rules are expected to address industry comments and concerns. These rules will then apply to breaches occurring 30 days after the publication of the rules, or no later than September 15, 2009.

Next Steps.  Hospital and other health care providers should consult with their health care professional to flesh out a plan for HITECH compliance. Some things to consider in making your plan include:

• Review of Business Associate agreements to ensure that BA’s are required to give timely notice of breaches to allow for your compliance with HITECH’s 60 day deadline for notification.

• Review of most common breach circumstances and reportability; does every misdirected fax require a breach notification? This must be thoroughly analyzed and a policy created to supplement your existing HIPAA compliance program. Policies should be worded broadly enough to allow for analysis of each individual situation.

• Education. While staff may be aware of the need for privacy of PHI, these new requirements, along with HITECH’s substantially increased financial penalties, put a much greater emphasis on the importance of maintaining confidentiality on a day to day basis.

The Future.  At the American Health Lawyers Annual Meeting in early July, a representative from the Office for Civil Rights (OCR) addressed the agency’s enforcement philosophy, saying, “I love the word reasonable,” when asked about the new HIPAA provisions. The commitment to this philosophy will be borne out in the coming months and years.

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