In today’s video, we’re going to talk about the Professional Medical Corporation, and in our scenario, ACME came to us, and they want to brand the name of their MSO to Professional Medical Corporations across states. And ACME knows that in California at least, the physician has to apply to the California Medical Board for fictitious name permit if they plan to practice through a name other than their own name.

So, in this case, the doctor’s name is not John ACME, so the question is whether they have to get a fictitious name permit. Now ACME is organized as an LLC, and the managers want to know how to handle the situation where the MSO wants to brand across states and involves a lot of different physicians and professional corporations.

Hi, I’m Michael H. Cohen, founding attorney of Cohen Healthcare Law Group. We help healthcare industry clients like you navigate the complex terrain of healthcare and FDA law, so you can launch, grow, or scale your healthcare business.

Now, this is actually a fairly complex question, since states differ in their requirements of what you have to do to name a medical practice, and at how strongly they enforce the ban on corporate practice of medicine. If in line between the medical spa, the IV clinic, the hydration clinic, or other wellness-oriented center on one hand, and the medical practice on the other is too blurry, then the state medical board can potentially find a Corporate Practice of Medicine violation. So, having said this, yes, in most cases, the MSO can and does own the intellectual property such as the brand name, the trademark for the name, the copyright for the logo, if there is one.

And the MSO in this management services agreement might license that IP, that intellectual property, to the Professional Medical Corporation to use for a licensing fee. This is the general model, because it’s typically the MSO, and not the physician practice part of the whole medical spa, IV hydration, what have you operation, that capitalizes on the IP, build a strong brand, expands across states, and becomes known for the name and everything it offers.

Now, once the IP is licensed to a medical corporation, the medical corporation, not the MSO, the medical corporation is the entity that registers the fictitious name permit with the medical board. It’s a curious hybrid in division of labor, the physician reports to the state medical board, and the MSO follows the usual rules of business outside of medicine.

As to ACME’s second question, whether multiple medical corporations can hold the fictitious name permit for the brand, normally the answer is not really. A medical practice is a different creature than a general corporation or LLC, so the medical practice is owned by one or more physicians, or it’s housed within a Professional Medical Corporation that’s physician owned and run.

So, really, only one medical corporation, at least within the state, can be registered with the medical board within that state to use the name, but medical corporations in other states potentially might be able to use the same name, since they’d be outside the jurisdiction of the first state’s medical board. A bit of a head scratcher, but that’s how we keep the brand alive and thriving while keeping the medical component within the purview of the state medical board, at least with respect to the name.

Thanks for watching. Please contact us with any questions. We’ve helped lots and lots of medical spas, MSOs, IV hydration clinics, you name it, people just like you build their dream, and we look forward to talking to you and wish you well on your journey to success.