While the Federal Communications Commission (FCC) temporarily has suspended enforcement of the requirement that businesses have a signed permission statement for every fax sent, drug marketers must respect the current rules that require that all receivers have an "existing business relationship" with the sender or avoid sending faxes that contain an "unsolicited advertisement."

The new rule is suspended until the FCC acts on requests to modify filed by the public in "Petitions for Reconsideration," or until January 1, 2005. Meanwhile, the FCC will enforce the rule against senders who violate the rules that have been on the books for over ten years. Unfortunately, many drug and device companies may not be in compliance with these rules. Moreover, in addition to the threat of FCC action, the publicity surrounding the fax rule may stimulate lawsuits by state attorneys general, individuals, and class action lawyers, all of whom may bring lawsuits under the FCC rules.

Here's the bottom line for now:

Businesses can send faxed advertisements to existing customers and to customers of clients. But, businesses cannot do cold faxing. Businesses cannot send fax advertisements to someone else's customer or membership list. However, businesses can avoid this ban, by sending faxes that do not fit the definition of an "unsolicited advertisement."

John Kamp
Wiley Rein & Fielding LLP
Phone: 202.719.7216
Fax: 202.719.7207
E-mail: jkamp@wrf.com

Here's the legal background:

The FCC must enforce its statute, the Federal Communication Act (FCA). The FCA says that it is illegal for any person to "use any telephone fax machine, computer or other device to send an unsolicited advertisement to a telephone facsimile machine." The FCC cannot change this law, only write rules that enforce it and "reasonably" interpret it. Only the Congress can change the FCA.

The cause of the current controversy was the FCC decision to interpret the terms "prior express invitation or permission" to require written permission from every recipient. The stringent interpretation has been "stayed," but the traditional definition of "existing business relationship" continues in effect. That rule says:

The term 'established business relationship' means a prior or existing relationship formed by a voluntary two-way communication between a (sender and recipient) with or without an exchange of consideration, on the basis of an inquiry, application, purchase or transaction ....regarding products or services offered by such person or entity, which relationship has not been terminated by either party.

Under this, companies may send commercial faxes based on an "inquiry, application, purchase or transaction." This seems to clearly allow faxes to any doctor or clinic who routinely orders the company's products, has discussed the company products with a company detail person, has attended a company seminar, or has made an inquiry to the company.

The other way to avoid being subject to the rule is to not send a fax that includes an "unsolicited advertisement." The FCA says "the term 'unsolicited advertisement' means any material advertising the commercial availability or quality of any property, good, or service which is transmitted to any person without that person's prior express invitation or permission. A mere invitation to a meeting without describing the drug, like a "reminder ad" that only names the product but does not describe it, would probably not be an unsolicited advertisement.

One more thing. Honor all requests to stop sending faxes. No matter how the FCC interprets the "existing business relationship" you do not have "permission" to send faxes once you have been told not to do so.

/John Kamp