COVID-19 Special Coverage
3M wins preliminary injunction in face mask price-gouging lawsuit
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3M wins preliminary injunction in face mask price-gouging lawsuit

A federal judge on Monday granted 3M a preliminary injunction against a New Jersey-based company accused of federal trademark violations and flagrantly increasing the price of highly-coveted N95 face masks. The order marks the first win in a string of price-gouging suits filed by 3M.

3M initially filed suit against Performance Supply, LLC on April 10, alleging that the company fraudulently used the 3M logos and trademarks to “perpetrate a false and deceptive price-gouging scheme on unwitting consumers, including agencies of government, in connection with the attempted sale of 3M’s N95 respirators during the global COVID-19 pandemic.” 3M asserted that Performance Supply inflated the price of the masks by up to 600%.

In a five-page order accompanied by a lengthy summary of factual findings, US District Court Judge Loretta Preska found for 3M and granted a preliminary injunction against Performance Supply, concluding that “[Performance Supply] is not, and has never been, a licensed or authorized distributor, agent, or representative of 3M-brand N95 respirators.”

Defendant is trading off the widespread commercial recognition and goodwill of the 3M [brand] in connection with offering to sell products that 3M is widely known for manufacturing and selling, namely, N95 respirators. Accordingly, it is no surprise that Defendant confused New York City procurement officials into believing that Defendant was an authorized vendor of 3M-brand N95 respirators.

The court emphasized the importance of maintaining strict quality control standards in manufacturing personal protective equipment during a global health crisis—traits the court said 3M possesses. “3M-branded products are highly visible throughout numerous hospitals, nursing homes, and other care facilities where patients, care workers, and procurement officers value and rely on the high quality and integrity associated with the 3M brand,” said the court.

The court also highlighted 3M’s efforts to help curtail unlawful conduct during the pandemic; attempts to stop “optimistic third parties seeking to exploit the increased demand for 3M-brand N95 respirators.” In addition to legal action against such third parties, 3M’s CEO sent a letter to U.S. Attorney General William Barr to offer “partnership in combatting price-gouging.” The company also posted valuable information on its website for customers to “more readily identify and avoid inflated prices.” Finally, it established a fraud “hotline” where customers can call to verify the authenticity of purported 3M authorized distributors.

Moving forward, Performance Supply is enjoined from using official 3M trademarks “or any other word, name, symbol, device, or combination thereof that is confusingly similar to the 3M Marks.” Monday’s order also superseded a temporary restraining order against Performance Supply.

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