A federal judge on May 4 granted 3M, the maker of N95 masks, an injunction against a New Jersey-based company accused of using 3M’s trademarks and deliberately inflating the price of the face masks.
3M had filed legal action April 10 in federal court in New York City against Performance Supply LLC, alleging price gouging and deceptive trade practices in the sales of N95 respirators used in the fight against the COVID-19 pandemic, according to a news release.
According to 3M, Performance Supply LLC offered to sell $45 million in N95 masks to New York City officials at prices 500-600% over 3M’s list price.
U.S. District Court Judge Loretta Preska ordered Performance Supply LLC to cease using 3M trademarks, stating in her order that the “defendant is trading off the widespread commercial recognition and goodwill of the 3M Marks and 3M Slogan 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 [Performance Supply LLC] confused New York City procurement officials into believing that [Performance Supply LLC] was an authorized vendor of 3M-brand N95 respirators,” the judge added in her order.
The judge’s order marks the first win for 3M in a series of price-gouging lawsuits against companies in Florida, California, Indiana and Wisconsin and elsewhere. There are about ten such cases now pending across the country.
3M accused a company in a California federal lawsuit of infringing its 3M-branded N95 masks by reselling the protective equipment at drastically increased prices. 3M Co. claims Utah-based Rx2Live LLC tried to sell millions of the masks to Community Medical Centers Inc. in Fresno, California, at a “grossly inflated” price that was about four to five times greater than the list price, according to the complaint.
The company doesn’t claim Rx2Live was trying to sell counterfeit versions of 3M’s masks, but was instead falsely asserting that it was a distributor of 3M products – making CMC believe the mask prices were authorized by 3M, according to the lawsuit.
In three complaints filed in Florida and a fourth in Indiana, the industrial giant accused a series of small entities of falsely claiming to be affiliated with 3M in order to sell masks to desperate government agencies at jacked-up prices.
In one of the cases, 3M accused an Indiana company of falsely claiming to work directly with 3M and having a whopping 5 billion masks to sell at more than double their shelf price.
In one of the new cases, 3M accused a Georgia entity called 1 Ignite Capital LLC of using misleading language in an attempt to sell 10 million masks to Florida’s Division of Emergency Management at more than four and a half times their actual price.
In another case, 3M accused a company called Zenger LLC and owner Zachary Puznak of even more egregious behavior. Puznak allegedly offered to sell as many as 5 billion N95 masks to the Indiana Economic Development Corporation by claiming to be in direct contact with “executives from 3M.” When pressed for verification, he allegedly accused IEDC of “paranoid irrationality.”
“3M does not – and will not – tolerate price gouging, fraud, deception, or other activities that unlawfully exploit the demand for critical 3M products during a pandemic,” said Denise Rutherford, 3M’s senior vice president, corporate affairs, in a press release.
“3M will not stop here. We continue to work with federal and state law enforcement authorities, and around the world, to investigate and track down those who are illegally taking advantage of this situation for their own gain.”