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3M Takes Action to Protect Its Brand from Price Gouging And Trademark Infringement

At the beginning of April, 3M, the nation’s largest producer of the now infamous N95 mask, filed two lawsuits against companies it claimed were confusing and deceiving buyers by falsely associating 3M with the defendants and re-selling its N95 masks at “grossly inflated”[1] prices. Such behavior, according to 3M, violates federal trademark law. The lawsuits, which were filed in the Southern District of New York[2] and the Eastern District of California[3], were some of the first major trademark lawsuits to come out of the COVID-19 pandemic. On the same day, 3M also filed suit against a John Doe in Texas state court. 3M did not stop there. Most recently, on April 30, 2020, 3M filed four additional lawsuits: two in the Middle District of Florida,[4] one in the Northern District of Florida[5], and one in the Southern District of Indiana.[6]  Overall, the complaints in these suits contain claims of federal trademark infringement, unfair competition, false association, false endorsement, false designation of origin, trademark dilution, false advertising, deceptive acts and business practices and other state law claims.

3M has been successful. For instance, on April 30, 2020, Judge Dale Drozd granted 3M a temporary restraining order in the Eastern District of California.[7]  Also, after previously granting 3M a temporary restraining order in the Southern District of New York, on May 4, 2020, Judge Loretta Preska granted 3M’s application for a preliminary injunction.[8]  Judge Preska found that the fact “3M cannot control whether the products that Defendant is offering for sale and/or selling outside of its authorized trade channels adhere to 3M’s rigorous quality-control standards . . . constitutes irreparable harm” and “[n]o amount of money could repair the damage to 3M’s brand and reputation if it is associated with the crime of price-gouging at the expense of healthcare workers and other first responders in the midst of the COVID-19 crisis.”[9]

While these cases have raised questions about the extent trademark law protects a brand owner after it has sold its products into the stream of commerce, they also demonstrate how companies are addressing trademark violations in this time of global pandemic, as well as the public relations and marketing considerations accompanying those choices. By filing this lawsuit, 3M was able to focus attention on distasteful and illegal marketing practices, while simultaneously being seen as the one standing up to the companies fostering consumer confusion as to the source of its 3M N95 masks. For instance, not only do the complaints chronicle 3M’s “Extensive Efforts to Assist With the Battle Against COVID-19”[10] and its efforts to fight price gouging, but 3M also stated that any damages resulting from the suits will be donated to COVID-19 relief efforts.

3M is not the first company to recognize the positive public relations value of  taking action against misleading marketing and advertising and misuse of its trademarks. However, the act of bringing a trademark suit with regard to price gouging may represent a new trend.

3M’s efforts stand in contrast to the recent efforts by several companies to employ humor instead of the traditional cease and desist letter. For example, Bud Light employed a costumed medieval crier and a handwritten scroll in order to ask a Minnesota brewery to stop using Bud Light’s trademarks. Legal blogs, newspapers and other online publications quickly made such efforts go viral, emphasizing the positives associated with an alternative approach to the draconian cease and desist letter. Though some reports were also quick to point out how these light hearted and humorous efforts were just another advertising and marketing strategy, the campaigns, like the one by Bud Light, were also seen as a successful means of both stopping the infringing action and avoiding the label of “trademark bully.”

Given the seriousness of the global pandemic and the widespread price gouging at hand, humor is not likely an effective tool, nor would it send the proper message to other possible infringers seeking to trade upon 3M’s fame and good will while price gouging. As the recent orders and multiple lawsuits demonstrate, an aggressive approach may be a necessary, and, more importantly, a successful way to protect the public.

At the end of the day, the suits filed by 3M are likely just the beginning. In a statement released on the same day 3M filed the first set of lawsuits, a company representative from 3M not only hinted there might be additional lawsuits on the horizon, but that lawsuits are just “‘one of the many legal tools 3M is using to protect the public.’” While a lighter touch may be used effectively to address trademark violations in some cases, as companies continue to navigate through these uncertain times, public health and safety may require use of traditional cease and desist letters and complaints seeking injunctive relief as the weapons of choice.

FOOTNOTES

[1] See, e.g., Complaint at 3, ECF No. 1, 3M Co. v. Performance Supply, LLC, No. 1:20-cv-02949 (S.D.N.Y Apr. 10, 2020).

[2] Complaint, ECF No. 1, 3M Co. v. Performance Supply LLC, No. 1:20-cv-02949 (S.D.N.Y Apr. 10, 2020).

[3] Complaint, ECF No. 1, 3M Co. v. Rx2Live LLC, No. 1:20-cv-00523 (E.D. Cal. Apr. 10, 2020).

[4] Complaint, ECF No. 1, 3M Co. v. King Law Ctr., Chartered, No. 6:20-cv-00760 (M.D. Fla. Apr. 30, 2020); Complaint, ECF No. 1, 3M Co. v. TAC2 Glob. LLC, No. 8:20-cv-01003 (M.D. Fla. Apr. 30, 2020).

[5] Complaint, ECF No. 1, 3M Co. v. 1 Ignite Capital, LLC, No. 4:20-cv-00225 (N.D. Fla. Apr. 30, 2020).

[6] Complaint, ECF No. 1, 3M Co. v. Puznak, No. 1:20-cv-01287 (S.D. Ind. Apr. 30, 2020).

[7] Order Granting Motion for Temporary Restraining Order 14; and Ordering Defendants to Show Cause re Preliminary Injunction, ECF No. 18, 3M Co. v. Rx2Live, LLC, No. 1:20-cv-00523 (E.D. Cal. Apr. 30, 2020).

[8] Order on Plaintiff 3M Company’s Application for a Preliminary Injunction Against Defendant Performance Supply, LLC, ECF No. 22, 3M Co. v. Performance Supply, LLC, No. 1:20-cv-02949 (S.D.N.Y May 4, 2020).

[9] Findings of Fact and Conclusions of Law, at 13-14, ¶¶ 6-7, ECF No. 23, 3M Co. v. Performance Supply, LLC, No. 1:20-cv-02949 (S.D.N.Y May 4, 2020) (internal citations omitted).

[10] See, e.g., Complaint at 9, ECF No. 1, 3M Co. v. Performance Supply, LLC, No. 1:20-cv-02949 (S.D.N.Y Apr. 10, 2020) (emphasis added).

Copyright © 2020, Sheppard Mullin Richter & Hampton LLP.National Law Review, Volume X, Number 126

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About this Author

Theodore Max, Attorney, Sheppard Mullin, Entertainment, Technology, Advertising
Member

Theodore C. Max is a member of the Entertainment, Technology and Advertising and Intellectual Property Practice Groups in the New York office, where he focuses on counseling clients on intellectual property issues and litigation. He is co-leader of the firm's Fashion and Apparel team. Mr. Max combines his skill and experience as a trial attorney with his knowledge of copyright, trademark and intellectual property law in servicing the firm's diverse clientele.

212.332.3602
Lindsay van Keulen Intellectual Property Attorney Sheppard Mullin San Francisco, CA
Associate

Lindsay van Keulen is an associate in the Intellectual Property Practice Group in the firm's San Francisco office.

Areas of Practice 

Lindsay’s practice focuses on protecting her clients’ intellectual property rights through litigation, counseling, prosecution and enforcement. Specifically, Lindsay assists in the enforcement and defense of her client’s rights in complex commercial litigation involving trademark, copyright and false advertising disputes. She has experience in conducting fact discovery, communicating with clients and drafting motions.

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