3M Company v. CovCare, Inc.
537 F. Supp. 3d 385
| E.D.N.Y | 2021Background
- 3M, owner of federal registrations for the 3M Marks, operates a fraud hotline and investigates suspected counterfeit 3M N95 respirators.
- CovCare (with affiliate Wooter Apparel) sold and marketed purported 3M N95 masks; 3M received hundreds of purchaser reports and specific hotline submissions alleging counterfeits.
- CBP and 3M representatives inspected Defendants’ inventories (including a March 24, 2021 Monroe Township warehouse inspection); about 84,000 masks were marked as illegitimate/counterfeit and later seized.
- 3M sent cease-and-desist letters and then filed suit alleging trademark counterfeiting, infringement, unfair competition, dilution, false advertising, and related New York claims; it sought a TRO and preliminary injunction.
- The court issued a TRO (April 7, 2021), held hearings, and granted in part and denied in part 3M’s motion for a preliminary injunction (May 5, 2021).
- The preliminary injunction bars Defendants (during the action) from selling/offering any 3M-brand N95 respirators, using the 3M Marks with purported 3M N95s, and falsely claiming to be an authorized 3M distributor or affiliate.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Likelihood of success on Lanham Act counterfeiting/infringement | 3M: holds valid federal registrations; 3M inspected products and 3M/CBP found counterfeit masks and sales to customers (including hospital broker). | Defs: challenge sufficiency of 3M's visual/remote inspection methods; assert some masks were legitimate or tested by TÜV. | Court: 3M showed a clear and substantial likelihood of success; inspection evidence and lack of competent rebuttal supported counterfeiting finding. |
| Irreparable harm | 3M: loss of control over quality, reputation, and goodwill from sale of counterfeit N95s (public safety concern). | Defs: they recalled/sequestered flagged items and agreed not to sell flagged masks; asserted hardship if barred from selling genuine product. | Court: 3M made a strong showing of irreparable harm; voluntary cessation insufficient and risk of future infringement supported injunction. |
| Scope of injunction / first-sale doctrine (ban on selling genuine 3M products) | 3M: broad relief necessary because Defendants’ conduct shows risk of future counterfeiting and misrepresentation; narrower relief would be ineffective. | Defs: injunction overbroad; would bar sale of legitimately obtained 3M goods and impose heavy hardship. | Court: permitted broad prophylactic relief; enjoined sale/offers of any 3M-brand N95s and use of 3M Marks in connection with purported 3M N95s to prevent future infringement. |
| Price-gouging / NY GBL § 369-R relief | 3M: defendants sold N95s at grossly inflated prices (examples submitted). | Defs: challenge sufficiency and relevance of price evidence. | Court: declined to grant injunction under § 369-R due to limited evidence of pricing practices. |
Key Cases Cited
- Benihana, Inc. v. Benihana of Tokyo, LLC, 784 F.3d 887 (2d Cir. 2015) (sets the four-factor preliminary injunction standard)
- Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492 (2d Cir. 1961) (framework for likelihood-of-confusion factors)
- eBay Inc. v. MercExchange, LLC, 547 U.S. 388 (2006) (limits presumptions of irreparable harm in injunctive-relief analysis)
- Fendi Adele S.R.L. v. Filene’s Basement, Inc., 696 F. Supp. 2d 368 (S.D.N.Y. 2010) (counterfeit-goods evidence and refusal to accept speculative defenses)
- Versace v. Versace, 213 F. App’x 34 (2d Cir. 2007) (district courts may craft injunctions that keep proven infringers away from potential future infringement)
- Juicy Couture, Inc. v. Bella Int’l Ltd., 930 F. Supp. 2d 489 (S.D.N.Y. 2013) (discusses irreparable harm in trademark cases)
- Tom Doherty Assocs., Inc. v. Saban Ent., Inc., 60 F.3d 27 (2d Cir. 1995) (loss of goodwill supports finding of irreparable harm)
- U.S. Polo Ass’n, Inc. v. PRL USA Holdings Inc., 800 F. Supp. 2d 515 (S.D.N.Y. 2011) (trademark owner’s loss of control over reputation constitutes irreparable harm)