3M Company v. Performance Supply, LLC

Background

3M sued Performance Supply on April 10, 2020. 3M alleged that Performance Supply was using 3M’s trademarks and slogan to make a deceptive offer to sell 3M-brand N95 respirators during the COVID-19 emergency. The complaint asserted federal trademark infringement, unfair competition, false association, false endorsement, false designation of origin, trademark dilution, and false advertising claims under the federal Trademark Act, as well as New York statutory and common-law claims.

On or about March 30, 2020, Performance Supply sent a formal quote to a New York City purchasing agent offering seven million 3M respirators. It quoted $6.05 per mask for two million Model 8210 masks and $6.35 per mask for five million Model 1860 masks. The court found that these prices were substantially above 3M’s listed prices. Performance Supply reproduced 3M’s marks several times, referred to 3M’s headquarters, attached 3M technical specification sheets, and stated that purchase-order acceptance and shipping depended on 3M. The court found that Performance Supply was not an authorized 3M distributor, agent, or representative and had no association with 3M. A 3M employee told the purchasing agent that Performance Supply was not associated with 3M, preventing the proposed sale.

3M sought a temporary restraining order and preliminary injunction under Rule 65 of the Federal Rules of Civil Procedure. The court granted the request to issue an order requiring Performance Supply to show why an injunction should not enter, and it temporarily restrained the challenged conduct through the hearing. Performance Supply did not file opposition papers. The court held the hearing by telephone on May 4, 2020.

Legal standard

A preliminary injunction is an order entered before the case is finally decided to prevent likely harm while the lawsuit continues. The court applied the same standard used for a temporary restraining order. 3M had to show a likelihood of success on the merits, a likelihood of irreparable harm that money could not adequately repair, that the balance of hardships favored 3M, and that the injunction would serve the public interest.

Court’s analysis

The court found likely irreparable harm to 3M’s product quality controls and reputation. Because Performance Supply was outside 3M’s authorized sales channels, 3M could not control the quality of products it was offering under the 3M marks. The court also found that the offer could falsely associate 3M with inflated prices and pandemic price-gouging, harming 3M’s goodwill.

The court concluded that 3M was likely to succeed on its trademark infringement, unfair competition, false endorsement, false association, and false designation claims under Sections 32 and 43(a)(1)(A) of the federal Trademark Act and New York common law. It found that 3M’s registered marks were entitled to strong protection, that Performance Supply had reproduced the marks and slogan in their entirety, and that both parties’ offers concerned the same type of product. The court also relied on evidence that New York City officials mistakenly identified Performance Supply as a 3M vendor, Performance Supply acted with knowledge of 3M’s rights, and the emergency created a heightened risk of confusion among buyers making rapid purchasing decisions.

The court separately found that 3M was likely to succeed on its federal false-advertising claim. It determined that Performance Supply’s statements about 3M’s acceptance of purchase orders, shipping terms, and production locations were false and likely to mislead buyers into believing that Performance Supply was authorized or affiliated with 3M. The court also found likely success on 3M’s New York claims for deceptive acts and practices and false advertising because the alleged conduct threatened public health and diverted public resources.

The court found that the balance of hardships favored 3M because Performance Supply could continue selling vehicles and other unrelated products while refraining from the challenged conduct. It also found that the public interest favored an injunction because healthcare workers, first responders, government agencies, and other buyers had an interest in obtaining authentic protective equipment without deception about its source, quality, or price.

Disposition

The court found that 3M met the requirements for preliminary injunctive relief and stated: “Accordingly, the preliminary injunction shall issue.” The injunction barred Performance Supply and persons acting with it from using the 3M marks or slogan in connection with the challenged respirator sales and from engaging in the deceptive conduct described in the court’s order. The opinion decided entitlement to preliminary relief; it did not enter a final judgment on the underlying claims.