3M Sues Third-Party Retailer For Fraudulent Sales On Amazon

3M has filed a complaint against defendant KM Brothers Inc., et al for trademark counterfeiting, trademark infringement, unfair competition, trademark dilution, and false advertising. 3M said the lawsuit is meant to help “combat the exploitation of consumers during the COVID-19 global pandemic.” 3M alleges that defendants “operated an illegal scheme to advertise and sell counterfeit, damaged, deficient, or otherwise altered respirators to unwitting customers” by falsely advertising these products with 3M’s trademarks and using bait-and-switch tactics. 3M added that any award for damages would be donated to charitable COVID-19 relief efforts.

3M claimed that the defendants used 3M’s name recognition and quality to deceive consumers, who were attempting to protect themselves during the pandemic. Meanwhile, 3M has increased its respirator production without increasing prices as a result of the COVID-19 pandemic. The defendants were allegedly wrongfully acting as third-party sellers on Amazon, which is not named as a party to the suit.

According to the complaint, the defendants “began selling what were advertised as authentic 3M products on Amazon.com across three accounts…The associated Amazon listings advertised what were purported to be 3M-branded N95 respirators listed under the title, among others ‘4M OHESD 142-8210Plus 8210Plus Particulate Respirator N95 – Pack of Two Masks.’” These accounts were only recently blocked by Amazon after numerous customer complaints about “authenticity, quality, and pricing.” However, 3M noted that “[d]efendants have shown a propensity to form multiple front entities to perpetuate their unlawful activities.” 3M fears they could be working to continue to engage in this unlawful conduct unless the court stops them. The masks were also priced much higher than list prices. For example, the average price across their different vendor pages was $23.21, “which is far in excess of 3M Company’s average list prices of approximately $0.63 to $3.40 depending on the model. For further reference, Defendants’ average price is almost 20 times 3M’s posted list price of $1.27 per respirator for the same or comparable products.” Defendants also falsely advertised and marketed that these were authentic 3M respirators.

3M accused the defendants of trademark counterfeiting, claiming that defendants “are using spurious designations that are identical with, or substantially indistinguishable from, the 3M Marks.” Further, defendants have used these marks commercially, “knowing they are counterfeit to advertise, promote, offer for sale, and sell non-3M respirators.” This conduct has likely caused consumer confusion and injury.

3M alleged that the defendants infringed 3M’s exclusive trademark rights. 3M claims that the “3M Marks have acquired distinctiveness and identify 3M as the exclusive source of products offered under the 3M marks including, without limitation, the 3M-brand N95 respirators.” Plaintiff states that using this Mark to sell and advertise alleged 3M N95 masks, that are “counterfeit, damaged, deficient, or otherwise altered.” This is also likely to cause consumer confusion and deception. Further, 3M states that defendants are profiting from their unauthorized use of the 3M trademarks.

3M claimed that the defendants have engaged in unfair competition, false endorsement, false association, and false designation of origin through advertising and selling “purported…3M-branded products at grossly inflated prices, well above 3M’s list prices for 3M brand N95 respirators.” 3M believes that these products “were materially different than legitimate 3M products.”

The complaint also stated that the defendants’ conduct has caused trademark dilution. 3M notes that its trademarks are famous and were famous before defendants’ conduct. Plaintiff 3M claims that “[d]efendants’ misuse of Plaintiff’s famous 3M Marks…is likely to dilute the distinctive quality of the famous 3M Marks, such that the famous 3M Marks’ established selling power and value will be whittled away.” This dilution allegedly occured through defendants’ wrongful conduct, advertising, and selling, deficient or counterfeit 3M products. 3M states that this conduct could harm 3M’s reputation.

State law claims included alleged violations of the California Unfair Competition Law via price-gouging and false advertising. Specifically, during the COVID-19 pandemic, California’s Governor Gavin Newsom and California Attorney General Xavier Becerra issued statements and declarations of emergency in response to COVID-19 and reminded consumers about price-gouging, which is illegal during a state of emergency.

3M has sought judgment in its favor; to permanently enjoin defendants from further violations; an injunction; an award for unjust profits, which 3M will donate to charity; award for statutory damages and treble damages to donate to charity; an award for costs and fees pre and post judgment interest; and an order requiring the destruction of all unauthorized goods and materials.

The suit is filed in the Central District of California. 3M is represented by Norton Rose Fulbright and Pirkey Barber.