At a September 15, 2022 WLF Webinar, 3M Assistant General Counsel William Childs and Faegre Drinker partner John W. Ursu discussed how the world’s largest producer of N95 masks fought counterfeiting and profiteering schemes during the COVID-19 pandemic. One legal action the panelists discussed was 3M Company v. Performance Supply, filed in the Southern District of New York against an entity that masqueraded as an authorized 3M mask retailer.
On April 26, 2023, a U.S. Magistrate Judge recommended to the presiding federal district court judge that she enter a default judgment against Performance Supply for two federal Lanham Act violations and one New York General Business Law violation and impose a permanent injunction. On May 1, 3M attempted to serve the Magistrate Judge’s recommendation on the defendant. At no point during the litigation has an attorney entered an appearance on Performance Supply’s behalf, so a district court default judgment and permanent injunction order seems to be a formality.
The district court’s May 4, 2020 order granting 3M a preliminary injunction details the defendant’s scheme. The defendant’s president, a car salesman, corresponded with a New York City procurement officer using 3M’s registered mark and slogans, offering to sell millions of N95 masks he did not possess at up to 590% markup. Before responding, the City contacted 3M and learned that even 3M itself did not have that amount of masks available and that Performance Supply was not an authorized 3M vendor.
3M initiated litigation on April 10, 2020 and obtained the above-noted injunction. The company paused its lawsuit when the Southern District’s U.S. Attorney criminally charged Performance Supply and its president. That process concluded last September, and 3M proceeded with its request for a default judgment and permanent injunction.
Magistrate Judge Willis concluded that 3M’s motion met each requirement for a default judgment, and that the plaintiff established liability as to each claim. The court conducted the requisite eight-part analysis of 3M’s Lanham Act trademark-violation claim and found that at least 7, if not all 8, factors favored liability. It also found that 3M had satisfied the pleading standards for colorable Lanham Act false-advertising and state deceptive acts-and-practices claims. Finally, the court reasoned that a permanent injunction is the most effective way to prevent confusion over Performance Supply’s use of 3M’s protected mark and slogans.