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Law360 (August 14, 2020, 5:16 PM EDT ) An Amazon vendor has agreed to pay more than $192,600 to resolve 3M Co.'s trademark lawsuit accusing it of price-gouging on N95 masks during the COVID-19 pandemic, money that the industrial giant said is set for charity.
In a Thursday joint notice of settlement, 3M — along with Mao Yu and several affiliated companies named as defendants — asked the court to sign off on the parties' agreed upon consent judgment and permanent injunction.
According to court filings, the defendants have agreed to pay $192,616 and to stop selling 3M products unless authorized.
"Defendants state that they no longer market or sell 3M products, and have no intention of marketing or selling 3M products, now or in the future," the joint notice said.
In a statement to Law360 on Friday, 3M said the payment would go to charity.
"We are extremely pleased with the resolution with these defendants, which both furthers 3M's goal of combating respirator counterfeiting and price-gouging and will result in a sizable donation to Direct Relief's nonprofit work to provide [personal protective equipment] to health workers," 3M senior counsel Laura Hammargren said in the statement.
The case was part of a nationwide litigation campaign from 3M — the country's largest producer of N95 masks — using trademark law to fight price-gouging during the pandemic.
Earlier cases had mostly accused defendants of using confusing tactics to mislead buyers into thinking the companies — and their "unconscionably high prices" — were somehow authorized by 3M. But those cases largely centered on the resale of legitimate 3M masks.
3M's case against Yu and other entities named in the lawsuit — such as KM Brothers Inc. and KMJ Trading Inc. — alleged that they used "bait-and-switch tactics" and other deceptive behavior to sell more than $350,000 worth of the questionable masks to unsuspecting Amazon customers. The suit accused Yu of using 3M's name and logo to sell outright counterfeit masks.
3M said in an amended complaint that it brought the case "to protect consumers from being deceived, prevent health care providers and procurement officers from wasting their valuable time interacting with illegitimate offers for critical health supplies." The company said the defendants were selling fake masks for significantly more than the list price.
After the suit against Yu was filed in June, Amazon said in a statement that it removed Yu's listings and alerted 3M after multiple consumer complaints. Amazon was not named as a defendant in the case.
Counsel for the defendants did not immediately respond to requests for comment.
3M is represented by Kevin Mayer and Saul Perloff of Norton Rose Fulbright and Christopher Weimer of Pirkey Barber PLLC.
The defendants are represented by Joseph A. Mandour and Ben T. Lila of Mandour & Associates APC.
The case is 3M Company v. KM Brothers Inc. et al., case number 2:20-cv-05049, in the U.S. District Court for the Central District of California.
--Additional reporting by Bill Donahue. Editing by Haylee Pearl.
For a reprint of this article, please contact reprints@law360.com.
