Retailer of N95 Respirator Masks Enjoined for Price-Gouging

Dr. Deborah Birx, ambassador and White House coronavirus response coordinator, holds a N95 mask as she and Vice President Mike Pence visit 3M headquarters in Minnesota. (Glen Stubbe/Star Tribune via AP, File)/Star Tribune via AP)

(CN) — A federal judge issued a preliminary injunction Monday against a New Jersey company that tried to sell N95 respirator masks to New York City officials at enormously inflated prices by pretending to be a licensed 3M vendor.

“The harm to 3M’s reputation and the 3M brand of being associated with price-gouging and/or raising the prices of its N95 respirators during the global Covid-19 pandemic is immeasurable,” U.S. District Judge Loretta Preska said.

In March, New Jersey-based company Performance Supply sent a formal quote to New York City’s Office of Citywide Procurement offering to sell the city 7 million N95 respirators made by 3M for $6 each — a 500% markup on the crucial piece of protective equipment.

New York City has been the hardest-hit area in the U.S. during the Covid-19 crisis, losing more than 19,000 residents to the disease as of Monday afternoon, according to a Johns Hopkins University tracker

Personal protective equipment for health care workers has been in short supply nationwide, with many nurses forced to wear one mask all day long due to shortages, or even care for sick patients without a mask. N95 masks, which filter out 95% of particulates, are intended to be single use and disposed of after seeing one patient.

Despite the spike in demand caused by the Covid-19 pandemic, 3M has not increased the price of its respirator masks, which it sells for just over $1 each.

Due to the shortage of respirators, however, many health care providers and local governments seeking N95 masks have turned to the secondary market, only to purchase fraudulent masks that do not provide the same level of protection. 

Performance Supply’s bid deceived New York City officials into thinking it was an authorized vendor for 3M because the company replicated the 3M mark and slogan “3M Science. Applied to Life” in its quote without authorization.

“Defendant is trading off the widespread commercial recognition and goodwill of the 3M Marks and 3M Slogan in connection with offering to sell products that 3M is widely known for manufacturing and selling, namely, N95 respirators,” Preska said. “Accordingly, it is no surprise that Defendant actually confused New York City procurement officials into believing that Defendant was an authorized vendor of 3Mbrand N95 respirators.”

After learning of the illegitimate bid, 3M sued Performance Supply for trademark infringement, unfair competition and false association in U.S. District Court for the Southern District of New York.

Preska’s 5-page opinion says the public has a strong interest in avoiding confusion about the source of goods, especially during the current public health crisis when people are relying on 3M products to protect themselves from infection.

Fraudulent sales of N95 respirators are so rampant at the moment that 3M has set up a new consumer hotline to help customers, particularly health care supply coordinators, to evaluate the legitimacy of a given offer.

3M says it intends to double its global respirator production and recently announced its plan to import 166.5 million of the masks into the U.S. to supplement that production increase.

3M spokeswoman Jennifer Ehrlich said in a statement: “We are pleased with this decision and thank the court for moving quickly to put an injunction in place. The court’s ruling furthers our goal in this lawsuit, and the others we have filed, to stop unlawful and unethical behavior seeking to take advantage of this crisis.  Our healthcare workers, first responders and the public deserve genuine, high quality 3M products at a fair price.”

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