3M Company v. CovCare, Inc.

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF NEW YORK

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3M Company,

Plaintiff,

MEMORANDUM & ORDER

-against- 21-CV-01644 (DG) (JRC)

CovCare, Inc. and Wooter Apparel, Inc.,

Defendants.

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DIANE GUJARATI, United States District Judge:

On March 26, 2021, Plaintiff 3M Company (“3M”) filed this action against Defendants

CovCare, Inc. and Wooter Apparel, Inc. (collectively, “Defendants”), alleging trademark

counterfeiting in violation of the Lanham Act, 15 U.S.C. §§ 1114(1), 1116(a); trademark

infringement under Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1); unfair competition,

false endorsement, false association, and false designation of origin under Section 43(a)(1)(A) of

the Lanham Act, 15 U.S.C. § 1125(a)(1)(A); trademark dilution under Section 43(c) of the

Lanham Act, 15 U.S.C. § 1125(c); false advertising under Section 43(a)(1)(B) of the Lanham

Act, 15 U.S.C. § 1125(a)(1)(B); trademark infringement under New York common law; false

advertising under New York General Business Law § 350; unfair competition and passing off

under New York common law; and dilution and injury to business reputation under New York

General Business Law § 360-l. Complaint ¶¶ 85-172, ECF No. 1.

On March 31, 2021, 3M filed an Emergency Motion for Temporary Restraining Order

and Preliminary Injunctive Relief (the “Motion”), ECF No. 8, pursuant to Rule 65 of the Federal

Rules of Civil Procedure (“Rule 65”), the Lanham Act, 15 U.S.C. § 1116(a), the New York

Consolidated Laws, and New York common law, together with supporting documents, including

Declarations of Christine L. McCool, Ph.D. (“First McCool Decl.”), ECF No. 8-2, and Kara M.

Mundy (“First Mundy Decl.”), ECF No. 8-20.1 Defendants responded by Memorandum of Law

in Opposition filed on April 5, 2021 (“Defs.’ First Br.”), ECF No. 14, together with Declarations

of Aaron Arroyo (“First Arroyo Decl.”), ECF No. 15, Alex Kagan (“First Kagan Decl.”), ECF

No. 16, and Robert Garson (“First Garson Decl.”), ECF No. 17.

On April 5, 2021, the Court held a conference on the Motion. ECF No. 18. On April 6,

2021, the parties submitted additional briefing, together with supporting documents. 3M

submitted a supplemental brief (“3M’s Second Br.”), ECF No. 22, an additional Declaration of

Kara M. Mundy (“Second Mundy Decl.”), ECF No. 22-1, and a Declaration of Cassie Jacobson

(“Jacobson Decl.”), ECF No. 22-2. Defendants submitted a supplemental Memorandum of Law

(“Defs.’ Second Br.”), ECF No. 21, and supporting documents, including additional Declarations

of Alex Kagan (“Second Kagan Decl.”), ECF No. 19, and Aaron Arroyo (“Second Arroyo

Decl.”), ECF No. 20. In its supplemental brief, 3M, inter alia, described the relief sought.

Specifically, 3M “request[ed] that this Court grant an order restraining and enjoining Defendants

from:

• Selling or offering for sale any 3M-brand N95 respirator products;

• using the 3M Marks in connection with the manufacture, distribution, advertising,

promoting, offering for sale, and/or sale of any purported 3M-brand N95

respirator products;

• falsely representing themselves as being a distributor, authorized retailer, and/or

licensee of 3M and/or otherwise falsely representing to have an association or

affiliation with, sponsorship by, and/or connection to 3M and its products; and

• offering to sell any of 3M’s products at a price and/or in a manner that would

constitute a violation of New York General Business Law [§] 369-R.”

1 On April 1, 2021, the Court ordered 3M to either provide notice of the Motion to Defendants

or, pursuant to Rule 65(b)(1)(B), certify in writing any efforts made to give notice to

Defendants and the reasons why notice should not be required. By certificate of service filed

April 2, 2021, 3M indicated that it provided notice to Defendants on April 1, 2021. See ECF

No. 9.

3M’s Second Br. at 20-21; see also id. at 17.

By order dated April 7, 2021, the Court, based on the record before it at that time, issued

a temporary restraining order (“TRO”) in accordance with the terms set forth above; reserved

decision on 3M’s Motion insofar as it sought a preliminary injunction; and set a briefing

schedule and date for argument on the requested preliminary injunction. See ECF No. 24.2

The parties thereafter submitted further briefing, together with additional supporting

documents. On April 14, 2021, Defendants submitted a Memorandum of Law in Opposition to

3M’s Motion for Preliminary Injunctive Relief (“Defs.’ Third Br.”), ECF No. 26, together with

an additional Declaration of Alex Kagan (“Third Kagan Decl.”), ECF No. 25. On April 19,

2021, 3M filed a Reply in Support of its Motion (“3M’s Third Br.”), ECF No. 29, together with

an additional Declaration of Christine L. McCool, Ph.D. (“Second McCool Decl.”), ECF No.

29-1. In response, Defendants, on April 19, 2021, filed a letter requesting to correct the record

with respect to a factual issue raised in 3M’s briefing. ECF No. 31.

The Court held argument on 3M’s Motion insofar as it sought a preliminary injunction on

April 21, 2021, after which the Court directed the parties to submit supplemental briefing on

certain limited issues raised at argument and extended the duration of the TRO until the Court

ruled on the preliminary injunction request. See ECF No. 33.

In keeping with the Court’s April 21, 2021 order, the parties submitted additional briefing

on April 23, 2021. 3M submitted another supplemental brief (“3M’s Fourth Br.”), ECF No. 34,

and Defendants submitted a Further Evidentiary Brief in Opposition to 3M’s Motion (“Defs.’

2 In issuing the TRO, the Court did not require 3M to post a bond. See ECF No. 24 at 5.

Fourth Br.”), ECF No. 35, together with additional Declarations of Aaron Arroyo (“Third Arroyo

Decl.”), ECF No. 36, and Robert Garson (“Second Garson Decl.”), ECF No. 37.

Having heard from the parties at both the April 5, 2021 conference and the April 21, 2021

argument and having considered all of the above filings and supporting documents, including the

sworn declarations, as well as the record and proceedings to date, including the Complaint, the

Court grants in part and denies in part 3M’s request for a preliminary injunction for the reasons

set forth below.

Additionally, the Court denies without prejudice to renewal before the appropriate

Magistrate Judge Defendants’ requests that this Court unseal case 21-MJ-00465 (E.D.N.Y.) and

order that certain seized goods that were previously in Defendants’ possession “be preserved

until further order of this Court.” See Defs.’ Fourth Br. at 7.

BACKGROUND

I. Factual Background

The following facts are drawn from the supporting declarations and other evidence

submitted in connection with the instant Motion and are undisputed, unless otherwise noted.3

Citations to the parties’ supporting declarations incorporate by reference the documents cited

therein.

3M is a leading manufacturer of N95 respirators (hereinafter, “masks”) and has sold N95

masks in the United States under the 3M brand name for decades. First McCool Decl. ¶ 4. Since

the beginning of the COVID-19 pandemic, the public has become familiar with 3M as a

3 The facts upon which the Court’s analysis herein relies are undisputed in that they are either

conceded or not contradicted by record evidence.

manufacturer of N95 masks and other equipment essential to protecting healthcare personnel and

workers from exposure to airborne particles, including viruses like COVID-19. Id. ¶ 6.

3M has invested hundreds of millions of dollars in advertising, promoting, offering for

sale, and selling its vast array of goods and services under its standard-character mark “3M” and

3M design mark (together, the “3M Marks”). Id. ¶ 7. 3M has obtained numerous federal

trademark registrations in connection with the 3M Marks and 3M’s associated logo. Id. ¶¶ 8-14.

3M has established a system by which the public can, either via telephone or via 3M’s

website, report suspected fraud, including the sale of potentially counterfeit 3M-branded

products (3M’s “Fraud Hotline”). See Jacobson Decl. ¶¶ 2, 4; see also Motion at 7. 3M

periodically publishes “counterfeit alerts” aimed at raising awareness of potentially counterfeit

products being sold under particular “lot codes.” See First Kagan Decl. ¶¶ 4-5; see also ECF No.

16-1 (3M “Counterfeit Alert” listing certain lot codes determined to be associated with

counterfeit products).

When 3M receives a report concerning a 3M-branded mask, 3M confirms if the flagged

mask is “authentic or counterfeit based on lot number and visual inspection.” Jacobson Decl.

¶ 5. 3M at least sometimes works with United States Customs and Border Protection (“CBP”)

“to inspect certain sellers of goods for counterfeit items” based on reports submitted to the 3M

Fraud Hotline. See Third Kagan Decl. ¶ 7; see also First McCool Decl. ¶ 26 (describing 3M’s

coordination with “federal agents” in conducting an inspection of products located in

Defendants’ warehouse in Monroe Township, New Jersey). If 3M determines that a reported

product is counterfeit, 3M informs the reporting purchaser that the masks in the purchaser’s

possession are counterfeit and do not come with 3M’s efficacy guarantees. Jacobson Decl. ¶ 6.

Defendant CovCare, Inc. was established in 2020 to supply personal protective

equipment (“PPE”), including masks, to hospitals, first responders, companies, and government

agencies. Third Kagan Decl. ¶¶ 3-4. In conducting its business, CovCare uses the “logistical

and manufacturing experience” of its corporate affiliate Defendant Wooter Apparel, Inc. Id. ¶ 3.

In September 2020, the “CovCare Team” sent to a customer an email in which CovCare

announced that “we now carry three models of 3M NIOSH N95 masks,” acknowledging in the

same email that “3M’s production lines have been filled to capacity” and that “many counterfeit

masks have saturated the market as a result.” ECF No. 8-9 (email sent by the “Covcare Team” to

a customer) at 1; see also First McCool Decl. ¶ 15.

3M alleges that it received “multiple reports of Defendants’ sale of suspected counterfeit

respirators to healthcare professionals and the general public, and price gouging.” Motion at 11.4

As a result, on December 1, 2020, 3M sent a cease-and-desist letter to Alex Aleksandrovski,

whom 3M claims to be CovCare’s founder and CEO. See First McCool Decl. ¶ 17; ECF No.

8-11 (copy of the December 1, 2020 cease-and-desist letter); Motion at 11. In that letter, 3M

informed Mr. Aleksandrovski that 3M had concluded that CovCare was, inter alia, “falsely

representing itself as an authorized distributor of 3M.” ECF No. 8-11 at 1. Defendants

responded to the cease-and-desist letter on December 15, 2020, asserting that CovCare “ha[d]

never claimed to be an authorized 3M distributor.” ECF No. 8-12 at 1 (email from “Katherine

Grimmie from Covcare” to 3M’s “Covid Enforcement” email account); see also First McCool

Decl. ¶ 18.

4 In their many submissions, the parties refer to “Defendants” without distinguishing between

CovCare and Wooter Apparel. Defendants do not contest these collective references or

otherwise indicate that CovCare and Wooter Apparel played separate roles in the relevant

factual history. Accordingly, in keeping with the parties’ submissions, the Court generally

refers to Defendants collectively.

After this exchange, 3M continued to receive reports via its Fraud Hotline from

purchasers of CovCare masks purporting to be 3M-branded N95 masks. See First McCool Decl.

¶¶ 20-24; see also ECF No. 8-14 (images of purported 3M masks and associated packaging,

together with receipts bearing the CovCare name, submitted via 3M’s Fraud Hotline); ECF No.

8-15 (images of 3M-branded masks submitted to the Fraud Hotline); ECF No. 8-16 (images of

masks, packaging, and receipts submitted to the Fraud Hotline); ECF No. 8-17 (images of masks

and receipts submitted to the Fraud Hotline); Motion at 13-14 (alleging that these four reports

were submitted in 2021 on February 2, 5, 8, and 9, respectively). With respect to each of these

reports, 3M, “[b]ased on identified concerns and upon inspection of photographs of the products

and packaging included in the hotline report[s], . . . determined that the products Defendants sold

to th[ese] purchaser[s] were counterfeit masks purporting to be 3M N95 respirators.” First

McCool Decl. ¶¶ 20-23.

On February 14, 2021, Defendants sent to 3M a further response to the December 1, 2020

cease-and-desist letter, in which Defendants acknowledged that they were in receipt of a

“Product Recall and Counterfeit Notice . . . concerning Model 1860 [a model of N95] masks.”

ECF No. 8-21 (letter from Robert Garson to 3M’s Office of General Counsel) at 1; see also First

Mundy Decl. ¶ 2. In the same letter, Defendants raised the possibility that they “ha[d] been the

victim of an elaborate fraud” and claimed that they would not sell or deal with any Model 1860

masks until they “[could] establish, with certainty, whether this [wa]s the case.” ECF No. 8-21

at 1; see also First Mundy Decl. ¶ 2.

3M alleges that Defendants nevertheless continued to sell 3M-branded Model 1860

masks, including selling approximately 60,000 masks to a New York-based broker who, in turn,

sold the masks to Ottawa Hospital in Ottawa, Ontario, Canada. See Motion at 15. 3M obtained

physical samples of the masks sold to Ottawa Hospital, inspected them, and, based on the

inspection, confirmed that the masks were counterfeit 3M-branded masks. See First McCool

Decl. ¶ 25. This inspection at least involved comparing the printing on the masks to that present

on authentic 3M masks and examining the “construction of the products” in comparison “to the

known characteristics of authentic 3M [masks].” See ECF No. 8-19 (copy of letter sent by 3M’s

Personal Safety Division to the Interim Director of Ottawa Hospital’s Supply Chain Operations)

at 1; First McCool Decl. ¶ 25.

It appears that, by this point, federal law enforcement had become involved. On

approximately February 17, 2021, CBP visited Defendants’ office in Staten Island, New York,

“because some of the 3M products ordered by Defendants were flagged at the airport as being

counterfeit goods.” First Arroyo Decl. ¶ 3. “Since it was unclear which of the 3M goods were

counterfeit, CBP advised Defendants to recall all 3M products and issue refunds.” Id.

On February 18, 2021, 3M sent to Defendants’ counsel a second cease-and-desist letter.

First Mundy Decl. ¶ 3; ECF No. 8-22 (copy of the February 18, 2021 cease-and-desist letter). In

this second letter, 3M informed Defendants of its determination that CovCare had sold certain

purported 3M-branded masks that were, in fact, counterfeit. See ECF No. 8-22 at 1. In the same

letter, 3M explained that it identifies counterfeit masks by examining the printing on the masks,

the construction of the masks, and the packaging associated with the masks. Id. at 1-2. 3M

requested that Defendants cease and desist all sales or offers to sell any 3M-branded products,

and that Defendants contact 3M to confirm that Defendants would not “return or destroy any

3M-branded products in [CovCare’s] possession, custody, or control.” Id. at 3.

After a series of phone calls between counsel for the parties, Defendants, on February 25,

2021, sent to 3M a letter in response to the second cease-and-desist letter, in which Defendants

continued to assert that they were not selling counterfeit masks. See First Mundy Decl. ¶ 4; see

also ECF No. 8-23 (Defendants’ February 25, 2021 letter in response to February 18, 2021

cease-and-desist letter) at 2. In the February 25, 2021 letter, Defendants acknowledged that they

had been engaged with several federal enforcement agencies, including the Federal Bureau of

Investigation, the Food and Drug Administration, the Department of Homeland Security

(“DHS”), and CBP. ECF No. 8-23 at 1. Defendants explained that officials from these agencies

had visited their facility, where “[n]o allegedly counterfeit items were found.” Id. Defendants

further explained that an agent believed to be from DHS had instructed them to issue exchanges

or refunds to customers who had received “masks that fall within the complained of model

numbers.” Id. at 1-2.

3M alleges that federal agents visited Defendants’ facilities a second time on March 16,

2021, where they observed a pallet and several cases of purported 3M-branded masks. See

Motion at 18. Defendants have submitted a declaration in which CovCare’s Chief Marketing

Officer, Alex Kagan, seems to reference this second visit, explaining that “on the second

occasion when CBP attended CovCare’s Staten Island location,” the agents observed products

that were “locally sourced goods and . . . [were] returns made at the direction of CBP to be

transferred to [a separate] location.” See Second Kagan Decl. ¶¶ 4-5.

On March 24, 2021, federal agents visited Defendants’ warehouse in Monroe Township,

New Jersey. First Arroyo Decl. ¶ 5; see First McCool Decl. ¶ 26. There, the agents “went

through samples of the inventory Defendants were holding in the warehouse.” First McCool

Decl. ¶ 26. The agents were joined by two 3M representatives present via videoconference, one

of whom was Christine L. McCool, Ph.D., a “Research Specialist” employed by 3M. Id. ¶¶ 2,

26; First Arroyo Decl. ¶ 5. “Representatives of the Defendants were present for this process.”

First McCool Decl. ¶ 26; see also First Arroyo Decl. ¶ 5.

3M keeps the methods and processes it uses to distinguish between counterfeit and

authentic masks “highly confidential.” See Second McCool Decl. ¶¶ 4-5. Accordingly, 3M has

not specified exactly how it conducted the “visual inspection” of the products present in

Defendants’ warehouse. See id. ¶ 12. However, the inspection involved, at minimum, “viewing

photos of the products and their packaging from many different angles via video conference.”

First Arroyo Decl. ¶ 7; see also First McCool Decl. ¶ 26 (describing the “visual inspection” in

which the 3M representatives and federal agents “went through samples of [Defendants’]

inventory”).

Based on this inspection, 3M determined that Defendants were in possession of some

counterfeit masks. See First McCool Decl. ¶ 26; see Second McCool Decl. ¶ 12 (“I personally

conducted a review and analysis of masks located at Defendants’ warehouse in Monroe

Township, New Jersey on March 24, 2021. I personally, as an agent and employee of 3M,

determined that masks located at Defendants’ warehouse were counterfeit.”); see also First

Arroyo Decl. ¶ 8 (explaining that the 3M representatives “determined that Defendants were in

possession of some illegitimate masks” (emphasis added)). Approximately 84,000 masks were

deemed counterfeit – or, according to Defendants, “illegitimate” – and marked with red tape by

CBP. See Second Arroyo Decl. ¶ 4. Approximately 2,400 masks were not marked with red tape.

See id. ¶ 5. Defendants have characterized these 2,400 masks differently throughout their

submissions, sometimes contending that they were deemed “legitimate” by 3M representatives,

see, e.g., First Arroyo Decl. ¶ 7, and sometimes contending that these 2,400 masks simply “were

not deemed to be counterfeit,” see, e.g., Defs.’ Third Br. at 4.

Following the March 24, 2021 inspection, Defendants informed CBP that they were in

possession of an additional 30,507 masks stored at their Staten Island warehouse, resulting

largely from returns, some of which shared lot codes with the masks that 3M deemed counterfeit.

See Second Arroyo Decl. ¶¶ 4, 7.

On April 19, 2021, CBP again visited Defendants’ New Jersey warehouse and seized

“491 boxes” of previously identified 3M products, “which Customs and Border Protection with

3M over video had previously flagged as suspicious on March 24, 2021.” Third Arroyo Decl.

¶ 4; see also Defs.’ Fourth Br. at 2. Defendants assert that they remain in possession of “467

boxes of various 3M products that have not been flagged as suspicious by Customs and Border

Protection.” Third Arroyo Decl. ¶ 5.

Although the parties have centered their submissions and arguments on Defendants’ sale

of 3M-branded masks, 3M alleges that Defendants engaged in misconduct beyond just selling

counterfeit masks. For example, 3M claims that CovCare supplied falsified documents to a

customer who was questioning the authenticity of CovCare’s 3M-branded masks. See Motion at

11-12; see also First McCool Decl. ¶ 19. The documents included an allegedly falsified “3M

acknowledgement agreement” stating that CovCare “is an authorized agent to procure product

for the company.” ECF No. 8-13 (copy of allegedly falsified acknowledgement agreement) at 5.

Certain of the documents, including the acknowledgement agreement, were signed by two

individuals who were at the relevant time not employees of, or otherwise affiliated with, 3M.

See id.; First McCool Decl. ¶ 19.

3M makes similar allegations with respect to the Ottawa Hospital sale, see Motion at 15,

and has submitted a document reflecting that an individual with a CovCare email address

messaged an account that, according to 3M, belongs to the broker involved in the Ottawa

Hospital sale. See ECF No. 8-18 (copy of the email) at 1; see also First McCool Decl. ¶ 24.

Therein, the CovCare employee assured the recipient that certain masks (presumably those sold

to Ottawa Hospital) were “purchased off a distributor of 3m Vietnam and the 1860S was made in

3m Singapore.” ECF No. 8-18 at 1. The CovCare employee also told the recipient that “we are

a trusted and reliable Distributor.” Id. at 1.

3M also alleges that Defendants have used proprietary images of 3M’s masks on the

CovCare website and misappropriated 3M videos about the different masks that 3M

manufactures. See Motion at 10.

Finally, 3M alleges that Defendants “have also engaged in price-gouging,” asserting that

Defendants at one point charged an inflated price of $74.99 for ten masks, “approximately 500%

above 3M’s actual listed price.” Id. at 20.

II. Procedural Background

3M filed its Complaint on March 26, 2021. ECF No. 1. On March 31, 2021, 3M filed

the instant Emergency Motion for Temporary Restraining Order and Preliminary Injunctive

Relief. ECF No. 8.

The Court held a conference on the Motion on April 5, 2021, ECF No. 18, and granted

the Motion in part on April 7, 2021, issuing a TRO with the terms set forth above and reserving

decision on the Motion insofar as it sought a preliminary injunction, see ECF No. 24.

On April 21, 2021, the Court heard oral argument on 3M’s request for a preliminary

injunction. ECF No. 33.

DISCUSSION

I. Preliminary Injunction Analysis

A. Applicable Law

“A party seeking a preliminary injunction must demonstrate: (1) ‘a likelihood of success

on the merits or . . . sufficiently serious questions going to the merits to make them a fair ground

for litigation and a balance of hardships tipping decidedly in the plaintiff’s favor’; (2) a

likelihood of ‘irreparable injury in the absence of an injunction’; (3) that ‘the balance of

hardships tips in the plaintiff’s favor’; and (4) that the ‘public interest would not be disserved’ by

the issuance of an injunction.” Benihana, Inc. v. Benihana of Tokyo, LLC, 784 F.3d 887, 895 (2d

Cir. 2015) (alteration in original) (quoting Salinger v. Colting, 607 F.3d 68, 79-80 (2d Cir.

2010)). The party seeking injunctive relief “need only show a likelihood of success on the merits

of at least one of [its] claims.” Home It, Inc. v. Wen, No. 19-CV-07070, 2020 WL 353098, at *5

(E.D.N.Y. Jan. 21, 2020) (quotation marks omitted).

“Irreparable harm exists in a trademark case when the party seeking the injunction shows

that it will lose control over the reputation of its trademark . . . because loss of control over one’s

reputation is neither calculable nor precisely compensable.” Juicy Couture, Inc. v. Bella Int’l

Ltd., 930 F. Supp. 2d 489, 503 (S.D.N.Y. 2013) (alteration in original) (quoting U.S. Polo Ass’n,

Inc. v. PRL USA Holdings Inc., 800 F. Supp. 2d 515, 540 (S.D.N.Y. 2011)); see also U.S. Polo

Ass’n, Inc. v. PRL USA Holdings, Inc., 511 F. App’x 81, 85 (2d Cir. 2013) (recognizing that

ceding “control over . . . reputation and goodwill” can constitute irreparable harm in the

trademark context); see also New York City Triathlon, LLC v. NYC Triathlon Club, Inc., 704 F.

Supp. 2d 305, 343 (S.D.N.Y. 2010) (“Prospective loss of . . . goodwill alone is sufficient to

support a finding of irreparable harm.” (citing Tom Doherty Assocs., Inc. v. Saban Ent., Inc., 60

F.3d 27, 37-38 (2d Cir. 1995))).

Preliminary injunctions are “prohibitory” or “mandatory.” See N. Am. Soccer League,

LLC v. U.S. Soccer Fed’n, Inc., 883 F.3d 32, 36 (2d Cir. 2018). “Prohibitory injunctions

maintain the status quo pending resolution of the case; mandatory injunctions alter it.” Id. (citing

Tom Doherty Assocs., 60 F.3d at 34). Because mandatory injunctions disrupt the status quo, a

party seeking a mandatory injunction must meet a heightened legal standard by “mak[ing] a

strong showing of irreparable harm” and “demonstrat[ing] a clear or substantial likelihood of

success on the merits.” A.H. ex rel. Hester v. French, 985 F.3d 165, 176 (2d Cir. 2021)

(quotation marks omitted); see also N. Am. Soccer League, 883 F.3d at 37. For purposes of this

analysis, the status quo is “the last actual, peaceable uncontested status which preceded the

pending controversy.” N. Am. Soccer League, 883 F.3d at 37 (quoting Mastrio v. Sebelius, 768

F.3d 116, 120 (2d Cir. 2014) (per curiam)); see also Gen. Mills, Inc. v. Champion Petfoods USA,

Inc., No. 20-CV-00181, 2020 WL 915824, *8 (S.D.N.Y. 2020) (“The Second Circuit has

repeatedly explained that, for purposes of granting a preliminary injunction, the ‘status quo’ is

not simply the status quo in the moment before relief is granted. Rather, it refers to ‘the last

actual, peaceable uncontested status which preceded the pending controversy.’” (quoting N. Am.

Soccer League, 883 F.3d at 37)).

“On a motion for preliminary injunction, where essential facts are in dispute, there must

be a hearing . . . and appropriate findings of fact must be made.” In re Defend H20 v. Town Bd.

of the Town of East Hampton, 147 F. Supp. 3d. 80, 96 (E.D.N.Y. 2015) (alteration in original)

(emphasis added) (quoting Republic of Philippines v. N.Y. Land Co., 852 F.2d 33, 37 (2d Cir.

1988)). “However, ‘[i]t is not a rigid requirement that oral testimony be taken on a motion for a

preliminary injunction.’” Id. (alteration in original) (quoting Republic of Philippines, 852 F.2d at

37). “Significantly, ‘[a]n evidentiary hearing is not required when the relevant facts either are

not in dispute or have been clearly demonstrated at prior stages of the case . . . or when the

disputed facts are amenable to complete resolution on a paper record.’” Id. (quoting Charette v.

Town of Oyster Bay, 159 F.3d 749, 755 (2d Cir. 1998)); see also Dress for Success Worldwide v.

Dress 4 Success, 589 F. Supp. 2d 351, 357 (S.D.N.Y. 2008) (“[T]here is no hard and fast rule in

this circuit that oral testimony must be taken on a motion for a preliminary injunction or that the

court can in no circumstances dispose of the motion on the papers before it.” (quoting Consol.

Gold Fields PLC v. Minorco, S.A., 871 F.2d 252, 256 (2d Cir. 1989))).

B. 3M is Entitled to a Preliminary Injunction

As an initial matter, the parties dispute whether the requested preliminary injunction is

mandatory or prohibitory. See Defs.’ Third Br. at 7-8; 3M’s Third Br. at 2-3. The Court need

not resolve this issue because, as set forth below, 3M has presented sufficient evidence to

warrant a preliminary injunction even under the more rigorous mandatory injunction standard.

See Yang v. Kellner, 458 F. Supp. 3d 199, 209 (S.D.N.Y.) (declining to decide whether requested

injunction was prohibitory or mandatory where more rigorous standard met), aff’d sub nom.

Yang v. Kosinski, 960 F.3d 119 (2d Cir. 2020).

i. 3M Has Shown a Clear and Substantial Likelihood of Success on the

Merits

3M alleges, inter alia, claims of trademark counterfeiting; trademark infringement; and

unfair competition, false endorsement, false association, and false designation of origin5 under

the Lanham Act, 15 U.S.C. §§ 1114(1), 1116(a), and 1125(a)(1)(A). See Compl. ¶¶ 85-124.

Section 32(1) of the Lanham Act prohibits “the use in commerce of ‘any reproduction,

counterfeit, copy, or colorable imitation of a registered mark in connection with the sale, offering

for sale, distribution, or advertising of any goods or services on or in connection with which such

use is likely to cause confusion, or to cause mistake, or to deceive.’” Yurman Studio, Inc. v.

Castaneda, 591 F. Supp. 2d 471, 486 (S.D.N.Y. 2008) (quoting 15 U.S.C. § 1114(1)); see also

Johnson & Johnson Consumer Cos., Inc. v. Aini, 540 F. Supp. 2d 374, 383 (E.D.N.Y. 2008). “A

‘counterfeit’ is a spurious mark which is identical with, or substantially indistinguishable from, a

registered mark.” 15 U.S.C. § 1127. Similarly, Section 43(a) of the Lanham Act imposes civil

liability on “[a]ny person who, on or in connection with any goods . . . uses in commerce any

word, term, name, [or] symbol . . . or any . . . false or misleading description of fact, or false or

misleading representation of fact, which – (A) is likely to cause confusion, or to cause mistake,

or to deceive as to . . . the origin, sponsorship, or approval of his or her goods . . . by another

person.” 15 U.S.C. § 1125(a)(1). “Under both provisions, the registrant need not prove intent in

order to succeed on the issue of liability and procure injunctive relief.” Johnson & Johnson

Consumer Cos., 540 F. Supp. 2d at 384.

5 For the sake of brevity, the Court hereinafter refers to 3M’s claim of unfair competition, false

endorsement, false association, and false designation of origin under 15 U.S.C. § 1125(a)(1)

simply as a claim of “unfair competition.”

Courts in this Circuit analyze trademark infringement claims under a two-step test that

asks “first whether the mark ‘merits protection’ and, second, whether the allegedly infringing use

of the mark (or a similar mark) is ‘likely to cause consumer confusion.’” Victorinox AG v. B&F

Sys., Inc., 709 F. App’x 44, 47 (2d Cir. 2017) (quoting Christian Louboutin S.A. v. Yves Saint

Laurent Am. Holdings, Inc., 696 F.3d 206, 224 (2d Cir. 2012)); see also Opal Fin. Grp., Inc. v.

Opalesque, Ltd., 634 F. App’x 26, 27 (2d Cir. 2015). In addition, a plaintiff must show that the

defendant used its mark in commerce. See 15 U.S.C. §§ 1114(1)(a), 1125(a)(1). To determine

whether there is a likelihood of confusion, courts generally rely on the eight-factor test set forth

in Polaroid Corp. v. Polarad Elecs. Corp., 287 F.2d 492, 495 (2d Cir. 1961).6

“However, ‘where counterfeit marks are involved, it is not necessary to perform the step-

by-step examination of each Polaroid factor because counterfeit marks are inherently

confusing.’” Chanel, Inc. v. RealReal, Inc., 449 F. Supp. 3d 422, 437 (S.D.N.Y. 2020) (quoting

Spin Master Ltd. v. Alan Yuan’s Store, 325 F. Supp. 3d 413, 421 (S.D.N.Y. 2018)); see also

Lorillard Tobacco Co. v. Jamelis Grocery, Inc., 378 F. Supp. 2d 448, 454-55 (S.D.N.Y. 2005).

In such cases, “[t]he court need only determine the more fundamental question of whether there

are items to be confused in the first place – that is, whether the items at issue are, in fact,

counterfeit and whether defendants sold those items . . . or offered those items for sale.” Fendi

Adele S.R.L. v. Filene’s Basement, Inc., 696 F. Supp. 2d 368, 383 (S.D.N.Y. 2010) (alterations

accepted) (quotation marks omitted) (citation omitted); see also Chanel, 449 F. Supp. 3d at 437;

6 The eight “Polaroid factors” are: “(1) strength of the trademark; (2) similarity of the marks; (3)

proximity of the products and their competitiveness with one another; (4) evidence that the

senior user may ‘bridge the gap’ by developing a product for sale in the market of the alleged

infringer’s product; (5) evidence of actual consumer confusion; (6) evidence that the imitative

mark was adopted in bad faith; (7) respective quality of the products; and (8) sophistication of

consumers in the relevant market.” Starbucks Corp. v. Wolfe’s Borough Coffee, Inc., 588 F.3d

97, 115 (2d Cir. 2009).

Spin Master, 325 F. Supp. 3d at 422 (“The sale of counterfeit goods is sufficient use to establish

liability.”).

Here, the record contains undisputed evidence that 3M has obtained numerous federal

trademark registrations in connection with the 3M Marks. See First McCool Decl. ¶¶ 8-14.

Specifically, 3M has obtained registrations in connection with its standard-character mark, see

id. ¶¶ 8-10; ECF No. 8-3 (“‘329 Registration”); in connection with the 3M logo as it is used,

inter alia, for “a full line of surgical masks, face shields, and respiratory masks for medical

purposes,” see First McCool Decl. ¶¶ 8, 11-12; ECF No. 8-5 (“‘036 Registration”); and in

connection with the 3M design mark, see First McCool Decl. ¶¶ 8, 13-14; ECF No. 8-7 (“‘534

Registration”). Each of these registrations constitutes “prima facie evidence of the validity of the

registered mark and of the registration of the mark, of the registrant’s ownership of the mark, and

of the registrant’s exclusive right to use the registered mark in commerce.” 15 U.S.C. § 1115(a);

see also Christian Louboutin, 696 F.3d at 224-25. Indeed, another decision in this Circuit found

in a different action that 3M was likely to establish the validity and protection of two of the 3M

Marks at issue in this case – those subject to the ‘329 and ‘534 Registrations. See 3M Co. v.

Performance Supply, LLC, 458 F. Supp. 3d 181, 193 (S.D.N.Y. 2020) (citing 15 U.S.C.

§ 1115(a), (b)).

In light of the record evidence, the Court finds that 3M has shown a clear and substantial

likelihood of establishing the validity and protection of the 3M Marks. Thus, 3M has shown a

clear and substantial likelihood of establishing the first element of its trademark counterfeiting,

trademark infringement, and unfair competition claims.

Turning to the second element, the Court finds that 3M has similarly demonstrated a clear

and substantial likelihood of establishing that Defendants have used the 3M Marks in a way

likely to cause consumer confusion. As noted above, where counterfeit goods are involved, a

plaintiff seeking to demonstrate a likelihood of confusion need only demonstrate that the items at

issue are, in fact, counterfeit and that the defendant sold those items or offered them for sale. See

Fendi Adele S.R.L., 696 F. Supp. 2d at 383. Thus, whether 3M has demonstrated a likelihood of

success on the merits depends on whether the record establishes that Defendants have sold,

marketed, or offered for sale counterfeit 3M-branded products. See Pearson Educ., Inc. v.

Labos, No. 19-CV-00487, 2019 WL 1949820, at *5 (S.D.N.Y. Apr. 23, 2019) (finding that

plaintiffs had shown a likelihood of success on the merits of a trademark infringement claim

under 15 U.S.C. § 1114(a) where plaintiffs had submitted evidence that defendant sold books

bearing counterfeit versions of plaintiffs’ marks).

3M has submitted evidence showing that Defendants, at least until recently, were in

possession of a significant number of counterfeit 3M-branded masks and that Defendants have,

on numerous occasions, sold counterfeit 3M-branded masks to various customers. Specifically,

3M has submitted declarations in which Dr. McCool, one of 3M’s “Research Specialists,” states

under penalty of perjury that she “personally conducted a review and analysis of masks located

at Defendants’ warehouse . . . [and], as an agent and employee of 3M, determined that masks

located at Defendants’ warehouse were counterfeit.” Second McCool Decl. ¶¶ 2, 12; see also

First McCool Decl. ¶¶ 2, 26 (explaining that, “[b]ased on 3M’s visual inspection of the products

at Defendants’ warehouse, 3M determined that Defendants were in possession of . . . counterfeit

products” and listing the lot codes and model numbers of those products deemed counterfeit).

Defendants’ evidentiary submissions do not contradict this evidence – and, arguably,

bolster it. In a sworn declaration, Aaron Arroyo, one of Defendants’ warehouse managers, states

that, after “some of the 3M products ordered by Defendants were flagged at the airport as being

counterfeit goods,” federal agents, accompanied by two 3M representatives present via

videoconference, conducted an inspection of the Defendants’ warehouse in Monroe Township,

New Jersey, during which “[t]he representatives from 3M . . . determined that Defendants were

in possession of some illegitimate masks.” First Arroyo Decl. ¶¶ 2-3, 5, 8. Following this

inspection, Defendants held these products at their New Jersey warehouse as they “await[ed]

further instructions [from federal agents] as to how to properly destroy the counterfeit products.”

Id. ¶ 9 (emphasis added).

Defendants’ later evidentiary submissions shed light on the number of masks deemed

counterfeit. Specifically, Mr. Arroyo, in another of his declarations, states that, as a result of

3M’s determination that Defendants were in possession of “illegitimate” products, federal agents

marked certain pallets with red tape. Second Arroyo Decl. ¶¶ 3-4. Approximately 84,000 masks

were marked as illegitimate, see id. ¶ 4, a number that the parties confirmed at argument, see

Transcript of April 21, 2021 Oral Argument (“Tr.”) at 22-23, 34, ECF No. 38. It seems that at

least some – and possibly all – of these masks have since been seized by CBP. See Third Arroyo

Decl. ¶¶ 3-4 (explaining that CBP conducted a seizure on April 19, 2021, in which CBP seized

from Defendants’ New Jersey warehouse 491 boxes that “had previously [been] flagged as

suspicious on March 24, 2021”); see also Tr. at 34 (counsel for Defendants describing “the

masks that are currently being sought or have been seized” as “491 boxes containing 84,446

masks”).

The record evidence concerning the March 24, 2021 inspection indicates that Defendants

were, at least until recently, in possession of approximately 84,000 counterfeit 3M-branded

masks.

Additionally, 3M has offered evidence beyond that concerning the March 24, 2021

inspection that Defendants have marketed, offered for sale, or sold counterfeit 3M-branded

masks. Specifically, 3M has submitted evidence that it has received “over 200 reports from

CovCare purchasers who were told that they were purchasing from CovCare genuine 3M-brand

N95 respirators, only to be told by 3M in many cases that upon inspection and verification, the

masks they purchased were counterfeit.” Jacobson Decl. ¶ 7 (emphasis added). 3M has

bolstered this assertion with documentary evidence – namely, four sets of images submitted to

3M’s Fraud Hotline in connection with four separate reports. See ECF Nos. 8-14, 8-15, 8-16,

8-17. These reports were, according to the declaration of Dr. McCool, each “submitted to 3M’s

COVID-19 Fraud Hotline by a purchaser of CovCare masks purporting to be 3M N95

respirators.” First McCool Decl. ¶¶ 20-23. With respect to each of these four reports, 3M

personnel, “[b]ased on identified concerns and upon inspection of photographs of the products

and packaging included in the hotline report[s], . . . determined that the products Defendants sold

to th[ese] purchaser[s] were counterfeit masks purporting to be 3M N95 respirators.” Id.

3M has submitted similar evidence with respect to the Ottawa Hospital sale. Dr. McCool

states that Ottawa Hospital, through a broker, purchased CovCare masks purporting to be 3M

N95 masks. See id. ¶ 24. She goes on to assert that 3M acquired physical samples of the masks

sold to Ottawa Hospital and, after inspecting those samples, confirmed that the sample masks

were counterfeit. Id. ¶ 25.

This evidence concerning the masks examined as a result of the Fraud Hotline reports and

those examined in connection with the Ottawa Sale indicates that Defendants have sold

counterfeit versions of purported 3M-branded masks.

None of the evidence concerning any of the masks that 3M has deemed counterfeit is, for

purposes of the instant analysis, disputed. That is, the record contains no contrary evidence

indicating that the masks that 3M deemed counterfeit were genuine. Defendants have not, for

example, submitted sworn testimony or documentary evidence that the approximately 84,000

masks flagged as counterfeit on March 24, 2021 were legitimate 3M masks. Nor have they

submitted evidence that the other masks previously examined by 3M – those associated with the

cited Fraud Hotline reports and the Ottawa Hospital sale – were legitimate 3M masks.7

The only evidence that Defendants have offered that might be said to go to these masks’

legitimacy comes in Mr. Kagan’s second declaration. Therein, Mr. Kagan explains that CovCare

routinely requests that its sources engage TÜV Rheinland (“TÜV”) to test certain products

“presented” to CovCare. Second Kagan Decl. ¶ 11. Mr. Kagan goes on to say that TÜV, on

several occasions, conducted testing on control samples of 3M masks and their packaging

(presumably on behalf of Defendants’ suppliers) before issuing test reports concluding that the

masks “conformed to the required standards.” Id. ¶¶ 12-17. The problem with this evidence,

however, is that it has no bearing on whether the masks that 3M deemed counterfeit were

actually legitimate 3M masks; all it shows is that certain masks “presented” to CovCare by its

7 As discussed further below, Defendants have submitted evidence indicating that they are in

possession of “467 boxes of various 3M products that have not been flagged as suspicious by

Customs and Border Protection.” See Third Arroyo Decl. ¶ 5. Defendants have also submitted

evidence that they are in possession of 2,400 masks that were either deemed “legitimate” by

3M, see First Arroyo Decl. ¶ 7, or at least “not marked with red tape,” as a result of the March

24, 2021 inspection, see Second Arroyo Decl. ¶ 5; see also Tr. at 34 (counsel for Defendants

describing these 2,400 masks as “deemed by CBP to be legitimate or to not be counterfeit

however one wants to couch those words”). The submissions regarding these products do not

undercut the evidence relating to the masks that were deemed counterfeit.

sources conformed to some unspecified standards.8 Accordingly, the evidence regarding TÜV

does not serve to create a dispute of fact as to the legitimacy of the masks deemed counterfeit.

Beyond the assertions regarding TÜV, Defendants have merely – in their briefing and

without supporting evidence – questioned the strength of 3M’s evidence. See Defs.’ Third Br. at

9 (“Plaintiff’s Evidence of Counterfeit is Prima Facie Insufficient”). Specifically, Defendants

take issue with the methods by which 3M determines whether the masks that it examines are

counterfeit, arguing that 3M’s practice of testing masks “wholly through visual inspection by

remote means” is not sufficiently conclusive, in part because 3M has given no “comparators,

standards, codes, or the like, which [could be used] to determine if there is any scientific method

being applied other than . . . subjective, self-serving [conclusions].” Id. at 10-11. Defendants

argue that Dr. McCool’s March 24, 2021 inspection, for example, cannot support a preliminary

injunction because 3M gives no “criteria for how [Dr. McCool’s] determination was made, only

that it was made.” Id. at 11-12. Relying on these alleged deficiencies in 3M’s inspection

process, Defendants assert, again without supporting evidence, that they “believe the masks to be

legitimate 3M Masks from 3M Singapore.” Id. at 12.

These arguments do not create a dispute of fact as to whether the examined masks were

counterfeit. See Walpert v. Jaffrey, 127 F. Supp. 3d 105, 131 (S.D.N.Y. 2015) (noting that

“[a]rguments in a brief do not constitute evidence”); see also Giannullo v. City of New York, 322

F.3d 139, 142 (2d Cir. 2003) (noting that a memorandum of law “is not evidence at all”). Here,

the Court considers Fendi Adele S.R.L. to be particularly instructive. 696 F. Supp. 2d at 368. In

that case, Fendi, a fashion designer, brought claims under the Lanham Act against Filene’s, the

8 Defendants acknowledged the limitations of this evidence at argument. See Tr. at 35 (counsel

for Defendants acknowledging that TÜV did not test whether the examined masks “were actual

3M mask[s]” but only whether the masks “met certain industry standards”).

corporate owner of a chain of retail stores, for, among other things, selling counterfeit Fendi

products. See id. at 373. The court ultimately granted summary judgment to Fendi and

permanently enjoined Filene’s from selling any item bearing the word “Fendi” or any of Fendi’s

trademarks based, in part, on a Fendi employee’s examination of 15 Fendi-branded products

obtained from Filene’s (the “Examined Items”). Id. at 376, 391-92. In reaching that decision,

the Fendi Adele S.R.L. court concluded that “Filene’s ha[d] not rebutted Plaintiffs’ evidence that

the Examined Items were counterfeit Fendi-branded goods.” Id. at 383. And most relevant here,

the court squarely rejected Filene’s assertions that some of the Examined Items were “obtained

on the ‘grey market’ – i.e., from ‘Fendi’s manufacturers,’ or from ‘the warehouse attached to

Fendi’s outlet store in Italy’ or from ‘authorized Fendi retailers.’” Id. at 384 (citations omitted)

(quoting Filene’s’ briefing). The court concluded that those arguments amounted to “mere

speculation or conjecture” that could not serve to create an issue of fact concerning the

authenticity of the Examined Items. Id. (quoting Fletcher v. Atex, Inc., 68 F.3d 1451, 1456 (2d

Cir. 1995)); see also Martal Cosms., Ltd. v. Int’l Beauty Exch. Inc., No. 01-CV-07595, 2007 WL

895697, *19-20 (E.D.N.Y. Mar. 22, 2007) (adopting report and recommendation rejecting

defendants’ argument that they “may” have obtained allegedly counterfeit products from

plaintiff’s manufacturers).

Here, Defendants have offered nothing more than the same sort of mere speculation and

conjecture that the court rejected in Fendi Adele S.R.L. Neither their objections to 3M’s

inspection methods nor their (unsubstantiated) theory that the masks at issue may have come

from 3M Singapore alters the fact that the record contains no evidence that the flagged masks

were actually genuine. Meanwhile, 3M has produced evidence – albeit evidence that Defendants

consider weak – that Defendants were in possession of a significant number of counterfeit 3M-

branded masks and, at times, sold counterfeit 3M-branded masks to various customers.9

Defendants have failed to rebut that evidence. 3M has demonstrated a clear and substantial

likelihood of establishing that Defendants have used the 3M Marks in a way likely to cause

consumer confusion.10

The Court finds that 3M has demonstrated a clear and substantial likelihood that it will

prevail on its claims of trademark counterfeiting, trademark infringement, and unfair

competition.

3M has met the first requirement for obtaining injunctive relief.

ii. 3M Has Made a Strong Showing of Irreparable Harm

The United States Court of Appeals for the Second Circuit has not yet decided the issue

of whether, after the Supreme Court’s decision in eBay Inc. v. MercExchange, LLC, 547 U.S.

388 (2006) – in which the Court held that irreparable harm could not be presumed in the patent

9 This defeats Defendants’ arguments concerning the first sale doctrine, which provides that,

“[a]s a general rule, trademark law does not reach the sale of genuine goods bearing a true

mark even though the sale is not authorized by the mark owner,” Ergowerx Int’l, LLC v.

Maxell Corp. of Am., 18 F. Supp. 3d 430, 450 (S.D.N.Y. 2014) (emphasis added) (quoting

Polymer Tech. Corp. v. Mimran, 975 F.2d 58, 61-62 (2d Cir. 1992)). Defendants’ arguments

concerning this doctrine are all premised on the assumption that their masks are, in fact,

genuine 3M masks. See, e.g., Defs.’ Third Br. at 13-14 (arguing that Defendants’ “sale of

genuine 3M products without more . . . does not violate [the Lanham Act]” (emphasis added)).

Because nothing in the record indicates that the flagged masks were genuine, Defendants’

arguments regarding the first sale doctrine are unpersuasive. See Abbott Lab’ys v. Adelphia

Supply USA, No. 15-CV-05826, 2015 WL 10906060, at *5 (E.D.N.Y. Nov. 6, 2015), aff’d sub

nom. Abbott Lab’ys v. H&H Wholesale Servs., Inc., 670 F. App’x 6 (2d Cir. 2016).

10 As noted above, because this case involves counterfeit goods, the Court need not conduct a full

analysis of the Polaroid factors to determine whether 3M has demonstrated a likelihood of

confusion. See Spin Master Ltd., 325 F. Supp. 3d at 421-22. However, even under a Polaroid

analysis, 3M would prevail in establishing consumer confusion based on the “national and

international recognition” of the 3M Marks, in addition to Defendants’ “deliberate use of

identical marks to sell products that appear [to have been] purposefully designed to be

indistinguishable from” 3M’s products. See id. at 422; see also Performance Supply, 458 F.

Supp. 3d at 193 (conducting full Polaroid analysis in an analogous case involving counterfeit

3M-branded masks and concluding that the Polaroid factors favored 3M).

context – a presumption of irreparable harm can arise from the fact of trademark infringement.

See U.S. Polo Ass’n, Inc., 511 F. App’x 81, 85 (2d Cir. 2013) (“We need not here decide whether

a presumption of irreparable harm from trademark infringement can apply in light of eBay.”); see

also Algood Casters Ltd. v. Caster Concepts, Inc., No. 20-CV-04623, 2020 WL 5274172, at *2

(S.D.N.Y. Sept. 4, 2020).11 Some courts in this Circuit, however, have applied the eBay standard

to trademark cases. See, e.g., Juicy Couture, Inc., 930 F. Supp. 2d at 503 (explaining that, under

eBay, “irreparable harm may not be presumed upon a showing of likelihood of success on the

merits” but noting that “a party’s demonstration of a likelihood of success on an infringement

claim often foretells a finding of irreparable harm”).12

The Court here need not decide whether irreparable harm may be presumed in the

trademark context because, whether or not such a presumption applies here, 3M has presented

sufficient evidence to support an independent finding of irreparable harm. See New York City

Triathlon, 704 F. Supp. 2d at 343 (proceeding in the same fashion).

Accepting that the masks flagged as counterfeit were indeed counterfeit – which is, for

the reasons set forth above, the only conclusion that the current factual record permits – 3M has

made a “strong showing of irreparable harm.” See A.H. ex rel., 985 F.3d at 176. 3M has

11 In the copyright infringement context, the Second Circuit, post-eBay, has required a moving

party to offer proof of irreparable harm and not simply rest on the fact of infringement. See

Salinger, 607 F.3d at 77, 79-80.

12 Prior to the eBay decision, the Second Circuit had held that irreparable injury was presumed

once a trademark owner demonstrated a likelihood of success on the merits of its trademark

claim. See, e.g., Weight Watchers Int’l, Inc. v. Luigino’s, Inc., 423 F.3d 137, 144 (2d Cir.

2005) (“A plaintiff who establishes that an infringer’s use of its trademark creates a likelihood

of consumer confusion generally is entitled to a presumption of irreparable injury.”); see also

Algood Casters, 2020 WL 5274172, at *2 (describing the law in the Second Circuit before

eBay).

established that the 3M Marks are recognized and well-known in households throughout the

United States, and that 3M has spent hundreds of millions of dollars in advertising, marketing,

and promoting its goods and services under the 3M Marks. See First McCool Decl. ¶ 5.

Defendants’ conduct – the marketing, offering for sale, and sale of counterfeit 3M-branded

masks – imperils 3M’s well-established brand and reputation in at least two respects.

First, 3M cannot control whether the counterfeit products that Defendants have sold or

offered for sale adhere to 3M’s rigorous quality-control standards. See id. ¶¶ 7, 28; see also

Performance Supply, 458 F. Supp. 3d at 192 (finding the same variety of irreparable harm with

respect to other counterfeit 3M-branded products). This loss of control over the quality of

products bearing the 3M Marks constitutes textbook irreparable harm. See Mister Softee, Inc. v.

Tsirkos, No. 14-CV-01975, 2015 WL 7458619, *5 (S.D.N.Y. Nov. 23, 2015) (finding irreparable

harm because “Plaintiffs ha[d] no actual control over the quality of Defendant’s products or

services”).

Second – and relatedly – Defendants’ conduct threatens 3M with a loss of goodwill and

control over its reputation. Over the past century, 3M’s products have become the subject of

“widespread, unsolicited media coverage and critical acclaim,” and, since the start of the

COVID-19 pandemic, the public has become familiar with 3M as a leading manufacturer of N95

masks. First McCool Decl. ¶¶ 6-7. 3M stands to lose that goodwill should the public purchase

3M-branded products from Defendants that, because they are not in fact real 3M products, “do

not come with 3M’s efficacy guarantees,” see Jacobson Decl. ¶ 6, or – worse – are, for reasons

beyond 3M’s control, less effective than genuine 3M products. 3M’s prospective loss of

goodwill and control over its reputation constitutes a second form of irreparable harm. See New

York City Triathlon, 704 F. Supp. 2d at 325 (“It is well-settled that a trademark owner’s loss of

goodwill and ability to control its reputation constitutes irreparable harm sufficient to satisfy the

preliminary injunction standard.”); see also Performance Supply, 458 F. Supp. 3d at 192 (finding

that, in the absence of an injunction, 3M would suffer irreparable harm if “its carefully curated

brand and reputation [were] left to the devices of Defendant’s scheme to profit from a

pandemic”).

Defendants argue that these harms are insufficient to warrant injunctive relief because

Defendants recalled certain products deemed potentially counterfeit, “sequestered” the masks

that were flagged as counterfeit, agreed not to sell those masks, agreed to have those masks

tested, and have not since sold any of the flagged masks. See Defs.’ Third Br. at 15-16; Defs.’

Second Br. at 4-5.

These arguments miss the mark because nothing in the record indicates that Defendants,

absent an injunction, will not sell counterfeit versions of 3M’s products in the future. See Sream,

Inc. v. Raj, No. 18-CV-02534, 2019 WL 3716540, at *5 (E.D. Cal. Aug. 7, 2019) (finding that

plaintiff “ha[d] shown irreparable harm because there [wa]s no reason to conclude that defendant

w[ould] not infringe plaintiff’s trademarks in the future given his established sale of a product

bearing plaintiffs’ trademark”), report and recommendation adopted, 2019 WL 5091138 (E.D.

Cal. Sept. 4, 2019); Coach, Inc. v. Allen, No. 11-CV-03590, 2012 WL 2952890, at *11

(S.D.N.Y. July 19, 2012) (explaining that injunctive relief may be proper “even if there is no

evidence that a Defendant is currently engaging in illegal sales”); see also Museum of Mod. Art

v. MOMACHA IP LLC, 339 F. Supp. 3d 361, 372 (S.D.N.Y. 2018) (explaining that the voluntary

cessation of misconduct can obviate the need for injunctive relief where: “(1) there is no

reasonable expectation that the alleged violation will recur and (2) interim relief or events have

completely and irrevocably eradicated the effects of the alleged violation,” but that a promise by

a party to discontinue past or ongoing misconduct is not sufficient (emphasis added) (quoting

Granite State Outdoor Advert., Inc. v. Town of Orange, 303 F.3d 450, 451 (2d Cir. 2002))).

A promise not to sell counterfeit versions of 3M’s products in the future, see Defs.’ Third

Br. at 15 (referencing Defendants’ agreement not to sell the masks flagged counterfeit), does not

mitigate this risk, particularly where Defendants continue to dispute that any of the masks it has

sold or offered for sale were, in fact, counterfeit. See Museum of Mod. Art, 339 F. Supp. 3d at

372 (“[A] bare promise by a party in the course of litigation to discontinue past or ongoing

misconduct does not justify denial of injunctive relief, since such unilateral action hardly suffices

to ensure that the party will not, in the future, reverse course and resume its challenged

activities.” (quotation marks omitted)); Cartier, Inc. v. Four Star Jewelry Creations, Inc., No.

01-CV-11295, 2003 WL 21056809, at *6 (S.D.N.Y. May 8, 2003) (“A defendant[’s] promise to

stop selling the offending products, while perhaps a nice gesture, does not prevent a federal

district court from ordering it to act pursuant to a party’s request for injunctive relief.”).

The Court finds that 3M has made a strong showing of irreparable harm absent injunctive

relief.

3M has satisfied the second requirement for a preliminary injunction.

iii. The Balance of the Equities Supports a Preliminary Injunction

The balance of the equities tips in 3M’s favor. As explained above in the Court’s

irreparable harm analysis, 3M would suffer substantial hardship in the form of loss of control

over the quality of products bearing the 3M Marks and loss of goodwill and control over its

reputation in the absence of injunctive relief. Moreover, Defendants’ conduct has already

required 3M to investigate over 200 reports from CovCare purchasers. See Jacobson Decl. ¶ 7.

And, 3M receives reports of potentially counterfeit masks purchased from CovCare “on a near-

daily basis.” Id. ¶ 4.

Defendants do not dispute that 3M would suffer hardship should Defendants go on to sell

counterfeit 3M-branded mask products – and for good reason, as such an argument would lack

merit. See WpIX, Inc. v. lvl, Inc., 691 F.3d 275, 287 (2d Cir. 2012) (“[I]t is axiomatic that an

infringer . . . cannot complain about the loss of ability to offer its infringing products.” (quotation

marks omitted)). Instead, Defendants argue that, if the Court grants 3M’s request to enjoin

Defendants from selling any 3M-branded mask products (including genuine 3M products, that

is), Defendants would lose out on “legitimate revenue” and suffer harm to their business. See

Defs.’ Third Br. at 17.

Undoubtedly, if Defendants were in possession of legitimate 3M mask products, an order

barring them from selling those products would subject them to some hardship. However, such

hardship would not outweigh the grave harm posed to 3M’s reputation and brand in the absence

of an injunction. Moreover, Defendants have adduced no evidence demonstrating that they are,

in fact, in possession of a significant number of genuine 3M mask products. They have, at most,

shown that they are in possession of “467 boxes of various 3M products that have not been

flagged as suspicious by Customs and Border Protection,” Third Arroyo Decl. ¶ 5 (emphasis

added), and that they are in possession of 2,400 masks that were either deemed “legitimate” by

3M, see First Arroyo Decl. ¶ 7, or at least “not marked with red tape,” as a result of the March

24, 2021 inspection, see Second Arroyo Decl. ¶ 5. As to the 467 boxes, Defendants have merely

shown that the products contained in those boxes were not flagged as suspicious, not that those

products are genuine 3M products or even that they are mask products. As for the 2,400 masks

not marked with red tape, even if Defendants are in possession of 2,400 legitimate 3M masks –

which 3M contests, see Tr. at 22-23 (counsel for 3M acknowledging 3M’s position that it could

not make a “conclusive determination” with respect to the 2,400 masks) – that figure pales in

comparison to the approximately 84,000 masks recently in Defendants’ possession that 3M,

according to sworn testimony, deemed counterfeit. Thus, the record does not permit a finding

that Defendants face significant hardship in the face of an injunction as compared to that posed

to 3M absent an injunction.

The Court finds that the balance of equities tips in 3M’s favor and 3M has thus satisfied

the third requirement for a preliminary injunction.

iv. A Preliminary Injunction Would Serve the Public Interest

“The consuming public has a protectable interest in being free from confusion, deception

and mistake,” U.S. Polo Ass’n, 800 F. Supp. 2d at 541, and “the public has an interest in . . .

being assured that the mark it associates with a product is not attached to goods of unknown

origin and quality,” New York City Triathlon, 704 F. Supp. 2d at 344; see also John Wiley &

Sons, Inc. v. Book Dog Books, LLC, 327 F. Supp. 3d 606, 637 (S.D.N.Y. 2018) (explaining that

an injunction “[does] not disserve the public interest” where it “would prevent the proliferation

of counterfeit works”).

Here, an injunction would serve the public interest because, in the absence of injunctive

relief, the public is at risk of being confused and/or deceived about the source and quality of 3M-

branded products sold by Defendants. See Performance Supply, 458 F. Supp. 3d at 198

(“[U]nless this Court enjoins Defendant’s unlawful conduct, the public will continue suffering

harm in the form of confusion and deception about the source and quality of the purported 3M-

brand N95 respirators that Defendant is offering to sell for exorbitantly high prices.”). That risk

is particularly acute in the context of the COVID-19 pandemic, as consumers make frequent and

sometimes rapid decisions in trying to protect themselves and others against a deadly virus. See

id.

Indeed, the record reflects that a hospital purchased some of the counterfeit masks sold

by Defendants. As stated in another decision concerning counterfeit 3M masks, “the protection

of healthcare professionals who are putting their lives on the line in the fight against COVID 19

is in the public interest. Those brave and selfless professionals deserve trustworthy supply lines

of authentic PPE, including N95 respirators, that are free of misrepresentations [and] false

designations of origin . . . .” Id.

This Court agrees and finds that an injunction would serve the public interest here, too.

3M has satisfied the fourth requirement for a preliminary injunction.

II. Scope of Relief

3M seeks a preliminary injunction that, like the TRO in this case, bars Defendants from:

• Selling or offering for sale any 3M-brand N95 respirator products;

• Using the 3M Marks in connection with the manufacture, distribution,

advertising, promoting, offering for sale, and/or sale of any purported 3M-brand

N95 respirator products;

• Falsely representing themselves as being a distributor, authorized retailer, and/or

licensee of 3M and/or otherwise falsely representing to have an association or

affiliation with, sponsorship by, and/or connection to 3M and its products; and

• Offering to sell any of 3M’s products at a price and/or in a manner that would

constitute a violation of New York General Business Law § 369-R.

3M’s Second Br. at 17, 20-21.

The Court concludes that 3M is entitled to some, but not all, of the requested relief.

First, 3M is entitled to an injunction barring Defendants from selling or offering for sale

any 3M-brand N95 respirator products and from using the 3M Marks in connection with the

manufacture, distribution, advertising, promoting, offering for sale, and/or sale of any purported

3M-brand N95 respirator products. Defendants strongly object to these provisions, arguing them

to be impermissibly broad because they would bar Defendants from selling not just counterfeit

3M-branded products but also lawfully obtained, genuine 3M products. See Defs.’ Fourth Br. at

2-3 (arguing that there is “no reason why CovCare should be forced to hold and/or destroy

product that has either been passed by CBP or that which is not deemed to be suspicious, or even

that which has been purchased from an authorized 3M reseller”).

Defendants are correct that the requested injunction would bar them from selling even

genuine 3M products. However, as the Second Circuit has remarked in the trademark context, a

district court “must be permitted to fashion an ‘injunction which will keep a proven infringer

safely away from the perimeter of future infringement.’” See Versace v. Versace, 213 F. App’x

34, 36 (2d Cir. 2007) (quoting Patsy’s Brand, Inc. v. I.O.B. Realty, Inc., 317 F.3d 209, 220 (2d

Cir. 2003), abrogated on other grounds by 4 Pillar Dynasty LLC v. N.Y. & Co., 933 F.3d 202 (2d

Cir. 2019)). Such an injunction may permissibly prohibit otherwise lawful conduct. See

Johnson & Johnson v. Advanced Inventory Mgmt., Inc., No. 20-CV-03471, 2020 WL 6119516,

at *13 (N.D. Ill. Oct. 16, 2020) (recognizing that a “district court may even enjoin certain

otherwise lawful conduct when the defendant’s conduct has demonstrated that prohibiting only

unlawful conduct would not effectively protect the plaintiff’s rights against future

encroachment” (quotation marks omitted)); see also Versace, 213 F. App’x at 36 (“[A] party

who has once infringed a trademark may be required to suffer a position less advantageous than

that of an innocent party.” (quoting Oral-B Labs., Inc. v. Mi-Lor Corp., 810 F.2d 20, 24 (2d Cir.

1987), abrogated on other grounds by Paddington Corp. v. Attiki Imps. & Distribs., Inc., 996

F.2d 577 (2d Cir. 1993))). In keeping with these principles, courts have repeatedly, in analogous

counterfeiting cases, rejected the argument that an injunction sweeps too broadly because it bars

the enjoined party from selling genuine versions of the goods previously counterfeited. See, e.g.,

Fendi Adele S.R.L., 696 F. Supp. 2d at 392 (“Filene’s argument that the injunctive relief sought

by Plaintiffs is not narrowly tailored is unpersuasive . . . .”); Advanced Inventory Mgmt., 2020

WL 6119516, at *13 (rejecting defendants’ argument that an injunction “would impose a

massive hardship on their business” by prohibiting them “from selling genuine . . . medical

devices during the pendency of [a] lawsuit,” in part because it appeared that defendants

“knowingly caused thousands of counterfeit and contaminated devices to enter the market”).

3M has submitted uncontradicted evidence that Defendants, on at least five occasions,

sold counterfeit masks to a variety of customers. 3M has submitted additional uncontradicted

evidence that Defendants were, at one time, in possession of tens of thousands of counterfeit

masks at their New Jersey warehouse. Defendants’ conduct indicates that an injunction

permitting them to sell any 3M-branded mask products would not sufficiently protect 3M against

future encroachments on its rights. Indeed, it seems that Defendants’ core motivation for

fighting the requested injunction is their desire to sell additional 3M-branded products, some of

which may turn out to be counterfeit themselves. See Third Arroyo Decl. ¶ 5 (referencing “467

boxes of various 3M products that have not been flagged as suspicious by Customs and Border

Protection”); Second Arroyo Decl. ¶ 5 (stating that 2,400 masks were “not marked with red tape”

as a result of the March 24, 2021 inspection); Defs.’ Third Br. at 4-5 (acknowledging 3M’s

position that 3M was unable to determine conclusively whether certain masks that remain in

Defendants’ possession were counterfeit).

Accordingly, 3M is entitled to an injunction barring Defendants from selling or offering

for sale any 3M-brand N95 respirator products and from using the 3M Marks in connection with

the manufacture, distribution, advertising, promoting, offering for sale, and/or sale of any

purported 3M-brand N95 respirator products.13

Second, 3M is entitled to an injunction barring Defendants from falsely representing

themselves as being a distributor, authorized retailer, and/or licensee of 3M and/or otherwise

falsely representing to have an association or affiliation with, sponsorship by, and/or connection

to 3M and its products. Just as the record reflects that Defendants have been in possession of,

marketed, and sold counterfeit masks, the record also reflects that Defendants have attempted to

portray themselves as authorized 3M distributors. Specifically, 3M has adduced documentary

evidence reflecting that an apparent CovCare employee messaged an account supposedly

belonging to the broker involved in the Ottawa Hospital sale, assuring the broker that CovCare is

a “trusted and reliable Distributor.” See ECF No. 8-18 at 1; First McCool Decl. ¶ 24. Although

Defendants characterize 3M’s assertions regarding this evidence as “quite the allegation on

information and belief,” see Defs.’ Third Br. at 11, they offer no evidence (whether sworn

declarations or documentary evidence) to contradict 3M’s submissions on this point. Regardless,

3M has also submitted evidence that CovCare supplied a customer with a fake “3M

acknowledgement agreement” stating that CovCare qualified as “an authorized agent to procure

product for the company.” See First McCool Decl. ¶ 19; ECF No. 8-13 at 5. Defendants do not

address this evidence even in briefing, let alone with contradictory evidence. The record

indicates that an injunction is needed to keep Defendants from representing themselves as being

13 Defendants argue that the requested injunctive relief runs afoul of the first sale doctrine

because it would bar them from selling goods that might otherwise fall under the doctrine’s

protection. See Defs.’ Third Br. at 8-9. But, even if the Court were to accept that Defendants

are in possession of 3M products to which the first sale doctrine might apply – which is not a

given fact based on the current record – the Court nevertheless has the power “to fashion an

‘injunction which will keep a proven infringer safely away from the perimeter of future

infringement.’” See Versace, 213 F. App’x at 36 (quoting Patsy’s Brand, Inc., 317 F.3d at

220).

a distributor, authorized retailer, and/or licensee of 3M and/or otherwise falsely representing to

have an association or affiliation with, sponsorship by, and/or connection to 3M and its products.

Third, the record as it currently stands does not support an injunction barring Defendants

from offering to sell any of 3M’s products at a price and/or in a manner that would constitute a

violation of New York General Business Law § 369-R. 3M has submitted only limited evidence

concerning the prices that Defendants charged for certain 3M-branded masks, see ECF No. 8-16

at 1 (image of CovCare receipt showing that a pack of five “3M 1860 N95 Facemasks” was

purchased for $39.99), and made (unsworn) assertions in its briefing as to standard prices

charged by 3M, see Motion at 7, 20 (“Defendants . . . have offered to sell thousands of 3M-brand

N95 respirators at grossly inflated prices – for example, $74.99 for 10 respirators – which is

approximately 500% above 3M’s actual list price.”). 3M has not carried its burden for obtaining

preliminary injunctive relief on this issue.

Finally, for the reasons set forth in the TRO, 3M shall not be required to post a bond. See

ECF No. 24 at 5.

III. Defendants’ Requests Regarding 21-MJ-00465 (E.D.N.Y.)

In their most recent brief, Defendants request that the Court unseal case 21-MJ-00465

(E.D.N.Y.), which, according to Defendants’ submissions, is the case in which the goods

previously in Defendants’ possession were seized. See Defs.’ Fourth Br. at 6; Second Garson

Decl. ¶ 7. Defendants also request that this Court “order that such goods be preserved until

further order of this Court.” See Defs.’ Fourth Br. at 7.

The Court denies these requests without prejudice to Defendants renewing these requests

before the Magistrate Judge assigned to 21-MJ-00465 (E.D.N.Y.).

In ruling on the instant Motion, the Court has not considered any sealed materials relating

to case 21-MJ-00465 (E.D.N.Y.).

CONCLUSION

For the reasons set forth above, Plaintiff 3M’s Motion is GRANTED IN PART and

DENIED IN PART, and IT IS ORDERED THAT:

Defendants, their agents, employees, officers, and all persons and entities in active

concert and participation with them are, pursuant to Federal Rule of Civil Procedure 65(a),

hereby preliminarily enjoined, during the pendency of this action, from:

1. Selling or offering for sale any 3M-brand N95 respirator products;

2. Using the 3M Marks in connection with the manufacture, distribution,

advertising, promoting, offering for sale, and/or sale of any purported 3M-brand

N95 respirator products; and

3. Falsely representing themselves as being a distributor, authorized retailer, and/or

licensee of 3M and/or otherwise falsely representing to have an association or

affiliation with, sponsorship by, and/or connection to 3M and its products.

SO ORDERED.

/s/ Diane Gujarati _

DIANE GUJARATI

United States District Judge

Dated: May 5, 2021

Brooklyn, New York