Enforcing Trademark Rights during a Pandemic
In an unlikely scenario, 3M has filed a lawsuit against a reseller of N95 surgical masks to enforce its trademark rights during a pandemic. The reseller, a medical supply company selling surgical masks to NY City for use during the pandemic, was price-gouging city officials. 3M brought suit against the reseller for trademark infringement; unfair competition; false association; false endorsement; false designation of origin; trademark dilution and false advertising.
The COVID-19 Outbreak
Pandemics are rare. It is currently estimated that the pandemic on the scale of COVID-19 will result in almost a million people suffering through the virus and many who do not survive. The COVID-19 outbreak will be a life altering event for the current generation. Globally, billions of people are being impacted by this novel virus and in times like these, people come together.
Most countries were unprepared for the magnitude of devastation brought by the COVID-19 outbreak. There were too few beds, doctors, supplies and equipment to treat the infected patients and as a result the medical communities have been unable to treat many of the infected patients. Even traditional consumer supply chains were unprepared for the increased spike in consumer demand. As a result of the COVID-19, panicked citizens converged on retailers and drained the shelves of basic commodities like toilet paper, paper towels, yeast and flour. As a result, many consumers have been unable to obtain supplies and retailers have rationed their replenished supplies. As a result of COVID-19, millions of residents have been ordered to stay home to help limit the spread of the virus and decrease the rate of infections.
Necessity is the Mother of Innovation
In times like this, ingenuity and innovation thrive. Demand for food, cleaning supplies and medical supplies and equipment has soared above available inventory. Many people have risen to the occasion by making products like cleaners and hand sanitizers. The global 3-D printing community came together to create wearable protection products to help protect front-line medical workers. Some people have developed new medical equipment, new medical supplies and new medical processes to identify and treat the virus including retrofitting existing ventilators to extend their capabilities and by making new ventilators along with masks and protective equipment. Advances are being made to food delivery, video conferencing and telemedicine.
During a health crisis, the government can enact laws to protect society and control hording and price gouging activities which are harmful to society. In the early stages of the COVID-19 outbreak, some individuals used the increased demand as an opportunity to purchase and resell supplies at highly inflated prices in an effort to capitalize on the increased demand created by the panic stricken consumers.
Trademark Infringement Litigation against Price-Gougers
Typically, a company has limited ability to control the resale of lawfully purchased goods. Supply in demand is the typical mantra for price determination. On April 10, 2020, 3M took taken an unusual position to pursue one profiteers from price-gouging 3M’s surgical masks using existing trademark infringement laws to prevent them from reselling the company’s products at highly inflated prices. In addition to civil litigation, over 33 states have taken steps to limit the illegal activities including sending demand letters, issue fines, make arrests and pursue criminal charges against illegal profiteers who are attempting to capitalize on the increased demand by selling various goods or services at unconscionably high prices.
There is a lot of uncertainty regarding COVID-19. The economic and medical impact is still unknown. As we adjust to the new normal, there is comfort in knowing that existing intellectual property laws, including trademark laws can protect businesses during the pandemic. Stay safe and keep innovating. Let us know if we can assist you with your trademarks, patents or copyrights.