throbber
Case 1:21-cv-01644-DG-JRC Document 39 Filed 05/05/21 Page 1 of 37 PageID #: 646
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`UNITED STATES DISTRICT COURT
`EASTERN DISTRICT OF NEW YORK
`--------------------------------------------------------------X
`3M Company,
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`
` Plaintiff,
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`
`
`
`MEMORANDUM & ORDER
`21-CV-01644 (DG) (JRC)
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`
`
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`
`
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`
`
`
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`
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`-against-
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`
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`CovCare, Inc. and Wooter Apparel, Inc.,
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` Defendants.
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`
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`--------------------------------------------------------------X
`DIANE GUJARATI, United States District Judge:
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`On March 26, 2021, Plaintiff 3M Company (“3M”) filed this action against Defendants
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`CovCare, Inc. and Wooter Apparel, Inc. (collectively, “Defendants”), alleging trademark
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`counterfeiting in violation of the Lanham Act, 15 U.S.C. §§ 1114(1), 1116(a); trademark
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`infringement under Section 32(1) of the Lanham Act, 15 U.S.C. § 1114(1); unfair competition,
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`false endorsement, false association, and false designation of origin under Section 43(a)(1)(A) of
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`the Lanham Act, 15 U.S.C. § 1125(a)(1)(A); trademark dilution under Section 43(c) of the
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`Lanham Act, 15 U.S.C. § 1125(c); false advertising under Section 43(a)(1)(B) of the Lanham
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`Act, 15 U.S.C. § 1125(a)(1)(B); trademark infringement under New York common law; false
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`advertising under New York General Business Law § 350; unfair competition and passing off
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`under New York common law; and dilution and injury to business reputation under New York
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`General Business Law § 360-l. Complaint ¶¶ 85-172, ECF No. 1.
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`On March 31, 2021, 3M filed an Emergency Motion for Temporary Restraining Order
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`and Preliminary Injunctive Relief (the “Motion”), ECF No. 8, pursuant to Rule 65 of the Federal
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`Rules of Civil Procedure (“Rule 65”), the Lanham Act, 15 U.S.C. § 1116(a), the New York
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`Consolidated Laws, and New York common law, together with supporting documents, including
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`Declarations of Christine L. McCool, Ph.D. (“First McCool Decl.”), ECF No. 8-2, and Kara M.
`1
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`

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`
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`Mundy (“First Mundy Decl.”), ECF No. 8-20.1 Defendants responded by Memorandum of Law
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`in Opposition filed on April 5, 2021 (“Defs.’ First Br.”), ECF No. 14, together with Declarations
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`of Aaron Arroyo (“First Arroyo Decl.”), ECF No. 15, Alex Kagan (“First Kagan Decl.”), ECF
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`No. 16, and Robert Garson (“First Garson Decl.”), ECF No. 17.
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`On April 5, 2021, the Court held a conference on the Motion. ECF No. 18. On April 6,
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`2021, the parties submitted additional briefing, together with supporting documents. 3M
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`submitted a supplemental brief (“3M’s Second Br.”), ECF No. 22, an additional Declaration of
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`Kara M. Mundy (“Second Mundy Decl.”), ECF No. 22-1, and a Declaration of Cassie Jacobson
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`(“Jacobson Decl.”), ECF No. 22-2. Defendants submitted a supplemental Memorandum of Law
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`(“Defs.’ Second Br.”), ECF No. 21, and supporting documents, including additional Declarations
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`of Alex Kagan (“Second Kagan Decl.”), ECF No. 19, and Aaron Arroyo (“Second Arroyo
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`Decl.”), ECF No. 20. In its supplemental brief, 3M, inter alia, described the relief sought.
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`Specifically, 3M “request[ed] that this Court grant an order restraining and enjoining Defendants
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`from:
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`•
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`•
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`•
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`Selling or offering for sale any 3M-brand N95 respirator products;
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`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;
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`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
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` •
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`
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`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.”
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`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.
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`2
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`

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`3M’s Second Br. at 20-21; see also id. at 17.
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`By order dated April 7, 2021, the Court, based on the record before it at that time, issued
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`a temporary restraining order (“TRO”) in accordance with the terms set forth above; reserved
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`decision on 3M’s Motion insofar as it sought a preliminary injunction; and set a briefing
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`schedule and date for argument on the requested preliminary injunction. See ECF No. 24.2
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`The parties thereafter submitted further briefing, together with additional supporting
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`documents. On April 14, 2021, Defendants submitted a Memorandum of Law in Opposition to
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`3M’s Motion for Preliminary Injunctive Relief (“Defs.’ Third Br.”), ECF No. 26, together with
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`an additional Declaration of Alex Kagan (“Third Kagan Decl.”), ECF No. 25. On April 19,
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`2021, 3M filed a Reply in Support of its Motion (“3M’s Third Br.”), ECF No. 29, together with
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`an additional Declaration of Christine L. McCool, Ph.D. (“Second McCool Decl.”), ECF No.
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`29-1. In response, Defendants, on April 19, 2021, filed a letter requesting to correct the record
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`with respect to a factual issue raised in 3M’s briefing. ECF No. 31.
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`The Court held argument on 3M’s Motion insofar as it sought a preliminary injunction on
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`April 21, 2021, after which the Court directed the parties to submit supplemental briefing on
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`certain limited issues raised at argument and extended the duration of the TRO until the Court
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`ruled on the preliminary injunction request. See ECF No. 33.
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`
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`In keeping with the Court’s April 21, 2021 order, the parties submitted additional briefing
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`on April 23, 2021. 3M submitted another supplemental brief (“3M’s Fourth Br.”), ECF No. 34,
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`and Defendants submitted a Further Evidentiary Brief in Opposition to 3M’s Motion (“Defs.’
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`2 In issuing the TRO, the Court did not require 3M to post a bond. See ECF No. 24 at 5.
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`3
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`
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`Fourth Br.”), ECF No. 35, together with additional Declarations of Aaron Arroyo (“Third Arroyo
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`Decl.”), ECF No. 36, and Robert Garson (“Second Garson Decl.”), ECF No. 37.
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`Having heard from the parties at both the April 5, 2021 conference and the April 21, 2021
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`argument and having considered all of the above filings and supporting documents, including the
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`sworn declarations, as well as the record and proceedings to date, including the Complaint, the
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`Court grants in part and denies in part 3M’s request for a preliminary injunction for the reasons
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`set forth below.
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`Additionally, the Court denies without prejudice to renewal before the appropriate
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`Magistrate Judge Defendants’ requests that this Court unseal case 21-MJ-00465 (E.D.N.Y.) and
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`order that certain seized goods that were previously in Defendants’ possession “be preserved
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`until further order of this Court.” See Defs.’ Fourth Br. at 7.
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`BACKGROUND
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`I.
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`Factual Background
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`The following facts are drawn from the supporting declarations and other evidence
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`submitted in connection with the instant Motion and are undisputed, unless otherwise noted.3
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`Citations to the parties’ supporting declarations incorporate by reference the documents cited
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`therein.
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`3M is a leading manufacturer of N95 respirators (hereinafter, “masks”) and has sold N95
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`masks in the United States under the 3M brand name for decades. First McCool Decl. ¶ 4. Since
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`the beginning of the COVID-19 pandemic, the public has become familiar with 3M as a
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`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.
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`4
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`Case 1:21-cv-01644-DG-JRC Document 39 Filed 05/05/21 Page 5 of 37 PageID #: 650
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`
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`manufacturer of N95 masks and other equipment essential to protecting healthcare personnel and
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`workers from exposure to airborne particles, including viruses like COVID-19. Id. ¶ 6.
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`3M has invested hundreds of millions of dollars in advertising, promoting, offering for
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`sale, and selling its vast array of goods and services under its standard-character mark “3M” and
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`3M design mark (together, the “3M Marks”). Id. ¶ 7. 3M has obtained numerous federal
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`trademark registrations in connection with the 3M Marks and 3M’s associated logo. Id. ¶¶ 8-14.
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`3M has established a system by which the public can, either via telephone or via 3M’s
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`website, report suspected fraud, including the sale of potentially counterfeit 3M-branded
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`products (3M’s “Fraud Hotline”). See Jacobson Decl. ¶¶ 2, 4; see also Motion at 7. 3M
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`periodically publishes “counterfeit alerts” aimed at raising awareness of potentially counterfeit
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`products being sold under particular “lot codes.” See First Kagan Decl. ¶¶ 4-5; see also ECF No.
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`16-1 (3M “Counterfeit Alert” listing certain lot codes determined to be associated with
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`counterfeit products).
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`When 3M receives a report concerning a 3M-branded mask, 3M confirms if the flagged
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`mask is “authentic or counterfeit based on lot number and visual inspection.” Jacobson Decl.
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`¶ 5. 3M at least sometimes works with United States Customs and Border Protection (“CBP”)
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`“to inspect certain sellers of goods for counterfeit items” based on reports submitted to the 3M
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`Fraud Hotline. See Third Kagan Decl. ¶ 7; see also First McCool Decl. ¶ 26 (describing 3M’s
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`coordination with “federal agents” in conducting an inspection of products located in
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`Defendants’ warehouse in Monroe Township, New Jersey). If 3M determines that a reported
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`product is counterfeit, 3M informs the reporting purchaser that the masks in the purchaser’s
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`possession are counterfeit and do not come with 3M’s efficacy guarantees. Jacobson Decl. ¶ 6.
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`5
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`Defendant CovCare, Inc. was established in 2020 to supply personal protective
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`equipment (“PPE”), including masks, to hospitals, first responders, companies, and government
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`agencies. Third Kagan Decl. ¶¶ 3-4. In conducting its business, CovCare uses the “logistical
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`and manufacturing experience” of its corporate affiliate Defendant Wooter Apparel, Inc. Id. ¶ 3.
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`In September 2020, the “CovCare Team” sent to a customer an email in which CovCare
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`announced that “we now carry three models of 3M NIOSH N95 masks,” acknowledging in the
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`same email that “3M’s production lines have been filled to capacity” and that “many counterfeit
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`masks have saturated the market as a result.” ECF No. 8-9 (email sent by the “Covcare Team” to
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`a customer) at 1; see also First McCool Decl. ¶ 15.
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`3M alleges that it received “multiple reports of Defendants’ sale of suspected counterfeit
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`respirators to healthcare professionals and the general public, and price gouging.” Motion at 11.4
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`As a result, on December 1, 2020, 3M sent a cease-and-desist letter to Alex Aleksandrovski,
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`whom 3M claims to be CovCare’s founder and CEO. See First McCool Decl. ¶ 17; ECF No.
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`8-11 (copy of the December 1, 2020 cease-and-desist letter); Motion at 11. In that letter, 3M
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`informed Mr. Aleksandrovski that 3M had concluded that CovCare was, inter alia, “falsely
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`representing itself as an authorized distributor of 3M.” ECF No. 8-11 at 1. Defendants
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`responded to the cease-and-desist letter on December 15, 2020, asserting that CovCare “ha[d]
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`never claimed to be an authorized 3M distributor.” ECF No. 8-12 at 1 (email from “Katherine
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`Grimmie from Covcare” to 3M’s “Covid Enforcement” email account); see also First McCool
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`Decl. ¶ 18.
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`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.
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`6
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`

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`Case 1:21-cv-01644-DG-JRC Document 39 Filed 05/05/21 Page 7 of 37 PageID #: 652
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`After this exchange, 3M continued to receive reports via its Fraud Hotline from
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`purchasers of CovCare masks purporting to be 3M-branded N95 masks. See First McCool Decl.
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`¶¶ 20-24; see also ECF No. 8-14 (images of purported 3M masks and associated packaging,
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`together with receipts bearing the CovCare name, submitted via 3M’s Fraud Hotline); ECF No.
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`8-15 (images of 3M-branded masks submitted to the Fraud Hotline); ECF No. 8-16 (images of
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`masks, packaging, and receipts submitted to the Fraud Hotline); ECF No. 8-17 (images of masks
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`and receipts submitted to the Fraud Hotline); Motion at 13-14 (alleging that these four reports
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`were submitted in 2021 on February 2, 5, 8, and 9, respectively). With respect to each of these
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`reports, 3M, “[b]ased on identified concerns and upon inspection of photographs of the products
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`and packaging included in the hotline report[s], . . . determined that the products Defendants sold
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`to th[ese] purchaser[s] were counterfeit masks purporting to be 3M N95 respirators.” First
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`McCool Decl. ¶¶ 20-23.
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`On February 14, 2021, Defendants sent to 3M a further response to the December 1, 2020
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`cease-and-desist letter, in which Defendants acknowledged that they were in receipt of a
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`“Product Recall and Counterfeit Notice . . . concerning Model 1860 [a model of N95] masks.”
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`ECF No. 8-21 (letter from Robert Garson to 3M’s Office of General Counsel) at 1; see also First
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`Mundy Decl. ¶ 2. In the same letter, Defendants raised the possibility that they “ha[d] been the
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`victim of an elaborate fraud” and claimed that they would not sell or deal with any Model 1860
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`masks until they “[could] establish, with certainty, whether this [wa]s the case.” ECF No. 8-21
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`at 1; see also First Mundy Decl. ¶ 2.
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`3M alleges that Defendants nevertheless continued to sell 3M-branded Model 1860
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`masks, including selling approximately 60,000 masks to a New York-based broker who, in turn,
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`sold the masks to Ottawa Hospital in Ottawa, Ontario, Canada. See Motion at 15. 3M obtained
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`7
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`Case 1:21-cv-01644-DG-JRC Document 39 Filed 05/05/21 Page 8 of 37 PageID #: 653
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`
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`physical samples of the masks sold to Ottawa Hospital, inspected them, and, based on the
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`inspection, confirmed that the masks were counterfeit 3M-branded masks. See First McCool
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`Decl. ¶ 25. This inspection at least involved comparing the printing on the masks to that present
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`on authentic 3M masks and examining the “construction of the products” in comparison “to the
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`known characteristics of authentic 3M [masks].” See ECF No. 8-19 (copy of letter sent by 3M’s
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`Personal Safety Division to the Interim Director of Ottawa Hospital’s Supply Chain Operations)
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`at 1; First McCool Decl. ¶ 25.
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`It appears that, by this point, federal law enforcement had become involved. On
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`approximately February 17, 2021, CBP visited Defendants’ office in Staten Island, New York,
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`“because some of the 3M products ordered by Defendants were flagged at the airport as being
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`counterfeit goods.” First Arroyo Decl. ¶ 3. “Since it was unclear which of the 3M goods were
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`counterfeit, CBP advised Defendants to recall all 3M products and issue refunds.” Id.
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`On February 18, 2021, 3M sent to Defendants’ counsel a second cease-and-desist letter.
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`First Mundy Decl. ¶ 3; ECF No. 8-22 (copy of the February 18, 2021 cease-and-desist letter). In
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`this second letter, 3M informed Defendants of its determination that CovCare had sold certain
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`purported 3M-branded masks that were, in fact, counterfeit. See ECF No. 8-22 at 1. In the same
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`letter, 3M explained that it identifies counterfeit masks by examining the printing on the masks,
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`the construction of the masks, and the packaging associated with the masks. Id. at 1-2. 3M
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`requested that Defendants cease and desist all sales or offers to sell any 3M-branded products,
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`and that Defendants contact 3M to confirm that Defendants would not “return or destroy any
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`3M-branded products in [CovCare’s] possession, custody, or control.” Id. at 3.
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`After a series of phone calls between counsel for the parties, Defendants, on February 25,
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`2021, sent to 3M a letter in response to the second cease-and-desist letter, in which Defendants
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`8
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`
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`continued to assert that they were not selling counterfeit masks. See First Mundy Decl. ¶ 4; see
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`also ECF No. 8-23 (Defendants’ February 25, 2021 letter in response to February 18, 2021
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`cease-and-desist letter) at 2. In the February 25, 2021 letter, Defendants acknowledged that they
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`had been engaged with several federal enforcement agencies, including the Federal Bureau of
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`Investigation, the Food and Drug Administration, the Department of Homeland Security
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`(“DHS”), and CBP. ECF No. 8-23 at 1. Defendants explained that officials from these agencies
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`had visited their facility, where “[n]o allegedly counterfeit items were found.” Id. Defendants
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`further explained that an agent believed to be from DHS had instructed them to issue exchanges
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`or refunds to customers who had received “masks that fall within the complained of model
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`numbers.” Id. at 1-2.
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`3M alleges that federal agents visited Defendants’ facilities a second time on March 16,
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`2021, where they observed a pallet and several cases of purported 3M-branded masks. See
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`Motion at 18. Defendants have submitted a declaration in which CovCare’s Chief Marketing
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`Officer, Alex Kagan, seems to reference this second visit, explaining that “on the second
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`occasion when CBP attended CovCare’s Staten Island location,” the agents observed products
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`that were “locally sourced goods and . . . [were] returns made at the direction of CBP to be
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`transferred to [a separate] location.” See Second Kagan Decl. ¶¶ 4-5.
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`On March 24, 2021, federal agents visited Defendants’ warehouse in Monroe Township,
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`New Jersey. First Arroyo Decl. ¶ 5; see First McCool Decl. ¶ 26. There, the agents “went
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`through samples of the inventory Defendants were holding in the warehouse.” First McCool
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`Decl. ¶ 26. The agents were joined by two 3M representatives present via videoconference, one
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`of whom was Christine L. McCool, Ph.D., a “Research Specialist” employed by 3M. Id. ¶¶ 2,
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`9
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`26; First Arroyo Decl. ¶ 5. “Representatives of the Defendants were present for this process.”
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`First McCool Decl. ¶ 26; see also First Arroyo Decl. ¶ 5.
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`3M keeps the methods and processes it uses to distinguish between counterfeit and
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`authentic masks “highly confidential.” See Second McCool Decl. ¶¶ 4-5. Accordingly, 3M has
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`not specified exactly how it conducted the “visual inspection” of the products present in
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`Defendants’ warehouse. See id. ¶ 12. However, the inspection involved, at minimum, “viewing
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`photos of the products and their packaging from many different angles via video conference.”
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`First Arroyo Decl. ¶ 7; see also First McCool Decl. ¶ 26 (describing the “visual inspection” in
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`which the 3M representatives and federal agents “went through samples of [Defendants’]
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`inventory”).
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`Based on this inspection, 3M determined that Defendants were in possession of some
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`counterfeit masks. See First McCool Decl. ¶ 26; see Second McCool Decl. ¶ 12 (“I personally
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`conducted a review and analysis of masks located at Defendants’ warehouse in Monroe
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`Township, New Jersey on March 24, 2021. I personally, as an agent and employee of 3M,
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`determined that masks located at Defendants’ warehouse were counterfeit.”); see also First
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`Arroyo Decl. ¶ 8 (explaining that the 3M representatives “determined that Defendants were in
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`possession of some illegitimate masks” (emphasis added)). Approximately 84,000 masks were
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`deemed counterfeit – or, according to Defendants, “illegitimate” – and marked with red tape by
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`CBP. See Second Arroyo Decl. ¶ 4. Approximately 2,400 masks were not marked with red tape.
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`See id. ¶ 5. Defendants have characterized these 2,400 masks differently throughout their
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`submissions, sometimes contending that they were deemed “legitimate” by 3M representatives,
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`see, e.g., First Arroyo Decl. ¶ 7, and sometimes contending that these 2,400 masks simply “were
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`not deemed to be counterfeit,” see, e.g., Defs.’ Third Br. at 4.
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`10
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`Following the March 24, 2021 inspection, Defendants informed CBP that they were in
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`possession of an additional 30,507 masks stored at their Staten Island warehouse, resulting
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`largely from returns, some of which shared lot codes with the masks that 3M deemed counterfeit.
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`See Second Arroyo Decl. ¶¶ 4, 7.
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`On April 19, 2021, CBP again visited Defendants’ New Jersey warehouse and seized
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`“491 boxes” of previously identified 3M products, “which Customs and Border Protection with
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`3M over video had previously flagged as suspicious on March 24, 2021.” Third Arroyo Decl.
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`¶ 4; see also Defs.’ Fourth Br. at 2. Defendants assert that they remain in possession of “467
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`boxes of various 3M products that have not been flagged as suspicious by Customs and Border
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`Protection.” Third Arroyo Decl. ¶ 5.
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`Although the parties have centered their submissions and arguments on Defendants’ sale
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`of 3M-branded masks, 3M alleges that Defendants engaged in misconduct beyond just selling
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`counterfeit masks. For example, 3M claims that CovCare supplied falsified documents to a
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`customer who was questioning the authenticity of CovCare’s 3M-branded masks. See Motion at
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`11-12; see also First McCool Decl. ¶ 19. The documents included an allegedly falsified “3M
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`acknowledgement agreement” stating that CovCare “is an authorized agent to procure product
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`for the company.” ECF No. 8-13 (copy of allegedly falsified acknowledgement agreement) at 5.
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`Certain of the documents, including the acknowledgement agreement, were signed by two
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`individuals who were at the relevant time not employees of, or otherwise affiliated with, 3M.
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`See id.; First McCool Decl. ¶ 19.
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`3M makes similar allegations with respect to the Ottawa Hospital sale, see Motion at 15,
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`and has submitted a document reflecting that an individual with a CovCare email address
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`messaged an account that, according to 3M, belongs to the broker involved in the Ottawa
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`11
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`Hospital sale. See ECF No. 8-18 (copy of the email) at 1; see also First McCool Decl. ¶ 24.
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`Therein, the CovCare employee assured the recipient that certain masks (presumably those sold
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`to Ottawa Hospital) were “purchased off a distributor of 3m Vietnam and the 1860S was made in
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`3m Singapore.” ECF No. 8-18 at 1. The CovCare employee also told the recipient that “we are
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`a trusted and reliable Distributor.” Id. at 1.
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`3M also alleges that Defendants have used proprietary images of 3M’s masks on the
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`CovCare website and misappropriated 3M videos about the different masks that 3M
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`manufactures. See Motion at 10.
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`Finally, 3M alleges that Defendants “have also engaged in price-gouging,” asserting that
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`Defendants at one point charged an inflated price of $74.99 for ten masks, “approximately 500%
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`above 3M’s actual listed price.” Id. at 20.
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`II.
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`Procedural Background
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`3M filed its Complaint on March 26, 2021. ECF No. 1. On March 31, 2021, 3M filed
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`the instant Emergency Motion for Temporary Restraining Order and Preliminary Injunctive
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`Relief. ECF No. 8.
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`The Court held a conference on the Motion on April 5, 2021, ECF No. 18, and granted
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`the Motion in part on April 7, 2021, issuing a TRO with the terms set forth above and reserving
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`decision on the Motion insofar as it sought a preliminary injunction, see ECF No. 24.
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`On April 21, 2021, the Court heard oral argument on 3M’s request for a preliminary
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`injunction. ECF No. 33.
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`12
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`Case 1:21-cv-01644-DG-JRC Document 39 Filed 05/05/21 Page 13 of 37 PageID #: 658
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`DISCUSSION
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`I.
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`Preliminary Injunction Analysis
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`A.
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`Applicable Law
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`“A party seeking a preliminary injunction must demonstrate: (1) ‘a likelihood of success
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`on the merits or . . . sufficiently serious questions going to the merits to make them a fair ground
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`for litigation and a balance of hardships tipping decidedly in the plaintiff’s favor’; (2) a
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`likelihood of ‘irreparable injury in the absence of an injunction’; (3) that ‘the balance of
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`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
`
`
`
`13
`
`

`

`Case 1:21-cv-01644-DG-JRC Document 39 Filed 05/05/21 Page 14 of 37 PageID #: 659
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`
`
`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
`
`
`
`14
`
`

`

`Case 1:21-cv-01644-DG-JRC Document 39 Filed 05/05/21 Page 15 of 37 PageID #: 660
`
`
`
`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).
`
`
`
`15
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`

`

`Case 1:21-cv-01644-DG-JRC Document 39 Filed 05/05/21 Page 16 of 37 PageID #: 661
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`
`
`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.”
`
`
`
`16
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`Case 1:21-cv-01644-DG-JRC Document 39 Filed 05/05/21 Page 17 of 37 PageID #: 662
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`
`
`Courts in this Circuit analyze trademark infringement

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