With the coronavirus pandemic driving up demand for protective gear, profiteers and unscrupulous middlemen have taken advantage. Now, one of the biggest manufacturers of the products is fighting back.
“Despite 3M’s extensive efforts during Covid-19, unsavory characters continue their quests to take advantage of health care workers, first responders, and others in a time of need and trade off the fame of the 3M brand and marks,” the company said in its complaints.
In taking action, the company joins a number of states in
That 3M has had to rely on trademark law to police the matter has also fueled calls for lawmakers to do something.
“There is no federal price gouging statute,” though Congress is considering legislation to address prices charged to consumers, businesses and governments during the pandemic, said
The Maryland Attorney General’s Office has received more than 200 complaints from consumers and sent more than 100 letters to retailers suspected of price-gouging, said Raquel Coombs, director of communications for the agency. Among the complaints are gas stations selling toilet paper for $20 for a four-pack, face masks for $70 and bottles of hand sanitizer for $11 a bottle, she said.
Elizabeth, New Jersey, officials have been going through the county’s consumer affairs office and a state procurement program to make sure offers to sell masks and other protective gear are legitimate, said Mayor Christian Bollwage.
While the city and local hospital have been able to fulfill their needs for now, “in a week or two, they’re going to be in dire straits,” Bollwage said. He joined with more than 100 mayors and county executives in a letter to the Trump administration calling for a more uniform federal supply plan.
“The system that is in place in this country is an abomination for a pandemic or an emergency,” Bollwage said. He’s calling for a “a pricing mechanism through the federal government that would alleviate all this price-gouging.”
The state actions are designed to protect consumers, but many states don’t have laws to protect themselves when they are the buyers paying the inflated prices.
“As we process orders through the supply chain, we are maintaining close coordination with governors to identify potential bidding conflicts,” the agency said in a statement. “If a bidding conflict does arise, we will work closely with the state to resolve it in a way that best serves their needs.”
The bidding wars have strained state and local government budgets. A ProPublica investigation found that New York state had paid almost $250,000 for a portable X-ray machine that normally cost as little as $30,000. Even FEMA is overpaying for the masks. The agency awarded a $55 million contract -- several multiples of the 3M prices -- to a company that’s filed for bankruptcy and has no employees, the
“All 50 states are competing against each other, the hospitals are competing against each other and they’re all competing with the federal government,” said
3M accuses the companies in its lawsuits of improper use of its trademarks, false advertising and undermining the value of the 3M brand.
Use of trademark law is “an interesting approach” because the law is more designed to ensure consumers know the origin of goods, said Eric Moran, a trademark lawyer with
While 3M may not be able to stop all price-gouging, the firms putting themselves out as being affiliated with 3M gives the company the legal basis for its suits, he said.
“If there is consumer confusion in the sales of these price-gouged mask, that’s a legitimate trademark suit,” Moran said. “It’s clear they feel that such price gouging has the potential to undermine the value of the 3M name.”
3M is trying to
The lawsuits are as much about brand protection as they are an effort to fend off criticisms. Billionaire
The company reached an agreement recently with the Trump administration to import 166.5 million masks from China after Trump had criticized it and tried to stop it from exporting products to neighboring countries.
In its suits and in public statements, 3M has said it may pursue criminal cases against some firms and is
“3M is working with national and international law enforcement, state Attorneys General, and the largest online retail and tech companies in the world to identify illegal activity and help punish criminals,” the company said. “The goal is to prevent fraud before it starts and stop it where it is happening.”
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