KM Brothers to pay $192,615 to settle price gouging, trademark suit

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KM Brothers, Inc. and it’s related companies have agreed to a settlement over their alleged trademark infringement and price gouging of N95 masks. The case was filed on June 8, as part of a 3M nationwide campaign against companies that have been taking advantage of the COVID-19 crisis for profit. 

The settlement terms were announced on August 13, for 3M Co. v. KM Brothers Inc., Case No. 2:20-cv-05049, in the U.S. District Court of Central California.

The Amazon sellers KM Brothers Inc, KMJ Trading Inc., Supreme Sunrise Inc., and Mao Yu were ordered by a California U.S. District Court to pay 3M or a charity of their choosing  $192,615.69. 

The defendants must immediately stop selling 3M products and admit to infringing on 3M’s trademark. They claim they have already stopped selling the masks.

Amazon blocked the seller’s accounts and said they were “proud to be working with 3M to hold these bad actors accountable” in a press release when the suit was filed.

The vendors were using the Amazon platform to sell the 3M manufactured N95 masks at almost 20 times the list price. The Amazon vendor group, owned by Yu sold the masks for around $23.21 each. In court documents, 3M claimed its product sold for $1.27.

This was the first-of-its-kind lawsuit against Amazon resellers. It was estimated that the KM Brothers related companies made more than $350,000 at the height of the pandemic.

The 3M campaign against price gougers

Minnesota-based 3M is one of the largest global manufacturers of the N95 masks that have been vital in fighting the coronavirus in the U.S. This specific type of mask is approved by the U.S. National Institute for Occupational Safety and Health.

3M claims that by mid-July it had filed 18 lawsuits, courts issued six temporary restraining orders, and four injunctions to halt N95 sales by third-party vendors. 

The company sees the lawsuits as a successful effort, resulting in quick preliminary injunctions and restraining orders to stem the tide of price gouging during the pandemic.

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