A Canadian retailer trading under the name Pirate Joe’s can be sued by Trader Joe’s on the grounds that the former, by using a name and marketing concept close to the latter’s, could damage the latter’s reputation, decreasing the value of its American-held trademarks, the U.S. 9th Circuit Court of Appeals ruled recently.
Their decision overruled a lower court’s decision.
The original court that had denied the lawsuit, arguing that Trader Joe’s could not clearly explain how a Canadian knockoff could affect U.S. commerce.
The defendant and creator of Pirate Joe’s, Michael Hallatt, reportedly buys Trader Joe’s products from Washington State, and resells them at higher prices in his Vancouver-based store. According to the Chicago Tribune, a Trader Joe’s location even refused to sell to Hallatt, but he put on disguises to avoid detection, shopped at other stores as far away as California, and hired others to shop for him. The lawsuit estimates that Hallatt spent more than $350,000 on Trader Joe’s products.
“Pirate Joe’s is an unaffiliated unauthorized re-seller of Trader Joe’s products (we were sued, they lost, they appealed, they won a second try),” Pirate Joe’s explains on its website. “We stock what we are asked to stock by Trader Joe’s lovers who don’t always have the time (or a car or a passport) to head south to Bellingham (the nearest Trader Joe’s).”
Hallatt declared in court documents by saying he was providing a service and never represented himself as an authorized reseller of Trader Joe’s products or as an affiliate of Trader Joe’s.
The 9th Circuit sent the case back to the district court for further proceedings.