Another Gray Market Case: Trader Joe’s Seeks Injunction Against Canadian Pirate Joe’s
IP Enforcement Against Gray Market Goods and Reselling
Trader Joe’s, the California company that brings Cookie Butter, Cat Cookies, Crispy Chocolate Chip Lil Cookies, Two Buck Chuck and other beloved products to about 400 stores in 30 states sued Michael Hallatt of Vancouver for, among other things, trademark infringement, false endorsement, false advertising, unfair competition, trademark dilution, injury to business and reputation and deceptive business practices. Every week Michael Hallatt travels across the border to spend thousands of dollars at Trader Joe’s stores to sell Canadians Trader Joe’s products at his shop Pirate Joe’s in Vancouver, British Columbia. Hallatt has spent over $350,000 at Trader Joe’s in less than two years. He then sells these products at a profit at his store Pirate Joe’s, which is reminiscent of Trader Joe’s in décor and ambience.
Trader Joe’s, for its part, has always been diligent in pursuing legal action against people capitalizing on its popularity. The lawsuit, filed in May, alleges that Hallatt “misleads and deceives consumers into falsely believing that Pirate Joe's and/or Transilvania Trading have been authorized or approved by Trader Joe's,” as Pirate Joe’s is “visually similar to Trader Joe's stores, imitating Trader Joe's famous 'South Pacific' trade dress.”
Hallatt has sought to dismiss Trader Joe’s suit based on lack of jurisdiction, as the conduct at issue occurs entirely outside of the United States, and therefore outside the jurisdiction of the U.S District Court. It is Hallatt’s position that his gray market importing is legal, because he does not represent himself as an authorized re-seller or retailer. Trader Joe’s responded arguing that Hallatt’s Canadian mailing address shouldn’t protect him from liability. It will be interesting to see how the District Court rules.
For more information on brand protection and gray market goods, see our Anti-Counterfeiting Solutions service page.
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