As reported by The Los Angeles Times, Trader Joe’s, the supermarket chain renowned for its “gluten-free granola” and “chocolate covered potato chips,” recently brought a trademark infringement lawsuit against Michael Hallatt, a Canadian with a professed love of Trader Joe’s products. Hallatt began making trips to the United States several years ago to purchase hundreds of bags of groceries from Trader Joe’s, only to deliver them for resale to his store in Vancouver, aptly named “Pirate Joe’s.” Hallatt claims to have started his business because there are no Trader Joe’s stores in Canada, and the prices for similar items in Canadian stores are often much higher than the marked-up prices he charges for Trader Joe’s items. Hallatt allegedly spent more than $350,000 over the past two years at Trader Joe’s, earning him the self-proclaimed designation of Trader Joe’s “best customer.”
Trader Joe’s, however, does not share a mutual admiration for Hallatt. The company has circulated Hallatt’s picture to store employees, who have on occasion asked him to leave. This has forced Hallatt to deploy a team of shoppers, and at least once, to shop in drag.
Earlier this year, Trader Joe’s brought a lawsuit against Hallatt, alleging trademark infringement, trade dress infringement, trademark dilution and unfair competition. Trader Joe’s claims that Hallatt: (i) is selling unauthorized products bearing the registered TRADER JOE’S trademark; (ii) utilizes a store design and logo that are similar to that of Trader Joe’s; and (iii) is unfairly profiting from Trader Joe’s hard work in creating products that the public covets. Trader Joe’s alleges that consumers will likely be confused into believing that there is an association between Trader Joe’s and Pirate Joe’s.
Hallatt claims that he is doing nothing wrong. In response to the lawsuit, he changed the name of his store to “Irate Joe’s” and adopted the motto: “Unauthorized, Unaffiliated and Unafraid.”
It will likely be difficult for Trader Joe’s to prevail on its trademark infringement claim, because trademark law generally does not confer upon trademark owners the right to control the resale of genuine products. The “first sale doctrine” is a defense to trademark infringement which provides that resale of an original item is not infringement, provided that the goods have not been altered. Thus, Hallatt’s sale of original, unaltered Trader Joe’s products will likely not be deemed trademark infringement. It remains to be seen whether Trader Joe’s trade dress infringement and unfair competition claims will have more traction.
It appears that Hallatt may actually enjoy the attention and publicity that has come from his dispute with Trader Joe’s. Had he wished to run his business in anonymity, however, an experienced trademark attorney would likely have advised him to adopt a name and logo that are sufficiently different from those of Trader Joe’s so as to avoid inviting an obvious dispute.
