Pirating Trader Joe’s®

Michael Hallatt has a bizarre business: He drives to the US from his home in Canada, buys stuff from Trader Joe’s®, drives home, and sells it. So far, Mr. Hallatt has bought more than $350,000 worth of merchandise at Trader Joe’s.[1]

Hallatt’s store was called Pirate Joe’s but is now called “__irate Joe’s” because Trader Joe’s has sued him. Here’s how the court describes it:

“Trader Joe’s [claims] that Hallatt . . . advertises his wares with Trader Joe’s trademarks . . . and designed the Pirate Joe’s store to mimic Trader Joe’s trade dress[2].”[3]

You might wonder why Trader Joe’s cares. After all, Hallatt is buying a huge amount of stuff at retail prices.

For Trader Joe’s, much more than $350,000 is at stake. Modern retail is built on customer experience and reputation. Trader Joe’s has a strong interest in controlling both. The Trader Joe’s brand is built on high-quality at low-cost.

Hallatt threatens both.

He marks the goods up quite a bit (duh) and Trader Joe’s claims that it “has received at least one complaint from a consumer who became sick after eating a Trader Joe’s-branded product she purchased from Pirate Joe’s.”[4] Stories about tainted products make international news these days and the fact that it was bought somewhere other than a Trader Joe’s store might not always get through the noisy news cycle.

On August 26, the court cleared the way for the case to proceed. I’ll keep an eye on this and let you know how it goes.

 

[1] Trader Joe’s Company v. Michael Norman Hallatt (9th Cir. 2016) at page 7.

[2] In other words, the store looks like a Trader Joe’s store inside. I’ll be writing more about trade dress in a few weeks.

[3] Trader Joe’s Company v. Michael Norman Hallatt (9th Cir. 2016) at page 6.

[4] Id.

The World’s Best Trademark Blog

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We all know the feeling. A newspaper writes a story on a topic we know well and it’s so bad it isn’t even wrong.[1]

The Washington Post headline was “Whole Foods just got called out for a pretty big exaggeration.”[2]

It’s all about Whole Foods trying to register WORLD’S HEALTHIEST GROCERY STORE as a trademark. The Post wants us to believe that the Trademark Office rejected the application because Whole Foods couldn’t prove it actually is the world’s healthiest grocery store.[3]

The US Trademark Office doesn’t care about the truth of a trademark[4] and the Trademark Office examiner never said anything about truth. The examiner challenged the application because:

  • the trademark is “merely laudatory”; and
  • trademarks that are “merely laudatory” are considered descriptive; and
  • descriptive trademarks can’t be registered unless certain other requirements have been met (none of which have anything to do with whether the words in the mark are true).

The Federal Trade Commission DOES care about the truth of advertising claims, but even the FTC doesn’t care about “puffery.”[5] “World’s healthiest grocery store” is an excellent example of puffery.

Bizarrely, the Post went on for paragraphs about how Whole Foods can’t be the world’s “_____est” anything because it didn’t have a significant presence outside the United States. I don’t see why even a single stand alone store can’t objectively be the “world’s ______est store.”

This article was the worst thing that’s ever happened in the whole world.

 

[1] With apologies to Wolfgang Pauli.

[2]Here’s the article.

[3] The Post article said: “The [Trademark Office] said it rejected the trademark because it makes a ‘laudatory’ claim, or is based on exaggerated praise that can’t be proven or has not been proved true.”

[4] There are some limited situations when the Trademark Office cares about truth. For example, you can’t include a place name in your trademark if it would make people think your product came from that place when, in fact, it didn’t. “Made from California grapes” couldn’t be used as a trademark for a jelly made with grapes grown in New York.

[5] Puffery is a promotional statement that expresses subjective views that no reasonable person would take literally. For example, see this blog from the FTC.

Just Don’t Do It

Coca-Cola® can. Samsung® can. McDonald’s® can.

Your company can’t.

So just don’t mention that big event going on down in Brazil. Not in your ad, not in your company’s tweet, not on your company’s Facebook page.

Unless you’re actually the United State Olympic Committee or an official sponsor, just stay a million miles away from all the words and all the symbols. If you’re Wham-O® don’t make a pretend symbol out of five Hula Hoops®.

And don’t even think about trying to use or register a trademark that includes the word OLYMPIC, unless you want to join the almost 500 other applicants who now have dead applications as a reward for their attempt.

How fast will your application die? Fast. Sarah Elizabeth Mason filed to register NERD OLYMPICS on May 4 of this year. She expressly abandoned that application before the month was out: May 31. Didn’t even live long enough to be rejected by an examiner.

An application to register Music Olympics was filed on July 25. That might live a little longer, but only because all of the lawyers are busy going after misuse of their trademarks in social media.

So, Just Don’t Do It.

Wham-O® Wins

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Among my many pathetic hobbies, is an ongoing search for the company that owns the most trademarks in danger of committing genericide.* The current leader is Wham-O Holding, Ltd., which is the proud owner of these endangered registered trademarks:

  • Hacky Sack®
  • Frisbee®
  • Hula Hoop®
  • Slip ‘N Slide®

What’s going on here? Does Wham-O lack the creativity to create a good trademark?

No. The problem is that they’re too creative. They make stuff that no one has ever seen. Before there was a Wham-O Frisbee, there was nothing else like it. So everyone refers to the thing using the trademark, because it’s pretty much the only word out there.

“Hey, cool, what is that?”

“It’s a Hacky Sack brand kick bag,” said no one ever.

If you invent a new thing, in addition to coming up with the trademark, come up with the generic phrase that goes with it.

  • Frisbee® brand flying disc.
  • Hula Hoop® brand, um, toy, um, hoop?

It’s hard to name something that novel. But it’s an important step. A long time ago, Bayer tried too late to get the headache suffering public to refer to its product as Aspirin brand acetylsalicylic acid.  No less than the brilliant Judge Learned Hand wrote:

Had Bayer “not been indifferent . . ., it could have protected itself [at the start]. . .. Instead . . ., they [built up the] demand without regard to the trade-mark. Having made that bed, they must be content to lie in it.”

Yup. That about sums it up.

 

*Genericide is what happens when a trademark becomes the generic word for the good it’s used the sell. Think ESCALATOR.