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.

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