Trader Joe's lawsuit will get its day in court

The founder of Vancouver-based Pirate Joe’s is turning to the internet to raise money to defend himself against a lawsuit by Trader Joe’s for buying and reselling the popular U.S. retailer’s products at his store. The case will go to trial in November.

Mike Hallatt, owner of Pirate Joe’s, is accepting donations on the fundraising platform, Crowd Justice, citing that “Trader Joe’s is trying to force my small grocery store to close its doors by suing us in U.S. Federal District Court — despite the fact that we have done absolutely nothing wrong.”

Last summer a U.S. federal appeals court determined that Washington State has the authority to hear a trademark lawsuit by Trader Joe's against Pirate Joe's for reselling the Monrovia, Calif.-based Trader Joe's products purchased in Washington. The U.S. Federal District Court initially dismissed Trader Joe's violation claims as the violation occurred in Canada, where no Trader Joe's stores exist.

The Ninth U.S. Circuit Court of Appeals overturned the district court's decision to dismiss Trader Joe's federal trademark claims against Pirate Joe's, ruling Hallatt could devalue the American-held trademark with the knockoff branding and online merchandising.

“This case could have enormous implications for entrepreneurs everywhere – we're defending the right for people and businesses to re-sell products they have lawfully purchased. If we lose, it may impact you in a big way,” Hallatt said on Crowd Justice.

According to Progressive Grocer, Store Brands’ sister publication, the initial case opened in October 2011, when workers at a Trader Joe's in Bellingham, Wash., noticed Hallatt purchasing products in excess, often returning several times a week. He claimed he was purchasing the products to distribute them in Canada through his store.

For more on the story, see “Rebel Canadian grocer Pirate Joe's prepares for Trader Joe's court battle” at The Guardian.