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Trader Joe’s Learns that Protecting Trademarks Across International Borders Isn’t Easy

Over more than 40 years in business, Trader Joe’s has developed a reputation as a unique grocery store where customers can purchase exclusive items like Organic Hummus Dip and Milk Chocolate Covered Potato Chips. The company operates in 30 U.S. states with about 400 stores. Because Trader Joe’s can’t be found on everywhere, they have been able to enhance their reputation as a distinct and unusual retailer. An inherent part of the Trader Joe’s experience is the trade dress in their stores. Their South Pacific theme is considered by the company and its customers to be an indispensable part of shopping there.

Trademarks%2047837347-001.jpgTrader Joe’s has not officially expanded across America’s border with Canada. One devotee of the brand, Michael Hallat, lamented the fact that he could get his Trader Joe’s fix only by driving from his home in Vancouver, Canada to a store in Bellingham, Washington. The trip involved a lengthy wait to cross the border in both directions and travel time was usually 3 to 4 hours round trip.

Hallat looked for a way to make the experience a little easier, bring Trader Joe’s goods to other Canadians and perhaps turn a profit. He began buying up Trader Joe’s wares in large quantities. In a little more than two years, he managed to spend hundreds of thousands of dollars at the store, bringing the merchandise back across the Canadian border to sell at his own retail store, which he called “Pirate Joe’s”. With a modest markup on the original price of the goods, Hallat was soon making good on his idea of turning a profit on the resold wares.

While Hallat’s customers may have been enjoying the ability to get Trader Joe’s items without crossing the border, Trader Joe’s itself was less than amused. They quickly filed a lawsuit alleging trademark infringement and false advertising.

At this point, Hallat dropped the “P” from the name of his store making it “Irate Joe’s”.

The suit was filed in the U.S. District Court in Seattle, but was recently thrown out by a judge who said that the court did not have jurisdiction in Canada. For now, Hallat triumphs in this matter, but it seems clear that Trader Joe’s is unlikely to allow this unauthorized use of their trademarks to continue.

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