Trader Joe’s Picks a Fight With a Pirate
If you’ve ever experienced the euphoria brought on by Trader Joe’s chocolate-covered potato chips, you might say Canadian Michael Hallatt is doing God’s work.
Using a cargo van that may as well be Santa’s sleigh when fully loaded, Hallatt hauls thousands of dollars worth of Trader Joe’s products from Washington state, where they’re sold, to Vancouver, where they aren’t. The products ultimately land on the shelves of Pirate Joe’s, a small shop where non-perishable Trader Joe’s goodies are resold at marked-up prices.
Despite the fact that Hallatt has spent more than $350,000 at various Trader Joe’s stores in the last two years, Trader Joe’s isn’t fond of Hallatt’s enterprise. In May, the grocer sued Hallatt for trademark infringement, false endorsement, false advertising, unfair competition, deceptive business practices and other related accusations.
You could say this left Hallatt a little P’d off. So much so that he took the “P” right off the sign in his front window, which now reads, “Irate Joe’s.”
Would the Real Trader Joe Please Stand Up?
Trader Joe’s says Pirate Joe’s seeks to deceive customers into believing there to be an affiliation between the two stores. This, despite Pirate Joe’s bold slogan: Unauthorized, Unaffiliated and Unafraid.
On the other hand, the similarities extend beyond the two stores’ common inventory. Pirate Joe’s logo is seemingly inspired by the whimsical font of Trader Joe’s signage. Trader Joe’s lawsuit also claims its unauthorized competitor is “visually similar to Trader Joe’s stores, imitating Trader Joe’s famous ‘South Pacific’ trade dress.”
While Hallatt has likened the dispute to “David versus Goliath,” he’s not afraid to fight back, as his store slogan promises. His business insurance policy is funding his attorneys, who have filed for a dismissal of the lawsuit.
Hallatt thinks Trader Joe’s has gone overboard with its accusations, telling the San Francisco Chronicle that the company “thinks Canadians are too ignorant to to tell the difference between the empire and my little shop on Fourth Avenue.”
Not a Job for Your Maritime Lawyer
Chicago legal consultant Kent Zimmermann said the court’s concern will focus on whether a “reasonable person” would be confused about whether Trader Joe’s and Pirate Joe’s are part of the same company.
“The court will want to protect consumers from confusion,” Zimmermann said. “Confusion could be driven by the names of the stores, their logos, colors, layout and appearance of the stores, uniforms of the employees and other factors.”
Zimmermann said Hallatt might have been able to avoid the suit by seeking specialized legal help before making final decisions about his brand.
“Any entrepreneur, when naming his business, is wise to ask an intellectual property lawyer to run a search of the name he would like to use for his new business,” Zimmermann said. “The purpose of the search will be twofold: to determine whether the name may infringe on the rights of a current trademark holder and also to determine whether it is possible to protect the use of the name, so that the entrepreneur can have the exclusive right to the name.”
Blackballed the Pirate
If Hallatt succeeds in getting the suit dismissed, you might still want to think twice before starting your own Trader Joe’s import business. After Trader Joe’s managers in Washington caught onto Hallatt’s scheme, they banned him from their stores, forcing him on at least one occasion to go shopping dressed in drag to keep Pirate Joe’s shelves stocked.
Such a business model “can be risky because it is the equivalent of hitching your wagon to something that may not want to pull the load,” Zimmermann warned.
Whose side are you on? Is Pirate Joe’s misleading the public by implying a false affiliation, or is Trader Joe’s trying to stop a pirate who’s just trying to earn some honest booty? Tell us what you think in the comments section below.