Vancouver-based Pirate Joe’s shut down on Thursday amid rising legal costs due to a lawsuit filed by Trader Joe’s for trademark infringement.
Trader Joe’s filed a lawsuit in 2013, a year after Mike Hallatt opened his store in Vancouver. “I opened Pirate Joe’s so my fellow Vancouverites would have easier access to better groceries,” he wrote on an online fundraising platform, Crowdjustice, where he was trying to raise $50,000 towards additional legal fees.
The Monrovia-based supermarket chain filed a lawsuit alleging trademark infringement based on federal and state law in the western District of Washington. Pirate Joe’s won at the lower federal district court level with the court ruling that since the violations occurred in Canada where Trader Joe’s does not operate, the latter had failed to prove that its business had been affected.
The ruling allowed for a short-lived victory for Hallat who in the meantime had changed his store’s name to Irate Joe’s. Trader Joe’s filed an appeal in the 9th Circuit in Aug. 2016 and the federal court overturned the district court’s ruling allowing the case to go to trial in Nov. of that year.
Hallat maintained that since he bought the products, he could do whatever he wanted with the inventory.
According to the fundraising page, he said he would drive to Seattle, Washington where he bought products from Trader Joe’s at full price. “… declare all those products at the Canadian border, and then re-sell them in my Vancouver shop.”
The federal court allowing the case to go to trial will have far-reaching impact.
“This is going to affect California businesses,” said Eugene Chong, attorney at Pasadena’s Chong IP Law Group. “Companies in California that have federal trademarks can file lawsuits against foreign companies who may be violating their trademark.”
While Pirate Joe’s has decided to close down and no longer fight the case, they may not be completely off the hook. “Trader Joe’s can still get damages for what’s been done, we’ll have to wait and see,” said Chong.
A spokesperson for Trader Joe’s declined to comment.
Manufacturing and trade reporter Shwanika Narayan can be reached at email@example.com. Follow her on Twitter @shwanika.