A screenshot from the home page of Pirate Joe's website shows the slogan 'Unauthorized

High Seas Retail: Trader Joe’s lawsuit against Pirate Joe’s thrown out

The Vancouver store's owner buys his product at U.S. chain Trader Joe's in Washington, and then re-sells it in Canada.

The real life buccaneers at Vancouver’s Pirate Joe’s – ‘Unauthorized, Unaffiliated, Unafraid’, according to their slogan above – have won their case on the high seas of retail, after a judge threw out a lawsuit filed from U.S. chain Trader Joe’s.

Michael Hallat, who owns Pirate Joe’s on 4th Avenue in Kitsilano, shops at Trader Joe’s in Washington and then re-sells it at his store in Vancouver. Trader’s had filed suit, alleging trademark infringement and false advertising, and said Hallat’s business was hurting their brand. If successful, the suit would have been applied under the United States’s Lanham Act.

However, Judge Marsha Peckham dismissed the case, saying any infringement happened in Canada – not the United States – and that Trader Joe’s had not shown Hallat’s Pirate Joe’s had caused harm on the American company.

“What Trader Joe’s should do is just open in Vancouver, you know, and put us all out of our misery,” Hallat told the CBC in the interview below. “But in the meantime, people need their stuff, so we’re in business.

“Who knew you could get into so much trouble for selling groceries?”

Judge Peckham said Trader Joe’s failed to prove the two stores compete for customers, but the American retailer argued that 40 per cent of their buyers are non-Americans – the majority Canadian – and that they won’t travel across the border to Bellingham if there’s a closer store on their side of the 49th.

Trader Joe’s has 10 days to file an appeal. There are 390 of their stores in 30 U.S. states, 14 in Washington, and none in Canada.

The decision, of course, was welcome to Hallat.

“The Lanham Act, which is this very broad powerful statute that allows corporations to, kind of, you know, beat up on anybody that affects U.S. commerce is very, very strong and powerful and can essentially shut down commerce in another country,” Hallat told the CBC.

“And so, for us to have it dismissed, it really had to be black and white that we were not affecting U.S. commerce at all.”

Trader Joe’s initially filed suit against Hallat in May, in Washington State Federal Court. The stores also started sending Hallat’s picture around, and had banned him from entering their stores.

At Hallat’s highest point, he said he was spending between $4,000 and $5,000 a week shopping at Trader Joe’s in Bellingham, Wash., and said he spent a total of $350,000 since he started doing his south-bound return trips in January, 2012.

Speaking with the CBC in August, Hallat insisted he was still a fan of Trader Joe’s, and said it’s their appeal to so many Canadian shoppers which formed the reason for his business in the first place.

“I can’t stress this enough: there’s a behaviour at the store level and there’s a corporate behaviour,” Hallatt said. “The stores are awesome, they are helpful, they get me stuff, they are fantastic.

“There’s a great opportunity to provide a service for Vancouverites.”

Recently, Hallat and Pirate Joe’s removed the ‘P’ in their store-front window, perhaps more accurately titling the franchise ‘Irate Joe’s’.

When the story was covered by American nationally broadcast news channel ABC, the story was titled with a slightly different slant than it has been in Canada: “Pirate Joe’s: Food Chain Fights Bootlegger Smuggling Products Across Border”.

“If they said they were opening a store in Vancouver tomorrow or this year or next year, I’d close the store,” Hallat told ABC News.

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