In Canada, Trader Joe's Takes on Bootleg Store 'Pirate Joe's' in Court
"We are an unauthorized, unaffiliated, international grocery smuggling operation."
Trader Joe's is getting ready for a legal showdown with Pirate Joe's.
The Joes have been duking it out since Pirate Joe's opened in 2012, when owner Mike Hallatt received a cease-and-desist from Trader Joe's. But Hallatt neither ceased nor desisted buying food from Trader Joe's to sell in his Vancouver storefront, which has a logo and typeface that are reminiscent of its US "counterpart."
Trader Joe's, no stranger to legal issues themselves, lawyered up big time in an effort to shut down Pirate Joe's, whose entire business model consists of buying Trader Joe's products in the US and selling them in Canada to people who want food from the American chain. Hallatt jokingly describes Pirate Joe's as an "international grocery smuggling operation" on the stores Instagram account.
In their lawsuit, Trade Joe's claimed that Hallatt was infringing on their trademark, meaning that it's incumbent upon them to prove that a small Canadian grocery store is affecting their business in the US.
Pirate Joe's, whose motto is "Unaffiliated. Unauthorized. Unafraid." refused to back down from the legal fight and actually won in the early stages of litigation, after a US court ruled that Trader Joe's couldn't sue in Canada because they don't do business there. But Pirate Joe's lost an appeal after the ninth circuit court of appeals forced the case to go to trial.
That ruling stung so bad that Hallatt eventually dropped the "P" from his store's sign so that it read "Irate Joe's." Now, he's gearing up for the legal fight of his life, as a trial date has been set for November and his livelihood hangs in the balance.
"I'm just trying to keep my business open but the lawsuit has opened my eyes to the importance of the First Sale Doctrine." Hallatt explained to MUNCHIES. "Upholding the First Sale Doctrine is important because it's the law that allows you to describe your stuff when you go to sell it. The laws says if you use a brand like 'Ford' to describe your used car you won't get sued for using the trademark.
"I'm supposed to be able put Trader Joe's Ridge Cut Potato Chips on a shelf and re-sell them in a secondary market without being hassled about trademark infringement. The Pirate-now-Irate thing is a red herring in this case. No one is confusing my store for a real Trader Joe's just like no-one is confused by a corner grocer re-selling Kirkland branded stuff from Costco."
Ultimately, for Hallatt, this lawsuit stems more from a love of Trader Joe's than any kind of animosity. When asked what his initial motivation to "smuggle" Trader Joe products across the border was, he said it was purely a question of getting better ingredients on Canadian grocery shelves.
"I grew to appreciate TJ's while living in San Francisco," Hallatt recounts. "I was penny-pinching and basically lived off the freezer section of a Trader Joe's near me. When my first daughter was born, I looked into food sourcing and was appalled by how hard it was to ensure a package of organic anything was actually what it said it was. Trader Joe's was the only grocery store I found that said 'We ensure our products are contaminant and junk-free because we work directly with our sources'. No shady distributors. Nothing that cannot be verified in person on a farm."
But this love for TJ's and good groceries has ironically led to Pirate Joe's being shunned out of store locations in the Pacific-Northwest. "Over the years, I've gotten some love at a few TJ's locations, so it was easier. With the trial coming up, there is pressure from 'corporate' to show no mercy. Fortunately, there are 406 Trader Joe's stores in the US, so there's gotta be some love in there somewhere."
Regardless of the outcome of this trial, which has led Hallatt to start a crowdfunding campaign, he is confident that basic economic forces will make his pirate outpost an attractive business model in a TJ-less Canada. "There's obviously a market for Trader Joe's in Canada and someone like me will always come along to fill it."
MUNCHIES has reached out to Trader Joe's for comment on the matter, but has not yet received a response.