HEADLINE: TRADER JOE’S CAN’T STOP CANADA’S PIRATE JOE’S

WHAT’S THE NEWS

  • U.S federal court in Washington State tosses TRADER JOE’S lawsuit aimed at Vancouver, Canada’s PIRATE JOE’s food store, which buys genuine TRADER JOE’S items purchased in the U.S. and resells them in a South Pacific–themed grocery located in Vancouver B.C.  To protest being sued, the Canadian grocer dropped the “P” and became “_IRATE JOE’S”

WHAT ARE THE ISSUES

  • Does a U.S. Court have power (subject matter jurisdiction) to decide  allegations of infringement involving conduct entirely outside the U.S.? 
  • Can U.S. trademark rights “cross the border?”

WHAT’S AT STAKE

  • TRADER JOE’S ability to stop a self-declared trademark “Pirate” who is no ordinary “Joe,” but rather one who makes no bones about being a pirate who parrots the TRADER JOE’s mystique

WHAT’S THE LAW

  • U.S. trademark law (The Lanham Act) can reach trademark infringement abroad where
    • The infringer’s action creates some effect on American foreign commerce
    • The effect is great enough to threaten the U.S. trademark owner with “cognizable” (i.e., real and provable) injury, and
    • “The interests of and links to American foreign commerce[are] sufficiently strong in relation to those of other nations to justify an assertion of extraterritorial authority.” 
      • Reebok Int’l v. Marantech Enters., 970 F.2d 552, 554 (9th Cir. 1992); see also Steele v. Bulova Watch Co.¸ 344 U.S. 280 (1952)

WHAT’S THE VERDICT—Trader Joe’s Co. v. Michael Norman Hallatt,  No. C13-768 MJP (W.D. Wa. 10/2/13)

  • The Court finds no economic harm to TRADER JOE’s, even assuming confusion among Canadian shoppers because
    • All the alleged infringement occurs in Canada
    • PIRATE JOE’S already paid full retail for the TRADER JOE’S products it sells, so no economic loss to TRADER JOE’s
    • TRADER JOE’S claimed loss of goodwill is “too tenuous” to apply the Lanham Act abroad
    • TRADER JOE’S claim that Canadians would otherwise cross the border to shop in the U.S. dismissed as a “stretch”
    • The impact on Canada and Canadians is greater than the impact on the U.S. and Americans
    • BUT, TRADER JOE’S permitted to amend its complaint to assert additional facts to support state law claims
  • WHAT’S NEXT
    • Vancouver Sun reports that PIRATE JOE’S owner has been banned from shopping at TRADER JOE’s
    • PIRATE JOE’s owner vows to drop the name if TRADER JOE’s opens Vancouver Stores