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Pirate Joe’s, Maverick Distributor of Trader Joe’s Products, Shuts Down (nytimes.com)
374 points by artsandsci 186 days ago | hide | past | web | favorite | 266 comments



I don't understand with what right trader Joe's can prohibit somebody from reselling their products. If he clearly states where he bought them from, and that he is not affiliated, and doesn't misuse their trademarks (impersonate them), it should be absolutely legal.

A side remark, people often say how great the US / north America is for entrepreneurs, compared to (continental) Europe where there is a lot of red tape and regulations. But in my opinion, if I were to do this in Germany there is no way ALDI (whom trader Joe's belongs to iirc) could sue me out of business. Not even with the old frivolous "we are wrong but you can't afford the defense" trick. There is just so much legal uncertainty in NA that it would give me nightmares doing business there.


A lot of people are using the "I bought chips at Costco and resold them at a concession stand example". This is at least a little different.

Say you owned Captainmuon Grocery and only sold private label Captainmuon Chips. Although demand is so high you could distribute your Chips to other groceries and retailers, you see greater value in driving traffic to your store through the exclusive distribution. Don't you have a legal right to create exclusive distribution of your consumable product? Don't you have a legal right to enter into a contract with your shoppers (i.e. You agree to purchase consumable products for consumption only and not resell them)? Don't you have the legal right to limit your product liability (i.e. If I buy and resell a defective bag of your chips, possibly becoming defective after it left your store, you will be jointly and severally liable for the damages as a result of a products liability lawsuit)?

Only playing devils advocate, but I do believe you can play with the facts to highlight the push and pull of contractual rights, ownership/resale rights, and product liability. Also, playing with the facts would highlight how trademark rights/goodwill could be more negatively effected, again something more along the lines of a reseller selling tampered/expired product.


> Don't you have a legal right to create exclusive distribution of your consumable product?

For the initial sale of it, yes. But not after that. See below.

> Don't you have a legal right to enter into a contract with your shoppers (i.e. You agree to purchase consumable products for consumption only and not resell them)?

You couold put that on your package, but legally, I don't think it would pass muster as a contract. Even if you got each customer to sign a form agreeing to such a contract, I'm not sure it would stand up in court, because statutes have limited what rights a customer can sign away even in a written contract. Which might not make sense, but lots of things in the law don't make sense. :-)

(The usual disclaimer that IANAL applies.)


>statutes have limited what rights a customer can sign away even in a written contract. Which might not make sense,...

Why not? Lots of things are illegal regardless of what people put in contracts. If I contract you to kill me, you'd still go to jail for murder. Lots of things are illegal to sell unless they meet quality standards, regardless of if consumers know about it being sub-standard or not or agree to it.

Society has decided it just doesn't want to have to deal with that kind of crap and it's annoying consequences for everybody else. I'm against the general principle of hundreds page EUAL fine print being enforceable. If the industry wants that sort of thing, they should agree some set standard contracts vetted by the government that meet specified standards of service and consumer rights. We shouldn't have to deal with obscure and impenetrable special exceptions to everything all the time.


Nope. You don't have any of those legal rights.

The courts agreed, but Trader Joes had bigger pockets and was able to kill Pirate Joes with just legal fees alone. They didn't have to win, they just had to keep him in court until he was broke. This is a pretty common tactic when big corporations are in lawsuits with individuals. Or in the case of healthcare suits they just wait until the plaintiff is dead of whatever condition they're suing over.


>keep him in court until he was broke

How many times do we have to hear these kinds of stories of abuse, or patent trolls, or of other unfairness and injustice in the legal system before anything is done about it?

I mean the legal system produces some incredible injustices currently: If we get more stories such as billionaires like Jeffrey Epstein raping underage girls and getting a house-arrest with week nights spent sleeping in a special cell, what does that imply for the rest of us?

The 99% of us are burdened with this BS while the 1% take advantage of it.


Nothing is done because it's just accepted as a foregone conclusion (i.e. factored into cost-of-business calculations, made part of strategies and so forth) of doing business here.

One of the many reasons this is the "land of opportunity"...


> How many times do we have to hear these kinds of stories of abuse [...]

Well, probably more, if this type of stuff keeps getting conflated with legitimate cases of abuse and trolling. As is ... people are getting frothy about the application of the law as written.

What are you mad about? Somebody protecting their trademark? Their direct channel? Their distribution? Their customer guarantees? Their quality assurances?

Yeah - go ahead. Burn it all down. It's not like the system provided you with the cheap-ass (maybe mobile) computers via which you connect to the Internet (also cheaply) anyway...


The legal system did not provide me with computers. This post is confused.


Either you adopt the system, or the system adopts you.


The courts did not "agree." TJs initial loss was on a jurisdictional issue, and they successfully appealed that ruling. The case then settled before trial.


Because he ran out of money. Justice wasn't found, they just bullied him with lawyers.


Regardless, it's wrong to say, as the grandparent poster did, that the courts agreed with Pirate Joes.

Also, saying that TJs "bullied" him assumes that he was not in fact trading on the TJs brand. Look at his store sign: http://www.cknw.com/2017/06/08/pirate-joes-in-vancouver-clos.... Even the font he uses is very similar. He wasn't just reselling TJs products. He was capitalizing on the TJs brand to resell products (at a high markup by the way).


I think you're possibly seeing what you want to see. Both the fonts themselves and the typesetting of the logos are pretty different. Trader Joe's logo font is serif with all the letters equally sized, the letterforms are curved to avoid right angles, and it is spaced in an orderly fashion, while Pirate Joe's is sans serif with very differently sized letters (e.g. the A and O are about twice as wide as the P), the T completely encroaches on the E to the point where the E has to shrink, the letters aren't particularly curved, and there's a heart in the middle. Basically the only thing they have in common is that they're they're both kind of whimsical.


so you're saying that Pirate Joe is violation of trademark then?


Trademark infringement is all about context. Pirate Joe's for a place that sells pirate costumes isn't trademark infringement. Pirate Joe's in the same font that Trader Joe's uses, for a store that sells Trader Joe's products is probably crossing the line.

Note that the company was started as Transilvania Trading, and didn't get sued until after it changed its name to Pirate Joe's. Moreover, he added the disclaimer "Unauthorized, Unaffiliated and Unafraid" after the lawsuit was filed. Trader Joe's had a very legitimate trademark infringement case, especially during the period where the store was called "Pirate Joe's" with no disclaimer.


There is also additional case law that supports TJ claim from a trademark perspective:

1. TJ would argue PJ was selling watered down product bearing the TJ mark (I know a seemly strange arguement bc PJ was buying selling TJ product without alteration);

2. However, Inherent in all the value of all TJ products are: a) The TJ guarantee of product (i.e. TJ will replace any product you bought at TJ without question/receipt) and b) TJ customer services is part of the TJ product value bc TJ product is sold exclusively thru TJ which they control completely.

3. Therefore, without the guarantee and customer service the TJ product PJ sells is "materially different" than the TJ product TJ sells. (Before others go crazy about this point, this is not my position, it's case law, both warranties/customer service can be qualities of trademark products that remove them from first sale doctrine protections);

4. Tying this into the standard of trademark law, TJ can likely prove customers were confused and bought TJ product from PJ thinking it was TJ product, when in fact it was "materially different" product with the TJ mark.plus it doesn't help PJ advertises they sell TJ product.

5. Further by selling Product with the TJ mark not backed by the TJ guarantee dilutes the TJ mark and goodwill associated with the mark.

Trademark is definitely tricky, there are always questions of facts (I.e. Was there customer confusion in the marketplace) and so they are always ripe for trial. That said I agree with you TJ likely had a good trademark case supported by case law...unfortunately HN likes to try to make absolutes out of law and so when they hear one week about "first sale doctrine" the next they believe in absolute ownership and absolute rights to resell notwithstanding common knowledge to the contrary (they know there is no absolute right to resell rx; alcohol; guns; etc...)


I don't see any resemblance between the fonts.


Aside from both being distressed, they are not similar. Trader Joe's uses a serif font, this is sans serif.

The colors are similar.


It sounded like they weren't actually suing him over selling their products, but over the name "Pirate Joe's"

Hey may still have won that one, but it's at least somewhat plausible that consumers might actually be confused by the name.


>> consumers might actually be confused by the name

Only problem is those consumers are in a different country - one where Trader Joe's does not operate. I would bet Pirate Joe's would have happily closed down if Trader Joe's opened up a store in Vancouver, since that's all the Pirate Joe guy wanted in the first place.


That's true, but trademark is covered by treaty and simply being in another country isn't a defense against violating trademark, and the average consumer doesn't know that Trader Joe's hasn't decided to open a store in Canada.

I'm not arguing that it's necessarily a good thing or that Trader Joe's would have won. I don't think Trader Joe's should have shut him down. But the fact that he called it Pirate Joe's, and setup the store to look like a Trader Joe's (along with carrying Trader Joe's merchandise), means that it wasn't just a nuisance lawsuit. Trader Joe's had a least some chance of winning, and they had a reasonable legal argument.


>> the average consumer doesn't know that Trader Joe's hasn't decided to open a store in Canada.

Honestly, the average consumer in Canada doesn't even know what Trader Joe's is (well they probably do now, since the Pirate Joe's story has made national news here).

I get all of your points about the legal stuff, but I don't think anybody walking into P/Irate Joe's didn't know what was going on. The owner was very transparent about it, and most of the publicity P/Irate Joe's got in the news was about what the store's premise was.

I look at it very simply. You have a super enthusiastic fan in another country who wants people to have access to your products. You can look at it as an opportunity (to find an amicable solution) or as a threat (to be addressed with lawyers).

One approach generates positive goodwill and the other one generates negative goodwill.

Obviously, it's Trader Joe's prerogative to choose which way they wanted to go, but I personally think they missed out on a marketing opportunity to expand their reach.


I agree. It was a stupid move on Trader Joe's part.


So, they were claiming exclusivity on the descriptor "pirate"?


They may have thought it was confusingly similar to the pattern they use for their brands (e.g. Trader Jose's, Baker Josef's).

Update: I went and read the actual complaint by Trader Joe's and, though it does mention this, I think this comment may be overly generous to their thought process.

The complaint[1], as far as I can tell, was basically that their decor looked kinda like Trader Joe's and they sold Trader Joe's products and this combination is deceptive.

[1]: https://static1.squarespace.com/static/51fc7d3ce4b05ae014fc8...


Wow, really. If I want to sell my (near worthless) right to commercially resell CaptainMuon products, then there's some jurist out there who decided I can just legally flout the terms of such an agreement, so no one makes them?

What's the thinking there? Is it just shock at alienating such a right, or is it part of some actual, coherent worldmodel that satisfies difficult desiderata?


You have framed this question in terms of your freedom to contract in order to restrict distribution. Although many think contractual freedom is paramount, that is not necessarily so. It may be bounded by other more basic legal principles. In your chips example, it may be bounded by property and competition law.

In property law, there is the concept of a restraint on alienation. In competition/anti-trust law, there is the concept of a post-sale restraint. The idea is simple: after you by the chips, they are yours and you can do with them what you want. Restricting resale also limits competition, which is bad for consumers. Whether this view trumps your freedom to contract is a legal question whose answer has varied over time.

Historically, such restraints were a problem for real property in England. An estate might have been held in "fee tail" to be passed on to heirs indefinitely. Society decided that land was not being effectively used in this way, so fee tails were broken by statute beginning in the 1800's. Your freedom to "devise by will" was limited in favor of the property right of alienation.

Software was traditionally sold to the end user, who could use or sell the product as he wished, subject to Copyright restrictions on making additional copies for distribution. Only recently did this property-like right erode in favour of the current norm where software is licensed under a plethora of contractual restrictions you may never have read (the EULA).


I see the circumscription of absolute property rights (e.g. right to limit redistribution) as an implicit admission that monopolies or cartels form even in well-functioning free markets.

If not, customers would be free to avoid onerous terms by choosing a competitor, thus disincentivizing their use in the market. Instead in our current world, I'm sure we can all think of companies who could easily impose the most draconian TOS restrictions & limitations on rights-after-purchase and yet would still sell approximately the same amount of product.

Ergo, we limit these rights by law.


No.

You do have a right to go after Commandermuon Grocery for abusing your trademark.

Usually liability traverses the chain of custody. If I give you a bag of chips, that doesn't absolve Frito-Lay of liability for a salmonella contamination issue associated with that lot of chips. Likewise, if I crush the chips and sell the bag to you, it's not Frito-Lay's problem, it's mine.

This stuff has been litigated extensively. There was a few cases around fancy grey-market watches that Costco was buying overseas and selling here at a discount. Costco provided a third party warranty to address that issue, but was allowed to continue. First sale doctrine applies here too.


Another real-world example is "grey market" cameras.

It is very common for camera stores to import cameras from overseas mass retailers in southeast Asia (IIRC Taiwan is a major source) and sell them in the US at a discount. The only limit is that the official Canon/Nikon repair centers know what region a camera was sold in and won't repair a foreign camera without a damned good reason (or a pro photographer rating, which entails owning a certain number of high-end lenses and so on)


Interestingly, in Taiwan it is common for camera stores to source cameras from Japan, alongside the official imported version. and the buyers can trade official warranty for a discount.


No, the seller does not have any of those rights. It's called the first-sale doctrine.


Just so we are on the same page first-sale doctrine applies to works with copyright (i.e. You buy my book you have a right to resell or display it) it does not apply to consumable goods/food stuffs. Almost any reasonable person can understand practical limits of resale rights: think reselling your prescription opiates claiming first-sale doctrine.

And no just because Trader Joe's products have TJ trademarks does not mean they are covered by first-sale doctrine, they are still food stuffs. Trademark under first sale-doctrine is more applicable to reselling a professional sports jersey containing the trademark logo/colors of the team.


This is false. The first sale doctrine can be summarized as, once I have physical possession of an item I can resell it.

Do not confuse issues around distributorships, which are contracts that say, I will agree to sell you these goods at wholesale prices so long as you agree not to sell them anywhere I say you can't.

Your example with reselling prescription opiates, is that opiates are a controlled substance, food is not.

Trademark would only be a problem here if what Pirate Joes was selling was counterfeit Trader Joe's goods.

Pirate Joes' core business was perfectly legal in the US. The only way trademark could be a problem is that Pirate Joes might be ruled too close to Trader Joes, and that's the trademark of the business, not the trademark of the items for sale in the store.


>Trademark would only be a problem here if what Pirate Joes was selling was counterfeit Trader Joe's goods.

That is wrong, according to the case law. Facts here are very different bc TJ product is backed by the TJ guarantee; therefore, although identical TJ product when PJ sells it, it is "materially different" because PJ doesn't back the TJ product. That material change is a trademark violation, especially where PJ is advertising they buy/resell TJ product (impossible and confusing to customers).

Simply look up the case law when first sale doctrine does not apply as a result of material changes to the product because the change in warranty/customer service inherently tied to the product/brand.


Seems quite a stretch to include the store's return policy in the identity of the "product".


So there is no confusion, I'm not making a arguement out of thin air, this is the case law.

Here is a decent article [1]published by the American Bar Association regarding the resale of "genuine" goods (not counterfeit) by unauthorized retailers. Skip to the "warranty policy and unauthorized dealer page" section, then "going to court".

Note the exceptions to first sale doctrine include "material changes" to the trademark good, including non physical changes, then does a decent job of listing those changes recorgnized by the courts.

[1] https://www.americanbar.org/publications/blt/2014/07/01_payn...

Edit: from article regarding non-physical changes to trademark product, "Perhaps most commonly, differences in warranty protection coverage between authorized and unauthorized sales often lead to trademark infringement"


Oh, I'm not surprised at all that it's in the law, like so many other flights of fancy.


No, you're just incorrect here.

Transfer of prescription medication is a different matter, and these are controlled substances with specific rules around transfer. If you happened to be a pharmacist and happened to have someone with a prescription for a drug, there are some scenarios where you could transfer them.

If you give me an apple, I have no obligation to eat or destroy the apple. I'm free to give it to anyone I wish, either as a whole or in parts.


The first-sale doctrine does not include an exception for food.

Reselling your prescription opiates is prohibited by specific laws. No such law exists for food.


First-sale doctrine is not limited to works of copyright. That's just what's most in the news.

Patented inventions for example can be resold or even incorporated into other devices which are then sold and you don't get to control such things.


First sale doctrine also applies to trademarked goods. Here's a good example of a similar case examining how first sale doctrine applies to trademarks: http://www.theiplawblog.com/2009/12/articles/trademark-law/w...

Definitely seems like a gray area, but the deciding factor appears to be how likely a customer is to confuse the reseller with the original manufacturer. Given the name of the store was "Pirate Joe's", and they in fact played up the idea that they were an unauthorized reseller, it seems like that confusion would be highly unlikely.


First-sale doctrine applies to copyrighted works. Deed restrictions are an example where someone can sell property with conditions on its use.


Real estate is the only type of property I'm aware of that allows the owner to enter into covenants that "run with the property." As of yet, I haven't heard about any exceptions. Software licensors have tried, but so far haven't been successful AFAIK.


The Supreme Court reinforced these doctrines just a week ago (in a patent case, but the same principles apply), ruling against Lexmark printer cartridge restrictions "that a patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose."


First-sale doctrine also applies to trademarks which is what would be at issue here. The doctrine allows reselling of trademarked products.


> Don't you have a legal right to create exclusive distribution of your consumable product?

Not a lawyer but, I'm not sure you do have that right. I know this isn't a copyright issue, but couldn't the same logic of the First Sale Doctrine apply? As a consumer, once I purchase something, it becomes mine and I may do with it as I wish, including reselling it, yes?


You have the right by default, but you are allowed to contract the right away (under many circumstances, but probably not all). But lol at Trader Joes trying to you to sign a contract at checkout.


Given that we live in an age where you have to sign away your right to the legal system to get a credit card or a job why not I guess.


Again all I am suggesting is there is a difference between buying/selling a copyrighted work (protected by first sale doctrine) and a private label consumable product that exposes the manufacturer and private labeled to product liability issues.


> Don't you have a legal right to create exclusive distribution of your consumable product?

IANAL, but the attitudes of judges in US courts seems to go the other way. See the recent inkjet refill lawsuit[1]. The courts appear to prefer the idea that once something is sold, it truly belongs to the person it was sold to. The first sale doctrine in copyright is another example.

* https://www.nytimes.com/2017/05/30/business/supreme-court-pa...


If you can't sell something you own, then you don't own it.

Being free to dispose of property how you see fit has been a foundation of common law for a few centuries.


In that case you don't own your prescription medication. Reselling alcohol is another legal gray area, but absolutely prohibited to sell to minors, so not being able to dispose of your property how you see fit I guess you don't own your alcohol either.


You are completely correct. Same with some other common products too. You can "own" all the uranium you want, but as soon as you make one little nuke the government gets all up in your face. It's annoying.


You're trying to argue against general rule by pointing out things that have been explicitly, purposefully excluded from that general rule. That doesn't make any sense. Alcohol and prescription drugs have explicit sale/resale restrictions in the law.


I completely agree. Also try not paying your property taxes, see how long you own that land.

These types of concessions wind up creeping into "free societies" as economic interest buy laws to help create monopolies.


Yes. Controlled substances are a grey area.


No they are not. You can't sell them without a government license. Simple.


"Don't you have a legal right to create exclusive distribution"

Fairly clearly, under law, no. Well, kinda: You have the right to decide who you will sell to, entirely.

You have no right to prevent things under the first sale doctrine.

(Some of the attempts to limit this include printing on packaging 'not for resale' as an attempt to EULA the physical product).


IIRC the "not for resale" markings are only relevant if the package is missing mandatory information like the nutrition label. In practice it only works to stop people who buy a bulk bag of a product and then break it apart and try to resell the individual items.


You have the right to decide who you will sell to, entirely.

Not entirely, see recent cases of bakers who didn't want to sell cakes for gay weddings.


True, "within the realm of current (anti-) discrimination law".


From a legal perspective, no, you don't have the right to prevent resale of your products. From a practical perspective though, you can kill resellers by simply entering the same markets as them. They're selling the exact same products as you, but at a significant markup -- you'll put them out of business in no time.

Trader Joes' actions here seem to defy their self-interest. Instead of suing Pirate Joe's out of existence, why not offer to buy them? They've already done half the work of marketing your brand and building a storefront -- seems like it'd be a slam dunk to convert Pirate Joe's into a legitimate Trader Joe's location.


Hm, no, I don't think there is a legal right for a business to do something just because they judge that it would be profitable or strategic.


but you're talking about a hypothetical. the relevant question is has TraderJoes made that contract with their customers or not? The store does not have a membership program (like some retailers do), it is open to the general public for shopping.


>Don't you have a legal right to create exclusive distribution of your consumable product?

Vertical integration is not a de facto right of a company, in general, for anti-trust concerns.


<"I bought chips at Costco and resold them at a concession stand example".

This is the intent of the big stores. Sams club has a limit to 10,000 packs of cigarettes. And rules on resellers, etc.


> Don't you have a legal right to create exclusive distribution of your consumable product?

Uhh, counter question. Does such a "right" exist in a free market?


I don't think it was about a lack of a reseller agreement.

> the company filed a lawsuit against Mr. Hallatt for trademark infringement, unfair competition, false designation of origin and false advertising.

It was pretty clear the guy was riffing off the TJ brand - there's plenty of legal precedent for that isn't there? Maybe if he had a different name and was selling products from other companies he'd have more of a leg to stand on.

And yes, the legal system sucks sometimes, but it seems like this guy was being deliberately provocative (Irate Joe's? I mean you're just begging for a fight now).

Bottom line, if you really like fighting with big institutions it's going to cost you money so you either need a really good case (and being deliberately provocative undermines that) or you need deep pockets yourself.


The purpose of trademark law is to avoid confusion, not to provide some sort of property over words.


It seems pretty clear that they have no right to prohibit reselling. He was being sued on trademark grounds. Personally, I think it is likely he would have won, but he could not afford the legal costs to fight it. He never really made money on the project.


He had already won the first round in court. He didn't run out of money until the first appeal.


He won an early motion to dismiss. When that dismissal was overturned, it meant that it was going to go to trial. That was what he could not afford.


The court granted a motion on a technical issue of jurisdiction, and an appeals court overturned that decision and sent it back to the original court. That is very different from "he won the first round".


Yeah, I don't really understand the difference between Pirate Joe's and every snack stand that resells candy and soda they bought from somewhere else like Costco.


I think the difference is the focus on the specific products and their brand. If someone named their candy stand "Silly Wonka" and only sold Nerds and Runts, I am sure they would have Nestle come after them too.


Nestle has the single word "wonka" itself trademarked, so you're going to need a better example.


Willy Zonka


Was Pirate Joe's selling counterfeits or knock offs? I thought they were reselling TJ's products.


For one, Costco is a wholesale club. It is specifically designed to sell resealable goods. E.g. buy by the box a good that is individually wrapped for resale. It is the design of Costco and the products they sell are regulatory compliant.

Not so of Pirate Joe's. The Pirate sells goods in Canada that only comply with U.S. market rules (food safety, nutritional markings, etc.).

That's not really the merit of this case, which is more about trademark and branding, but reselling Trader Joe's goods (not meant for resell) in Canada (different market) is hardly comparable to reselling Costco goods (meant for resell) in the U.S. (same market).


Better analogy would be a store called "Smirkland's Signature" that sells Costco-branded products (e.g., Kirkland's Signature).


Not being an expert in the history of the enterprise I read the story as saying that Trader Joe's failed to get legal relief and that Pirate Joe's shut down for other reasons. Trader Joe's was welcome to make life difficult for Pirate Joe's, by refusing to trade, but in the end it was other frictions/owner interest that caused the shut down, not the legal system.


> But in my opinion, if I were to do this in Germany there is no way ALDI (whom trader Joe's belongs to iirc) could sue me out of business.

They could, and Levi's jeans did it with Tesco who were selling grey market imports.

http://news.bbc.co.uk/1/hi/business/1261829.stm


There are two ALDIs in Germany.

ALDI Süd operates the American ALDI stores. ALDI Nord owns Trader Joe's.


That's irrelevant to the point being made, which is that trademark owners have a lot of power over who does or doesn't sell the product, especially if the product is a grey market import.


"I don't understand with what right..."

trademark. he picked the wrong name for his business.


Trader Joe's doesn't have a trademark in Canada because they don't do business there.


afaik, he was not sued in canada.


afaik he wasn't trading in the US


but he had assets there and his business required access to a us-based store.

one story said he met his wife in the us. if she was a us citizen that could be an addtional reason he might want to be able to travel to the us.

in other words, he had reasons to care about potentially having an outstanding judgment against him in the us.

or maybe the appeals court date was before he changed the name to pirate joes?

to be fair, i am making an assumption when i say he picked th wrong name (original name was transilvania trading): that he did not want to be sued in the us. but maybe he did. does not sound like he had a large legal budget though.

there is also the possibility that the name of the business and the other things he did to mimick trader joes had nothing to do with courts reasoning. the fact that he sold goods with a us trademark on the label was enough.

in that case maybe the name matters little.

but if that is true, then shouldn't we see some changes in the risk profile for all sellers of grey market goods even when the names of their stores bear no resemblance to any us trademark associated with goods they sell.

all of the grey market stores i have seen have names that do not mimick any trademarks held by the manufacturers of the goods they sell. but maybe i have not seen enough of them.

my opinion is he picked the wrong name. what consumer would think "transilvania trading" was an authorized reseller of trader joes? otoh, "pirate joes"? but what do i know? not much.


I'm a little unclear as to why Trader Joe's did not simply negotiate a franchise with the chap running Pirate Joe's - strikes me as a cheap way to set up in another country. Better than paying all the legal fees.


because they'd want to control everything to do with the new corporation. A successful chain like that tries to make everything right, everything the same across stores. They'd never just let some random guy in his store look like a semi-official reseller.

I hate that they ran him out of business. I hate companies that try to enforce the no-resell strategy. It's really another version of the "you can't work on your tractor or phone without my permission" strategy.


I buy something from Pirate Joes that is tainted or recalled and get really sick or die. Who do you sue? I can see Trader Joes thinking about that scenario.


Pfft we don't sue at the drop of a hat here in Canada.

There's been several recent recalls of flour over the last few months and other foods tainted but you don't see people suing. The government cracks down but people here can't be bothered to be so petty.

I mean sure it happens if it's really serious but for small stuff people would just think you're a dick.


People who sue for small stuff don't care what you think they are. Trader Joes has deep pockets, Pirate Joes does not, you sue Trader Joes.


Same as if you bought a bad soda at a bodega, or Advil that had been adulterated: the manufacturer, not the retailer.


Setting aside the various snarking about lawsuits, I could imagine this being a more complicated question in that case--Pirate Joe's being an "unauthorized reseller" might be legally significant with respect to liability.


No, you sue everyone. Everyone who has been involved. Truck driver almost killed Tracy Morgan. Did he sue the trucker? No he sued walmart.


Correction: you sue the wealthiest people who can be construed as involved.


Isn't this exactly what the OP is talking about? Why would you sue anybody in that situation?


I'm legitimately being honest and not condescending but in that case you sue everyone. Trader Joes, Pirate Joes, the owner of Pirate Joes, etc. It's how lawsuits work.


Good job helping ruin it for everybody.

Accidents happen. It doesn't entitle you to a free pay day.


> I don't understand with what right trader Joe's can prohibit somebody from reselling their products.

I can see this line of reasoning: a lot of products TJ sells are of TJ's brand. If this individual buys the product but then lets it spoil and resells it and makes someone sick, there might be a chance for that end-consumer to sue TJ for it.


If you're in the business of selling food you are taking that risk no matter what. You have insurance.


Contrary to popular belief, I've read that there are actually more entrepreneurs per capita in Europe than in the US.


That might on how the source you read counted "entrepreneurs".

In Poland, where I live, probably every other adult is an "entrepreneur" these days - people start one-man companies because employers all across the board are pushing people away from normal job contracts towards fake, on-paper B2B relationships. If you visit a grocery store in Poland, then while regular clerks are most likely normal employees, there's a good chance that the shift manager is an "entrepreneur".


The problem is people typically say "entrepreneur" when they mean "VC-backed vaporware tech startup with no business plan". And as far as I'm aware, it's true that Europe doesn't have as many of those as the US.


thankfully europe hasn't followed the us over the cliff of endless VC money and bad business ideas


If your employee "protection" laws make it difficult to start and grow small businesses, of course you'll end up with lots more 1-2 person businesses, and can claim you have more "entrepreneurs".


His bulk shopping trips got the attention of Trader Joe’s, and in 2013, the company filed a lawsuit against Mr. Hallatt for trademark infringement, unfair competition, false designation of origin and false advertising.

What's so hard to understand? The guy was using a knock-off name on a well-known brand without permission to sell their same products. Also, food is one of those specially regulated items that distributors must go through certification and checks on quality in most countries as part of consumer protection laws.

Also, I don't know the term for it offhand, (IANAL,) but there's a legal difference between buying a product as a consumer and then disposing of it because you happen not to need it vs. going in and buying in bulk with full intention to resell. There's a kind of implicit agreement when you buy retail.


It is called the Grey Market. It isn't a legal designation.

The first sale doctrine still applies to bulk purchases. If a seller wants to, they can refuse to sell to anyone that they think will latter resell their product.

You can go into a store right now, buy something at full retail price, and list it on eBay. I doubt you would make any money, unless, like Pirate Joe's, you are selling to a market that is unable to buy from the original retailer.


No, First Sale Doctrine is something else. This guy was not selling copies. There's something in the law pertinent to the fact that this guy bought at a retail location, which causes TJ's loss on their commercial real estate which presumably they invest in to reach the consumer public with quantities said consuming public would typically purchase. Stores can put limits on units per customer of course, but there's recourse too if the individual buys with the hidden intent of reselling. Because this guy is a de facto distributor, he needs to contract with his wholesaler to get permission to buy the offerings at a retail location for that purpose. I just can't for the life of me remember the law or terminology around it. Again, IANAL, but there is some recourse around this kind of action.


I think you are wrong. you are allowed to resell anything you buy. Many companies try to control this, like trying to block costco from reselling overpriced but legitimately bought watches (apparently they charge much more for swiss watches in the us than in say Guatemala). Costco won that legal fight. This was just a loss because of money, one side had a lot more to waste.

I also don't understand what you are getting at about TJs losing money on commercial real estate. Since TJ doesn't sell in canada, and they sold more in the stores they this guy bought from, didn't they make more money from their real estate?


> There's something in the law pertinent to the fact that this guy bought at a retail location, which causes TJ's loss on their commercial real estate which presumably they invest in to reach the consumer public with quantities said consuming public would typically purchase.

I thought people do this all the time, successfully defending themselves in court when necessary. Can you show me statute or a current judicial decision that says otherwise?

What happened here, is that Pirate Joe's didn't have enough money to pay their lawyers, so they gave up and settled with Trader Joe's.


One of the things at issue in his case was whether Pirate Joes was, in fact, not misusing the TJ trademarks, etc. TJ's initial loss had nothing to do with the merits of those claims. The issue was whether the harm had occurred in Canada and whether it affected thei US business. TJs won that issue on appeal and the case was slated to go to trial before the settlement.

More generally, TJs has every right to sell to people on specific terms. That's just freedom of contract.


Looks like there's a dark web opportunity there :)


lul yea, if you just blatantly resell an aldi brand, they can totally wreck your shit.

google cases of people selling as little as 5 items of "esprit" clothing.

if you resell brands and youre not an authorized vendor, youre not going to have a lot of fun for a while.


I am not a lawyer, so I don't know that I am qualified to comment on the legal issues.

I can say that this does make me upset at Trader Joe's, and I will be considering where else I can spend my money.

They could have worked with this guy, eventually set up a Trader Joe's in Canada, and then offered to let this guy run it. That would have been better for their brand, in my view.

I care about what companies do. Costco hires employees and treats them well. It pays above average, and it hires and keeps on people with disabilities and injuries, even if they can't do everything someone else can do. It makes me feel good to shop there. And it's employees are loyal, hard working, happy and friendly, and they have less pilferage then other stores.

This idea that a company has a duty to be a dick is silly. Companies should care about their brand, and about being a good corporate citizen.


I totally get what you're saying, but if you're a business about to open in a new country, and you have to choose a manager for your first location there, would you pick some random businessperson or would you pick a guy you've banned from shopping in your store who's been sneaking into your Seattle stores in a wig and fake glasses in order to sell in Vancouver with inflated prices? Because I'd totally pick the random guy.


Well, if the guy with a wig proved he could grow a business selling my products in my target market, and is connected to a large base of potential customers, no I should totally not pick the random guy.

Good luck finding someone more motivated.


Trader Joe's own staff are already highly motivated because they're paid really really well.

The reason they don't set up in Canada is not lack of motivation, but that as a chain they'll have to get all sorts of products certified as suitable for sale. Most countries have strict rules about the import and sale of fresh produce or meat. Trader Joe's doesn't want to open a store that doesn't carry a full line of products, which would damage their brand. As a small store owner this guy was able to skate on all that regulatory overhead.


I expect there are logistical reasons that make it more cost effective to expand within the continental US for now.


I'd totally pick the person who has already shown extreme enthusiasm for my products.


It really depends upon the person, as I'd never want to go into a business partnership with someone who's just as likely to try and undermine or countermand me later over opinion, but yeah, my inclination would be to at least interview the guy.


How does his opinion differ, really? Everything he's done indicates that his desire was to operate as closely as possible to the Trader Joes formula as he could. He has proven he can operate a successful business. At the very least I'd give him a franchise to run.


And has proven to be able to sell these products profitably.


So it's okay to mimic stores, down to riding on their trademark?

It's probably best to think of "What if someone cloned my favorite game and called it a slightly different name?" People had big problems with what Zynga was doing.


When they don't exist in the country, yes. Likewise, if my favorite game had georestrictions prevents its sale in some countries, I'd have no problem with Zynga selling clones for those countries.


So make your own game, with your own name. Make your own store with its own name. Don't try to tread on the name of others. It's unethical.


Claiming that actions are unethical without providing any argument is unethical.


When you clone a game, the original game makes no profit. Pirate Joe's gave TJ's full profit.


Yeah I'm not buying these arguments either.


Let's review one of the court documents because it has a very important detail. https://cdn.ca9.uscourts.gov/datastore/opinions/2016/08/26/1...

> Defendant Michael Norman Hallatt purchased Trader Joe’s-branded goods in Washington State, transported them to Canada, and resold them there in a store he designed to mimic a Trader Joe’s store. Trader Joe’s sued under the Lanham Act and Washington law.

Repeated later:

> It is uncontested that Defendant Michael Norman Hallatt purchases Trader Joe’s-branded goods in Washington state, transports them to Canada, and resells them there in a store he designed to mimic a Trader Joe’s store.

Emphasis mine and it's a big deal. Trader Joe's would have had a hell of a time bringing a suit if it would be called Hallat's Little Shack and would look like any random grocery store.


> he designed to mimic a Trader Joe’s

So what? The mimicry occurs in Canada, where Trader Joe's apparently does not operate. I thought the whole point of trademark law was to prevent customer confusion, not to give a party property-like rights to some retail "style."

I'm really surprised this is an issue for the US courts at all, and that they didn't refer Trader Joe's to the Canadian court system.


> to some retail "style."

So says Wikipedia:

> Trade dress is a legal term of art that generally refers to characteristics of the visual appearance of a product or its packaging (or even the design of a building) that signify the source of the product to consumers.

IANAL but selling Trading Joe's products and those alone in a store that looks like Trading Joe's could at least give rise to a trade dress claim.

As to extraterritoriality, NAFTA applies, trademarks are recognized across the border.


Oh yeah it would. TJ's has a very defined, distinct, and recognizable 'feel' to its stores which are a part of their brand. If I started a grocery store called Merchant Mike's and all the employees wore Hawaiian shirts, you could bet that TJ would assert its trade dress.


> Trade dress is a legal term of art that generally refers to characteristics of the visual appearance of a product or its packaging (or even the design of a building) that signify the source of the product to consumers.

I'm aware of that. My point is the purpose of that is solely to prevent confusion in consumers, and two stores with similar trade dress in geographically and jurisdictional separate areas should not cause enough confusion to warrant a legal judgement (especially one by a foreign court).


What if they want to open up in Canada and he's messing up their branding by running a sort of half-ass version of their store? It's not trivial for a corporation to get all the permits they need to do their full store model (selling fresh meat, produce etc.). Meantime his activities impact their brand identity. It's very possible that TJs has some rights here under NAFTA; I'm nto sure how that interacts with trademarks and so son but that is the sort of thing that trade agreements are designed to address in the first place.


I've been in Pirate Joe's (several years ago now); I can't imagine anyone thinking it was a legitimate Trader Joe's store - it felt very obviously to be a parody/rip-off. Isn't the main point of trademarks to avoid brand confusion? I doubt people were thinking this was an actual outlet of Trader Joe's - Hallat was always very transparent about his business practices.


I know that many stores have different design on where they places products, but I doubt if that design is covered under copyright or trademark law. There could be fraud claim if he intend to fool a customer, but a store called pirate joe store do have a rather strong message that it isn't the true store.


I'm not sure how anyone could construe that (P)Irate Joe's in their most recent location looked like a real Trader Joe's. It basically consisted of two walls of shelves and one employee at the register compared to a large market.


Sounds more like he was moving them with names like Pirate Joe's, and Irate Joe's at one point.


Problem is it sounds like he was trying to rely on association to the Trader Joe's brand to make money, kind of a shadow franchise. That opens up the problem of brand dilution, and even the most ethical companies have to be ruthless about that, or they can lose their own brand and all the benefits they worked to build with it.

He should have realized the need, and done things like match their product mix with his own brands, work on making the store's own feel, and dampened direct association to Trader Joe's. He didn't and it bit him in the ass. No sympathy here.


The first thing I thought of was McDowells in Coming to America even though they weren't reselling McDonald's food and then it turns out that the guy behind Pirate Joes is (was) planning to open a "Big M" fast food restaurant.

http://www.cbc.ca/news/canada/british-columbia/pirate-joe-s-...


There's protecting your brand, and then there's whatever the heck it is Trader Joe's did here, which seems senseless and malevolent.


Aldi Nord (owner of TJ) has done such an incredibly poor job of expanding the Trader Joe's brand outside of the USA. For example, all you get in their German stores are some random crappy products with the TJ label.

It makes so little sense to go after this tiny company when you're not even competing in Canada. Which they probably should! I'm sure there's demand in cities like Toronto for the actual unique products that TJ offers.


A previous article on Pirate Joe's (http://www.piratejoes.ca/legalandpress/2016/1/16/how-why) mentions that Michael Hallatt, the guy behind Pirate Joe's, said he'd close up shop if the real Trader Joe's ever moved into Canada.


There is demand in Toronto. I am sitting in Toronto, and I still crave a lot of the good stuff I bought there when I lived in Seattle.

I can't believe they opened stores in Germany, but never bothered to open one in Vancouver, where there was proven demand for their products.


There are no Trader Joe's stores in Germany. It was bought in 1979 by the German family that owns the Aldi Nord chain of discount stores[0]. That German chain uses the Trader Joe's brand for some American-themed fast food ingredients, nuts, and sweet ice tea.

[0]: Which is different from the Aldi Süd chain of discount stores which runs stores under the "Aldi" brand in the US.


I'm sitting in Toronto, and am in the process of getting my Canadian citizenship. One of the things I was looking forward to was getting a Canadian passport and having easier jaunts in to upstate New York for Trader Joe's runs.


Especially when you can reap all the benefits of increased sales without having to pay for real estate or employees. Seems they're cutting off their nose to spite their face.


When I lived in Germany I always despised Aldi Nord. Aldi Süd was always cleaner and seemed to just be better in every aspect. It always annoyed me that there for obvious reason was no competition between the two because I would have loved for Süd to drive Nord out.


Trademark law takes a kind of defend-it-or-lose-it approach to brand protection. It's not malevolence, so much as that if they don't litigate, their rights can evaporate.


Trader Joes doesn't have a goddamn peg-leg to stand on in this dispute. If Trader Joes had made any indication whatsoever they were seeking to satisfy the clearly substantial demand for their products in Vancouver I might better be able to see their side of the story, but they have done absolutely nothing to expand into what would be ludicrously lucrative market. I know multiple people who have sent bloody hand-written letters to Trader Joes begging them to open a store in Vancouver and yet they would rather spend hundreds of thousands of dollars fighting a local small-business owner than satisfy the demand themselves. Regardless of the legality of this situation Trader Joes has not won the moral high ground.


Yeah, I just don't understand capitalists that actively fight against capitalizing on clear opportunities. I would have just opened a store down the street or something.


It's because legal departments are not capitalists. They're a kind of ultra-conservative entity motivated entirely by fear/anger of any perceived change.

What we have here is a COO/CEO asleep at the wheel. One of the CEOs most important jobs is to watch the legal department for signs they're about to draw the old foot-gun and start playing "this little piggy" with company toes.


No, no, no. Legal departments are fiduciaries and where the law itself is weird (as in trademark protection where companies are virtually forced to sue potential infringers) it's not their responsibility to reform the legal system.

https://www.forbes.com/sites/oliverherzfeld/2013/02/28/failu...

motivated entirely by fear/anger of any perceived change

Oh don't be such a baby, that's like saying engineering departments made up of social cripples who can't hold a conversation like regular business people.


It seems no more or less anthropomorphic than to say a corporation is motivated by "greed".

Legal departments are like nervous little dogs who bark at everything. The CEO is the one who has to decide if the potential loss in PR is worth the upside of any given legal action (this case is a good example where it probably wasn't).

The lawyers on staff will do because they can sometimes to justify their jobs (or on retainer will do because billable hours). The CEO has to decide if they should.


Just because you can sue, and might win, doesn't mean you should. This was damaging to the Trader Joes brand. If I was Chief Marketing Officer of Trader Joes, I'd be demanding the Chief Legal Officer be fired.

Civil courts do not exist outside of the real world. There are consequences to how you use them.


Yes, but failure to defend a trade mark can result in the loss of legal rights thereto, even when it's obvious that the infringement doesn't matter.

Suppose they had shrugged this off and done nothing. Then a year later I, a rival grocer, open 'Trader Moe's' and open up 50 stores using a very similar business model to Trader Joe's. TJ sues, and my defense is that 'Pirate Joe's infringed on their mark and they did nothing, so I assumed they had abandoned their rights.

This is an affirmative defense in trademark law, by statute, specifically 15 U.S.C. § 1127 A good summary is at http://www3.ce9.uscourts.gov/jury-instructions/node/248

Unlike copyright and patents, trademark durations are infinite, but the price for this is that the owner must aggressively defend any possible infringement or risk a competitor claiming abandonment.

If you were the Chief Marketing Officer of Trader Joe's and I was the CEO, I'd fire you for not knowing this.


Not exploiting an opportunity waives rights? How does that make sense?


It protects the world from submarine brands.


While this was arguably a legally heavy-handed act on Trader Joe's part, it also seems like Mr. Hallatt became increasingly bold and antagonistic as his revenue increased.

I mean, he did change his store name to Pirate Joe’s (from the far more ambiguous Transilvania Trading) and his actions seem to betray less charitable motivations than his words would lead you to believe ("This is not a business I should be doing from a personal profitability standpoint” - https://www.theguardian.com/world/2014/nov/21/pirate-joes-tr...)

That said, seems like Trader Joe's missed an opportunity for a win-win partnership with someone who had already developed rudimentary logistics to meet a demonstrated demand. But then it doesn't surprise me based on my 30+ years shopping at Trader Joe's: I would never describe them as innovative, instead I'd say they are very focused on what they've been doing well for decades.


Pardon my ignorance, but... why would Trader Joe's have a problem with their products being resold in Canada if they don't have a presence there? Does their parent company have a competing brand that sales are being cannibalized from?

From my perspective: every product sold in Canada was purchased in the U.S. so... if anything, this Pirate Joe fellow has provided additional sales for Trader Joes and proved that there is demand for Trader Joe's products in Canada at an incredible 40% markup!

If they're not interested in servicing Canada, would it not be to Trader Joe's advantage to enter a formal franchising or wholesaling agreement with Pirate Joe?

There must be more to this story in terms of Trader Joes objectives as opposed to Pirate Joe's methods or the legal proceedings.


I obviously can't comment from Trader Joes perspective, but did work in food safety for awhile so I can comment from that perspective.

The problem I imagine they have is that someone is selling Trader Joe products (with their label) after handling it themselves, and often having random Craiglists employees handle the items. Prior to this, Trader Joe's (or companies hired by them) are handling the products.

Imagine someone begins tampering with the food items and a few Canadians get sick or injured. This might prompt a recall of all Trader Joe's cookies, not just the ones imported into Canada for example. The FDA wouldn't be able to say that the tampering happened after the products were purchased by Pirate Joe's. The same argument applies to temperature sensitive products as well.


1) Liability

2) Brand Dilution

3) Trademark Protection


As much as I like to side with the little guy, I think it's pretty fair for an establishment to restrict whom they sell to (as long as it's not based on a protected class like race, gender, orientation, etc). Despite being banned from the store this guy still sought out ways to shop there, so I can't defend him too enthusiastically.

Then again it kind of annoys me that TJ's just didn't open a damn store in Canada. And if they don't want to do that then why not just look the other way while someone else took on the risk of importing their products into another country?


But they weren't restricting selling to him (in fact, I am going to guess that the manager of the store he stocked up at was happy to see the artificial lift in sales). He didn't sue them for refusing to sell to him, they sued him for infringing (which he was quite boldly, but in a country they don't actually do business in, so it seems like a stretch).


Sure, you can stop selling to HIM.

But there is nothing illegal about this guy convincing other people to buy stuff for him.

You as a consumer, can sell your goods to whoever you want because of the first sale doctrine, and trader Joe's can't stop you.

Yes they could then ban YOU from buying from there..... But then the guy could just convince someone else to shop there, and around and around it goes.


I live in Bellingham, WA, which has (I think) the closes TJ's to Vancouver. The parking lot is already about 50% British Columbia plates, and maybe now it'll be even more. I certainly welcome more friendly neighbors shopping in town, but it's a bummer they have to shut down.


A previous article on Pirate Joe's (http://www.piratejoes.ca/legalandpress/2016/1/16/how-why, also a great read) mentions that indeed Bellingham has the closest Trader Joe's to Vancouver.


I live in Vancouver, I travel a lot to Seattle and San Francisco for work, I used to make sure Trader Joe's was a stop before I head home. After this move I'll try and actively avoid Trader Joe's. If Trader Joe's feels so strongly about Canadians buying their products then I have no reason to give them money. keep in mind I never actually went to the pirate Joe's even though I walked by it frequently.


That's the one I shop at. Thanks for tolerating so many canucks in your city! Sorry about bogarting all the milk.


Relevant episode of "Reply All" podcast: https://gimletmedia.com/episode/pirate-needs-pirate-season-3...


It's Startup, not Reply All. But both are Gimlet!


Gotta love capitalism, eh? Just like votes, more money = more protection.

This certainly wasn't a trademark issue. Trader vs Pirate. There was no question this store wasn't run by Trader Joes/Aldi North. They were buying in bulk to stock a store where they couldn't normally get the goods. Reselling should be 100% A-OK. Any trademarks go along with the products. And as far as I would guess, the grocer certainly wasn't tampering with anything - if (s)he was, they'd go out of business quick.

This is just normal SLAPP-style punitive legal actions that a large monied corporation can do to stop the little guy from doing legal behaviors that they don't like.


> Just like votes, more money = more protection.

That's what I find strange with the often-seen "well, just vote with your wallet" argument when a company screws up; it's almost literally the definition of an oligarchy (IE, more money = more decision power).


It's the similar power arrangement when an employee has legitimate grievances with their employer. Individually, they are a speck. Nothing. They can be gotten rid of like the chattel they are.

However, when Unions show up, they are the equal and opposing force that keeps a company in check with regards to their employees. Some have issues with Unions, as some of them are significantly corrupt. But by and large, unions are the equal and opposite force.

What protects small companies from large companies? In reality, nothing. That's what allows fake-patent shakedowns like the "SSL Patent", or others. And that's by exploiting protections in law... But what happens when one side has *10000 the resources? You capitulate and go bankrupt due to legal fees, legal harassment, and a continual defense against a legal monied attack.

In the end, there's fuck-all you can do. Well, other than whatever the monied plantiff wants.


"Vote with your wallet" means hit them where it hurts, because you don't have much of an actual vote in a company's behavior. It has nothing to do with using money to subvert the democratic process.


It normalizes the behavior as acceptable. In reality, the aphorism is based on a ridiculous premise that nobody in their right mind should accept; that money is the only thing responsible for dictating what is acceptable behavior.


Uh, that's the entire premise behind the free market. Money decides who is right and who is wrong. The Invisible Hand doesn't have morals.


> Uh, that's the entire premise behind the free market. Money decides who is right and who is wrong. The Invisible Hand doesn't have morals.

Yeah, free market. Like "I have more money, and I dont like your face, so I nuisance sue you until you're bankrupt." free market?

That's not a world I want to be part of, continue, or assist in any way.


It's pretty clear that unregulated capitalism does not work; that's why we have regulations.

What kind of world would it be if we didn't even have rules about things like how much lead is acceptable for a person to consume, or what constitutes 'acutely toxic,' or what you are and aren't allowed to put in food?

"Well," the free market idealist replies, "it would be fine. Nobody would consume things with a lot of lead over a competitor without lead. Nobody would use unlabeled toxic things after the first few incidents. Nobody would eat or drink poison over a nutritious competitor."

And that malicious failure to acknowledge that people are not omniscient or in possession of perfect information about The Market on a second-to-second basis is what leads to us accepting those sorts of stupid arguments.


To be fair, that phrase usually applies to everyday consumer purchases, not a firm using large amounts of money to apply legal pressure to another firm. The normal usage of the phrase is fairly reasonable.


I love capitalism


When is the wedding


I hope they don't get married. I've been happy with capitalism since (at least) March of 1776. And, you know, we both have our flaws (like when she goes out with politicians and gets dirty, no denying it, from time-to-time), but I can always bring capitalism to heel with that "profit motive", and the politicians? Not so much...


Usually it doesn't work to buy products at full retail price and resell them at a higher retail price. I guess the "in Canada" part is how it worked out for him?

Trader Joe's probably wants to protect their brand in hopes of a future Canadian expansion.


Lets be serious here. This is a standard "I'm wrong, but I have more money so Ill exhaust your resources to get what I want."

There's no trademark devaluation. There's no copyright infringement. There's no patent infringement. This is straight up First Sale Doctrine stuff. And even if there was the above 3, SCOUTS ruled those rights are exhausted on sale recently.

This is directly an issue of "More Money = Better Legal Justice". And that should be very worrying.


^This. This kind of shit along with the archaic copyright system we have (though thats slowly improving) I think is one of the biggest reasons the American economy is so sluggish right now.

Easiest way to fix this I think is to make it so that the plaintiff in these kinds of suits has to show real, actual damage: not to branding, not to "theoretical sales", not to "possible expansion", but actual and documented ill effects on their business resulting from the activity of the defendant, and more importantly make the award for such a case relative to that damage. That would shut down 90% of these cases overnight.


There ought to be a law against that. Better, an amendment. No idea on the verbiage though.


IANAL but my impression is the provision in legal due process for expediency is relevant only to the criminal justice system. This example makes for a very good argument that it ought to also apply to the civil justice system. The main mechanism that is used for this kind of legal action is the cost of retaining a law firm for extended periods of time. If the time was reduced the costs would be reduced also. That would partially equalize access to legal representation in civil disputes.


Or make it unlawful to extend a case artificially or until the other party goes bankrupt.


It worked because Trader Joe's hasn't bothered to open up stores in Canada for some reason. They created a market vacuum and this guy came in to fill it.


> Usually it doesn't work to buy products at full retail price and resell them at a higher retail price. I guess the "in Canada" part is how it worked out for him?

This is the most tried-and-true, reliable method of becoming rich in history. You buy something at full retail price, move it, and resell it at a higher full retail price.


This has little to do with capitalism. More like the corporo-fascist police state we inhabit.

In capitalism, Pirate Joe's could open up right next door to Trader Joe's and charge whatever prices they like for the products purchased next door.


Capitalism just means private ownership of the means of production. What you call corporo-fascist is just the natural end game of such an economic system.


In free market land Trader Joe's would have been able to prevent the resale to Pirate Joe's in the first place.


This comment is perhaps a little hyperbolic but it's also pretty dead-on. India is FAR more capitalist the US is these days, possibly too much but here in the States our capitalism is regulated to death, ironically to a large extend by the corporations who whine about too much regulation all the time.


It is only regulation if it hurts you.


No way, there are tons of ways corporations lobby for favorable regulations, most often against competitors. They either make sure the regulations being met will cost more than their competitors can spend, or they write them in such a way where they already meet them and therefore have an advantage, etc. There are numerous ways corporate interests use influence to not so much author regulations, but get them tweaked in such a way that it gives them a leg up.


Trader Joe's is a masterclass example in branding.

The only reason anyone's surprised or outrage is that the store feels like a small, homey, good natured place full of organic this and that that's lower priced than you'd expect. That might have been true, 40 years ago. For a store that had the same name, but was a different entity entirely.

Trader Joe's now is just a giant marketing and packaging front for 70 billion dollar a year Aldi, a multinational chain. It's a corporation. None of this behavior surprises me at all.


I'm not clear on how US courts were allowed to hear a case about events in Canada. Is that a thing?


A court said that since the "harm" (devaluing the trademark) happened in America, the case could move ahead. https://www.nytimes.com/2016/08/28/us/court-infringement-law...


It seems like after you buy something at point of sale whatever you do with it is fair game. I can buy Coke from Sam's Club or Costco and sell it in my restaurant. How is what Pirate Joe's did any different?


This is a trademark infringement case. The (alleged) problem is that he set up a store which billed itself as being basically a Trader Joe's.


Except he didn't. It was always clear what he was doing.

This is pretty straightforward legal bullying, in my opinion.


The guy clearly tried to position himself as a pseudo-Trader Joe's though. He called it Pirate Joes and only sold products from Trader Joe's. It seems like everyone thought of it as a kind of Trader Joe's.

Even though copyright infringement might not have been his intent, intent doesn't matter. That said, this does look like egregious legal bullying even if the case holds water.

IANAL


> It seems like everyone thought of it as a kind of Trader Joe's.

FWIW, I live 4 blocks from Pirate Joes and can tell you that no-one thought of it "as a kind of Trader Joe's".

Okay, maybe there are a few uninformed people but it's still a very long way from "everyone".


What did you think of it as? In my mind, this store is in no way associated with Trader Joe's, but sells exclusively Trader Joe's products (I've only been in it once); that made it into a kind of Trader Joe's.

I think this debate is more about how one can define "kind of Trader Joe's" than about how one associated it with the company.


But big companies can't allow this kind of infringement. They have to defend aggressively. You never to which mistake may cost billions of dollars in the future.


To me it is pretty clear that's what he was doing.


It's OK. A court in the US ruled that we should have jurisdiction there, so now we do.


That's really too bad. Pirate Joe's fit nicely into our cultural tradition of thumbing our noses at the Americans.


I'm surprised Trader Joe's hasn't gone to Amazon yet to have all of these listings removed yet... https://www.amazon.com/s/ref=nb_sb_noss_2?url=search-alias%3...


Have them removed? They are the seller.

>by Trader Joe's


The "by" line in the Amazon listing refers to the manufacturer. The sellers in the linked example have names like "TopPicks" and "South Side Enterprises" (and are probably doing what Pirate Joe did, but without crossing national boundaries, for a customer base of people like me* who live 1.5 hours drive from the nearest TJ's but like the products). TJ doesn't officially sell online.

*I've never actually patronized any of these sellers, but I've been tempted.


Assuming that taking care of customs duties and other food quality issues legally would not be that expensive, all I'm seeing is missed revenue.

If the person wants to order 10,000 palettes of cookies at retail price, why wouldn't you sell the cookies to the person? He's not stealing from the back of the store, he's paying full price. I'm very confused why Trader Joe's would not have created a direct connection with the guy.

This reminds me of major services cutting off API access because they thought they could do it better in-house. Just HIRE the person doing your own service better in a different way.


Is Trader Joe's that much better than anything else Canada has to offer?


For sure.

I love in Toronto and my girlfriend is going to school in philly. Every time she visits she brings up treats from TJ's

There's a chilli-lime spice shaker, and an "everything bagen seasoning" shaker. I've never seen either of those combinations in a single shaker. If I wanted to make either of these at home from constituent parts it would actually be challenging. (powdered lime is really hard to find, maybe not as much for everything bagel)

The chili lime is amazing on popcorn by the way.

Anyways - the thing that makes TJ's so special is if you go into the store there are hundreds of things that you've never seen anywhere else interesting and experimental flavor combinations etc... on top of that, the prices are reasonable instead of "gouging". (possibly cheap, but I haven't shopped there enough to make that claim).

There is no shop in Canada quite like it - but that's because we're dominated by the "big-box-grocery-store"

I wouldn't say there was any single item which was must have at TJs - but on aggregate it is without question "that much better" than anything we have in Canada.


Trader Joe's is different from other stores, not necessarily better or worse. When I lived in California, we did a lot of shopping at Trader Joe's, but you couldn't really get all of your groceries there. Conversely, you could not get equivalents to a lot of Trader Joe's products at other stores. Canada has grocery stores that are 100% equivalent to regular grocery stores in the U.S., but it has nothing that is really equivalent to Trader Joe's.


Traditionally groceries refers to foodstuffs only. Hence the creation of the word supermarket where groceries, household good and other things things were all sold under one roof. TJs carries a few personal care items like toothbrushes and soap but they're probably only about 2% of the shelf space in a store. They're in the food business, that's it.


When I said "groceries," I was referring to food. I wouldn't be happy having to buy 100% of my food at Trader Joe's.


TJ's doesn't carry garbage bags. I remember that being pretty frustrating, since it's one of those things most grocery stores have had for decades.


It's clearly better than much of what America has to offer, given that many consumers in the US choose to shop there.


What does it even mean "what America has to offer"? The Trader Joe stores are in America. True TJ is owned by a multi-national corporation, but almost all stores are owned by multi-national corporations. If what America has to offer only includes stores that are not owned by multi-national corporations then I'm not really sure what is left that TJ is being compared to.


I suspect that meant that many Americans will go out of their way to go to a Trader Joes, because their products are unique in some way. Ergo, the rest of "what America has to offer" isn't a good TJ replacement, either.


A few years ago I was thinking about moving to another state, and we made a checklist of things to look for when checking out locations.

Up near the top of the list was "how far is it to the nearest Trader Joe's?"


I think Trader Joe's is mostly about having different things, not necessarily better. At least the one near me has poor selections of most basic grocery items with weak produce and missing the less common basic items if you want to cook yourself (corn meal for example). Instead, it has a large selection of TJ-branded frozen and semi-prepared food items that aren't available elsewhere as well as snacks. I'm rather contemptuous of the whole idea as I'm in favor of more basic food items being the standard and think Trader Joes' take up precious grocery store space in urban areas, but I can see its appeal.


>Trader Joes' take up precious grocery store space in urban areas

At least they have tiny parking lots [1]

[1] https://www.citylab.com/solutions/2016/03/trader-joes-parkin...


>the one near me has poor selections of most basic grocery items with weak produce

Same here - the last time I went they didn't have lettuce.

I haven't been back.


My son used to love their Hawaiian bagels, which we would stock up on when we lived in Maple Ridge and went down to the US for a day trip occasionally. Trader Joe's also has wine which is good for the price, but that doesn't work for Canadians because of import duties and quantity limits. The Trader Joe's in Bellingham is overrun by us Canadians, just like Point Roberts for package receiving...


Someone hasn't had Joe-Joe's.


Or that frozen orange chicken. Damn that stuff is good.


I have lived and worked near a few for over a decade now. It's nice but I wouldn't travel to another state for one.


Everything at Trader Joe's is delicious, plus they have $3 wine that actually tastes good.


I'm in the Bay Area so decent wine in general is relatively cheap


With regards to specialty foods that aren't available in big chain grocery stores, Marilu's Market in Burlington, Ontario is a close comparison to Trader Joe's.


Have you not shopped at a Trader Joe's? It's unique.


I feel that I've lived so long in the Bay Area now that I'm starting to take nice things for granted. While I wouldn't drive to another state for it, I'll drop by Trader Joe's today and be thankful =)


This story has always baffled me and I've never really understood where Trader Joe's comes from on this. It seems like business opportunity exists, but they're either really full of themselves, or have some other tacit reason for avoiding the Canadian market. I just don't get it, and I don't like how Trader Joe's has behaved here. Right or wrong, as a consumer, I disagree, and I'm putting this down as another reason to never go to a Trader Joe's again.


"At one point, Mr. Hallatt dropped the “P” from his store sign so it read “Irate Joe’s” — a signal of his determination to fight the grocery chain."

Hilarious!!!


That's too bad. I loved it when they took the "P" out of their sine after Trader Joe's sued them! ("Irate Joe's")


Makes sense. If it was called Pirate Pete's I would understand. The same thing happened with South Butt, which was a weaker case in my opinion.


So if Trader Joes is so concerned why don't they just open up shop in Canada? I've heard the podcast about it and original articles way back and it's amazing they're shutting out a market that seems to be very welcoming.

Maybe they see Target Canada failure and are scared away by that?


It's sad to see Pirate Joes go away. I don't know anyone who shopped there on a regular basis, but I do think TJ would do well in that neighborhood.

The main draw to Trader Joe's is that its part of the journey across the line. This week I'll be doing this same old routine -- pick up some packages at the mail place ($2 per package), hit up a few grocery stores for different hot sauces and staples (including condensed milk in a squeeze tube), have lunch in Bellingham, go for a walk around Fairhaven, then return home.

Trader Joe's is part of that journey, much like Target (who had a massive, depressing attempt to break into Canada). Strip away that special-trip aspect, and all you really have is another grocery store with a few exceptional items.


Trader Joe's doesn't want customers who spend a ton of money buying in bulk at full retail price. Furthermore, they clearly have no intention of expanding into a large market that desperately wants them. What kind of business is this?


TJ's clearly had a opportunity - there's pent up demand for TJ products in Canada, but instead of investing in a couple of satellite stores in Canada and some bilingual labeling, they chose to spend their money on lawyers and lawsuits.


Well, that's one way to deal with a guy who has spent the money proving the market for your product line. I think a better move would have been to take a page from Dave Thomas' (Wendy's) play book and open a Trader Joe's down the street.

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