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Trader Joe’s trying to make Pirate Joe’s “walk the plank” in U.S. trade-mark case

By Kwan T. Loh on September 14, 2016
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pirates-1440445_1920In the ongoing dispute between Michael Hallatt, a Vancouver businessman, and U.S. based retailer Trader Joe’s, the United States Court of Appeals for the Ninth Circuit (the “Ninth Circuit”) has overruled the 2013 decision of the U.S. District Court for the Western District of Washington (the “District Court”) not to hear Trader Joe’s claim against Hallatt for, among other things, trade-mark infringement, dilution, unfair competition and false advertising.

The dispute arose out of Hallatt’s purchase of products from Trader Joe’s stores in the U.S., particularly in the state of Washington, for resale in Canada (there are no Trader Joe’s stores in Canada).  Hallatt has and continues to mark up and re-sell Trader Joe’s products at his store in Vancouver, named Pirate Joe’s.

The goods are not counterfeit, and the source of the products being sold is not in dispute – the packaging on the products bears Trader Joe’s trade-marks, and Hallatt states on his website that he sells Trader Joe’s products.  Hallatt expressly states on his website that he is not an authorized or affiliated distributor or reseller of Trader Joe’s.  Nevertheless, Trader Joe’s took the view that Hallatt’s conduct violated its U.S. trade-mark rights under the U.S. Lanham Act, and in 2013 it brought a claim against Hallatt in the District Court.

Taking the view that any unlawful conduct by Hallatt would have taken place in Canada rather than the U.S., and that Hallatt’s activities did not cause a cognizable injury to Trader Joe’s in the U.S. or an effect on American foreign commerce, the District Court judge decided in October 2013 that the Court had no subject matter jurisdiction to hear Trader Joe’s claims.  Trader Joe’s appealed that decision to the Ninth Circuit.

The Ninth Circuit disagreed with the District Court judge, opining instead that Hallatt’s activities could affect the goodwill and value of the Trader Joe’s brand in the U.S., and accordingly, its U.S. trade-mark rights.  The Ninth Circuit concluded that the Lanham Act does apply to Hallatt’s allegedly infringing conduct, and in the result, remanded the case back to the District Court for further proceedings.

We will be keeping an eye on this trade-mark case that is likely of particular interest to cross-border shoppers.

Photo of Kwan T. Loh Kwan T. Loh

Kwan Loh is an associate with the firm’s Technology and Intellectual Property Groups. In addition to being a lawyer, Kwan is also a registered Canadian Trade-mark Agent.

Kwan practices exclusively in intellectual property law, and regularly advises clients how to procure, protect, and…

Kwan Loh is an associate with the firm’s Technology and Intellectual Property Groups. In addition to being a lawyer, Kwan is also a registered Canadian Trade-mark Agent.

Kwan practices exclusively in intellectual property law, and regularly advises clients how to procure, protect, and enforce their intellectual property rights. In particular, he is well-versed in a wide spectrum of trade-mark matters, including the filing and prosecution of trade-mark applications in Canada, the United States and around the world, as well as the handling of trade-mark opposition and cancellation proceedings in Canada.

Kwan is also experienced in managing trade-mark portfolios for clients across multiple jurisdictions, including clearance work and prosecution strategy. As part of this work, Kwan also engages in the negotiation of licenses, assignments and other commercial agreements for clients.

In addition to handling prosecution and solicitor work, Kwan also has experience with trade-mark related disputes, and has appeared before the Federal Court and Federal Court of Appeal in trade-mark related litigation.

Kwan received his Bachelor of Science in Physiology, with Honours, from The University of British Columbia in 2002 and his Bachelor of Laws in 2006 also from UBC. He was called to the Bar of Ontario in 2007 and the Bar of British Columbia in 2010. Kwan is fluent in Mandarin, and conversant in Cantonese.

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  • Posted in:
    Intellectual Property
  • Blog:
    ILN IP Insider
  • Organization:
    International Lawyers Network
  • Article: View Original Source

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