In the highly-publicized case about unauthorized reselling of Trader Joe’s merchandise by renegade Canadian merchant “Pirate Joe’s,” social media provided the powder keg for Trader Joe’s arbitration enforcement demand. The case set sail in May 2013, when Trader Joe’s sued Pirate Joe’s proprietor Michael Hallatt for federal trademark infringement and violations of Washington state consumer protection and trademark dilution laws. A Washington federal judge dismissed that suit on jurisdictional grounds, but the Ninth Circuit brought Trader Joe’s federal trademark infringement claims back from the deep on appeal. The parties entered arbitration, obligating Hallatt to cease reselling Trader Joe’s merchandise while they parleyed a confidential final settlement.
Last June, however, Hallatt posted to the Pirate Joe’s website “We re-opened today for good. … The law is on our side and I’ve got everyone addicted, so it’s only fair I keep up supply!” Trader Joe’s immediately moved to confirm and enforce the arbitration award, parroting this post as key evidence in its papers, which the court approved in August. The court made shark bait of Hallatt’s motion to reconsider affirming the arbitration award last month.
Takeaway: Advertisers that use social media or website posts regarding litigation may provide the opposition with ammunition to sink their case.