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.
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.
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.
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.
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.
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.
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.
> 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.
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.
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.
> 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.
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.
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.
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.
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.
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.
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.
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.
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.
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).
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.
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.
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.
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.
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.
[+] [-] dang|2 years ago|reply
[+] [-] captainmuon|8 years ago|reply
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.
[+] [-] will_brown|8 years ago|reply
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.
[+] [-] tryitnow|8 years ago|reply
> 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.
[+] [-] goodcanadian|8 years ago|reply
[+] [-] TommyBombadil|8 years ago|reply
[+] [-] terravion|8 years ago|reply
[+] [-] DanBC|8 years ago|reply
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
[+] [-] 801699|8 years ago|reply
trademark. he picked the wrong name for his business.
[+] [-] keithpeter|8 years ago|reply
[+] [-] post_break|8 years ago|reply
[+] [-] rdtsc|8 years ago|reply
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.
[+] [-] analog31|8 years ago|reply
[+] [-] lr4444lr|8 years ago|reply
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.
[+] [-] rayiner|8 years ago|reply
More generally, TJs has every right to sell to people on specific terms. That's just freedom of contract.
[+] [-] random3|8 years ago|reply
[+] [-] wayn3|8 years ago|reply
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.
[+] [-] chx|8 years ago|reply
> 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.
[+] [-] Chaebixi|8 years ago|reply
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.
[+] [-] patmcc|8 years ago|reply
[+] [-] belorn|8 years ago|reply
[+] [-] buildbot|8 years ago|reply
[+] [-] fnordfnordfnord|8 years ago|reply
[+] [-] Noos|8 years ago|reply
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.
[+] [-] Steko|8 years ago|reply
http://www.cbc.ca/news/canada/british-columbia/pirate-joe-s-...
[+] [-] thefalcon|8 years ago|reply
[+] [-] TillE|8 years ago|reply
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.
[+] [-] anigbrowl|8 years ago|reply
[+] [-] rfdub|8 years ago|reply
[+] [-] culturalzero|8 years ago|reply
[+] [-] lolsal|8 years ago|reply
[+] [-] settsu|8 years ago|reply
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.
[+] [-] SeeDave|8 years ago|reply
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.
[+] [-] giarc|8 years ago|reply
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.
[+] [-] ci5er|8 years ago|reply
2) Brand Dilution
3) Trademark Protection
[+] [-] lsiebert|8 years ago|reply
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.
[+] [-] CobrastanJorji|8 years ago|reply
[+] [-] sillysaurus3|8 years ago|reply
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.
[+] [-] tryitnow|8 years ago|reply
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?
[+] [-] blacksmith_tb|8 years ago|reply
[+] [-] heynk|8 years ago|reply
[+] [-] mazameli|8 years ago|reply
[+] [-] kefka|8 years ago|reply
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.
[+] [-] bbarn|8 years ago|reply
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.
[+] [-] joncp|8 years ago|reply
[+] [-] echlebek|8 years ago|reply
[+] [-] hallalex831|8 years ago|reply
[+] [-] sailfast|8 years ago|reply
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.
[+] [-] chaostheory|8 years ago|reply
[+] [-] Simulacra|8 years ago|reply