Pirate Joe's was a specialty

grocery store A grocery store ( AE), grocery shop ( BE) or simply grocery is a store that primarily retails a general range of food products, which may be fresh or packaged. In everyday U.S. usage, however, "grocery store" is a synonym for supermarket, a ...

Vancouver Vancouver ( ) is a major city in western Canada, located in the Lower Mainland region of British Columbia. As the List of cities in British Columbia, most populous city in the province, the 2021 Canadian census recorded 662,248 people in the ...

British Columbia British Columbia (commonly abbreviated as BC) is the westernmost province of Canada, situated between the Pacific Ocean and the Rocky Mountains. It has a diverse geography, with rugged landscapes that include rocky coastlines, sandy beaches, ...

Canada Canada is a country in North America. Its ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, covering over , making it the world's second-largest country by tot ...

, owned by Michael Hallatt. Its inventory consisted entirely of store brand products resold from locations of the U.S.-based grocery chain

Trader Joe's Trader Joe's is an American chain of grocery stores headquartered in Monrovia, California. The chain has over 569 stores across the United States. The first Trader Joe's store was opened in 1967 by founder Joe Coulombe in Pasadena, California ...

, which does not operate any locations in Canada. Despite the high costs of operating the store because of its business model, the store became popular with residents who enjoyed the opportunity to purchase some of the distinct private label products offered by Trader Joe's. Although considered a legal grey market business, Hallatt's operation drew the ire of the Trader Joe's company. The shop eventually became the subject of a lawsuit filed by Trader Joe's in May 2013, which claimed that the Pirate Joe's shop was infringing on its

trademark A trademark (also written trade mark or trade-mark) is a type of intellectual property consisting of a recognizable sign, design, or expression that identifies products or services from a particular source and distinguishes them from others ...

s and damaging its reputation. Hallatt chose to fight for his business model in court while continuing to operate the store. In 2013, a judge dismissed the suit, ruling that Hallatt could not be convicted under US trademark law because the alleged infringements did not occur within the country. Trader Joe's was not able to prove the business was causing them any harm, and it was determined that they were in fact benefiting since all products were purchased from their stores at full retail price. However, the suit was reopened on appeal, and Hallatt finally decided to close the store in 2017 due to mounting legal costs.

History

While living in the

San Francisco Bay Area The San Francisco Bay Area, often referred to as simply the Bay Area, is a populous region surrounding the San Francisco, San Pablo, and Suisun Bay estuaries in Northern California. The Bay Area is defined by the Association of Bay Area Go ...

as an employee of

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, Michael Hallatt had become fond of the unique store brand products carried by the California-based

chain

, which did not operate any locations in Canada. After returning to his hometown of Vancouver, Hallatt decided to open a store which would resell Trader Joe's' products. First established in January 2012 under the name "Transilvania Trading", the shop moved to a new location in Vancouver's

Kitsilano Kitsilano () is a neighbourhood located in the city of Vancouver, British Columbia, Canada. Kitsilano is named after Squamish chief August Jack Khatsahlano, and the neighbourhood is located in Vancouver's West Side along the south shore of Engli ...

neighbourhood under the name "Pirate Joe's" later in the year. To facilitate his business model, Hallatt made weekly trips to Trader Joe's stores in nearby

Washington Washington commonly refers to: * Washington (state), United States * Washington, D.C., the capital of the United States ** A metonym for the federal government of the United States ** Washington metropolitan area, the metropolitan area centered on ...

(particularly Bellingham) with an unmarked van to purchase products, spending $4000 to $5000 on each trip. He then brought the products back to Vancouver, and sold them at Pirate Joe's on a grey market basis with markups between $2–3 per product. The store stocked around 1,000 products, and did not carry any fresh or

frozen food Freezing food preserves it from the time it is prepared to the time it is eaten. Since early times, farmers, fishermen, and trappers have preserved grains and produce in unheated buildings during the winter season. Freezing food slows decompositi ...

products. Although popular with residents, Hallatt stated that the store "barely" made enough money to remain operational due to its expenses, which alongside rent and salaries, also included the cost of his trips into the United States to acquire inventory.

Opposition

Although he had spent an estimated $350,000 at the American grocery store since he established Pirate Joe's, Trader Joe's eventually began to show resistance to Hallatt's operation. Hallatt found himself banned from various Trader Joe's locations (with his photo also distributed to other locations as a warning), requiring him to venture farther south to locations in

Seattle Seattle ( ) is a seaport city on the West Coast of the United States. It is the seat of King County, Washington. With a 2020 population of 737,015, it is the largest city in both the state of Washington and the Pacific Northwest regio ...

and even

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in order to obtain products for his inventory without being recognized. On one occasion, Hallatt tried to disguise himself by

cross-dressing Cross-dressing is the act of wearing clothes usually worn by a different gender. From as early as pre-modern history, cross-dressing has been practiced in order to disguise, comfort, entertain, and self-express oneself. Cross-dressing has play ...

, but a bystander in a nearby

drug store A pharmacy (also called "drugstore" in American English or "community pharmacy" or "chemist" in Commonwealth English, or rarely, apothecary) is a retail shop which provides pharmaceutical drugs, among other products. At the pharmacy, a pharmacis ...

's parking lot mistook him for a robber, and called the police. In May 2013, Trader Joe's filed a lawsuit against Hallatt in the state of Washington, alleging

trademark infringement Trademark infringement is a violation of the exclusive rights attached to a trademark without the authorization of the trademark owner or any licensees (provided that such authorization was within the scope of the licence). Infringement may o ...

, unfair competition,

false designation of origin In consumer law, false designation of origin occurs when the manufacturer or seller lies about the country of origin Country of origin (CO) represents the country or countries of manufacture, production, design, or brand origin where an article ...

, and

false advertising False advertising is defined as the act of publishing, transmitting, or otherwise publicly circulating an advertisement containing a false claim, or statement, made intentionally (or recklessly) to promote the sale of property, goods, or servic ...

. The lawsuit claimed that the Pirate Joe's store was arranged too similarly to an actual Trader Joe's store, and that the store's "prominent display of Trader Joe’s trademarks and other

intellectual property Intellectual property (IP) is a category of property that includes intangible creations of the human intellect. There are many types of intellectual property, and some countries recognize more than others. The best-known types are patents, cop ...

and their flagrant attempts to pass themselves off as an approved retailer of Trader Joe’s-brand products convey the false impression that the defendants’ retail store is affiliated with and/or endorsed by Trader Joe's." Trader Joe's submitted an application for a trademark on its name in Canada in 2010, but, , it had not been granted. Hallatt pledged to continue operating the store (but with newly hired staff members filling his previous role of purchasing inventory), as he still believed he was legally able to sell the products he obtained. After the lawsuit was filed, he began marketing the shop as being "Unauthorized, Unaffiliated and Unafraid", and modified the store's window sign to read "Irate Joe's". Intellectual property lawyer Greg Owen argued that Trader Joe's had no chance of winning the lawsuit unless the store was actually located in the United States or the lawsuit was filed in Canada, and also noted that the company was "certainly benefiting from Hallatt purchasing the products." Law professors Kal Raustiala and Chris Sprigman also believed that Trader Joe's' attempt to sue its "best customer" would be unsuccessful, arguing that there would be no consumer confusion between Pirate Joe's and an official Trader Joe's shop due to their dissimilar designs, the first-sale doctrine could also apply in large-scale reselling operations like Pirate Joe's, and that Trader Joe's inaccurate interpretation of trademark law would effectively ban the sale of any

used good Used goods mean any item of personal property offered for sale not as new, including metals in any form except coins that are legal tender, but excluding books, magazines, and postage stamps. Risks Furniture, in particular bedding or upholstere ...

s by retailers.

Dismissal and appeal

In October 2013, Judge Marsha Pechman dismissed the case, ruling that Trader Joe's did not provide sufficient evidence of any economic harm caused by the operation, and that Hallatt could not be held liable under the Lanham Act because the alleged trademark infringements did not occur within the United States. In August 2016, the dismissal was overturned by the 9th U.S. Circuit Court of Appeals, which ruled that a U.S. court does have authority to hear the case, sending the case back to the district court. On June 8, 2017, Pirate Joe's announced that it was closing its doors because the ongoing lawsuit was simply too expensive.

Related ventures

After the lawsuit was dismissed in 2013, Hallatt announced his "plans" to open a

fast food Fast food is a type of mass-produced food designed for commercial resale, with a strong priority placed on speed of service. It is a commercial term, limited to food sold in a restaurant or store with frozen, preheated or precooked ingredien ...

restaurant in Vancouver, with a goal to "revisit fast food" and use "fresh, organic, sustainably harvested ingredients" to produce a healthier hamburger.

References

{{portalbar, Supermarkets, Companies Trader Joe's Defunct supermarkets of Canada Companies based in Vancouver Retail companies established in 2012 Canadian companies established in 2012 Retail companies disestablished in 2017 2012 establishments in British Columbia 2017 disestablishments in British Columbia