To your average person, a 6oz bag of dried pineapple is a non-threatening treat. To the cherished grocery store chain Trader Joe’s, that and other products including black bean quinoa chips and dark chocolate-covered edamame are worth a five-year legal battle.
The company claims a rebel Canadian grocery operation called Pirate Joe’s is violating its trademark. Pirate Joe’s buys Trader Joe’s products, smuggles them across the border to Vancouver, and sells them.
The case is set to go to trial in November. For Pirate Joe’s to have a fighting chance against one of the most popular grocery stores in the US, its founder, Mike Hallatt, needs to raise some serious money. So he has turned to the internet, launching a crowdfunding campaign on the platform Crowd Justice, seeking $250,000.
That number pales when compared to the more than $1m Hallatt says he has spent at Trader Joe’s locations in the US, in order to supply Vancouver residents with goods that are not sold in their country.
“It’s the biggest bet in my life,” said Hallatt, who has lived and breathed Pirate Joe’s for more than five years. “Everybody in my world is telling me to quit, and yet customers are coming in and saying: ‘Oh my god, I’ll support you.’”
Trader Joe’s has a cult-like following in the US, where it is known for its friendly corporate culture, affordable prices and speciality food items. Its legal battle with Pirate Joe’s, however, has showcased its corporate might.
The company, which has not commented on pending litigation, sent Hallatt a cease-and-desist order almost immediately after he started Pirate Joe’s, in 2012. It then pursued a trademark case. That was dismissed in October 2013, because the court determined Trader Joe’s, a US company, couldn’t sue in Canada, where it does not have shops or offices.
It was a major win for Hallatt and his customers, many of whom do not have the time, money or documentation to cross the border to shop at the nearest Trader Joe’s, which is nearly 90km from Vancouver.
Celebrations ground to a halt last year, though, when the ninth circuit court of appeals overturned the lower court’s motion to dismiss, sending the case to trial.
The ninth circuit decision has had a significant impact on US trademark law. “Just opening the door to trademark owners to sue in US courts for acts that occurred abroad and to be able to survive a motion to dismiss is huge,” said Christine Farley, a professor at American University Washington College of Law.
Farley said the onus was now on Trader Joe’s, to prove that Hallatt’s business has affected its commerce and trademark rights in the US.
“The ninth circuit has essentially rolled out the red carpet for Trader Joe’s to make the claim and now the ball is in their court,” she said, “they have to figure out how to do it with this quirky set of facts.”
One such quirky fact is that Trader Joe’s, which is privately owned by the German grocery chain Aldi, has a Canadian and a US trademark but decided to pursue the case in a US court. Another is that Hallatt does not hide the fact he is an unauthorized retailer – in fact, he is open about the company’s frustrations with his operation and seems to revel in its relentless efforts to bring him down.
The Pirate Joe’s website declares that it is “unaffiliated, unauthorized, unafraid” and has a section titled “lawsuits n’ such”. Keen observers have also noticed that dropping one letter turns the chain’s name to “Irate” Joe’s.
Hallatt is one of Trader Joe’s best customers – he estimates he has spent $20,000 to $25,000 at stores each month in the past five years – at least $1.3m. But Trader Joe’s will not have to worry about such detail if Hallatt cannot raise the resources to fund a trial.
“If Mike Hallatt can’t pay a trademark attorney to do the litigation,” Farley said, “then they’ve won.”
Which is why Hallatt turned to CrowdJustice, a British platform recently expanded to the US that helps people raise money for court cases against high-powered adversaries. “What we’re setting out to do in general is to level the playing field in the legal system and democratize access to justice,” said CrowdJustice chief executive Julia Salasky.
The Pirate Joe’s campaign launched on Tuesday and is seeking $50,000 initially, with the ultimate goal of $250,000.
The need to raise funds could be more pressing if Trader Joe’s efforts to stop Hallatt shopping at its stores are successful. Hallatt said the company has told him it plans to file a motion that would ask the court to stop him purchasing products ahead of trial.
He believes he has been unofficially blacklisted for years by stores across the Pacific north-west, which is why he hires fleets of local shoppers to buy goods requested by his customers. He then packs the goods up and takes them across the border.
When the legal battle began, Hallatt said, he wished Trader Joe’s would “just open in Canada already, put me out of my misery.” But motivation to continue the fight comes from his customers and the company’s focus on seeing him shut down.
“If I’m in my store and I’m unloading my van and people say, ‘This is the only thing my kids will eat,’ that’s encouraging,” he said.
“All I have got to do is get to November.”
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