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Trader Joe's drags a pirate to court

AmyH Aug 16, 2013 08:55 AM

Well, this is one way to get Trader Joe's products in places where they won't open:
http://www.timesunion.com/news/articl...

  1. f
    ferret Aug 16, 2013 10:45 AM

    You really can't view it as a matter of where Trader Joe's "won't open," it's more of a "haven't yet opened."

    I know people are critical of Trader Joe's limited scale but that ties into their product availability and favorable pricing. They can only grow so quickly.

    Look at the Fairway stores which recently had an IPO. They have 12 locations in the New York tri-state area and offer lots of specialty and artisanal products at reasonable prices. They are talking about expansion to 300 locations which seems ludicrous given that their sourcing would have to grow massively to keep up and may not even been viable at that scale.

    You can't just open everywhere at once and maintain quality, pricing and variety.

    While this guy's business model may work for him, Trader Joe's has every right to challenge it. For example, trader Joe's is well-known for its liberal returns policy if you don't like something. I doubt he can match that. Also, as noted in the article, not all products travel well if steps aren't taken to protect them in shipping and may ultimately reflect poorly on Trader Joe's. There are any number of valid business reasons why TJs wants him to stop.

    There were a couple of "I'll ship you TJ's products for a fee" businesses over the years which were similarly shut down.

    1. i
      INDIANRIVERFL Aug 16, 2013 12:13 PM

      Good for Trader Joe's. While I am not a fan, I fully support their effort to protect their reputation and business.

      And given the exchange rate, I doubt if that is much of a markup.

      2 Replies
      1. re: INDIANRIVERFL
        f
        ferret Aug 16, 2013 12:19 PM

        The Canadian dollar is about the same as the US dollar these days.

        1. re: INDIANRIVERFL
          g
          GH1618 Aug 17, 2013 09:37 PM

          How does this hurt their business? Pirate Joe is buying the products, not stealing them.

        2. drongo Aug 16, 2013 12:32 PM

          I'm not a lawyer, but I would think the first sale doctrine would allow him to resell the items (although not allow him to use the Pirate Joe's name, which perhaps is a trademark infringement). But the unauthorized importation from one country into another may be a problem (as it was for Costco in this case: http://www.mondaq.com/canada/x/122642... ).

          4 Replies
          1. re: drongo
            f
            ferret Aug 16, 2013 01:18 PM

            "First sale doctrine" is an intellectual property concept that doesn't really apply here.

            1. re: ferret
              j
              John Francis Aug 16, 2013 02:32 PM

              What other concept does? There's no such thing as "scalping" cans of soup, is there? If Pirate Joe's were actually stealing what they sell, then of course that would be wrong. But the guy is buying products at the full retail price. Where's the beef?

              1. re: John Francis
                f
                ferret Aug 16, 2013 02:47 PM

                According to the article:

                "federal trademark infringement; unfair competition, false endorsement and false designation of origin; false advertising; federal trademark dilution; injury to business and reputation; and deceptive business practices"

                For many purchasers this is their first exposure to Trader Joe's products and it's not being done in a way that provides the full Trader Joe's experience.

                As I mentioned above Trader Joe's encourages adventurousness so you can buy something outside your comfort zone and be sure they'll take it back. They also control their shipping/storage/selling conditions so if Pirate Joe leaves things in a hot van too long and it negatively impacts flavor/quality whose reputation is at risk?

                Trader Joe's has spent tens of millions securing its image and reputation and has a right (and obligation) to protect it.

                1. re: ferret
                  j
                  John Francis Aug 17, 2013 06:49 PM

                  Maybe I've missed something, but Pirate Joe does not sell in the same geographical area or even in the same country as Trader Joe's, so "unfair competition" isn't an issue. The other elements of your paragraph 1 seem also to be irrelevant to what Pirate Joe's actually does.

                  The main thing about the "Trader Joe's experience" is Trader Joe's products, which Canadians can apparently only get from Pirate Joe's without going abroad. Closing Pirate Joe's would deprive them of any part of the "Trader Joe's experience." If that's an issue.

                  No reason why TJ's reputation should suffer because some of its products are sold in a store not named Trader Joe's, any more than that Kellogg's corn flakes are sold in stores not named Kellogg's.

                  As for Trader Joe's protecting its trademark, the name of the Canadian store is not Trader Joe's but Pirate Joe's, which proclaims that it is not a TJ's store or affiliate - to the contrary. The food sold there may carry the Trader Joe's trademark, but so what? It can't be a trademark violation to sell a product in its original packaging. Not to do so would be to deceive the customers.

          2. j
            John Francis Aug 16, 2013 12:38 PM

            I can see why Trader Joe's is irate about this, but I can't say that I am.

            1 Reply
            1. re: John Francis
              g
              GH1618 Aug 17, 2013 09:38 PM

              Ok, why are they? It's a mystery to me.

            2. Will Owen Aug 16, 2013 03:17 PM

              I'm a big TJ's fan, love most of their products, do most of my shopping there, especially like the way their employees are treated and paid. What I do not like is their dogged insularity and their deliberate opacity - their refusal to allow any employee to be interviewed or to say anything for publication about the company or anything related. And as for advertising any local and/or charitable event, forget that - it's simply not allowed.

              I've always been of the opinion that once I've bought a consumable product, what I do with it is no longer the seller's business, period. Copyright law does not apply to groceries; if I use my loaf of bread and my bologna and the condiments I bought to make sandwiches for sale, I don't owe the market any more than the purchase price I paid. If this man has a clientele that will pay his markup on items he's bought with his own money, in an area with no Trader Joe's markets and probably none soon planned, seems to me that the only harm TJ's can claim is to their reputation if someone hates his seaweed snack or whatever. I've had a couple of items I hated, too, but even if they didn't happily take them back (or if I were up there in Vancouver and couldn't be bothered, or have the nerve!) it wouldn't keep me from getting other stuff there. I think those guys need to un-wad some panties here.

              2 Replies
              1. re: Will Owen
                s
                sciencediet Aug 16, 2013 05:16 PM

                I agree. It's like all those people who buy up the hot thing at Target and sell it on Ebay--it's theirs, they can do whatever they want with it (although Target may disagree). And I don't particularly think "Pirate Joe's" could be easily mistaken for "Trader Joe's" in a copyright sense--lots of people are named Joe. And why would they be concerned about their copyright or market share in Canada if they don't even have stores there?

                1. re: Will Owen
                  b
                  BigWoodenSpoon Aug 21, 2013 08:11 PM

                  As far as "insularity" is concerned, it really depends on your area's Regional Manager because they are the ones who set the tone in the stores. The Corporate structure has changed in the past few years (when the older German owner died) and things aren't quite as "secretive" as they used to be.
                  Our store (Alameda, CA) has a Community bulletin board where folks can post information about events. We donate food daily to our local food bank and we participate in our local 4th of July parade as well as a Meals on Wheels event at Rock Wall Winery.
                  I think people should rely on their own reputations rather than trying to ride on the coattails of someone else's hard work.

                2. t
                  tardigrade Aug 16, 2013 05:49 PM

                  IANAL, but Trader Joe's has an obligation to protect its trademark. To their thinking, "Pirate Joe's" is an attempt to cash in on their cachet: if he had called his store Pirate Mike's, or could demonstrate that he had the name first, TJ's wouldn't have much of a case - assuming Canadian trademark law is anything like that in the US.

                  I'm more surprised Canadian customs hasn't had more to say in the matter.

                  2 Replies
                  1. re: tardigrade
                    Mr Taster Sep 13, 2013 05:04 PM

                    Mr Taster's Public Service to Prevent Brain Bumps When Encountering Obscure or Indecipherable Acronyms (MTPSPBBWEOIA)

                    IANAL = I am not a lawyer

                    http://chowhound.chow.com/topics/555190

                    Mr Taster

                    1. re: Mr Taster
                      monfrancisco Sep 13, 2013 05:16 PM

                      Public service is a good thing! I always read that as "I anal", which seems appropriate.

                  2. g
                    GH1618 Aug 17, 2013 09:35 PM

                    I don't see any basis for a lawsuit. Pirate Joe's is a Canadian business with no presence in the US. Trader Joe's does not have stores in Canada. They are not in competition, so how can there be "unfair competition."

                    It seems to me that Pirate Joe is actually a good customer of Trader Joe's. If he were counterfeiting the products that would be a real problem, but he's reselling the authentic goods.

                    The US court should dismiss it for lack of jurisdiction.

                    3 Replies
                    1. re: GH1618
                      ipsedixit Aug 17, 2013 09:45 PM

                      The US court should dismiss it for lack of jurisdiction.
                      ____________

                      You make some valid common sense points, even though they may not all be legally sound.

                      But that statement above is just legally incorrect.

                      1. re: ipsedixit
                        h
                        hawkeyeui93 Aug 18, 2013 08:03 PM

                        Sounds like a final exam question for a Jurisprudence class ...

                      2. re: GH1618
                        f
                        ferret Aug 18, 2013 09:26 AM

                        The minute he opened a commercial venture based solely on the retail purchase of goods from a recognizable single source he opened himself up to all kinds of liability. This isn't a mom and pop corner store that buys Heinz ketchup or Coca Cola from a wholesaler and resells it. He is intending to be the Vancouver presence of an iconic grocery chain. He is, for all intents and purposes, marketing himself as a limited version of Trader Joe's. It's not merely a matter of selling the same types of goods (for example, selling similarly-packaged and branded products) he's capitalizing on the goodwill developed at great expense by Trader Joes. The key difference is that he's not giving buyers a Trader Joes experience.

                        If Trader Joe's decides to move into Vanouver - and they very likely will at some point - they will have buyers who have become familiar with their goods in a less than optimal way. It's very possible that they will lose potential customers who had an unfavorable exposure through Pirate Joe's.

                        In any case, he's an idiot because if there are any issues with tainted food or spoilage leading to illness he is now on the list of defendants and may well be the only person on the list if Trader Joes issued a recall that he didn't know of.

                        However well-intentioned he may be, he needs to come up with his own idea and not piggy-back on another retailer's business.

                      3. ipsedixit Aug 17, 2013 10:10 PM

                        Just curious, for those who do not consider this a trademark infringement issue, ever wonder why the store is named "Pirate Joe's" (or Irate Joe's)?

                        Why not "Michael's Mart"? After the store owner's first name?

                        6 Replies
                        1. re: ipsedixit
                          drongo Aug 18, 2013 06:40 AM

                          Clearly he is playing on the Trader Joe's name, but perhaps he'll argue that it's a parody with no likelihood of confusion.

                          1. re: ipsedixit
                            g
                            GH1618 Aug 18, 2013 05:10 PM

                            Owners of trademarks typically seek the broadest possible interpretation of infringement.  For example, Intel once tried to claim rights to every number ending in "86" (they lost).  This just seems to me to be not close enough to confuse anybody.  It is no more an infringement than Original Joe's restaurant, in my opinion.  There must be a lot of places called Joe's.  Anyway, they should bring that complaint in a Canadian court, which is where the name is being used.

                            1. re: GH1618
                              ipsedixit Aug 18, 2013 06:36 PM

                              That begs the question.

                              Why did the guy name his store "Pirate Joe's" as opposed to Michael's Mart?

                              1. re: ipsedixit
                                g
                                GH1618 Aug 18, 2013 07:59 PM

                                You will have to ask him. But I am reminded of a local workout place called "God's Gym." It's an obvious play on the well-known "Gold's Gym," but not an infringement of trademark.

                                1. re: GH1618
                                  AmyH Aug 19, 2013 04:56 AM

                                  There's a book called "God's Gym" too.
                                  http://www.amazon.com/Gods-Gym-Leon-W...

                            2. re: ipsedixit
                              h
                              hawkeyeui93 Aug 18, 2013 08:06 PM

                              Why does a Mexican orange liqueur maker copy the shape of a Cointreau Bottle and call itself Controy? Obviously, it could have been named something different.

                            3. Veggo Aug 18, 2013 05:38 PM

                              Pirate should be condemned to walk a plank off the TJ mother ship, with TJ's crew swilling rum in approval, with a chorus of parrots squawking in agreement.
                              To borrow from Rick in Casablanca, "I don't object to parasites. I don't like a cut rate one "

                              3 Replies
                              1. re: Veggo
                                drongo Aug 19, 2013 05:00 PM

                                He's not cut rate -- he's charging a premium!

                                It will be interesting to watch, but my guess is that the big corporation (relatively speaking) will bully/threaten/intimidate/etc the smaller into submission... as usual. What a fine world we live in!

                                1. re: drongo
                                  f
                                  ferret Aug 19, 2013 06:49 PM

                                  Because the little guy is never in the wrong?

                                  1. re: ferret
                                    ipsedixit Aug 19, 2013 07:05 PM

                                    Which he clearly is in this instance.

                              2. DoobieWah Sep 13, 2013 11:01 AM

                                If TJ's were smart, they'd give the guy a volume discount.

                                They're not even in Vancouver, (but probably WILL be!), so all he's really doing is preparing the market for them.

                                Once they do enter the market, he won't be able to compete with them either selection or price wise, so he'll fade away and they will have a ready made customer base.

                                Instead, they're just stirring up ill will.

                                Unnecessarily, it seems to me.

                                1. r
                                  rainey Sep 13, 2013 05:34 PM

                                  OMG!!! This recalls the days when I lived in Vancouver and my kids were still very young. At the time 2 McD's had wormed their way into Vancouver after many court battles that forced them to conform to the local architecture and not incentivize the food by offering Kids' Meals.

                                  I still had business in The States and drove down for that and a shopping spree of familiar groceries. One stop I always made was McD's to load up on the Kids' Meals. I took about a dozen boxes with toys back for the neighborhood kids.

                                  I guess, having dumped the actual food and not charging I would have been OK but, in retrospect, I can see myself in prison stripes for getting the kids the stuff that was heavily advertised on the US TV they were all watching but couldn't have. =o

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