The very popular US grocery retailer Trader
Joe's has a following among Canadian
consumers. Capitalizing on this popularity north of the border, a
Vancouver entrepreneur has made it his business to buy genuine
Trader Joe's-branded merchandise in the US, and re-sell the
products in a retail location in Vancouver under the banner Pirate
Joe's. Citing Lanham Act trademark
infringement, TJs sued the Canadian businessman in Washington State
(Link to the complaint
The US court dismissed the complaint, and Trader
Joe's has now appealed that
decision to the US Federal Circuit Court of
While this appeal will run its course under US legal principles,
it is worth noting the law on "parallel
importation" in Canada.
Parallel importation or "grey marketing" is the
importation into Canada of genuine products, which fall outside the
brand owner's established channels. These are not
knock-offs or counterfeits, but rather legitimate products
imported through a channel "parallel" to the brand
owner's preferred distribution routes (or, in the case of
Trader Joe's, where the brand owner has no established
trading network in Canada at all).
There are two main intellectual property tools to attack
parallel importation, and unfortunately for brand owners, both
of them can be problematic in Canada:
Trade-marks: Brand owners sometimes try to rely on
their trade-mark rights in Canada
(Trader Joe's may have some reputation in Canada
through spill-over advertising). In parallel import cases, any
claim of trade-mark infringement in Canada is likely to
face challenges in light of decisions like Coca-Cola Ltd. vs.
Pardhan, which dealt with the export of
genuine Coca-Cola products (I wrote a case commentary on this
decision for Canadian International Lawyer, June
Copyright: In the Euro Excellence case (Euro
Excellence Inc. vs. Kraft Canada Inc.), the brand
owner attempted to employ copyright
law to stop parallel imports of genuine
Toblerone-branded chocolate bars into Canada. On appeal, the
Supreme Court of Canada ruled that the Copyright Act could
not be used to block the parallel imports.
Stay-tuned to see where this case leads in the US appeal.
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A recent Saskatchewan Court of Queen's Bench decision allowed a court-appointed receiver to sell and transfer intellectual property rights free and clear of encumbrances, finding that a license to use improvements of an invention was a contractual interest and not a property interest.
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