In the ongoing dispute between Michael Hallatt, a Vancouver
businessman, and U.S. based retailer Trader Joe's, the United
States Court of Appeals for the Ninth Circuit (the "Ninth
Circuit") has overruled the 2013 decision of the U.S. District Court for the
Western District of Washington (the "District Court") not
to hear Trader Joe's claim against Hallatt for, among other
things, trade-mark infringement, dilution, unfair competition and
The dispute arose out of Hallatt's purchase of products from
Trader Joe's stores in the U.S., particularly in the state of
Washington, for resale in Canada (there are no Trader Joe's
stores in Canada). Hallatt has and continues to mark up and re-sell
Trader Joe's products at his store in Vancouver, named Pirate
The goods are not counterfeit, and the source of the products
being sold is not in dispute – the packaging on the products
bears Trader Joe's trade-marks, and Hallatt states on his website that
he sells Trader Joe's products. Hallatt expressly states on his
website that he is not an authorized or affiliated distributor or
reseller of Trader Joe's. Nevertheless, Trader Joe's took
the view that Hallatt's conduct violated its U.S. trade-mark
rights under the U.S. Lanham Act, and in 2013 it brought a claim
against Hallatt in the District Court.
Taking the view that any unlawful conduct by Hallatt would have
taken place in Canada rather than the U.S., and that Hallatt's
activities did not cause a cognizable injury to Trader Joe's in
the U.S. or an effect on American foreign commerce, the District
Court judge decided in October 2013 that the Court had no subject
matter jurisdiction to hear Trader Joe's claims. Trader
Joe's appealed that decision to the Ninth Circuit.
The Ninth Circuit disagreed with the District Court judge,
opining instead that Hallatt's activities could affect the
goodwill and value of the Trader Joe's brand in the U.S., and
accordingly, its U.S. trade-mark rights. The Ninth Circuit
concluded that the Lanham Act does apply to Hallatt's allegedly
infringing conduct, and in the result, remanded the case back to
the District Court for further proceedings.
We will be keeping an eye on this trade-mark case that is likely
of particular interest to cross-border shoppers.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
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.
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).