U.S. judge dismisses case against B.C. s Pirate Joe s

VANCOUVER - A Washington state judge has dismissed a lawsuit filed by U.S. grocery giant Trader Joe s against a Vancouver retailer who bought products at its stores south of the border and then resold them back in British Columbia from a shop called Pirate Joe s.

Judge Marsha Pechman dismissed the case this week, saying there was no basis to apply a U.S. law known as the Lanham Act, which confers upon U.S. courts broad jurisdictional powers.

The lawsuit was filed in Washington state in May by Trader Joe s against Michael Hallatt, a Canadian citizen with permanent U.S. alien status who operates a business in Vancouver.

"Here, all alleged infringement takes place in Canada and Trader Joe s cannot show economic harm," wrote Pechman. "Even if Canadian consumers are confused and believe they are shopping at a Trader Joe s or an approved affiliate when shopping at Pirate Joe s, there is no economic harm to trader Joe s because the products were purchased at Trader Joe s at retail price."

She said Trader Joe s also unsuccessfully argued Pirate Joe s was competing for Canadian customers who may purchase goods in the U.S.

Trader Joe s had alleged trademark infringement and false advertising and raised other concerns that it said were hurting the company s brand. The company also argued Hallatt was not authorized to resell Trader Joe s products and was misleading people by dressing up the shop in a way that looks similar to the U.S. stores.

By Thursday night, Trader Joe s had not posted a comment about the ruling on its website, and attempts to contact its Seattle-based lawyers by email were not successful.

However, Pechman gave Trader Joe s 10 days to amend its complaint over state law claims.

"We were cautiously optimistic that we were going to prevail with our motion to dismiss, and we were confident that even if it wasn t dismissed we would prevail in the litigation in defending ourselves," said Hallatt.
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