Trader Joes Complaint

7/30/2019 Trader Joes Complaint

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UNITED STATES DISTRICT COURTWESTERN DISTRICT OF WASHINGTON

AT SEATTLE

TRADER JOES COMPANY, aCalifornia Corporation,

Plaintiff,

v.

MICHAEL NORMAN HALLATT, anindividual, d/b/a PIRATE JOES a/k/aTRANSILVANIA TRADING; andDOES 1-10,

Defendants.

No.

COMPLAINT

JURY DEMAND

Plaintiff Trader Joes Company (Trader Joes), by and through its undersigned

counsel, for its Complaint against Defendant Michael Norman Hallatt d/b/a Pirate Joes

a/k/a Transilvania Trading and DOES 1-10 (Defendants), hereby alleges, on knowledge

as to its own conduct and otherwise on information and belief, as follows:

THE PARTIES

1. Trader Joes is a California corporation with its principal place of business at

800 South Shamrock Avenue, Monrovia, California 91016. Trader Joes is engaged in the

business of selling high-quality groceries at low prices, including thousands of its own

products under the TRADER JOES brand label. Trader Joes owns numerous federally

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COMPLAINT Page 1

818 STEWART STREET, SUITE 1400

SEATT LE WASHINGTON 98101

T 206.516.3800 F 206.516.3888

Case 2:13-cv-00768 Document 1 Filed 05/01/13 Page 1 of 24


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registered and common-law trademarks associated with its retail grocery chain and its

products.

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2. Upon information and belief, Defendant Michael Norman Hallatt is an

individual residing in Vancouver, British Columbia, Canada, with a mailing address of

2348 West 4th Avenue, Vancouver, British Columbia, Canada V6K 1P2.

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3. Upon information and belief, Michael Norman Hallatt does business or has

done business as Pirate Joes and/or Transilvania Trading.7

4. Upon information and belief, Pirate Joes is a company based in Vancouver,

British Columbia, Canada, with a principal place of business at 2348 West 4th Avenue,

Vancouver, British Columbia, Canada V6K 1P2.

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5. Upon information and belief, Transilvania Trading is a company based in

Vancouver, British Columbia, Canada, with a principal place of business at 3474 West

Broadway, Vancouver, British Columbia, Canada V6R 2B3.

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6. Trader Joes is ignorant of the true names and capacities of the defendants

sued herein under the fictitious names DOES 1 through 10 inclusive. Trader Joes will seek

leave of court to amend this complaint to allege such names and capacities when they are

ascertained. Trader Joes is informed and believes, and based thereon alleges, that each of

the fictitiously named DOE defendants is responsible in some manner for the wrongful

conduct alleged herein. Trader Joes further alleges that each defendant acted in concert

with, as agent or representative for, or at the request or on the behalf of one or more of the

defendants identified in paragraphs 2-5 above.

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JURISDICTION AND VENUE

7.

This action asserts claims arising under the Lanham Act, 15 U.S.C.

1114(1), 1125(a) and 1125(c). This Court has federal question jurisdiction over these

claims pursuant to 15 U.S.C. 1121, and 28 U.S.C. 1331, 1338(a) and 1338(b). This

Court also has subject matter jurisdiction over Trader Joes state law claims pursuant to the

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principles of pendant jurisdiction under 28 U.S.C. 1367(a).1

8. This Court has personal jurisdiction over Defendants because, inter alia,

Defendants transact business in the State of Washington, engage in a persistent course of

conduct in the State of Washington, expect or reasonably should expect their acts to have

legal consequences in the State of Washington, and because Defendants acts have caused

harm and continue to cause harm to Trader Joes in the State of Washington.

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9. Venue is proper in the Western District of Washington pursuant to 28 U.S.C.

1391 because a substantial part of the events giving rise to the claims asserted in this

action occurred in the Western District of Washington, Defendants expect or reasonably

should expect their acts to have legal consequences in the District, and because Defendants

acts have caused harm and continue to cause harm to Trader Joes in the Western District of

Washington.

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FACTUAL BACKGROUND

The Trader Joes Story

10. Trader Joes, one of the most popular grocery retailers in the United States,

comes from humble beginnings. In 1958, Joe Coloumbe opened a small but successful

chain of convenience stores in the Los Angeles area called Pronto Markets.

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11. Over the next several years, Coloumbe completely redesigned Pronto

Markets, and by 1967, his renamed Trader Joes stores were offering a full grocery

selection against the backdrop of the Companys now famous South Pacific store design.

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12. Trader Joes has always prided itself on its carefully chosen high-quality and

unique food selection. Today, the name Trader Joes is synonymous with high-quality,

affordable groceries.

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13. More than 390 Trader Joes grocery stores now operate in 30 states and the

District of Columbia, including 14 stores in the state of Washington. The widespread

success of Trader Joes is due in large part to its carefully cultivated reputation and its

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consistent focus on product and service quality.1

14. Trader Joes and its trademarks are also well known in Canada. Many

Canadian customers regularly cross the border into the United States to shop at Trader Joes

stores. More than forty percent of the credit card transactions at Trader Joes Bellingham,

Washington store are with non-U.S. residents. Moreover, as of April 14, 2013, 49 out of 88

Yelp.com reviews for the Trader Joes store in Bellingham, Washington were posted by

Yelp.com users who identified themselves as current residents of Canada.

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Trader Joes Intellectual Property Rights

15. Trader Joes uses the mark TRADER JOES to identify not only its retail

stores and services, but also the majority of the goods it sells at its retail stores. Of the

approximately 4,000 items Trader Joes stocks at its stores, about eighty percent bear the

TRADER JOES mark. These products include TRADER JOES Organic Hummus Dip,

TRADER JOES Mac & Cheese Bites, TRADER JOES Gummy Multivitamin Dietary

Supplement, TRADER JOES Organic Reduced Sugar Raspberry Preserves, TRADER

JOES Charmingly Chewy Chocolate Chip Cookies, TRADER JOES Ready to Bake

Brownies, TRADER JOES Milk Chocolate Covered Potato Chips, TRADER JOES

Roasted Garlic Salsa, TRADER JOES Macaroni & Cheese, TRADER JOES Beef Recipe

Jerky Strips, TRADER JOES Salt and Vinegar Potato Chips, TRADER JOES Organic

Lentil Vegetable Soup, TRADER JOES Organic Cornflakes, TRADER JOES Organic

Creamy Tomato Soup, TRADER JOES Gluten Free Rice Pasta, TRADER JOES Low

Calorie Lemonade, TRADER JOES Extra Virgin California Estate Olive Oil, TRADER

JOES Tea Tree Tingle Conditioner, TRADER JOES Hot and Sweet Mustard, TRADER

JOES Himalayan Pink Salt Crystals, TRADER JOES Tomato Paste Vine-Ripened

Tomatoes, TRADER JOES Organic Whole Wheat Spaghetti, TRADER JOES Brown

Rice Medley, TRADER JOES Multigrain Tortilla Chips, and TRADER JOES Dark

Chocolate Bars.

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16. The United States Patent and Trademark Office (USPTO) has granted

Trader Joes Trademark Registration No. 2,171,157 for the trademark TRADER JOES for

retail store services in the field of specialty foods and beverages in International Class 42.

This registration is valid, subsisting and incontestable pursuant to 15 U.S.C. 1065.

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17. The USPTO has also granted Trader Joes Trademark Registration No.

4,001,533 for the trademark TRADER JOES for retail grocery services in International

Class 35.

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18. Trader Joes has further obtained numerous United States trademark

registrations for the TRADER JOES trademarks used in connection with TRADER JOES-

branded goods, including but not limited to Registration No. 2,160,601 in International

Class 29 (meats and processed foods); Registration No. 1,424,176 in International Class 30

(staple foods); and Registration No. 2,158,990 in International Class 32 (beverages). Each

of these registrations is valid, subsisting and incontestable pursuant to 15 U.S.C. 1065.

True and correct copies of these registrations are attached as Exhibit 1.

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19. Food and beverage products carrying the TRADER JOES mark are sold

exclusively at Trader Joes retail grocery stores. To ensure that the TRADER JOES mark

is associated only with goods of the highest quality, Trader Joes maintains strict standards

for the handling, storage, and packaging of its goods.

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20. Trader Joes has advertised for more than 40 years over the radio, through its

extensive monthly mailing list, and by word of mouth. Trader Joes Fearless Flyer

newsletter has more than 200,000 subscribers.

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21. Trader Joes also operates a website at the address www.traderjoes.com,

featuring its distinctive red lettering and South Pacific theme. The Trader Joes website

receives 700,000 visitors monthly a particularly high number given that customers

cannot place orders on the Trader Joes website.

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22. As a result of the tremendous success of Trader Joes and the vast

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advertising and promotional efforts and expenditures undertaken by Trader Joes, the

TRADER JOES trademarks have come to symbolize extraordinary goodwill and have

achieved great fame both within and outside the United States.

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DEFENDANTS INFRINGEMENT OF

TRADER JOES INTELLECTUAL PROPERTY RIGHTS

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23. Defendants own and operate a grocery store in Vancouver, British

Columbia, Canada operating under the name Pirate Joes.7

24. Defendants previously owned and operated a grocery store in Vancouver,

British Columbia, Canada that operated under the name Transilvania Trading.9

25. Defendants and/or individuals operating at Defendants direction have

purchased and continue to purchase TRADER JOES-brand products at Trader Joes retail

stores multiple times each week, including at the Trader Joes retail store located in

Bellingham, Washington.

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26. Without Trader Joes approval or authorization, Defendants and/or

individuals operating at Defendants direction have transported and continue to transport

TRADER JOES-brand products, including perishable frozen food products, across the

United States border with Canada.

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27. Without Trader Joes approval or authorization, Defendants have re-sold and

are currently re-selling TRADER JOES-brand products at Pirate Joes and/or Transilvania

Trading.

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28. Defendants have re-sold and are re-selling only Trader Joes products at

Pirate Joes and/or Transilvania Trading, including but not limited to TRADER JOES

Organic Hummus Dip, TRADER JOES Mac & Cheese Bites, TRADER JOES Gummy

Multivitamin Dietary Supplement, TRADER JOES Organic Reduced Sugar Raspberry

Preserves, TRADER JOES Charmingly Chewy Chocolate Chip Cookies, TRADER JOES

Ready to Bake Brownies, TRADER JOES Milk Chocolate Covered Potato Chips,

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TRADER JOES Roasted Garlic Salsa, TRADER JOES Macaroni & Cheese, TRADER

JOES Beef Recipe Jerky Strips, TRADER JOES Salt and Vinegar Potato Chips,

TRADER JOES Organic Lentil Vegetable Soup, TRADER JOES Organic Cornflakes,

TRADER JOES Organic Creamy Tomato Soup, TRADER JOES Gluten Free Rice Pasta,

TRADER JOES Low Calorie Lemonade, TRADER JOES Extra Virgin California Estate

Olive Oil, TRADER JOES Tea Tree Tingle Conditioner, TRADER JOES Hot and Sweet

Mustard, TRADER JOES Himalayan Pink Salt Crystals, TRADER JOES Tomato Paste

Vine-Ripened Tomatoes, TRADER JOES Organic Whole Wheat Spaghetti, TRADER

JOES Brown Rice Medley, TRADER JOES Multigrain Tortilla Chips, and TRADER

JOES Dark Chocolate Bars. All products were and are being sold in their original

packaging bearing the TRADER JOES trademarks.

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29. On information and belief, Defendants have re-sold and are re-selling Trader

Joes products at significantly higher prices than Trader Joes charges for the same

products.

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30. In addition to the re-sale of TRADER JOES-brand products in their store,

Defendants have engaged in other conduct that misleads and deceives consumers into

falsely believing that Pirate Joes and/or Transilvania Trading have been authorized or

approved by Trader Joes. For example, Defendants have placed a sandwich board outside

of their retail store containing the phrase We Sell Trader Joes! A sticker bearing the

phrase I [heart] TJ is affixed to the back of Defendants cash register. Defendants also

provide customers with shopping bags from Trader Joes, which prominently display the

TRADER JOES trademark. Moreover, Defendants maintain a website at

www.piratejoes.ca (Pirate Joes Website), which features elements of Trader Joes

famous trade dress.

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31. Defendants retail store is also visually similar to Trader Joes stores,

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employees admitted to an investigator that were pirating Trader Joes, sort of.1

32. Defendants prominent display of Trader Joes trademarks and other

intellectual property and their flagrant attempts to pass themselves off as an approved

retailer of TRADER JOES-brand products convey the false impression that Defendants

retail store is affiliated with and/or endorsed by Trader Joes.

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33. To ensure the safety and consistent high quality of its products, Trader Joes

maintains strict guidelines concerning the storage and shipment of products sold in its

stores. Among these, Trader Joes also mandates temperature requirements for its fresh,

frozen, and other sensitive food product categories. For example, frozen foods must be kept

at temperatures below 10 degrees Fahrenheit and refrigerated products between 33 and 39

degrees Fahrenheit.

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34. In addition to their unpermitted and deceptive use of Trader Joes trademarks

and other source-identifying elements, Defendants unauthorized resale of Trader Joes

products including frozen food products and other perishable items is conducted outside

the scope of Trader Joes stringent quality-control standards as well as its established

product recall practice.

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35. Defendants continued infringement thus creates a material risk that

consumers who purchase TRADER JOES-brand food products that have been transported

to Canada by Defendants will be harmed by receiving dangerous or defective goods.

Indeed, Trader Joes is aware of at least one customer who became ill after consuming a

frozen food product purchased from Defendants.

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36. Defendants continued infringing conduct and re-sale of Trader Joes

products at significantly higher prices also creates a material risk that Defendants

customers will mistakenly believe that Trader Joes charges higher prices for its products,

contrary to Trader Joes reputation for offering high-quality, affordable groceries.

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37. By creating these risks, Defendants activities threaten the reputation and

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goodwill that Trader Joes has carefully cultivated over the last 45 years.1

COUNT ONE FEDERAL TRADEMARK INFRINGEMENT

(15 U.S.C. 1114(1))

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38. Trader Joes repeats and realleges each and every allegation contained in

paragraphs 1 through 37, inclusive, and incorporates them herein by reference.5

39. Defendants unauthorized and willful use of Trader Joes famous trade dress,

product packaging images, and federally registered trademarks in connection with the

unauthorized re-sale of TRADER JOES-brand products constitutes use in commerce.

Such use infringes Trader Joes exclusive rights in its federally registered trademarks,

explicitly misleads consumers as to the source or sponsorship of Pirate Joes and/or

Transilvania Trading, and has caused and is likely to cause confusion, mistake or deception

as to the source of Pirate Joes and/or Transilvania Trading, which are operated solely by

Defendants.

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40. The aforesaid acts of Defendants, namely, the unauthorized and willful use

of Trader Joes registered marks in connection with the display and operation of retail

stores constitutes trademark infringement in violation of Section 32(1) of the Lanham Act,

15 U.S.C. 1114(1).

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41. The aforesaid acts of Defendants have caused and, unless said acts are

restrained by this Court, will continue to cause Trader Joes to suffer irreparable injury.19

42. Trader Joes has no adequate remedy at law and is therefore entitled to

preliminary and permanent injunctive relief.21

COUNT TWO UNFAIR COMPETITION, FALSE ENDORSEMENT AND FALSE

DESIGNATION OF ORIGIN

(15 U.S.C. 1125(a)(1)(A))


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44. Through the use of Trader Joes trademarks, famous South Pacific trade

dress, retail product images, bags, and other design elements that are owned by and/or

publicly associated with Trader Joes, Defendants are knowingly and intentionally

misrepresenting and falsely designating to the general public the affiliation, connection,

association, origin, source, sponsorship, endorsement and approval of Pirate Joes and/or

Transilvania Trading, and intend to misrepresent and false designate to the general public

the affiliation, connection, association, origin, source, approval, endorsement or

sponsorship of Pirate Joes and/or Transilvania Trading, so as to create a likelihood of

confusion by the public as to the affiliation, connection, association, origin, source,

approval, endorsement and sponsorship of Pirate Joes and/or Transilvania Trading.

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45. The aforesaid acts of Defendants constitute false endorsement, false

designation of origin and unfair competition in violation of 15 U.S.C. 1125(a)(1)(A).13

46. As a direct and proximate result of the foregoing acts of Defendants, Trader

Joes has been damaged and has suffered and will continue to suffer immediate and

irreparable injury.

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COUNT THREE FALSE ADVERTISING

(15 U.S.C. 1125(a)(1)(B))



49. Through the use of Trader Joes trademarks, famous South Pacific trade

dress, retail product images, bags, and other design elements that are owned by and/or

publicly associated with Trader Joes, Defendants are knowingly and intentionally

misrepresenting the nature, characteristics, and qualities of Pirate Joes and/or Transilvania

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Trading, and intend to misrepresent the nature, characteristics, and qualities of Pirate Joes

and/or Transilvania Trading, so as to create a likelihood of confusion by the public as to the

nature, characteristics, and qualities of Pirate Joes and/or Transilvania Trading.

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50. The aforesaid acts of Defendants constitute false advertising in violation of

15 U.S.C. 1125(a)(1)(B).

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irreparable injury.

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COUNT FOUR FEDERAL TRADEMARK DILUTION

(15 U.S.C. 1125(c))


paragraphs 1 through 52, inclusive, as if fully set forth herein.14

54. The TRADER JOES trademarks are individually and collectively famous in

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55. Defendants use of copies, variations, reproductions, simulations or

colorable imitations of the TRADER JOES trademarks and trade dress in connection with

Pirate Joes and/or Transilvania Trading will lessen the capacity of Trader Joes famous and

distinctive retail trademarks and trade dress to designate the Trader Joes retail stores as the

sole origin of TRADER JOES-brand products

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56. Pirate Joes and/or Transilvania Tradings use of Trader Joes trademarks

and trade dress, combined with its unauthorized resale activities, has diluted and will

continue to dilute and tarnish the distinctive quality of Trader Joes famous and distinctive

TRADER JOES trademarks.

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57. The aforesaid acts of Defendants constitute dilution by blurring by whittling

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away the distinctiveness of Trader Joes famous marks in violation of Section 43(c) of the

Lanham Act, 15 U.S.C. 1125(c).

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58. The aforesaid acts of Defendants also constitute dilution by tarnishment in

violation of Section 43(c) of the Lanham Act, 15 U.S.C. 1125(c).

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irreparable injury.

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COUNT FIVE INJURY TO BUSINESS OR REPUTATION: DILUTION

(RCW 19.77.160)



62. The TRADER JOES trademarks are individually and collectively famous in

the State of Washington.15

63. The TRADER JOES trademarks were famous in the State of Washington

prior to Defendants past, present and threatened use of the TRADER JOES trademarks in

connection with Pirate Joes and/or Transilvania Trading, which use injures and will injure

the business reputation that Trader Joes enjoys in the State, and impairs, diminishes, and

trades on the TRADER JOES trademarks, which identify Trader Joes goods and services.

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64. Defendants conduct injures and dilutes, or is intended to injure and dilute,

Trader Joes reputation and the distinctive quality of the TRADER JOES trademarks, in

violation of RCW 19.77.160.

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irreparable injury.

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preliminary and permanent injunctive relief.

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COUNT SIX DECEPTIVE BUSINESS PRACTICES IN VIOLATION OF THECONSUMER PROTECTION ACT

(RCW 19.86.090)



68. Pirate Joes use of the TRADER JOES trademarks to engage in the

unauthorized promotion, marketing, and resale of Trader Joes products not subject to

Trader Joes quality control measures is a deceptive practice occurring in trade or

commerce that impacts the public interest and has caused injury to Trader Joes.

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69. The aforesaid acts of Defendants constitute a Deceptive Business Practice

pursuant to RCW 19.86.020 et seq.14

70. As a direct and proximate result of the aforesaid acts of Defendants, Trader


irreparable injury.

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RELIEF SOUGHT

WHEREFORE, Plaintiff Trader Joes prays that:

A. Judgment be entered in favor of Trader Joes and against Defendants as to

each of the above Counts;

B. Defendants pay damages incurred by Trader Joes as a result of the

trademark infringement, false designation of origin, false endorsement, false advertising,

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deceptive practices, injury to business reputation and dilution perpetrated by Defendants,

including, but not limited to, (1) in the case of Defendants violation of 15 U.S.C.

1125(a), treble damages and attorneys fees, and (2) in the case of Defendants violation

of RCW 19.86.020, treble damages (up to the maximum allowed) and attorneys fees;

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C. An accounting be ordered to determine the profits realized by Defendants

due to the unauthorized use of the TRADER JOES trademarks and Defendants other

infringing activities in the operation of Pirate Joes and/or Transilvania Trading;

D. The Court issue an injunction restraining, enjoining and prohibiting

Defendants and any of their officers, directors, agents, servants, employees, representatives,

successors, assigns, attorneys, licensees, distributors and all persons in active concert or

participation with Defendants from directly or indirectly:

i. using the TRADER JOES trademarks or any confusingly similar

designations, alone or in combination with other words, as a trademark, service mark or

trade name, to identify, market, distribute, advertise, promote, to offer for sale or to operate

Pirate Joes, Transilvania Trading, or any related goods or services;

ii. otherwise infringing the TRADER JOES trademarks;

iii. engaging in the unauthorized offering for resale of Trader Joes products;

and

iv. continuing acts of false designation of origin or unfair trade practices herein

complained of, or doing any acts that may cause consumers to falsely believe that

Defendants goods or services are affiliated with, associated with, authorized by, sponsored

by, and/or endorsed by Trader Joes.

E. Defendants be directed to file with this Court and to serve on Trader Joes

within ten (10) days after issuance of an injunction, a report in writing, under oath, setting

forth in detail the manner and form in which Defendants have complied with the injunction;

F. Defendants be required to deliver up for destruction all goods, signs,

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packaging, literature, advertising and other materials bearing the TRADER JOES

trademarks or any confusingly similar name or mark, or colorable imitation thereof, used in

connection with Pirate Joes and/or Transilvania Trading;

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G. Defendants be required to remove all TRADER JOES trademarks and any

other elements likely to cause confusion with Trader Joes from the Pirate Joes Website,

the Websites URL, HTML code, search engine query terms, search engine advertising

keywords, and any other electronic communications hosts, links and devices;

H. Defendants be ordered to pay costs of this action, including attorneys fees

incurred by Trader Joes in connection with Defendants infringement; and

I. Such other and further relief as this Court deems just and proper.

DATED this 1st day of May, 2013.

YARMUTH WILSDON PLLC

By /s/ Scott T. WilsdonBy /s/ Jeremy E. RollerScott T. Wilsdon, WSBA No. 20608Jeremy E. Roller, WSBA No. 32021818 Stewart Street, Suite 1400Seattle, WA 98101

Telephone: 206.516.3800Facsimile: 206.516.3888Email: [email protected]

[email protected]

OMELVENY & MYERS LLP

Brian M. Berliner, (pro hac vice application tobe filed)Jordan Raphael, (pro hac vice application to befiled)400 South Hope Street

Los Angeles, CA 90071-2899Telephone: 213.430.6000Facsimile: 213.430.6407Email: [email protected]

[email protected]

Attorneys for Plaintiff Trader Joes Company

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Trader Joes Complaint

Documents

Transcript of Trader Joes Complaint