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A U.S. federal appeals court determined that Washington State has the authority to hear a trademark lawsuit by Trader Joe's against Pirate Joe's, a Canadian store in Vancouver that resells Trader Joe's products purchased in Washington.
The Ninth U.S. Circuit Court of Appeals overturned a district court's decision to dismiss Trader Joe's federal trademark claims against Pirate Joe's, ruling that its owner, Michael Hallatt, could devalue the American-held trademark with the knockoff branding and online merchandising, The New York Times reported. The case will return to a federal district court in Washington. The district court initially dismissed Trader Joe's violation claims as the violation occurred in Canada, where no Trader Joe's stores exist, and the Monrovia, Calif.-based limited-assortment retailer failed to prove that Pirate Joe's affected its U.S. business.
The initial case opened in October 2011, when workers at a Trader Joe's in Bellingham, Wash., noticed Hallatt purchasing products in excess, often returning several times a week. He claimed he was purchasing the products to distribute them in Canada through his store, then known as Transilvania Trading, but now known as Pirate Joe's.