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Pirate Joe’s, Maverick Distributor of Trader Joe’s Products, Shuts Down

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81–90 of 283 posts

Re: Pirate Joe’s, Maverick Distributor of Trader Joe’s Products, Shuts Down

#81

I don't understand with what right trader Joe's can prohibit somebody from reselling their products. If he clearly states where he bought them from, and that he is not affiliated, and doesn't misuse their trademarks (impersonate them), it should be absolutely legal. A side remark, people often say how great the US / north America is for entrepreneurs, compared to (continental) Europe where there is a lot of red tape…

A lot of people are using the "I bought chips at Costco and resold them at a concession stand example". This is at least a little different. Say you owned Captainmuon Grocery and only sold private label Captainmuon Chips. Although demand is so high you could distribute your Chips to other groceries and retailers, you see greater value in driving traffic to your store through the exclusive distribution. Don't you have…

You have framed this question in terms of your freedom to contract in order to restrict distribution. Although many think contractual freedom is paramount, that is not necessarily so. It may be bounded by other more basic legal principles. In your chips example, it may be bounded by property and competition law.

In property law, there is the concept of a restraint on alienation. In competition/anti-trust law, there is the concept of a post-sale restraint. The idea is simple: after you by the chips, they are yours and you can do with them what you want. Restricting resale also limits competition, which is bad for consumers. Whether this view trumps your freedom to contract is a legal question whose answer has varied over time.

Historically, such restraints were a problem for real property in England. An estate might have been held in "fee tail" to be passed on to heirs indefinitely. Society decided that land was not being effectively used in this way, so fee tails were broken by statute beginning in the 1800's. Your freedom to "devise by will" was limited in favor of the property right of alienation.

Software was traditionally sold to the end user, who could use or sell the product as he wished, subject to Copyright restrictions on making additional copies for distribution. Only recently did this property-like right erode in favour of the current norm where software is licensed under a plethora of contractual restrictions you may never have read (the EULA).

Re: Pirate Joe’s, Maverick Distributor of Trader Joe’s Products, Shuts Down

#82

I don't understand with what right trader Joe's can prohibit somebody from reselling their products. If he clearly states where he bought them from, and that he is not affiliated, and doesn't misuse their trademarks (impersonate them), it should be absolutely legal. A side remark, people often say how great the US / north America is for entrepreneurs, compared to (continental) Europe where there is a lot of red tape…

It seems pretty clear that they have no right to prohibit reselling. He was being sued on trademark grounds. Personally, I think it is likely he would have won, but he could not afford the legal costs to fight it. He never really made money on the project.

He had already won the first round in court. He didn't run out of money until the first appeal.

Re: Pirate Joe’s, Maverick Distributor of Trader Joe’s Products, Shuts Down

#84

Earlier quoted context omitted.

First-sale doctrine applies to copyrighted works. Deed restrictions are an example where someone can sell property with conditions on its use.

Real estate is the only type of property I'm aware of that allows the owner to enter into covenants that "run with the property." As of yet, I haven't heard about any exceptions. Software licensors have tried, but so far haven't been successful AFAIK.

The Supreme Court reinforced these doctrines just a week ago (in a patent case, but the same principles apply), ruling against Lexmark printer cartridge restrictions "that a patentee’s decision to sell a product exhausts all of its patent rights in that item, regardless of any restrictions the patentee purports to impose."

Re: Pirate Joe’s, Maverick Distributor of Trader Joe’s Products, Shuts Down

#85
While this was arguably a legally heavy-handed act on Trader Joe's part, it also seems like Mr. Hallatt became increasingly bold and antagonistic as his revenue increased.

I mean, he did change his store name to Pirate Joe’s (from the far more ambiguous Transilvania Trading) and his actions seem to betray less charitable motivations than his words would lead you to believe ("This is not a business I should be doing from a personal profitability standpoint” - https://www.theguardian.com/world/2014/nov/21/pirate-joes-tr...)

That said, seems like Trader Joe's missed an opportunity for a win-win partnership with someone who had already developed rudimentary logistics to meet a demonstrated demand. But then it doesn't surprise me based on my 30+ years shopping at Trader Joe's: I would never describe them as innovative, instead I'd say they are very focused on what they've been doing well for decades.

Re: Pirate Joe’s, Maverick Distributor of Trader Joe’s Products, Shuts Down

#86
post #51

I don't understand with what right trader Joe's can prohibit somebody from reselling their products. If he clearly states where he bought them from, and that he is not affiliated, and doesn't misuse their trademarks (impersonate them), it should be absolutely legal. A side remark, people often say how great the US / north America is for entrepreneurs, compared to (continental) Europe where there is a lot of red tape…

"I don't understand with what right..." trademark. he picked the wrong name for his business.

Trader Joe's doesn't have a trademark in Canada because they don't do business there.

Re: Pirate Joe’s, Maverick Distributor of Trader Joe’s Products, Shuts Down

#87
post #54

Earlier quoted context omitted.

No, the seller does not have any of those rights. It's called the first-sale doctrine.

Just so we are on the same page first-sale doctrine applies to works with copyright (i.e. You buy my book you have a right to resell or display it) it does not apply to consumable goods/food stuffs. Almost any reasonable person can understand practical limits of resale rights: think reselling your prescription opiates claiming first-sale doctrine. And no just because Trader Joe's products have TJ trademarks does not…

The first-sale doctrine does not include an exception for food.

Reselling your prescription opiates is prohibited by specific laws. No such law exists for food.

Re: Pirate Joe’s, Maverick Distributor of Trader Joe’s Products, Shuts Down

#88
post #40

Earlier quoted context omitted.

"Vote with your wallet" means hit them where it hurts, because you don't have much of an actual vote in a company's behavior. It has nothing to do with using money to subvert the democratic process.

It normalizes the behavior as acceptable. In reality, the aphorism is based on a ridiculous premise that nobody in their right mind should accept; that money is the only thing responsible for dictating what is acceptable behavior.

Uh, that's the entire premise behind the free market. Money decides who is right and who is wrong. The Invisible Hand doesn't have morals.

Re: Pirate Joe’s, Maverick Distributor of Trader Joe’s Products, Shuts Down

#89
post #5

Gotta love capitalism, eh? Just like votes, more money = more protection. This certainly wasn't a trademark issue. Trader vs Pirate. There was no question this store wasn't run by Trader Joes/Aldi North. They were buying in bulk to stock a store where they couldn't normally get the goods. Reselling should be 100% A-OK. Any trademarks go along with the products. And as far as I would guess, the grocer certainly wasn't…

Usually it doesn't work to buy products at full retail price and resell them at a higher retail price. I guess the "in Canada" part is how it worked out for him? Trader Joe's probably wants to protect their brand in hopes of a future Canadian expansion.

It worked because Trader Joe's hasn't bothered to open up stores in Canada for some reason. They created a market vacuum and this guy came in to fill it.

Re: Pirate Joe’s, Maverick Distributor of Trader Joe’s Products, Shuts Down

#90
post #23

Earlier quoted context omitted.

> But in my opinion, if I were to do this in Germany there is no way ALDI (whom trader Joe's belongs to iirc) could sue me out of business. They could, and Levi's jeans did it with Tesco who were selling grey market imports. http://news.bbc.co.uk/1/hi/business/1261829.stm

There are two ALDIs in Germany. ALDI Süd operates the American ALDI stores. ALDI Nord owns Trader Joe's.

That's irrelevant to the point being made, which is that trademark owners have a lot of power over who does or doesn't sell the product, especially if the product is a grey market import.
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