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Pirate Joe’s tries to shore up funds for fight with Trader Joe’s

Owner Mike Hallatt launches crowdfunding campaign as trial looms

Vancouver rebel grocer Pirate Joe’s has launched a crowdfunding campaign to help cover the legal costs of its ongoing battle with Trader Joe’s.

Billing itself as “unaffiliated, unauthorized, unafraid,” Pirate Joe’s re-sells items purchased from Trader Joe’s stores in Washington, saving shoppers a trip across the border to get their beloved TJ’s private- label products.

Trader Joe’s, which doesn’t operate in Canada, sued Pirate Joe's owner and operator Mike Hallatt in 2013, citing copyright infringement and false advertising, and alleging that Pirate Joe’s was hurting its profits in the U.S. The lawsuit was dismissed, but Trader Joe’s appealed and won. A new trial is slated for November.

In addition to trademark violation and false advertising, Trader Joe’s is arguing that Hallatt doesn’t transport or store the products in accordance with its strict quality-control standards.

had to come up with a serious argument, which is ‘this guy is damaging the product,’” said Hallatt, in an interview with Canadian Grocer. “It’s basically a red herring to make an exception to an iron-clad right that I have to resell the products that I own.”

Hallatt maintained Pirate Joe’s is legal under the first sale doctrine, a century-old legal concept in the U.S. that gives people the right to resell items.

“When you buy something brand-new, the brand holder, trademark holder or the intellectual property holder exhausts their control over the product at the sale,” he said. “You’re essentially buying the right to do whatever you want with that product. That includes selling it on Craigslist -- even if it’s a beat-up, abused, worn out Ford Explorer, you can still call it a Ford.”

Hallatt needs to raise $250,000 for his legal fees, but has set a $50,000 goal on the CrowdJustice crowd-funding platform, which operates with an all-or-nothing model. He didn't want to set the goal too high -- "you don't want to be a loser."

"When you go out in these crowd funding things, you want to blow through your target and people go oh, what a winner, that's fantastic," he said.

With 26 days to go as of press time, the campaign had raised just $4,500. Hallatt said he would close Pirate Joe’s if the funds aren’t raised.

“We’re going to do a death countdown, so I’m going to put a 26 on the webpage and send out tweets and say, ‘we’re 26 days to Pirate Joe’s being over with,” said Hallatt. “If we have not made the nut, I am completely happy about it because I’ve given it a good shot.”

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