The District Court has now ruled that Trader Joe's did not sufficiently allege how commercial activities arising out of consumer confusion in Canada is harming Trader Joe's in U.S. commerce. Consequently, the Court dismissed Trader Joe's federal claims with prejudice.
"Here, all alleged infringement takes place in Canada and Trader Joe's cannot show economic harm," ruled the Court. "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."
Trader Joe's now faces a legal conundrum -- since it has no stores and does not own a trademark in Canada, it is not clear that it can file a trademark lawsuit there against Pirate Joe's.
Additionally, since all the goods that Pirate Joe's sells are genuine and purchased at full price, as the District Court noted, the adverse ruling might lead the Canadian court to agree, and similarly rule that Trader Joe's suffers no harm there either.
Maybe Trader Joe's should just offer Pirate Joe's a distribution agreement? Just a thought.