Saturday, January 10, 2009

Trader Joe’s Sues New York Grocery Chain Over Trader John’s

Earlier this week (link here), I wrote about the Larry Flynt’s nephews being sued because they distributed an adult movie under the company name Flynt Media Corporation. Their logic was that they have every right to use the name “Flynt” as a business name because its their name.

Yesterday, the news was about John Catsimatidis, the CEO of Gristede’s Foods Inc., the owner of the Gristede’s supermarket chain in New York City. The popularity of Gristede’s in New York has apparently been languishing with the number of stores declining from 78 stores in 2000 to 35 stores in 2008.

Catsimatidis, a billionaire and potential mayoral candidate for New York City, decided to change the look of one particular store on 14th Street in Manhattan as an “experiment.” His idea for the name of this rebranded store came from the fact that his name is John and he is a trader, ergo call it “Trader John’s.” No one should have a problem with that, right?

Trader John's on 14th Street
(Photo Credit: The Shophound)

Well, no one except the Trader Joe’s Company Corporation – the California company that owns the chain of 326 Trader Joe’s grocery stores throughout the United with estimated current annual revenue of around $7.2 billion – including a store on 14th Street in Manhattan which is apparently so popular that shoppers often have to stand in line just to get inside and shop, and which also, coincidentally, is just three blocks away from the “Trader John’s” location. Trader Joe’s holds numerous registrations for the mark TRADER JOE’S including one for “specialty grocery store services.”

Trader Joe's on 14th Street

And did I mention that Catsimatidis also came up with the “unique” idea of decorating his store with “wood paneling, wagon wheels, and baskets.” No one has a grocery store that looks quite like that, right?

Not surprisingly, Trader Joe’s filed suit to stop Gristede’s from opening the “Trader John’s” store – set to open sometime next week – after previous cease and desist letters were apparently ignored. Bloomberg, Forbes, and the NY Post all had news reports on the lawsuit.

While I have not seen the complaint, Trader Joe’s is apparently claiming both trademark infringement, trade dress infringement, as well as trademark dilution (dilution by blurring and dilution by tarnishment) of its famous grocery name (among other likely state and common laws trademark related causes of action). The tarnishment argument is apparently supported in part by numerous online postings commenting on the shoddy conditions found by such consumers at Gristede’s stores. The trade dress argument attacks Catsimatidis creation of a store which mimics the look and feel of a Trader Joe’s store, which Trader Joe’s will undoubtedly maintain has acquired a secondary meaning as identifying their grocery stores. [While I’m not so sure I agree that the type of interior used by Trader Joe’s has acquired a particular distinctiveness as identifying Trader Joe’s exclusively, when the trade dress is combined with a similar sounding mark, it is certainly supportive of a likelihood of confusion as well as strong evidence of an attempt by Catsimatidis to infringe upon the Trader Joe’s – not only naming your store with a similar mark, but then giving it a similar look].

One wonders how a man who was able to become a billionaire can honestly say with a straight face that he has the right to rename his stores “Trader John’s” just because his name is John and he is a trader. And is there anybody out there that doesn’t think that he chose this particular name in order to take advantage of the goodwill built up in the “Trader Joe’s” name?

What’s next – his use of the name “Trader John’s” does not infringe the “Trader Joe’s” registered trademark for “specialty grocery stores” because he plans for his grocery stores to be very average, ordinary grocery stores that will be not be selling any “specialty” goods?

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