08/26/2016 11:51 EDT | Updated 08/27/2017 01:12 EDT

U.S. court revives Trader Joe's lawsuit against Vancouver man who resells products

SAN FRANCISCO — A U.S. federal appeals court has revived a trademark lawsuit by grocery chain Trader Joe's against a Vancouver man who purchases the company's products and resells them in the city's Kitsilano neighbourhood at a store called Pirate Joe's.

The 9th U.S. Circuit Court of Appeals ruled Friday that a district court in Washington did have the authority to hear the lawsuit's federal trademark claims even though the defendant, Michael Hallatt, does not sell the products in the United States.

U.S. Circuit Judge Morgan Christen said Hallatt's conduct could harm Trader Joe's reputation, decreasing the value of its American-held trademarks.

Christen also pointed out that Hallatt buys the Trader Joe's goods he resells in Washington state.

The 9th Circuit overturned part of a lower court ruling dismissing the suit.

In 2012, Hallatt began taking weekly trips to the nearest Trader Joe’s in Bellingham, Wash., about 90 kilometres away, and stuffed his Honda Element with groceries, intending to resell them.

The popularity of his store grew as word of mouth spread. Hallatt soon found himself making more frequent trips south of the border and even hiring local workers to do his shopping.

Trader Joe's quickly learned about Pirate Joe's and hit back with legal action.

Hallatt is banned at every Trader Joe’s store in the U.S. but admits he still visits from time to time in disguise.

He says customers who shop at Pirate Joe’s can expect to pay a 30 per cent markup after the currency exchange. The most popular items it carries are frozen meals, coffee, wild rice and body care products like soaps and sunblock.

— with files from The Canadian Press