Trader Joe's Co. v. Hallatt

Lanham Act / Extraterritorial Application. The panel affirmed in part and reversed in part the district court’s dismissal of trademark infringement and unfair competition claims for lack of subject-matter jurisdiction. Defendant Michael Norman Hallatt purchased Trader Joe’s-branded goods in Washington State, transported them to Canada, and resold them there in a store he designed to mimic a Trader Joe’s store. Trader Joe’s sued under the Lanham Act and Washington law. Reversing the dismissal of the Lanham Act claims, the panel held that the extraterritorial reach of the Lanham Act raises a question relating to the merits of a trademark claim, not to federal courts’ subject-matter jurisdiction. On the merits, the panel concluded that Trader Joe’s alleged a nexus between Hallett’s conduct and American commerce sufficient to warrant extraterritorial application of the Lanham Act. The panel affirmed the dismissal of the state law claims because Trader Joe’s did not allege trademark dilution in Washington or harm to a Washington resident or business. The panel remanded the case to the district court for further proceedings.

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