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Lawyers representing United States supermarket chain Trader Joe’s have filed a complaint in California against decentralized exchange Trader Joe.
In an Oct. 5 filing in U.S. District Court for the Central District of California, Trader Joe’s sued Trader Joe and its co-founder Cheng Chieh Liu over federal trademark infringement and dilution claims. According to the lawsuit, Trader Joe and Liu used many of the supermarket’s ideas from “donning a red cap” — red features prominently in the store’s branding — as well as its narrative for one of the platform’s fictionalized characters.
“Defendants committed fraud to obscure that origin story and to prevail in international legal proceedings with Trader Joe’s over the domain name, recognizing that the true story would doom their case and any plausible claim of right to use the traderjoexyz.com domain,” said the lawsuit.
“Trader Joe’s sent Defendants cease-and-desist letters demanding that they stop using the ‘Trader Joe’ name,” said the lawsuit. “Well after Trader Joe’s demanded that they stop, Defendants continued capitalizing on Trader Joe’s name, goodwill, and brand recognition — built up through Trader Joe’s investment across more than half a century — to peddle their own goods and services.”
The store’s lawyers pointed to Trader Joe using “confusingly similar” names on the exchange’s website, YouTube page, Reddit, Github, LinkedIn, Substack, CoinMarketCap, Telegram, and Discord. Within the content of some of these accounts, according to the lawsuit, Trader Joe using the possessive form of its name — i.e. “Trader Joe’s” — matched the supermarket chain’s “exact word mark” registered as a trademark.
“Most courts use like 7 or 8 different factors to assess and make a determination as to whether there’s infringement in a given case,” trademark and copyright lawyer Michael Keyes told Cointelegraph. “The relatedness of the goods is just one of the factors […] one is the similarity of the marks. Here you’ve got Trader Joe’s and Trader Joe. For all intents and purposes, they’re identical at least in terms of how they sound.”
Keyes added that he believed Trader Joe’s had a stronger case as the business had a recognizable brand in the U.S., which could result in an injunction against Trader Joe forcing the platform to stop using its name. According to the attorney, the dilution claim in the case could also be something to watch out for, as it tends to focus on protecting famous recognizable brands.
“I think both claims are pretty strong. I think dilution is probably stronger […] for dilution you don’t have to show that the goods are related. The caveat being, in order to have a claim for dilution, you need to show that your trademark is truly famous, which means widespread recognition among U.S. consumers.”
Related: Trader Joe joins top 5 DEX list as Liquidity Book model thrives on Arbitrum
Lawsuits involving trademark infringement between crypto firms and companies operating in a completely different sector do arise from time to time. In 2021, major U.S. fast food chain Jack in the Box sued crypto exchange FTX US — currently in the middle of bankruptcy proceedings — over alleged similarities between its ‘Moon Man’ character and the firm’s ‘Jack’ mascot.
Trader Joe’s opened its first store in California in 1967 and has more than 500 locations around the United States. In contrast, Trader Joe is one of the top-ranked decentralized exchanges in the crypto space, allowing liquidity providers to add liquidity in designated “price bins” to improve capital efficiency. Cointelegraph reached out to Trader Joe for comment, but did not receive a response at the time of publication.
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