Pasadena Appeals Court Revives Trader Joe’s Trademark Suit Against Employee Union

A federal appeals court based in Pasadena has reinstated Trader Joe’s trademark infringement lawsuit against its employee union, ruling that the case was improperly dismissed and must proceed.

In a unanimous Sept. 8 decision, a three-judge panel of the 9th U.S. Circuit Court of Appeals reversed a lower court’s dismissal of Trader Joe’s claims against Trader Joe’s United, an independent labor group formed in July 2022 following a successful union election at the company’s Hadley, Massachusetts store. The panel also vacated an attorney fee award previously granted to the union and remanded the case for further proceedings.

Circuit Judge Gabriel P. Sanchez, writing for the panel, stated: “This is not one of those rare trademark infringement cases in which there is no plausible likelihood that a reasonably prudent consumer would be confused.”

Judges Holly A. Thomas and James Donato, sitting by designation, joined in the opinion.

The dispute centers on merchandise sold by Trader Joe’s United bearing branding similar to the retailer’s. According to Reuters, Trader Joe’s sent a cease-and-desist letter to the union on June 27, 2023, demanding it stop using the company’s trademarks on non-grocery items such as tote bags. The company filed suit on July 5, 2023.

The appellate panel held that the district court erred by focusing narrowly on tote bags, rather than considering the broader category of goods. It also found the marks used by the union to be “strikingly similar,” sharing capitalized red lettering, stylized fonts, and concentric circle design. The court said that a “reasonably prudent consumer” could plausibly be confused.

Addressing the union’s argument that its merchandise was protected under federal labor law, the court clarified that such protections do not extend to purely commercial activity.

“There is room for accommodation between Lanham and Norris-LaGuardia; in a pure ‘commercial case’ a union is, of course, subject to a Lanham injunction,” Sanchez wrote.

The decision, issued from the Ninth Circuit courthouse in Pasadena, has been described by legal experts as potentially carrying implications for labor organizing and intellectual property enforcement nationwide.