Popular grocery store chain Trader Joe’s has filed a trademark lawsuit against a cryptocurrency platform operating as “Trader Joe.” The retailer alleges that the decentralized exchange (DEX) platform deliberately uses the name in reference to the 50-year-old supermarket chain — the domain name is traderjoexyz.com. It claims the platform capitalizes on the retailer’s name, goodwill, and brand recognition.
The chain further argues the connection in the lawsuit by pointing out that the Trader Joe platform uses “confusingly similar” names on the exchange’s website, YouTube page, Reddit, GitHub, LinkedIn, Substack, CoinMarketCap, Telegram and Discord. It also argues that DEX’s platform and branding uses red as a signature color, which the retailer also does. Moreover, despite the retailer having an ‘s at the end of its name, the two sound the same when spoken.
The crypto company claims that Trader Joe was named after the co-founder Cheng Chieh Liu’s (who is also named in the suit) brother and not the retail chain, but the retailer claims that the company is trying to create a false narrative to distort the true origins of the name, which is a poke at the grocery chain.
The platform currently holds $77 million in tokens from various chains, with $25 million in trades in September. Still, news of the lawsuit has impacted the platform, causing a one-day decline in value of 1.68%, a 3.85% decrease in one week and a whopping 60.82% in the last six months.
In May 2022, the grocer filed a claim with the World Intellectual Property Organization (WIPO), asking the crypto entity to relinquish the domain name. After numerous attempts via cease-and-desist letters to resolve the matter privately, the retailer filed a lawsuit at the U.S. District Court of Central California on October 5.
Trademark protections
Trademark protections generally protect a name within a market. For instance, Apple Computers and the Beatles’ Apple Records/Corps both used the name. Things, however, got much more complicated when Apple Computers created music platforms to download music onto devices. The tech giant eventually settled the matter with the band. The grocery chain is also suing for trademark dilution which does not require proof of likely consumer confusion. The plaintiff need only prove that its brand is famous (essentially a household name) and that the defendant’s mark diminishes the distinctiveness of the famous brand.
A growing phenomena
The difference between cryptocurrency trading and a brick-and-mortar retailer selling groceries is ostensibly quite different, but the retailer argues that it is too close for comfort. Cryptocurrency is becoming more mainstream and can be used to purchase a variety of groceries and home goods. Some believe that the retailer (which opened its first store in California in 1967) has the upper hand as a singularly recognizable brand with 500 stores in the U.S., but Trader Joe is one of the top decentralized exchanges in the crypto space.
Has the grocery retailer achieved the top marketing echelon where the name is synonymous with a particular brand? Do digital businesses need to be more careful about trademarks and branding as they become more mainstream?
Watch this space for updates on this evolving story.