Pirate Joe'sTechdirt is one of many who have been covering the curious tale of Pirate Joe—aka Michael Hallatt, a Vancouver entrepreneur who has set up a store in which he sells, at a markup, products he purchases at the Trader Joe’s chain on the American side of the border.

Hallatt claims he is doing nothing wrong—he buys his “merchandise” at full retail price and is permitted to sell them if he wishes to under the first-sale doctrine. Trader Joe’s begs to differ and has filed a lawsuit for trademark infringement.

Mike Masnick makes some useful points in his discussion of the case. Firstly, he points out that many infringement cases are predicated on protecting a business from counterfeit goods. That is not the case here. These are genuine goods, not counterfeit ones, and Hallatt purchased them legally.

There is also the anti-competition issue, which again, is moot. There are no Trader Joe’s stores in Canada, so Hallatt cannot be argued to be taking business from them. And if Trader Joe’s ever did come to Canada, their retail prices would be cheaper than his marked-up ones, and he’d be driven out of business by normal market forces.

I think this case has potentially interesting ramifications for the media industry. One of the justifications people sometimes use for “illegal” downloading is geographical restrictions. If a product is not available to them through mainstream channels in the first place, can they be blamed for seeking them out through other means?

And if they do download something off the torrents and creators moan about the “lost sale,” can they argue that the sale was never “lost” in the first place because the item was not available for them to buy?

How ironic that, when this argument is applied to a physical good, as Hallatt is applying it, it seems perfectly logical. But when it is applied to a digital good, the “piracy” banner gets waved.