On October 5, American grocery store chain Trader Joe’s filed a federal lawsuit against a decentralized finance (DeFi) platform named Trader Joe. The lawsuit accuses the DeFi platform of trademark infringement and seeks all profits generated by the platform as damages.
Background and Allegations
This lawsuit follows an unsuccessful legal attempt by Trader Joe’s in 2022 to close down the platform. According to the lawsuit, Trader Joe’s alleges that the DeFi platform did not seek permission to use the grocery store’s name. “Defendants neither sought nor received Trader Joe’s permission to name their platform after Trader Joe’s,” the lawsuit states. The grocery chain had previously sent cease-and-desist letters to the platform but received no response.
The DeFi platform known as Trader Joe was launched in 2021 by an anonymous team. It operates on the Avalanche blockchain and initially started as a fork of SushiSwap. Liquidity providers who deposit funds into Trader Joe earn supply-side fees from traders.
Branding and Intent
The lawsuit by Trader Joe’s also delves into branding issues. It claims that the DeFi platform’s employees use aliases within the company, and that its use of the “Trader Joe” name helps it benefit commercially from the grocery chain’s well-known trademark and broader reputation. “Obscuring their identities both from outsiders and each other in day-to-day business dealings evidences an intent to avoid detection, subvert legal process, and operate free of legal consequence,” the lawsuit says.
Last year, Trader Joe’s filed a complaint with the United Nations’ World Intellectual Property Organization (WIPO), accusing the DeFi platform of capitalizing on the grocery chain’s name. However, the defense from Cheng Chieh Liu, a co-founder of the Trader Joe DeFi platform, was successful, and the case was dismissed. Liu argued that the platform was actually named after his brother, Joe Liu. This defense seemed to work until a Substack newsletter from cryptofish, another co-founder of the DeFi platform, stated, “With no name for the DEX yet, [we] just named it Trader Joe, after the supermarket.” This revelation led to the new lawsuit filed in the United States District Court Central District of California.
Lawyers for Trader Joe’s claim the defendants concocted a false story about the platform’s name, stating, “Those representations were false, and Defendants knew of their falsity.” The lawsuit not only seeks all profits from the DeFi platform but also insists that all affiliated websites be immediately seized and the platform be permanently shut down.
