It seems like after you buy something at point of sale whatever you do with it is fair game. I can buy Coke from Sam's Club or Costco and sell it in my restaurant. How is what Pirate Joe's did any different?
The guy clearly tried to position himself as a pseudo-Trader Joe's though. He called it Pirate Joes and only sold products from Trader Joe's. It seems like everyone thought of it as a kind of Trader Joe's.
Even though copyright infringement might not have been his intent, intent doesn't matter. That said, this does look like egregious legal bullying even if the case holds water.
What did you think of it as? In my mind, this store is in no way associated with Trader Joe's, but sells exclusively Trader Joe's products (I've only been in it once); that made it into a kind of Trader Joe's.
I think this debate is more about how one can define "kind of Trader Joe's" than about how one associated it with the company.
But big companies can't allow this kind of infringement. They have to defend aggressively. You never to which mistake may cost billions of dollars in the future.