Judge Finds Trademark Rights in 'The Krusty Krab'

Those of you with kids, or who are kids at heart, are probably familiar with the Nickelodeon show "SpongeBob Squarepants," which has been on the air since 1999. The show features an animated sponge as its main character, and that character works at a fictional restaurant called "The Krusty Krab" for the miserly Mr. Krabs.

In 2014, IJR Capital Investments ("IJR") filed a trademark registration for "The Krusty Krab" in relation to "restaurant services." IJR is not affiliated with Nickelodeon, or its parent company Viacom, in any way. Viacom wasn't happy about the filing and sent IJR a cease and desist letter demanding that they stop using the name "The Krusty Krab" and refrain from using any SpongeBob trademarks. IJR declined the invitation to cease and desist, and Viacom followed up with a lawsuit in 2016. The court issued its ruling on Viacom's Motion for Summary Judgment last month.

The interesting aspect of this case is that the trademark at issue was used in a cartoon, with respect to an entirely fictional restaurant. IJR argued that there is no way Viacom can have valid trademark rights in a name used for a fictional restaurant. Viacom pointed out that the name appeared in 166 of 203 aired SpongeBob episodes, and argued that elements of a TV show (like a fictional restaurant name) qualify for protection.

In finding in favor of Viacom, the judge pointed out that previous cases have held that elements of TV shows are protectable (for example, the court cited to previous cases holding that "Kryptonite" and "The Daily Planet," though fictional, were entitled to common law trademark rights as a result of their longstanding use as staples of the Superman story and characters). From there, the court noted that "The Krusty Krab" has acquired what is known as "secondary meaning" over the course of the use of that name on the show. In other words, over time the name has come to be associated with SpongeBob Squarepants.

Given the above, the court concluded that Viacom did indeed have trademark rights in the name "The Krusty Krab." Whether there was any infringement by IJR remained to be decided. The hallmark of infringement is likelihood of confusion--are consumers likely to believe, mistakenly, that there is some affiliation or sponsorship between IJR and the SpongeBob program? The court noted that the spelling was identical in the Viacom and IJR marks, and that both were directed to restaurants (albeit fictional in Viacom's case). The court also noted that Viacom used the mark not only in its television show, but in mobile apps, movies, and other licensed products. The court then acknowledged that there is precedent for a fictional restaurant name to be licensed to a real restaurant, namely the Bubba Gump Shrimp Co., which appeared in the movie "Forrest Gump," and which Paramount Pictures (also owned by Viacom) has licensed for use by a real restaurant chain.

For all of the reasons above, among others, the court decided that IJR did in fact infringe Viacom's trademark for "The Krusty Krab," even though the mark represents a fictional, cartoon restaurant.

You can read the whole opinion here.