SpongeBob Restaurant Found To Infringe Viacom’s Trademark

On January 11, 2017, the Southern District of Texas granted Viacom International Inc. summary judgment on its trademark infringement claim against IJR Capital Investments, LLC’s name for its proposed restaurant, “The Krusty Krab.”

“The Krusty Krab” is a fictional restaurant that, since 1999, has appeared on Nickelodeon’s animated television series “SpongeBob SquarePants.” In response to IJR’s filing of an intent-to-use application for THE KRUSTY KRAB and preparations to use that mark in connection with restaurant services., Viacom sued alleging, among other things, trademark infringement and dilution. 

Because Viacom had no federal trademark registration for “The Krusty Krab,” Viacom first had to prove that it owned valid common law rights in the mark. The Court found that Viacom owned rights because: (1) it has used “The Krusty Krab” continuously since 1999; (2) “The Krusty Krab” was featured in 166 of 203 episodes; (3) “The Krusty Krab” was depicted in two SpongeBob feature films released in 2004 and 2015, which had total gross receipts of over $470 million; and (4) Viacom sells licensed “The Krusty Krab” consumer products. The Court rejected IJR’s argument that Viacom could not establish trademark rights in the title of a fictional restaurant, stating that trademark protection can extend to specific ingredients of a successful television series, including symbols, design elements, and characters which the public directly associates with the plaintiff or its product.

The Court also found a likelihood of confusion. Among other things, Viacom had a strong mark, the parties’ marks were identical, and there was an overlap in customer base. With respect to the similarity of the services, the Court found that IJR’s actual restaurant was sufficiently similar to Viacom’s fictional restaurant because consumers could mistakenly believe that IJR’s restaurant was licensed or otherwise authorized by Viacom. Viacom also produced survey evidence showing that 30% of respondents believe a restaurant named “The Krusty Krab” is operated or sponsored by Viacom. Because all of the likelihood-of-confusion factors supported Viacom, the Court granted Viacom summary judgment on its infringement claim.

The case is Viacom Int’l Inc. v. IJR Capital Investments, LLC, Case No. H-16-257.