Sponge Bob SquarePants. Lawsuit.
Almost everyone with young children knows about the animated TV series, Sponge Bob SquarePants. The show is based in the fictional underwater city, Bikini Bottom. And of course, within this city is a restaurant called The Krusty Krab, run by a grouchy crab called Mr. Krabs.
In January of 2016, this fictional restaurant became the center of a trademark lawsuit.
Viacom, who owns Nickelodeon, the network which airs Sponge Bob SquarePants, filed a trademark infringement lawsuit against a Texas based company, IJR Capital Investments, who attempted to open a seafood restaurant called…The Krusty Krab.
Although the name of the fictional restaurant was never registered with the United States Patent and Trademark Office, Viacom contended that its common law trademark rights were violated. A common law trademark is established through continued “use” and not through statute. Attorneys for Viacom argued that the Krusty Krab animated restaurant has been in continuous use since 1999 and appeared in over 160 episodes of the TV series.
Earlier this year, U.S. District Court Judge Gray Miller ruled in favor of the plaintiff, Viacom. The judge cited precedent and continued use in his decision, noting that the name “Krusty Krab” had acquired “secondary meaning” and was thus, distinctive. He went on to say that the potential for confusion was very high.
Judge Miller stopped short of awarding Viacom on their claim of trademark dilution, noting that the defendant, IJR Capital Investments, never actually opened the proposed restaurant, thus never used the trademark in commerce, a requirement for both federal and state trademark dilution law.
In the past, Viacom has allowed restaurants to use its trademarks via licensing agreements, the most notable example being a restaurant chain called Bubba Gump Shrimp Co. which originated from the 1994 box office hit “Forrest Gump.”
This case is far from the first of its kind. Other common law marks such as “Daily Planet” and “Kryptonite” were the subject of lawsuits involving Warner Bros. and DC Comics.
Once again, this case highlights the importance of “use” when there is no registration. Consistent use over a prolonged period, as well as “secondary meaning” are two of the key elements of common law trademark lawsuits.