To the imaginary denizens of Bikini Bottom, including cartoon legend SpongeBob SquarePants, the Krusty Krab has earned a delectable reputation for the secret-recipe burgers and other fast food it slings. Who knew that the fictional eatery — like the Daily Planet, General Lee, and Conan the Barbarian — also has real world legal protections as a product and for its name ?
That’s what a federal appellate court has found. The panel held that a real company could be in some deep water for infringing on the Krusty Krab name for its real world restaurants serving Cajun seafood, purportedly with a distinctive exterior coating.
This food fight launched in 2016, when Viacom International Inc. sued IJR Capital Investments, when it sought to open seafood restaurants the firm called The Krusty Krab.
Viacom, which owns Nickelodeon, asked the court to bar IJR from using that name, as the media conglomerate asserted it has a common law trademark of the fictional restaurant from SpongeBob SquarePants, which the judges of the U.S. Court of Appeals for the Fifth Circuit would note has been “the most watched animated television series for 15 years,” and has been the focus of a two-movie package that grossed $470 million.
A federal district court granted Viacom’s motion for summary judgment on its trademark infringement claim. In response, IJR appealed, arguing there were genuine issues of material fact as to the mark’s ownership of the mark.
The appellate judges dropped IJR’s arguments in the deep fat fryer.
Lone Star state mark infringement
The appeals court found that this Texas case had similarities to a Lanham Act claim, in which a claimant must establish (1) that it owns a legally protectable mark in The Krusty Krab and (2) that IJR’s use of the mark creates a likelihood of confusion as to source, affiliation, or sponsorship.
“When an element plays a more central role in a franchise,” the appellate judges wrote, “trademark protection is ordinarily granted.” The court said the name of the Bikini Bottom eatery, where SpongeBob labors as a fry cook, was analogous to famed elements in: the Superman comics and TV shows, including the place where reporter Clark Kent toils, the Daily Planet, and the super hero’s ultimate weakness, kyrptonite; or to General Lee, the ’69 orange Dodge Charger, so prominently featured in The Dukes of Hazzard television show. These elements have become so well know that they become protected trademarks under common law.
The Krusty Krab, the judges noted, played a big and central part in SpongeBob SquarePants, appearing in more than 80 percent of the TV episodes in the past 18 years. Viacom also swayed the court by noting it also has licensed The Krusty Krab mark in consumer products, such as Legos, video games and aquarium ornaments.
The appellate court found another central issue in the case — a likelihood of confusion due to the similar appearance of the two marks. The unique spelling of Krusty Krab, and the detail that both marks would be used as a restaurant name, likely would confuse a consumer as to legal protections’ true owner.
Further, it is foreseeable that Viacom could develop The Krusty Krab restaurant for its benefit, and it would have first claim. Paramount Pictures, a Viacom subsidiary, has licensed a mark from the movie, Forrest Gump, to create the beloved restaurant, Bubba Gump Shrimp Co.
Although the appellate court holding does not grant Viacom complete trademark protection, IJR will now have to fish for a different name, other than The Krusty Krab, for its restaurants.