Infringement makes federal court Krabby

Cartoon eatery wins mark protection

With its corps of intellectual property lawyers, Viacom, the entertainment giant, somehow didn’t legally shield the Krusty Krab— and some interlopers soon had plans to have their way with it.

Unfamiliar with this famed eatery, and maybe not savvy about the Sponge Bob Squarepants universe, too? Well, the Krusty Krab is the fictional, featured workplace of SpongeBob and the ever acerbic Squidward. Their famous joint also has its own legendary burger: the Krabby Patty.

Both were in danger, in Viacom’s view, of falling into the nefarious mitts of IJR Capital Investments, an LLC that proposed to open a Krusty Krab restaurant and to trademark that name.

As Mr. Bill, another notable fictional character, would exclaim: Oh, no!

Fear not sea sponges. Viacom pulled up its legal big boy pants and fought back – winning its case recently with a reminder from a federal court in Houston about critical components of IP and trademark law. Hint: Use in the market matters.

Going from Krabby to litigants

The Krusty Krab caper turned to litigation roughly a year ago when IJR sought to trademark the name of a restaurant it wanted to open and promote online and with ads. Viacom sued IJR, asserting it was infringing on the corporation’s “Krusty Krab” name. But, as Viacom learned when IJR responded, that restaurant moniker never had been trademarked, though certainly the cartoon productions and products in which amply had been featured, were.

That made a legal world of difference to the district court judge who granted Viacom’s summary judgement request, finding IJR, indeed, had infringed on the crab mark. The court held that the name Krusty Krab, including its unique spelling, was so distinctive that it had gained mark protection. The court noted that “ownership of a mark is established by use in the market, not by registration.”

The court said  in Viacom effectively had secured legal protection for its restaurant name because it, distinctively, had appeared in 249 cartoon episodes, is part of two movies with total gross receipts of  $470 million or so, and is the subject of toys, apparel, and other products.

Further, the judge found that IJR’s use would create a likelihood of confusion as to the source, affiliation, or sponsorship of its Krusty Krab versus the Viacom version. That’s because “consumers may mistakenly believe IJR’s restaurant is an officially licensed or endorsed restaurant.”

This isn’t a speculative but a real concern, the court said, noting, for example, that Viacom, through its subsidiary Paramount Pictures Corp., had licensed its marks from films for restaurants—see Bubba Gump Shrimp Co., now a seafood chain inspired by Forrest Gump.

By the way, when Viacom gets rolling, watch out: Among the legal issues the parties tussled over, and which IJR lost on, was the admissibility of testimony from Dr. Edward Blair. Turns out Viacom hired him to conduct a nationwide survey to see if consumers would confuse their fictional Krusty Krab with a real restaurant similarly named. He said they would be.

IJR argued that a fictional restaurant, as an element of a television show, could not be trademarked. But the court swiftly pointed to instances of mark-protected elements of TV shows and films, based on use in the marketplace, and including, say Superman’s “Daily Planet,” or “Kryptonite.”

The list of elements from television and movies which have been turned into real life dining is endless. (See the “Krusty Burger” featured in “The Simpsons” or “The Leaky Cauldron” from “Harry Potter.”) For those who would be thrilled to eat at a real life “Krusty Krab” restaurant, should book a trip immediately to Palestine before Viacom takes action.