SpongeBob SquarePants restaurant wins trademark battle over ‘The Krusty Krab’

He may live in a pineapple under the sea, but that doesn’t make him immune to trade mark issues…

The fictional ‘Krusty Krab’ restaurant – famed as the workplace of popular cartoon character SpongeBob SquarePants – has become entwined in a trademark dispute with a real-life restaurant hoping to use the name ‘The Krusty Krab’.

The applicant, real-life company IJR Capital Investments, filed a trademark application for the mark ‘The Krusty Krab’ for the use in restaurant services. This prompted Viacom, who distribute the SpongeBob SquarePants cartoon, to object to the application, with Viacom asking IJR to withdraw it and also change the name of their restaurant. Despite this request, IJR have continued with their application and the use of the restaurant name.

Given the resistance of IJR, Viacom filed a complaint in a Southern District of Texas court on the basis that the use of the mark constituted trademark infringement and dilution. The court subsequently ruled in favour of Viacom, holding that trademark infringement had occurred despite Viacom having no federal trademark registration or application over the mark themselves.

The court concluded that ‘The Krusty Krab’ was protectable as a common-law trademark owned by Viacom. This was based on the court’s view that Viacom had presented sufficient evidence of the mark’s acquired distinctiveness. As such, the court held that IJR had committed trademark infringement.

The court also considered the likely confusion caused by the use of the mark and was persuaded that Viacom could operate, approve or be affiliated with the “Krusty Krab” restaurant and as such there would be likely confusion.

IJR have appealed this decision so the dispute is likely to be revisited. This is notwithstanding the fact that IJR have stated that they will change the restaurant name from ‘Krusty Krab’ to ‘Crusty Crab’, however it remains to be seen whether Viacom, or indeed the court, consider this minor change to be enough to take IJR’s restaurant out of the remit of Viacom’s trademark. Stay tuned.