The U.S. Court of Appeals for the 5th Circuit recently considered an entertaining case. Viacom, the owner of the wildly popular “SpongeBob SquarePants” television series, sought to prevent a third party from opening a restaurant under the name “The Krusty Krab.”
Krabby Patties, anyone?
As millions of people know, Viacom launched the “SpongeBob SquarePants” television series in 1999. Since that time, Viacom has expanded the “SpongeBob” concept into two feature films and a wide variety of licensed products. All of these ventures prominently feature The Krusty Krab fast food restaurant.
Notably, prior to the lawsuit in question, Viacom had not sought to register The Krusty Krab as a trademark.
In 2014, IJR Capital Investments decided to open seafood restaurants in California and Texas under the name The Krusty Krab. Subsequently, IJR filed a trademark application in the U.S. Trademark Office for THE KRUSTY KRAB.
Upon learning of IJR’s trademark application and restaurant plans, Viacom sent a cease and desist letter in November 2015. IJR refused to cease use of The Krusty Krab, and Viacom subsequently filed a lawsuit in January 2016.
A central legal question within the case was whether fictional elements of a television show can be protectable trademarks. More specifically, is The Krusty Krab a protectable trademark?
As a threshold issue, an important question in the case was whether specific elements from within a television show - as opposed to the title of the show itself – receive trademark protection. In deciding this issue, the court looked to previous decisions from other courts that found protectable trademark rights in Conan (from “Conan the Barbarian”), the General Lee (from “The Dukes of Hazzard”), and the Daily Planet (from “Superman”).
In line with these prior decisions, the court concluded fictional elements in entertainment entities can be protected as trademarks.
Turning to the Viacom case, the salient question was whether The Krusty Krab mark, as used, will be recognized in itself as an indication of origin for the particular product or service. The mark must create a separate and distinct commercial impression to perform the trademark function of identifying the source.
The court concluded that Viacom uses The Krusty Krab as a source identifier and therefore owns the mark.
In support of its decision, the court reasoned that the Krusty Krab’s central role in the multibillion-dollar SpongeBob franchise, coupled with the consistent use of the mark on licensed products establishes ownership of the mark because of its immediate recognition as an identifier of Viacom as the source for goods and services.
Since filing the lawsuit, Viacom has filed three trademark applications for “KRUSTY KRAB” for some diverse goods/services, such as plastic cake decorations, aquarium ornaments, and providing a website featuring general interest entertainment information related to television programs and cartoons for entertainment purposes.