On January 11, 2017, the Southern District of Texas granted
Viacom International Inc. summary judgment on its trademark
infringement claim against IJR Capital Investments, LLC's name
for its proposed restaurant, "The Krusty Krab."
"The Krusty Krab" is a fictional restaurant that,
since 1999, has appeared on Nickelodeon's animated television
series "SpongeBob SquarePants." In response to IJR's
filing of an intent-to-use application for THE KRUSTY KRAB and
preparations to use that mark in connection with restaurant
services., Viacom sued alleging, among other things, trademark
infringement and dilution.
Because Viacom had no federal trademark registration for
"The Krusty Krab," Viacom first had to prove that it
owned valid common law rights in the mark. The Court found that
Viacom owned rights because: (1) it has used "The Krusty
Krab" continuously since 1999; (2) "The Krusty Krab"
was featured in 166 of 203 episodes; (3) "The Krusty
Krab" was depicted in two SpongeBob feature films released in
2004 and 2015, which had total gross receipts of over $470 million;
and (4) Viacom sells licensed "The Krusty Krab" consumer
products. The Court rejected IJR's argument that Viacom could
not establish trademark rights in the title of a fictional
restaurant, stating that trademark protection can extend to
specific ingredients of a successful television series, including
symbols, design elements, and characters which the public directly
associates with the plaintiff or its product.
The Court also found a likelihood of confusion. Among other
things, Viacom had a strong mark, the parties' marks were
identical, and there was an overlap in customer base. With respect
to the similarity of the services, the Court found that IJR's
actual restaurant was sufficiently similar to Viacom's
fictional restaurant because consumers could mistakenly believe
that IJR's restaurant was licensed or otherwise authorized by
Viacom. Viacom also produced survey evidence showing that 30% of
respondents believe a restaurant named "The Krusty Krab"
is operated or sponsored by Viacom. Because all of the
likelihood-of-confusion factors supported Viacom, the Court granted
Viacom summary judgment on its infringement claim.
The case is Viacom Int'l Inc. v. IJR Capital
Investments, LLC, Case No. H-16-257.
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