Virtual Krusty Krab Wins the Day
The denizens of Bikini Bottom could be confused by a real Krusty Krab restaurant. Viewers of the cartoon, SpongeBob SquarePants, are familiar with the underwater (and, of course, fictional) eatery, The Krusty Krab. When IJR Investments, LLC wanted to register the trademark, “The Krusty Krab”, for a dry land real restaurant, Viacom International, Inc., sued for trademark infringement, unfair competition and other causes of action. IJR argued that Viacom never registered the trademark and Viacom only has a fictional restaurant. So, IJR argued, it was free to use the name. The court rejected IJR’s arguments. The court looked at Viacom’s use of the name. It appeared in 166 out of 203 SpongeBob episodes over the 17 year run of SpongeBob. There were 2 successful movies and substantial merchandizing. Viacom’s substantial use for 2 decades established that the name acquired secondary meaning in the minds of consumers. Thus, Viacom had established enforceable common law rights in the name. The court entered judgment in favor of Viacom on its trademark and unfair competition claims.
WHY YOU SHOULD KNOW THIS. This case demonstrates how a trademark owner can establish rights in a common law trademark; even if the trademark relates to a fictional product. Here’s a list that is not, by any means, exhaustive: (1) Active, continuous use of the trademark over a span of time; (2) Large advertising and promotional budget; (3) Active merchandising; and (4) Licensing of the trademark. Note, however, that rights in a common law trademark can be restricted to the geographic location in which they are used.