Wednesday, November 03, 2021

Judge Rules Business Can't Open "Krusty Krab" Joint in Kemah, Texas

A federal judge has ruled that a Houston, Texas-based company cannot open a restaurant called The Krusty Krab in Kemah because of trademark infringement, the Houston Press is reporting.

IJR Capital should be happy it was spared the wrath of Mr. Krabs, who once threatened the Chum Bucket for trying to steal his Krabby Patty recipe. From the lawsuit.

Viacom International sued IJR Capital Investments after discovering its plans to open its own Krusty Krab in November 2015. The TV giant, which owns Nickelodeon, accused the entrepreneurs of trying to piggyback off the Krusty Krab's well-established fame and reputation in order to make money, claims that IJR Capital adamantly denied.

In an opinion last week, U.S. District Judge Gray H. Miller issued the blow to IJR, laying out in great detail how the fictional Krusty Krab — home to Mr. Krabs's famous Krabby Patty and where SpongeBob and his perpetually unenthused friend Squidward are employed — rose to distinguished prominence amongst fans of the beloved animated series.

The Krusty Krab has appeared on 249 episodes of SpongeBob SquarePants, appeared in SpongeBob videogames, on baseball hats and shirts, in books called Jokes from the Krusty Krab and Trouble at the Krusty Krab!, and has been manufactured as Lego sets, cake decorations, aquarium adornments and even costumes, according to Viacom. As a result, Miller concluded there's a good chance that restaurant-goers would confuse IJR's Krusty Krab seafood restaurant with the one located in SpongeBob's hometown, Bikini Bottom.

Javier Ramos, owner of IJR Capital Investments, told the Houston Press that he found Miller's ruling unfair, and that he planned to appeal it and fight Viacom to the end. Ramos said he had never heard of SpongeBob before conceiving of the seafood restaurant, and once he looked it up on the Internet, still didn't think Mr. SquarePants was a big enough deal for him to choose a different name.

“I don't think SpongeBob is that famous,” he said. “I think it's more of a niche fame. There's too many legal questions about whether it would be confusing or not, but I didn't think it would. I don't think anybody would drive by the Gulf Freeway and think, 'Hey, there's SpongeBob's restaurant.'”

Since its launch July 17, 1999, SpongeBob SquarePants has reigned as the number-one animated series on TV for the last 18 years, while generating a universe of beloved characters, pop culture catchphrases and memes, theatrical releases, consumer products, a Tony Award®-winning Broadway musical and a global fan base.  SpongeBob SquarePants is the most widely distributed property in ViacomCBS Networks International history, seen in more than 170 countries and territories, translated in 30+ languages, and averaging more than 100 million total viewers every month.

IJR tried to argue that, since Viacom never specifically registered the Krusty Krab for a trademark, it was fair game for usage. Yet Judge Miller, citing case law, disagreed, saying that ownership of a mark is established by use and popularity in the marketplace, not registration.

He brought in SpongeBob to help explain this law in a useful footnote: “As SpongeBob Squarepants says, 'You don't need a license to drive a sandwich.'”

Ramos said he had tried to settle with Viacom and suggested new names for the restaurant such as “Crusty Crab” or “Krusted Krab,” but said Viacom continued to “bully” his company and would not agree to those names. (According to Miller's ruling, IJR's lawyers argued that calling the restaurant the Krusty Krab with K's was important because K's are more “aesthetically pleasing” than C's. In a footnote, the court defended the letter C as also aesthetically pleasing.)

Judge Miller did not grant Viacom's claims of dilution, in which Viacom argues that IJR's use of the Krusty Krab has already tarnished its reputation.

“The court imagines an appropriate reaction from SpongeBob SquarePants would be, 'Aw, tartar sauce,'” Miller wrote.

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