Viacom's SpongeBob keeps rights to 'Krusty Krab' restaurant name

[May 23, 2018]   By Jonathan Stempel

(Reuters) - Aye, aye, captain: the rights to The Krusty Krab, the greasy spoon featured in the popular children's TV series "SpongeBob SquarePants," belong to Viacom Inc and not to a Texas restaurateur hoping to open a seafood chain with that name.

The 5th U.S. Circuit Court of Appeals ruled 3-0 on Tuesday that Viacom deserves trademark protection for The Krusty Krab, and that IJR Capital Investments LLC and its owner Javier Ramos cannot use it for their restaurants.

Circuit Judge Priscilla Owen wrote that Viacom proved that diners would likely be confused if IJR used the name The Krusty Krab, the restaurant located in the underwater city of Bikini Bottom where SpongeBob works as a fry cook.

She also said while Viacom had not registered "The Krusty Krab" with the U.S. Patent and Trademark Office, the name was important enough to the "SpongeBob" series to deserve trademark protection, despite not being the title.

Owen said The Krusty Krab has appeared in 166 of 203 SpongeBob episodes since its 1999 premiere on Viacom's Nickelodeon network, as well as in two feature films.

She said that made it like the Daily Planet, the newspaper that employed Clark Kent in "Superman," and the orange General Lee muscle car from "The Dukes of Hazzard," both of which received trademark protection in earlier court rulings.

"In the minds of consumers, The Krusty Krab identifies the source of products, which is Viacom, the creator of the 'SpongeBob SquarePants' fictional universe and its inhabitants," Owen wrote.

A lawyer for IJR and Ramos declined immediate comment.

Ramos claimed not to have heard of The Krusty Krab when he began fishing for a name, and chose it after checking Google and finding no restaurants using that name.

Viacom said it was pleased the court found that its rights in The Krusty Krab mark were "strong" and deserved protection.

The decision by the New Orleans-based appeals court upheld an April 2017 ruling by U.S. District Judge Gray Miller in Houston.

The case is Viacom International Inc v IJR Capital Investments LLC, 5th U.S. Circuit Court of Appeals, No. 17-20334.

(Reporting by Jonathan Stempel in New York; Editing by Tom Brown and Marguerita Choy)

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