Recently, Viacom, the company responsible for the Sponge SquarePants television show, prevailed in a trademark lawsuit. The dispute resulted from the Defendant’s plans to use the name “Krusty Krab” for a restaurant. The Plaintiff objected and then filed a lawsuit against the Defendant for trademark infringement and other claims under the Federal Lanham Act and common law. The Plaintiff argued that the Defendant’s proposed use of “Krusty Krab” infringed upon its rights since Plaintiff has been using “The Krusty Krab” as the name of a fictional restaurant in the SpongeBob SquarePants television show since 1999. The Plaintiff moved for summary judgment.
The Plaintiff did not have a trademark registration for the term “The Krusty Krab” and relied upon its common law use of the mark. Specifically, the Plaintiff argued that the “The Krusty Krab” mark appeared in 166 of the 203 SpongeBob SquarePants episodes that were aired, and was also depicted in two SpongeBob SquarePants feature films. The Plaintiff also pointed to the fact that it has been selling products and licensing the right to sell products utilizing the term “The Krusty Krab.”
The Defendant argued that the Plaintiff could not obtain trademark rights in the title of a fictional restaurant. The Court disagreed finding that elements of a television show can be protected as a trademark, such as “symbols, design elements, and characters which the public directly associates with the plaintiff or its product.” In support of its reasoning the Court pointed to previous court rulings that the term “Kryptonite,” from the Superman comics, books and movies, can be protected as a trademark, even though it is a “fictional radioactive compound in the Superman series.”
Finding that the Plaintiff had a valid trademark in the term “The Krusty Krab,” the Court moved on to determining whether Defendant’s use of the term created a likelihood of consumer confusion. The Court found that likelihood of confusion existed because consumers would be likely to mistakenly believe that the Defendant’s restaurant is an officially licensed or endorsed restaurant of Plaintiff, which was partially based upon a consumer survey entered into evidence by Plaintiff. As a result, the Plaintiff was granted summary judgment on its claim for trademark infringement. The Court denied Plaintiff’s motion for summary judgment as to its claim for dilution as well as Plaintiff’s other claims for false designation of origin, unfair competition and refusal of registration.
Unless the Defendant decides to appeal the Court’s decision, the Defendant will be prevented from using “The Krusty Krab” as the name of its restaurant. Please contact our office if you have any questions regarding the information in this article.
Daniel Devine, Esq.
Santucci Priore, P.L.
 See, Viacom Int’l, Inc. v. IJR Capital Investments, LLC, Case No. 16-cv-00257 at Docket Entry No. 32 (S.D. Tex. January 11, 2017).
A common question in trademark law is what constitutes “use” in commerce of a service mark. The answer is often complicated and fact driven. This week the Federal Circuit clarified the question in its ruling in David Couture v. Playdom, Inc.
On May 30, 2008, Couture filed an application to register the mark PLAYDOM for entertainment services, under Section 1(a) of the Trademark Act. A Section 1(a) registration requires that a mark be “used in commerce”. A mark is used in commerce “on services when  it is used or displayed in the sale or advertising of services and  the services are rendered in commerce, or the services are rendered in more than one State or in the United States and a foreign country and the person rendering the services is engaged in commerce in connection with the services.” 15 U.S.C. §1051(a)(1). At the time of registration, Couture alleged that he was using the mark in commerce, and the mark was registered on January 13, 2009.
On February 9, 2009, Playdom Inc., (a company purchased by the Walt Disney Company) filed an application to register the same mark as Couture, PLAYDOM, and sought cancellation of Couture’s registration, on the basis that Couture had not performed the services under the mark at the time he filed a use-based application.
The evidence shows that Couture had purchased a domain name, advertised his services, but did not acquire his first costumer and actually perform any of the services he applied for until 2010, almost two years after he first filed his application. Therefore, the Trademark Trial and Appeal Board (TTAB) granted the petition for cancellation, which was affirmed by the Federal Circuit.
The Federal Circuit emphasized that the statute clearly requires that you perform the services in interstate commerce prior to filing your application. Many people file 1(a) applications and submit advertisements, websites and the like before actually performing any of the services. It may be accepted by the TTAB, but could ultimately result in losing your registration.
The bottom line is that merely advertising services is not enough to file a Section 1(a) application- services identified in a use-based application must be rendered before filing the application. If you are not performing the services in your application yet, it is best to either wait to file a 1(a) application when the services are actually rendered, or file a Section 1(b) intent to use application. If you have any questions regarding this case or trademark law in general, please call (954) 351-7474 for a consultation.