We’ve written before about the potential liability associated with using some famous reference to a movie or a book as the name of your business or product.  

Just think about it for a second, there’s a reason you want to use the name.  The association you’re looking to achieve between your product and the larger ouvre – be it Star Wars, or Star Trek, or Marvel or Tolkien – is a thing of value.  If it had no cachet, you wouldn’t be using it.  

The issue recently found some concrete application in a Texas federal case.

A restaurant wanted to open up and call itself the “Krusty Krab” which is the name of a fictional restaurant in the SpongeBob SquarePants cartoons.  The restaurant filed an intent to use application with the USPTO for “THE KRUSTY KRAB” for restaurant services, and Viacom sent a cease and desist asking that the restaurant change its name, not use any SpongeBob related marks and withdraw its pending trademark application.  The restaurant owner responded to Viacom stating that it “rejects Viacom’s claim of likelihood of consumer confusion and respectfully declines to cease use.” So Viacom sued alleging Lanham Act violations including false designation of origin, unfair competition, trademark infringement and dilution amongst other state claims.  You can read the complaint here.

After some limited discovery, Viacom moved for summary judgment and won, Viacom then asked for clarification of the Court’s determination and the Court issued a second order reflecting the grounds for summary judgment and denying Viacom’s request for an injunction.  You can read the Court’s opinion here.  It is instructive.

The restaurant owner argued that Viacom could not have a trademark that would give rise to infringement based on the title of a fictional restaurant.  The Court disagreed citing to precedent showing that trademark protection extends to the “specific ingredients of a successful T.V. series including symbols, design elements, and characters which the public directly associates with the plaintiff or its product.”  Harkening back to former issues surrounding “Kryptonite” and the “Daily Planet” where those made-up words were held to create a “common law trademark based on use, in part because they have been a staple of the Superman character and story and regularly appeared on licensed consumer merchandise over the years” the Court was sympathetic to Viacom’s arguments that fictional titles are afforded trademark protection, especially where the mark, as here, was shown to be distinctive given the number of episodes in which the Krusty Krab appears and the hundreds of millions generated and spent on the feature films along with the billion page views for nick.com – the website featuring SpongeBob related content.  

Citing to the continued use of the mark in the television series, movies, in web and mobile applications and in licensed products that directly mentioned the Krusty Krab, the Court found there was a high likelihood that the public would assume a relation, affiliation or sponsorship between Viacom and the restaurant even though there was no such authorized endorsement.  This apparent association was heightened given that both parties used the mark for restaurants and both stuck with the “K” spelling for the words krusty and krab.  And that’s the real rub, isn’t it.  A media company has put time and effort into creating a fictional universe that has developed a cult following and someone comes along and wants to capitalize on that creation.

With the potential penalties and remedies of attorneys’ fees and disgorgement of profits, there’s really no good justification to trade on someone else’s creation.

But those looking for a Krab Patty need not be disheartened, while this case is an application of the rule of law in the U.S., the reach of U.S. copyright and trademark principles have apparently not hit  Palestine where Viacom hasn’t shut down another replica Krusty Krab.

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