4:16-cv-00257
S.D. Tex.Mar 17, 2017Background
- Viacom (owner of SpongeBob SquarePants) has used the fictional restaurant name "The Krusty Krab" in its show and related merchandising since 1999; it has not registered that exact mark but claims common-law rights and extensive secondary use.
- IJR (Ramos) filed a federal trademark application for "THE KRUSTY KRAB" for restaurant services in 2014 and planned a real restaurant using that name; Viacom sent a cease-and-desist and then sued.
- Viacom moved for summary judgment on eight claims (trademark infringement, unfair competition, dilution, refusal of registration, etc.); IJR moved to exclude Viacom’s survey expert, which the court denied.
- The court found Viacom had established ownership and secondary meaning of "The Krusty Krab" as a protectable mark based on extensive use, licensing, and marketplace recognition.
- The court found no genuine issue of material fact that IJR’s proposed use would cause a likelihood of confusion and therefore granted summary judgment for trademark infringement (state common law) and Lanham Act unfair competition.
- The court denied summary judgment on federal and state dilution claims because IJR had not yet used the mark in commerce and those claims were unripe.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether "The Krusty Krab" is a valid protectable mark | Viacom: long, continuous use in show, films, merchandising gives common-law trademark rights and secondary meaning | IJR: mark unregistered; fictional restaurant title not protectable; no use as a trademark | Court: Valid mark — protectable; acquired distinctiveness via secondary meaning (summary judgment for Viacom) |
| Whether IJR’s use causes likelihood of confusion (infringement) | Viacom: identical mark, same commercial field (restaurant), overlapping channels/audience, survey shows confusion, defendant aware of mark | IJR: denies likelihood of confusion, asserts differences in marketplace and no overlap | Court: Likelihood of confusion established; summary judgment for Viacom on infringement and Lanham Act unfair competition |
| Whether Viacom’s dilution claims are ripe / whether IJR used the mark in commerce | Viacom: IJR’s business plan, domain registrations, pending application and preparatory steps show imminent commercial use | IJR: had not actually used the mark in commerce; steps were preparatory and suspended due to lawsuit | Court: IJR had not used the mark in commerce; dilution claims unripe — summary judgment denied on dilution |
| Whether Lanham Act unfair competition follows infringement finding | Viacom: same likelihood-of-confusion standard applies across Lanham Act claims | IJR: contends standards differ (not specified) | Court: Agreed with Viacom; same likelihood-of-confusion analysis supports Lanham Act unfair competition — summary judgment granted |
Key Cases Cited
- Amazing Spaces, Inc. v. Metro Mini Storage, 608 F.3d 225 (5th Cir.) (federal likelihood-of-confusion analysis applies to corresponding state claims)
- Elvis Presley Enters., Inc. v. Capece, 141 F.3d 188 (5th Cir.) (likelihood-of-confusion test explained and Texas law treated as coextensive)
- Wal–Mart Stores, Inc. v. Samara Bros., 529 U.S. 205 (U.S. 2000) (inherent distinctiveness/secondary meaning framework)
- Scott Fetzer Co. v. House of Vacuums Inc., 381 F.3d 477 (5th Cir.) (survey methodology flaws affect weight, not admissibility)
- Smack Apparel Co. v. Board of Supervisors for LSU A&M Coll., 550 F.3d 465 (5th Cir.) (ownership of trademark established by use, not registration)
- Fuji Photo Film Co. v. Shinohara Shoji Kabushiki Kaisha, 754 F.2d 591 (5th Cir.) (bad faith inference and intent in copying discussed)