## Facts

- Viacom owns the *SpongeBob SquarePants* franchise, which prominently features “The Krusty Krab,” a fictional fast-food restaurant where a main character works.
- “The Krusty Krab” appeared in most episodes, in feature films, and in other franchise channels (apps, stage musical, and advertising).
- Viacom licensed “The Krusty Krab” for merchandise and related products (e.g., playsets, video games, aquarium accessories, stickers, and apparel), generating substantial sales, royalties, and consumer exposure.
- IJR planned to open a real-world seafood restaurant in Texas using the name “The Krusty Krab.”
- Viacom presented evidence of likely confusion, including a consumer survey showing about 35% association between IJR’s restaurant name and Viacom’s franchise, plus anecdotal confusion by at least one prospective investor.
- Viacom sued for trademark infringement and unfair competition under federal and Texas law; the district court granted summary judgment for Viacom and enjoined IJR’s use of the name.

## Issues

1. Whether Viacom owned a valid, protectable common-law trademark in “The Krusty Krab,” even though it originated as a fictional element rather than an operating restaurant.
2. Whether IJR’s proposed use of the identical name for restaurant services created a likelihood of confusion as to source, affiliation, or sponsorship.

## Decision

- The Fifth Circuit affirmed summary judgment for Viacom.
- The court held that a specific element from within a television series can function as a trademark if it serves as a source identifier in commerce.
- The court concluded that “The Krusty Krab” had acquired secondary meaning such that consumers associated it with Viacom and the franchise.
- The court held that IJR’s planned restaurant use of the identical mark created a likelihood of confusion as a matter of law, supporting injunctive relief.

## Legal Principles

- A protectable trademark may arise from a recurring fictional element in an expressive work when the element is used in commerce to identify source, not merely as a story component.
- When a designation is not inherently distinctive for the relevant services, the owner must prove secondary meaning—consumer association of the designation with a single source—which may be established through extensive exposure, consistent use, and licensing.
- Likelihood of confusion can be established where the parties use identical marks and the junior user’s services could reasonably be viewed as licensed, sponsored, or affiliated with the senior user, even if the senior user does not itself operate the same type of physical business.
- Survey evidence and anecdotal evidence of mistaken association may support a finding of likely confusion at summary judgment when the record permits only one reasonable conclusion.

## Conclusion

The Fifth Circuit held that “The Krusty Krab,” though fictional, functioned as a protectable common-law mark due to widespread, consistent commercial use and secondary meaning, and that a real-world restaurant’s identical use would likely confuse consumers as to affiliation or sponsorship.


Viacom International, Inc. v. IJR Capital Investments, L.L.C., 891 F.3d 178 (5th Cir. 2018)