Viacom Sues Owner of "Krusty Krab" Restaurant for Violating 'SpongeBob' Rights

The next Bubba Gump Shrimp Co.?
Nickelodeon

Viacom once got into the shrimp business via Forrest Gump, so maybe there's a fortune in crabs to be had courtesy of SpongeBob SquarePants.

On Friday, the media conglomerate filed a lawsuit in Houston against IJR Capital Investments, said to be operating a restaurant called "The Krusty Krab."

For those unfamiliar with "The Krusty Krab," Viacom identifies it as the "well-known fictional fast food restaurant" in SpongeBob SquarePants, appearing in 249 episodes beginning with the pilot and soon to be featured in the upcoming Broadway musical adaptation of the show. In the series,  Eugene H. Krabs owns the Krusty Krab, which employs SpongeBob as a fry cook. Actually, SpongeBob's official title is "Vice Assistant General Manager in charge of certain things."

The court filing has a picture:

Viacom says it has capitalized on "Krusty Krab" over the year through playsets, cake decorations, aquarium ornaments, magnet sets, costumes and more, though apparently not as of yet, a crab shack.

But that might only be a matter of time. After Forrest Gump came out, Viacom Consumer Products licensed the Bubba Gump Shrimp Co., which continues to be a good earner. In the court filing, Viacom says that given its "extensive use of the 'Krusty Krab' mark in a wide variety of trade channels — and the fact that the 'Krusty Krab' is a restaurant in the SpongeBob universe — it is within the zone of natural expansion of Viacom business to operate in restaurant services."

But if a restaurant is to come out, Viacom needs to protect its turf.

So a new lawsuit asserting multiple trademark violations and unfair competition is coming against this Texas company, which according to the complaint, has tried to register "Krusty Krab" at the U.S. Trademark Office. 

"Defendant’s use of the Infringing Mark — which is identical in appearance and sound to the Viacom Trademark — creates a high likelihood of confusion as to the source of the Infringing Mark and Defendant’s corresponding services," states the complaint.

An attorney for the defendant is said to have responded to a demand letter by denying any infringement of rights and stating that it "declines to cease use."

Viacom is now in court much like Sony Pictures did in 2014 when a sports-themed establishment in Fort Worth, Texas opened called "Ricky Bobby Sports Saloon & Restaurant."

The potential for "Krusty Krab" is endless. See what reportedly opened a couple years ago in the West Bank city of Ramallah. We'll leave it to others to figure out jurisdiction there.

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